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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BETWEEN
ASSOCIATED BANC-CORP
AND
FIRST FEDERAL CAPITAL CORP
APRIL 27, 2004
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
SECTION 1.01. The
Merger...............................................
SECTION 1.02. Effective
Time...........................................
SECTION 1.03. Effect of the
Merger.....................................
SECTION 1.04. Articles of
Incorporation and Bylaws.....................
SECTION 1.05. Directors and
Officers...................................
SECTION 1.06. Conversion of
Securities.................................
SECTION 1.07. Exchange of
Certificates.................................
SECTION 1.08. Stock Transfer
Books.....................................
SECTION 1.09. Anti-Dilution
Adjustment.................................
SECTION 1.10. Treatment of
Company Stock Options.......................
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 2.01. Organization and
Qualification of the Company, Bank,
and the Company Subsidiaries...........................
SECTION 2.02. Articles of
Incorporation and Bylaws.....................
SECTION 2.03.
Capitalization...........................................
SECTION 2.04.
Authority................................................
SECTION 2.05. No Conflict;
Required Filings and Consents...............
SECTION 2.06. Compliance;
Permits......................................
SECTION 2.07. Banking Reports,
SEC Reports, and Financial Statements...
SECTION 2.08. Absence of
Certain Changes or Events.....................
SECTION 2.09. Absence of
Litigation....................................
SECTION 2.10. Employee Benefit
Plans...................................
SECTION 2.11. Employment
Contracts; Material Contracts.................
SECTION 2.12. Registration
Statement; Proxy Statement..................
SECTION 2.13. Title to
Property........................................
SECTION 2.14. Compliance with
Environmental Laws.......................
SECTION 2.15. Absence of
Agreements....................................
SECTION 2.16.
Taxes....................................................
SECTION 2.17.
Insurance................................................
SECTION 2.18. Absence of
Adverse Agreements............................
SECTION 2.19. Internal Control
Over Financial Reporting................
SECTION 2.20.
Loans....................................................
SECTION 2.21. Related Party
Transactions ..............................
SECTION 2.22. Labor
Matters............................................
SECTION 2.23. NASDAQ;
Compliance with SOX..............................
SECTION 2.24.
Brokers..................................................
SECTION 2.25. Tax
Matters..............................................
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SECTION 2.26. Full
Disclosure..........................................
SECTION 2.27 Vote
Required............................................
SECTION 2.28. Board
Approval...........................................
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASSOCIATED
SECTION 3.01. Organization and
Qualification...........................
SECTION 3.02. Articles of
Incorporation and Bylaws.....................
SECTION 3.03. Capitalization
of Associated.............................
SECTION 3.04.
Authority................................................
SECTION 3.05. No Conflict;
Required Filings and Consents...............
SECTION 3.06. Compliance;
Permits......................................
SECTION 3.07. SEC Reports, and
Financial
Statements.............................................
SECTION 3.08. Absence of
Certain Changes or Events.....................
SECTION 3.09. Absence of
Litigation....................................
SECTION 3.10. Registration
Statement; Proxy Statement..................
SECTION 3.11. Absence of
Agreements....................................
SECTION 3.12.
Taxes....................................................
SECTION 3.13. Compliance with
SOX......................................
SECTION 3.14.
Brokers..................................................
SECTION 3.15. Tax
Matters..............................................
SECTION 3.16. Full
Disclosure..........................................
SECTION 3.17. Absence of
Adverse Agreements............................
SECTION 3.18. Employee Benefit
Plans...................................
SECTION 3.19. Compliance With
Environmental Laws.......................
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative
Covenants....................................
SECTION 4.02. Negative
Covenants.......................................
SECTION 4.03. Access and
Information...................................
SECTION 4.04. Affiliates and
Tax Treatment.............................
SECTION 4.05.
Expenses.................................................
SECTION 4.06. Delivery of
Shareholder List.............................
SECTION 4.07. Employee
Benefits........................................
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ARTICLE V
COVENANTS OF ASSOCIATED
SECTION 5.01.
Covenants................................................
SECTION 5.02. Access and
Information...................................
SECTION 5.03. Tax
Treatment............................................
SECTION 5.04. Charitable
Contributions ................................
SECTION 5.05. SEC
Filings..............................................
SECTION 5.06. Stock Exchange
Listing...................................
SECTION 5.07. Nomination of
Director...................................
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration
Statement...................................
SECTION 6.02. Meeting of
Shareholders..................................
SECTION 6.03. Appropriate
Action; Consents; Filings....................
SECTION 6.04. Notification of
Certain Matters..........................
SECTION 6.05. Public
Announcements.....................................
SECTION 6.06. Environmental
Matters....................................
SECTION 6.07. Employee
Benefits........................................
SECTION 6.08. Associated
Advisory Boards...............................
SECTION 6.09. Certain Benefits
of Company Directors....................
SECTION 6.10. Severance
Benefits for Company Employees.................
SECTION 6.11. Directors' and
Officers' Indemnification and Insurance...
SECTION 6.12. 2004 Accrued
Bonuses.....................................
SECTION 6.13. Stay
Bonuses.............................................
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.01. Conditions to
Obligation of Each Party to Effect the
Merger.................................................
SECTION 7.02. Additional Conditions to
Obligations of Associated.......
SECTION 7.03. Additional
Conditions to Obligations of the Company......
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01.
Termination..............................................
SECTION 8.02. Effect of
Termination....................................
SECTION 8.03.
Amendment................................................
SECTION 8.04.
Waiver...................................................
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of
Representations, Warranties, and
Agreements.............................................
SECTION 9.02. Disclosure
Schedules.....................................
SECTION 9.03.
Notices..................................................
SECTION 9.04. Certain
Definitions......................................
SECTION 9.05. Mitigation and
Reimbursement ............................
SECTION 9.06.
Headings.................................................
SECTION 9.07.
Severability.............................................
SECTION 9.08. Entire
Agreement.........................................
SECTION 9.09.
Assignment...............................................
SECTION 9.10. Parties in
Interest......................................
SECTION 9.11. Governing
Law............................................
SECTION 9.12.
Counterparts.............................................
SECTION 9.13. Enforcement of
Agreement.................................
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 27, 2004 (the
"Agreement"), between ASSOCIATED BANC-CORP,
a Wisconsin corporation
("Associated") and FIRST FEDERAL CAPITAL
CORP, a Wisconsin corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company is a unitary thrift holding company, the
wholly
owned subsidiary of which is First Federal
Capital Bank (the "Bank"), and its
wholly owned subsidiaries, First Cap
Holdings, Inc., First Reinsurance, Inc.,
First Enterprises, Inc., FF Mortgage
Reinsurance, Inc., and Turtle Creek
Corporation (such subsidiaries collectively
with the Bank and any other direct
or indirect subsidiary of the Company are
referred to in this Agreement as the
"Company Subsidiaries"); and
WHEREAS, the Company, upon the terms and subject to the conditions
of
this Agreement and in accordance with the
Wisconsin Business Corporation Law
("Wisconsin Law") will merge with and into
Associated (the "Merger"); and
WHEREAS, the respective Boards of Directors of the Company and
Associated have determined that the Merger
will enhance the ability of the
Company and Associated to better serve
their existing depositors and customers
and increase their financial strength;
and
WHEREAS, the respective Boards of Directors of the Company and
Associated believe that the Merger will
benefit the shareholders and the
employees of the Company and Associated;
and
WHEREAS, the respective Boards of Directors of Associated and
the
Company have (i) determined that the Merger
and the exchange of cash and newly
issued shares of Associated Common Stock
(as defined in Section 1.06) for shares
of Company Common Stock (as defined in
Section 1.06) pursuant and subject to the
terms and conditions of this Agreement are
fair to and in the best interests of
the respective corporations and their
shareholders, and (ii) approved and
adopted this Agreement and the transactions
contemplated hereby; and
WHEREAS, the Board of Directors of the Company has, subject to
its
fiduciary duties under applicable law,
resolved to recommend approval of the
Merger by the shareholders of the Company;
and
WHEREAS, Associated and the Company intend to effect a merger
that
qualifies as a tax-free reorganization
under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the
"Code"); and
NOW, THEREFORE, in consideration of the foregoing and the
mutual
covenants and agreements herein contained,
and intending to be legally bound
hereby, Associated and the Company hereby
agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions
set forth in this Agreement, and in
accordance with Wisconsin Law, at the
Effective Time (as defined in Section
1.02), the Company shall be merged with
and into Associated. As a result of the
Merger, the separate corporate existence
of the Company shall cease and Associated
shall continue as the surviving
corporation of the Merger (the "Surviving
Corporation").
SECTION 1.02. Effective Time. The parties hereto shall cause the
Merger
to be consummated by filing Articles of
Merger (the "Articles of Merger") with
the Department of Financial Institutions of
the State of Wisconsin, in such form
as required by, and executed in accordance
with the relevant provisions of,
Wisconsin Law (a) after the satisfaction
or, if permissible, waiver of
conditions set forth in Article VII, and
(b) as promptly as possible within the
thirty (30) day period commencing with the
latest of the following dates:
(i)
The date of expiration of any applicable waiting period
after approval by the Board of Governors of the Federal Reserve
System
(the "Federal Reserve Board") under the Bank Holding Company Act
of
1956, as amended (the "BHCA");
(ii) Such date as may be prescribed by the Federal Reserve
Board or any other agency or authority pursuant to applicable
law,
rules, or regulations, prior to which consummation of the
transaction
described and referred to herein may not be effected;
(iii) The date of the shareholders meeting of the Company to
vote upon and approve the Merger pursuant to Section 6.02; or
(iv) If the transaction contemplated by this Agreement is
being contested in any legal proceeding and Associated or the
Company
has elected to contest the same, the date that such legal
proceeding
has been brought to a non-appealable conclusion sufficiently
favorable,
in the judgment of Associated and the Company, to permit
consummation
of the transaction contemplated hereby.
The date and time of the filing of the Articles of Merger with
the
Wisconsin Department of Financial
Institutions, or on such later date or later
time as specified in the Articles of
Merger, is hereinafter referred to as the
"Effective Time." In no event shall the
Effective Time occur prior to August 1,
2004. Notwithstanding anything herein to
the contrary, with respect to the
calendar quarter in which the Effective
Time is to occur, Associated and the
Company will cooperate not to set the
Effective Time on a date that is after the
record date for Associated's regular
quarterly dividend for such quarter, if
any, and before the record date for the
Company's regular quarterly dividend for
such quarter, if any, in order to prevent
the Company's shareholders from not
being entitled to receive either dividend
for such quarter.
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect
of the Merger shall be as provided in the
applicable provisions of Wisconsin
Law. Without limiting the generality of the
foregoing, and subject thereto, at
the Effective Time, except as otherwise
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provided herein, all the property, rights,
privileges, powers, and franchises of
Associated and the Company shall vest in
the Surviving Corporation, and all
debts, liabilities, and duties of
Associated and the Company shall become the
debts, liabilities, and duties of the
Surviving Corporation.
SECTION 1.04. Articles of Incorporation and Bylaws. At the
Effective
Time, the Articles of Incorporation and the
Bylaws of Associated, as in effect
immediately prior to the Effective Time,
shall be the Articles of Incorporation
and the Bylaws of the Surviving
Corporation.
SECTION 1.05. Directors and Officers. The directors of
Associated
immediately prior to the Effective Time,
together with one (1) independent
director (as defined by The NASDAQ Stock
Market ("NASDAQ")) of the Company
(selected by the nominating committee of
the Board of Directors of Associated)
who will be designated a Class B Director
with a term expiring at the annual
meeting of Associated's shareholders in
2006 and Jack C. Rusch who will be
designated a Class C Director with a term
expiring at the annual meeting of
Associated's shareholders in 2007, shall be
the initial directors of the
Surviving Corporation, each to hold office
in accordance with the Articles of
Incorporation and Bylaws of the Surviving
Corporation, and the officers of
Associated immediately prior to the
Effective Time shall be the initial officers
of the Surviving Corporation, in each case
until their respective successors are
duly elected or appointed and
qualified.
SECTION 1.06. Conversion of Securities. At the Effective Time,
by
virtue of the Merger and without any action
on the part of Associated, the
Company, or the holders of any of the
following securities:
(a) each share of common stock, par value $0.10 per share, of
the Company (the "Company Common Stock")
(all issued and outstanding shares of
the Company Common Stock being hereinafter
collectively referred to as "Shares")
issued and outstanding immediately prior to
the Effective Time (other than any
Shares to be canceled pursuant to Section
1.06(b)) shall, at the election of the
holder of each Share, (i) be converted, in
accordance with Section 1.07, into
the right to receive 0.635 (such ratio, as
it may be adjusted pursuant to the
terms of this Agreement, the "Exchange
Ratio") shares of common stock, par value
$0.01 per share, of Associated ("Associated
Common Stock") or (ii) be converted
into the right to receive Cash
Consideration (as defined below); provided,
however, that ten percent (10%) of the
Company Common Stock to be converted
pursuant to the Merger shall consist of the
aggregate of (i) the Company Common
Stock that will be converted to Cash
Consideration, and (ii) the Company Common
Stock that will be converted into the right
to receive cash in lieu of
Fractional Shares (as defined in Section
1.07(f)) if any pursuant to Section
1.07(f). Cash Consideration shall be the
amount of cash equal to the product
obtained by multiplying the Exchange Ratio
by the Associated Common Stock
closing price on the date of the Effective
Time. As of the Effective Time, all
such Shares shall no longer be outstanding
and shall automatically be canceled
and retired and shall cease to exist, and
each Certificate (as defined in
Section 1.07(c)) shall thereafter represent
the right to receive a certificate
representing shares of Associated Common
Stock into which such Shares are
convertible and/or Cash Consideration.
Certificates shall be exchanged for
certificates representing whole shares of
Associated Common Stock issued in
consideration therefor and/or for Cash
Consideration and cash in lieu of
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Fractional Shares (if any) upon the
surrender of such Certificates in accordance
with the provisions of Section 1.07,
without interest. No Fractional Shares (if
any) shall be issued, and, in lieu thereof,
a cash payment shall be made
pursuant to Section 1.07(f) hereof. Under
no circumstances shall the total
Shares converted to Cash Consideration and
Shares converted to the right to
receive cash in lieu of Fractional Shares
(if any) represent more or less than
ten percent (10%) of the Company Common
Stock to be converted pursuant to the
Merger.
(b) each share of Company Common Stock held in the treasury of
the Company and each Share owned by
Associated or any direct or indirect wholly
owned Associated Subsidiaries (as defined
in Section 3.01) immediately prior to
the Effective Time shall be canceled and
extinguished without any conversion
thereof and no payment shall be made with
respect thereto.
(c) (i) Each Election Form (as defined in Section 1.07(b))
shall permit the holder of Shares (or the
beneficial owner through appropriate
and customary documentation and
instructions), other than Shares to be cancelled
in accordance with Section 1.06(b), to (A)
elect to receive Associated Common
Stock with respect to all or a portion of
such holder's Shares (a "Stock
Election") and/or (B) elect to receive cash
with respect to all or a portion of
such holder's Company Common Stock (a "Cash
Election"). Shares as to which a
Stock Election is made are referred to
herein as "Stock Election Shares," and
Shares as to which a Cash Election is made
are referred to herein as "Cash
Election Shares." Any Shares with respect
to which the holder (or the beneficial
owner, as the case may be) shall not have
submitted to the Exchange Agent an
effective, properly completed Election Form
on or before 5:00 P.M., Central
Time, on the business day that is two
business days prior to the Effective Time
(the "Election Deadline") shall be deemed
to be Stock Election Shares. Any such
election shall have been properly made only
if the Exchange Agent shall have
actually received a properly completed
Election Form by the Election Deadline.
Any Election Form may be revoked or changed
by the person submitting such
Election Form prior to the Election
Deadline. Subject to the terms of this
Agreement and of the Election Form, the
Exchange Agent shall have reasonable
discretion to determine whether any
election, revocation or change has been
properly or timely made and to disregard
immaterial defects in the Election
Forms, and any good faith decisions of the
Exchange Agent regarding such matters
shall be binding and conclusive. None of
Associated, the Company and the
Exchange Agent shall be under any
obligation to notify any person of any defect
in an Election Form.
(ii) If the number of Cash Election Shares is, when
considered together with the number of
shares of Company Common Stock to be
converted into cash to be paid in lieu of
Fractional Shares, equal to more or
less than ten percent (10%) of the total
Shares, Associated and the Company will
reduce or increase the number of Cash
Election Shares by the number necessary to
cause the Cash Election Shares to equal ten
percent (10%) of the total Shares.
If there is an excess of Cash Election
Shares, the number of Cash Election
Shares which may not be so converted into
Cash Consideration shall be converted
into Stock Election Shares and exchanged
for Associated Common Stock in
accordance with Section 1.06(a), with the
reduction in Cash Election Shares to
be made pro rata among the shareholders of
the Company making Cash Elections
based upon the number of Shares for which
each such shareholder has made a Cash
Election. If there is a deficiency of Cash
Election Shares, the number of Stock
Election Shares which may not be so
converted into shares of Associated Common
Stock, shall
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be converted into Cash Election Shares and
exchanged for Cash Consideration in
accordance with Section 1.06(a), with the
reduction in Stock Election Shares to
be made pro rata among the shareholders of
the Company making Stock Elections
based on the number of shares for which
each such shareholder has made a Stock
Election.
SECTION 1.07. Exchange
of Certificates.
(a) Exchange Agent. As of the Effective Time, Associated shall
deposit, or shall cause to be deposited,
with an exchange agent designated by
Associated and acceptable to the Company
(the "Exchange Agent"), and such
deposit shall be solely for the benefit of
the holders of Shares, for exchange
in accordance with this Article I through
the Exchange Agent, Cash
Consideration, certificates representing
the shares of Associated Common Stock
and cash to be paid in lieu of Fractional
Shares (if any) (such Cash
Consideration, certificates for shares of
Associated Common Stock and cash in
lieu of Fractional Shares (if any),
together with any dividends or distributions
with respect thereto, being hereinafter
referred to as the "Exchange Fund")
payable or issuable pursuant to Sections
1.06 or 1.07(f) (if any) in exchange
for Shares.
(b) Election Forms.At least fourteen (14) days prior to the
Effective Time, the Exchange Agent shall
mail or personally deliver to each
holder of record of Shares (or his or her
attorney in fact) forms mutually
agreeable to Associated and the Company for
the exercise of elections as
described in Section 1.06(c) ("Election
Forms").
(c) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, but in no event
later than three (3) business days
after the Effective Time, the Exchange
Agent shall mail or personally deliver to
each holder of record (or his or her
attorney-in-fact) of a certificate or
certificates which immediately prior to the
Effective Time represented Shares
(the "Certificates"), whose Shares were
converted into the right to receive Cash
Consideration and/or shares of Associated
Common Stock pursuant to Section 1.06
and cash in lieu of Fractional Shares (if
any), (i) a letter of transmittal
(which shall specify that delivery shall be
effected, and risk of loss and title
to the Certificates shall pass, only upon
delivery of the Certificates to the
Exchange Agent (or a lost certificate
affidavit in a form reasonably acceptable
to the Exchange Agent) and shall be in such
form and have such other provisions
as Associated may reasonably specify), and
(ii) instructions for use in
effecting the surrender of the Certificates
in exchange for certificates
representing shares of Associated Common
Stock and/or Cash Consideration and
cash in lieu of Fractional Shares (if any).
The foregoing letter of transmittal
and instructions shall be subject to prior
approval of the Company. At the
Effective Time and upon surrender of a
Certificate for cancellation to the
Exchange Agent, together with such letter
of transmittal, duly executed, the
holder of such Certificate shall be
entitled to receive in exchange therefor
Cash Consideration and/or a certificate
representing that number of whole shares
of Associated Common Stock which such
holder has the right and cash in lieu of
Fractional Shares (if any), and the
Certificate so surrendered shall forthwith
be canceled and Cash Consideration and/or
certificate representing shares of
Associated Common Stock and the cash in
lieu of Fractional Shares (if any) shall
be sent as promptly as practicable to such
holder. In the event of a transfer of
ownership of Shares which is not registered
in the transfer records of the
Company, Cash Consideration and/or a
certificate representing the proper number
of shares of Associated Common Stock and
the cash in lieu of Fractional Shares
(if any) may be issued to a transferee if
the Certificate representing such
Shares is presented to the Exchange
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Agent, accompanied by all documents
required to evidence and effect such
transfer and by evidence that any
applicable stock transfer taxes have been
paid. The Exchange Agent shall make
reasonable efforts to make available
additional letters of transmittal and
instructions to all such persons who
become holders (or beneficial owners) of
Company Common Stock. Certificates
surrendered for exchange by any affiliate
of the Company shall not be exchanged
for certificates representing shares of
Associated Common Stock and/or Cash
Consideration and cash in lieu of
Fractional Shares (if any) until Associated
has received a written agreement from such
person as provided in Section 4.04
hereof. Until surrendered as contemplated
by this Section 1.07, each Certificate
shall be deemed at any time after the
Effective Time to represent only the right
to receive upon such surrender the
certificate representing shares of Associated
Common Stock and/or Cash Consideration and
cash in lieu of Fractional Shares (if
any) as contemplated by Section
1.07(f).
(d)
Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared
or made after the Effective Time with
respect to Associated Common Stock with a
record date after the Effective Time
shall be paid to the holder of any
unsurrendered Certificate with respect to the
shares of Associated Common Stock
represented thereby, and no Cash Consideration
or cash payment in lieu of Fractional
Shares (if any) shall be paid to any such
holder pursuant to Section 1.07(f), until
the holder of such Certificate shall
surrender such Certificate. All dividends
or other distributions declared on or
after the Effective Time with respect to
Associated Common Stock and payable to
the holder of record thereof on or after
the Effective Time that are payable to
the holder of a Certificate not theretofore
surrendered and exchanged for
Associated Common Stock pursuant to this
Section 1.07(d) shall be paid or
delivered by Associated to the Exchange
Agent, in trust, for the benefit of such
holders. All such dividends and
distributions held by the Exchange Agent for
payment or delivery to the holders of
unsurrendered Certificates unclaimed on
the date of termination of the Exchange
Fund pursuant to Section 1.07(g) shall
be repaid or redelivered by the Exchange
Agent to Associated. Subject to the
effect of applicable laws, following
surrender of any such Certificate, there
shall be paid to the holder of the
certificates representing whole shares of
Associated Common Stock issued in exchange
therefor, without interest, (i)
promptly, the amount of any cash payable
with respect to a Fractional Share (if
any) to which such holder is entitled
pursuant to Section 1.07(f) and the amount
of dividends or other distributions with a
record date after the Effective Time
theretofore paid with respect to such whole
shares of Associated Common Stock,
and (ii) at the appropriate payment date,
the amount of dividends or other
distributions, with a record date after the
Effective Time but prior to
surrender and a payment date occurring
after surrender, payable with respect to
such whole shares of Associated Common
Stock.
(e) No Further Rights
in the Shares. All Cash Consideration
and shares of Associated Common Stock
issued upon conversion of the Shares in
accordance with the terms hereof (including
any cash paid pursuant to Section
1.07(f)) shall be deemed to have been
issued in full satisfaction of all rights
pertaining to such Shares.
(f) No Fractional
Shares. No certificates or scrip
representing fractional shares of
Associated Common Stock ("Fractional Shares")
shall be issued upon the surrender for
exchange of Certificates, and such
Fractional Share interest will not entitle
the owner thereof to vote or to any
rights of a shareholder of Associated. Each
holder of a Fractional Share
interest shall be paid an amount in cash
equal to the product obtained by
multiplying such Fractional
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Share interest to which such holder (after
taking into account all Fractional
Share interests then held by such holder)
would otherwise be entitled by the
Associated Common Stock closing price on
the date of the Effective Time.
(g) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the
shareholders of the Company for one year
after the Effective Time shall be delivered
to Associated, upon demand, and any
shareholders of the Company who have not
theretofore complied with this Article
I shall thereafter look only to Associated
for payment of their claim for Cash
Consideration, Associated Common Stock, any
cash in lieu of Fractional Shares
(if any), and any dividends or
distributions with respect to Associated Common
Stock.
(h) No Liability. Neither Associated nor the Company shall be
liable to any holder of Shares for any such
Shares (or dividends or
distributions with respect thereto) or cash
delivered to a public official
pursuant to any abandoned property,
escheat, or similar law.
(i) Withholding Rights. Associated shall be entitled to deduct
and withhold from any cash consideration
payable pursuant to this Agreement to
any holder of Shares or any holder of
Company Stock Options pursuant to Section
1.10 such amounts as Associated is required
by law to deduct and withhold with
respect to the making of such payment under
the Code, or any provision of state,
local, or foreign tax law. To the extent
that amounts are so withheld by
Associated, such withheld amounts shall be
treated for all purposes of this
Agreement as having been paid to the holder
of the Shares or Company Stock
Options, as applicable, in respect of which
such deduction and withholding was
made by Associated.
SECTION 1.08. Stock Transfer Books. At the Effective Time, the
stock
transfer books of the Company shall be
closed and there shall be no further
registration of transfers of shares of
Company Common Stock thereafter on the
records of the Company. From and after the
Effective Time, the holders of
certificates evidencing ownership of Shares
of the Company Common Stock
outstanding immediately prior to the
Effective Time shall cease to have any
rights with respect to such Shares except
as otherwise provided herein or by
law. On or after the Effective Time, any
Certificates presented to the Exchange
Agent or Associated for any reason shall be
converted into Cash Consideration
and/or shares of Associated Common Stock in
accordance with this Article I.
SECTION 1.09. Anti-Dilution Adjustment. If, subsequent to the
date
hereof and prior to the Effective Time,
Associated shall pay a stock dividend or
make a distribution on Associated Common
Stock in shares of Associated Common
Stock or any security convertible into
Associated Common Stock or shall combine
or subdivide its stock, then in each such
case, from and after the record date
for determining the shareholders entitled
to receive such dividend or
distribution or the securities resulting
from such combination or subdivision,
an appropriate adjustment (if any) shall be
made to the Exchange Ratio set forth
in Section 1.06 above, for purposes of
determining the number of shares of
Associated Common Stock into which the
Company Common Stock shall be converted.
For purposes hereof, the payment of a
dividend in Associated Common Stock, or
the distribution on Associated Common Stock
in securities convertible into
Associated Common Stock, shall be deemed to
have effected an increase in the
number of outstanding shares of Associated
Common Stock equal to the number of
shares of Associated Common Stock into
which such securities shall be initially
convertible without the
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<PAGE>
payment by the holder thereof of any
consideration other than the surrender for
cancellation of such convertible
securities. Notwithstanding the foregoing, this
Section shall not apply to any stock
options, warrants, restricted stock sale,
or performance stock issued under option
plans of Associated existing as of the
date of this Agreement.
SECTION 1.10. Treatment of Company Stock Options. All rights under
any
option to purchase shares of Company Common
Stock that remains outstanding and
unexercised, whether vested or unvested,
immediately prior to the Effective Time
(the "Company Stock Options") shall become
null and void and cease to represent
a right to acquire shares of Company Common
Stock as of the Effective Time and
shall at the option of the holder be either
(i) converted into options (the "New
Options") to purchase that number of shares
of Associated equal to (a) the
number of shares of Company Common Stock
subject to the Company Stock Option
immediately prior to the Effective Time,
multiplied by (b) the Exchange Ratio
(rounding Fractional Shares down to the
nearest whole share), or (ii) converted
to the right to receive cash in an amount
(less any applicable withholding tax)
equal to the number of shares of Company
Common Stock subject to the Company
Stock Option multiplied by the amount by
which the Exchange Ratio times the
Associated Common Stock closing price on
the date of the Effective Time exceeds
the exercise price for such Company Stock
Option; provided, however that Company
Stock Options issued after April 1, 2004
shall be converted to a right to
receive cash pursuant to (ii) of the first
clause of this sentence with no
option to convert to New Options pursuant
to (i) of the first clause of this
sentence. The exercise price per share of
Associated Common Stock under each
converted New Option shall be equal to the
exercise price per share of Company
Common Stock which was purchasable under
the Company Stock Option that such New
Option replaces divided by the Exchange
Ratio (rounded down to the nearest whole
cent). Each option which is an "incentive
stock option" as defined in Section
422 of the Code shall be adjusted as
required by Section 424 of the Code and the
regulations promulgated thereunder so as
not to constitute a modification,
extension, or renewal of the option within
the meaning of Section 424(h) of the
Code. The duration and vesting of each such
New Option shall be the same as the
original Company Stock Option it replaces,
except to the extent vesting may be
accelerated under the terms of the
applicable Company stock option plan by
reason of the transactions contemplated by
this Agreement. At or before the
Effective Time, the Company shall cause to
be effected any amendments to any
plans, grant agreements, or other documents
relating to any of the Company Stock
Options which may be necessary in order to
give effect to the provisions of this
Section 1.10 and, if necessary, will use
reasonable efforts to obtain the
consent of any holder of Company Stock
Options necessary to effect any such
amendments.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Associated that:
SECTION 2.01. Organization and Qualification of the Company, Bank,
and
the Company Subsidiaries. The Company is a
corporation duly organized and
validly existing under the laws of the
State of Wisconsin. The Bank is a duly
organized and validly existing federally
chartered savings bank headquartered in
La Crosse, Wisconsin, and a wholly owned
subsidiary of the Company. First Cap
Holdings, Inc. ("FCHI") is a duly organized
and validly existing Nevada
8
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corporation and wholly owned subsidiary of
the Bank. First Reinsurance, Inc.
("FRI") is a duly organized and validly
existing Arizona corporation and a
wholly owned subsidiary of the Bank. First
Enterprises, Inc. ("FEI") is a duly
organized and validly existing Wisconsin
corporation and wholly owned subsidiary
of the Bank. FF Mortgage Reinsurance, Inc.
("FFMRI") is a duly organized and
validly existing Vermont corporation and
wholly owned subsidiary of FEI. Turtle
Creek Corporation ("TCC") is a duly
organized and validly existing Wisconsin
corporation and wholly owned subsidiary of
the Bank. Except as set forth in the
Company Disclosure Schedule at Section
2.01, the Bank, FCHI, FRI, FEI, FFMRI,
and TCC are the only direct or indirect
subsidiaries of the Company. The Company
and the Company Subsidiaries each have the
requisite corporate power and
authority and are in possession of all
franchises, grants, authorizations,
licenses, permits, easements, consents,
certificates, approvals, and orders
("Company Approvals") necessary to own,
lease, and operate their respective
properties and to carry on their respective
business as they are now being
conducted, except where the failure to be
so organized, existing, or in good
standing or to have such power, authority,
and Company Approvals would not,
individually or in the aggregate, have a
Material Adverse Effect (as defined
below) on the Company and the Company
Subsidiaries when taken as a whole. The
term "Material Adverse Effect" as used in
this Agreement shall mean any change
or effect that is or is reasonably likely
to be materially adverse to the
business, operations, properties (including
intangible properties), condition
(financial or otherwise), prospects,
assets, or liabilities (including
contingent liabilities) of a party and its
subsidiaries, taken as a whole, or
which would prevent or materially delay
consummation of the Merger or otherwise
prevent such party performing its
obligations under this Agreement and shall be
deemed to include, without limitation, (a)
with respect to the Company or any
Company Subsidiary any changes or effects
that result in, or are reasonably
likely to result in (within the period
beginning with the Effective Time and
ending twelve (12) months therefrom), a
cost, expense, or liability (including
contingent liability), individually or in
the aggregate, in an amount of $7.5
million or greater on the Company and the
Company Subsidiaries, when taken as a
whole, or an effect, individually or in the
aggregate, of $4.0 million or more
on the Company's consolidated earnings on
an after-tax basis and (b) with
respect to Associated or any Associated
Subsidiary any changes or effects that
result in, or are reasonably likely to
result in (within the period beginning
with the Effective Time and ending twelve
(12) months therefrom), a cost,
expense, or liability (including contingent
liability, individually or in the
aggregate, in an amount of $60 million or
greater on Associated and the
Associated Subsidiaries, when taken as a
whole, or an effect, individually or in
the aggregate, of $35 million or more on
Associated's consolidated earnings on
an after-tax basis; provided, however, that
no assessment or proposed assessment
by the Wisconsin Department of Revenue
relating to the income or reallocation to
a party of income from a Nevada entity
shall be considered a Material Adverse
Effect or included in the computation of
any Material Adverse Effect unless,
with respect to the Company or any Company
Subsidiary, the Company breaches its
obligations pursuant to Section 4.01(o) or
4.02(o); and provided further,
however, that no changes or events relating
to the mortgage servicing revenue
allowance of a party shall be considered a
Material Adverse Effect or included
in the computation of any Material Adverse
Effect as long as such allowance has
been and will continue to be determined in
accordance with GAAP (as defined in
Section 2.07(b) below). The Company has not
received any notice of proceedings
relating to the revocation or adverse
modification, or proceeding with respect
to any Company Approvals. The Company and
each of the Company Subsidiaries are
duly qualified or licensed as a foreign
corporation to do business, and are in
good standing, in each jurisdiction where
the character of the properties owned,
leased, or operated by them or the
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<PAGE>
nature of their activities makes such
qualification or licensing necessary,
except for such failures to be so duly
qualified or licensed and in good
standing that would not have a Material
Adverse Effect on the Company. The
Company is registered with the Office of
Thrift Supervision ("OTS") as a savings
and loan holding company under the Home
Owner's Loan Act (the "HOLA"). Except as
set forth in the Disclosure Schedule of the
Company attached hereto (the
"Company Disclosure Schedule") at Section
2.01, the Company does not hold any
interest, either directly or indirectly, in
any other entity except the Company
Subsidiaries. Except as set forth in the
Company Disclosure Schedule at Section
2.01, the Bank holds no interest, either
directly or indirectly, in any other
entity except for FCHI, FRI, FEI, FFMRI,
and TCC.
SECTION 2.02. Articles of Incorporation and Bylaws. The Company
has
heretofore furnished to Associated complete
and correct copies of the Articles
of Incorporation and the Bylaws, as amended
or restated, of the Company and each
of the Company Subsidiaries and such
Articles of Incorporation and Bylaws of the
Company and each of the Company
Subsidiaries are in full force and effect and
neither the Company nor any of the Company
Subsidiaries is in violation of any
of the provisions of its Articles of
Incorporation or Bylaws.
SECTION 2.03. Capitalization.
(a) Capitalization of the Company. The authorized capital
stock of the Company consists of
100,000,000 shares of Company Common Stock and
5,000,000 shares of preferred stock, par
value $0.10 per share ("Company
Preferred Stock"). As of the date of this
Agreement, (i) 22,487,868 shares of
Company Common Stock are issued and
outstanding (net of treasury), all of which
are duly authorized, validly issued, fully
paid, and non-assessable, except as
provided in Section 180.0622(2)(b) of
Wisconsin Law (such section, including
judicial interpretations thereof and
Section 180.40(6), its predecessor statute,
are referred to herein as "Section
180.0622(2)(b) of Wisconsin Law"), (ii) 3,552
shares of Company Common Stock are held in
the Company's treasury, and (iii) no
shares of Company Preferred Stock are
issued and outstanding. Except as set
forth at Section 2.03 of the Company
Disclosure Schedule, as of the date of this
Agreement, there are no options, warrants,
or other rights, agreements,
arrangements, or commitments of any
character relating to the issued or unissued
capital stock of the Company or obligating
the Company to issue or sell any
shares of capital stock of, or other equity
interests in, the Company. Except as
set forth at Section 2.03 of the Company
Disclosure Schedule, there are no
obligations, contingent or otherwise, of
the Company or the Company Subsidiaries
to repurchase, redeem, or otherwise acquire
any shares of the capital stock of
the Company or to provide funds to or make
any investment (in the form of a
loan, capital contribution, or otherwise)
in any other entity.
(b) Capitalization of the Bank. The authorized capital stock
of the Bank consists of 1,000,000 shares of
common stock, par value $0.10 per
share ("Bank Common Stock"). As of the date
of this Agreement, (i) 1,000,000
shares of Bank Common Stock are issued and
outstanding, all of which are duly
authorized, validly issued, fully paid and
non-assessable, and (ii) the Company
owns all of the issued and outstanding Bank
Common Stock. As of the date of this
Agreement, there are no options, warrants,
or other rights, agreements,
arrangements, or commitments of any
character, relating to the issued or
unissued Bank Common Stock or obligating
the Bank to issue or sell any shares of
Bank Common Stock, or other equity
interests in the Bank. There are no
obligations, contingent or otherwise, of
the
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<PAGE>
Company or the Company Subsidiaries to
repurchase, redeem, or otherwise acquire
any shares of the Bank's Common Stock or to
provide funds to or make any
investment (in the form of a loan, capital
contribution, or otherwise) in any
other entity.
(c) Capitalization of FCHI. The authorized capital stock of
FCHI consists of 25,000 shares of common
stock, no par value per share ("FCHI
Common Stock"). As of the date of this
Agreement, (i) 1,000 shares of FCHI
Common Stock are issued and outstanding,
all of which are duly authorized,
validly issued, fully paid and
non-assessable, and (ii) the Bank owns all issued
and outstanding FCHI Common Stock. As of
the date of this Agreement, there are
no options, warrants, or other rights,
agreements, arrangements, or commitments
of any character, other than as set forth
at Section 2.03 of the Company
Disclosure Schedule, relating to the issued
or unissued FCHI Common Stock or
obligating FCHI to issue or sell any shares
of FCHI Common Stock, or other
equity interests in FCHI. There are no
obligations, contingent or otherwise, of
the Bank to repurchase, redeem, or
otherwise acquire any shares of FCHI Common
Stock or to provide funds to or make any
investment (in the form of a loan,
capital contribution, or otherwise) in any
other entity.
(d) Capitalization of FRI. The authorized capital stock of FRI
consists of 10,000,000 shares of common
stock, par value $1.00 per share ("FRI
Common Stock"). As of the date of this
Agreement, (i) 100,000 shares of FRI
Common Stock are issued and outstanding,
all of which are duly authorized,
validly issued, fully paid and
non-assessable, and (ii) the Bank owns all issued
and outstanding FRI Common Stock. As of the
date of this Agreement, there are no
options, warrants, or other rights,
agreements, arrangements, or commitments of
any character, other than as set forth at
Section 2.03 of the Company Disclosure
Schedule, relating to the issued or
unissued FRI Common Stock or obligating FRI
to issue or sell any shares of FRI Common
Stock, or other equity interests in
FRI. There are no obligations, contingent
or otherwise, of the Company or the
Company Subsidiaries to repurchase, redeem,
or otherwise acquire any shares of
FRI Common Stock or to provide funds to or
make any investment (in the form of a
loan, capital contribution, or otherwise)
in any other entity.
(e) Capitalization of FEI. The authorized capital stock of FEI
consists of 15,000 shares of common stock,
par value $100.00 per share ("FEI
Common Stock"). As of the date of this
Agreement, (i) 15,000 shares of FEI
Common Stock are issued and outstanding,
all of which are duly authorized,
validly issued, fully paid and
non-assessable, except as provided in Section
180.0622(2)(b) of Wisconsin Law, and (ii)
the Bank owns all issued and
outstanding FEI Common Stock. As of the
date of this Agreement, there are no
options, warrants, or other rights,
agreements, arrangements, or commitments of
any character, other than as set forth at
Section 2.03 of the Company Disclosure
Schedule, relating to the issued or
unissued FEI Common Stock or obligating FEI
to issue or sell any shares of FEI Common
Stock, or other equity interests in
FEI. There are no obligations, contingent
or otherwise, of the Company or the
Company Subsidiaries to repurchase, redeem,
or otherwise acquire any shares of
FEI Common Stock or to provide funds to or
make any investment (in the form of a
loan, capital contribution, or otherwise)
in any other entity.
(f) Capitalization of FFMRI. The authorized capital stock of
FFMRI consists of 100,000 shares of common
stock, no par value per share ("FFMRI
Common Stock"). As of the date of this
Agreement, (i) 100 shares of FFMRI Common
Stock are issued and outstanding,
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<PAGE>
all of which are duly authorized, validly
issued, fully paid and non-assessable,
and (ii) FEI owns all issued and
outstanding FFMRI's Common Stock. As of the
date of this Agreement, there are no
options, warrants, or other rights,
agreements, arrangements, or commitments of
any character, other than as set
forth at Section 2.03 of the Company
Disclosure Schedule, relating to the issued
or unissued FFMRI Common Stock or
obligating FFMRI to issue or sell any shares
of FFMRI Common Stock, or other equity
interests in FFMRI. There are no
obligations, contingent or otherwise, of
the Company or the Company Subsidiaries
to repurchase, redeem, or otherwise acquire
any shares of FFMRI Common Stock or
to provide funds to or make any investment
(in the form of a loan, capital
contribution, or otherwise) in any other
entity.
(g) Capitalization of TCC. The authorized capital stock of TCC
consists of 9,000 shares of common stock,
par value $1.00 per share ("TCC Common
Stock"). As of the date of this Agreement,
(i) 500 shares of TCC Common Stock
are issued and outstanding, all of which
are duly authorized, validly issued,
fully paid and non-assessable, except as
provided in Section 180.0622(2)(b) of
Wisconsin Law, and (ii) the Bank owns all
issued and outstanding TCC Common
Stock. As of the date of this Agreement,
there are no options, warrants, or
other rights, agreements, arrangements, or
commitments of any character, other
than as set forth at Section 2.03 of the
Company Disclosure Schedule, relating
to the issued or unissued TCC Common Stock
or obligating TCC to issue or sell
any shares of TCC Common Stock, or other
equity interests in TCC. There are no
obligations, contingent or otherwise, of
the Company or the Company Subsidiaries
to repurchase, redeem, or otherwise acquire
any shares of TCC Common Stock or to
provide funds to or make any investment (in
the form of a loan, capital
contribution, or otherwise) in any other
entity.
SECTION 2.04. Authority. The Company has the requisite corporate
power
and authority to execute and deliver this
Agreement, to perform its obligations
hereunder, and to consummate the
transactions contemplated hereby. The execution
and delivery of this Agreement by the
Company and the consummation by the
Company of the transactions contemplated
hereby have been duly and validly
authorized by all necessary corporate
action and no other corporate proceedings
on the part of the Company are necessary to
authorize this Agreement or to
consummate the transactions contemplated
hereby other than, with respect to the
Merger, the approval of this Agreement by
the Company's shareholders in
accordance with Wisconsin Law and the
Company's Articles of Incorporation and
Bylaws. The Company's Board of Directors
has unanimously approved and adopted
this Agreement and the transactions
contemplated by this Agreement and
unanimously recommended that the Company's
shareholders approve this Agreement
and the Merger. This Agreement has been
duly and validly executed and delivered
by the Company and, assuming the due
authorization, execution, and delivery by
Associated, constitutes the legal, valid,
and binding obligation of the Company
enforceable against the Company in
accordance with its terms.
SECTION 2.05. No
Conflict; Required Filings and Consents.
(a) Except as set forth at Section 2.05 of the Company
Disclosure Schedule, the execution and
delivery of this Agreement by the Company
does not, and the performance of this
Agreement by the Company shall not, (i)
conflict with or violate the Articles of
Incorporation or Bylaws of the Company
or any of the Company Subsidiaries, (ii)
conflict with or violate any domestic
(federal, state, or local) or foreign law,
statute, ordinance, rule,
12
<PAGE>
regulation, order, judgment, or decree
(collectively, "Laws") applicable to the
Company or any of the Company Subsidiaries,
or by which their respective
properties are bound or affected, or (iii)
result in any breach of or constitute
a default (or an event that with notice or
lapse of time or both would become a
default) under, or give to others any
rights of termination, amendment,
acceleration, or cancellation of, or result
in the creation of a lien or
encumbrance on, any of the properties or
assets of the Company or any of the
Company Subsidiaries pursuant to any note,
bond, mortgage, indenture, contract,
agreement, lease, license, permit,
franchise, or other instrument or obligation
to which the Company or any of the Company
Subsidiaries are a party or by which
the Company or any of the Company
Subsidiaries or any of their respective
properties are bound or affected, except
for any such breaches, defaults, or
other occurrences that would not have a
Material Adverse Effect on the Company.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance of
this Agreement by the Company will not,
require, with respect to the Company, any
consent, approval, authorization, or
permit of, or filing with or notification
to, any governmental or regulatory
authority, domestic or foreign, or any
other person except (i) for applicable
requirements, if any, of the Securities Act
of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"),
state securities or blue sky laws ("Blue
Sky Laws"), the BHCA, the HOLA, the
banking laws and regulations of the State
of Wisconsin (the "BL"), any
applicable antitrust authorities, and the
filing and recordation of appropriate
merger or other documents as required by
Wisconsin Law and federal banking laws,
or (ii) where the failure to obtain such
consents, approvals, authorizations, or
permits, or to make such filings or
notifications would not have a Material
Adverse Effect on the Company.
SECTION 2.06. Compliance; Permits. Neither the Company nor any of
the
Company Subsidiaries is in conflict with,
or in default or violation (except for
any such conflicts, defaults, or violations
which would not have a Material
Adverse Effect on the Company) of (a) any
Law applicable to the Company or any
of the Company Subsidiaries or by which any
of their respective properties are
bound or affected, or (b) any note, bond,
mortgage, indenture, contract,
agreement, lease, license, permit,
franchise, or other instrument or obligation
to which the Company or any of the Company
Subsidiaries is a party or by which
the Company or any of the Company
Subsidiaries or any of their respective
properties are bound or affected.
SECTION 2.07. Banking Reports, SEC Reports, and Financial
Statements.
(a) The Company and the Company Subsidiaries have timely filed
all forms, reports, and documents required
to be filed with the Federal Reserve
Board, the Wisconsin Department of
Financial Institutions, the Federal Deposit
Insurance Corporation, the Office of Thrift
Supervision, and any other
applicable federal or state banking
authorities (all such reports and statements
are collectively referred to as the
"Company Bank Reports"). The Company Bank
Reports, including all Company Bank Reports
filed after the date of this
Agreement, (i) were or will be prepared in
accordance with the requirements of
applicable law, and (ii) did not at the
time they were filed, or will not at the
time they are filed, contain any untrue
statement of material fact or omit to
state a material fact required to be stated
therein or necessary in order to
make the statements therein, in the light
of the circumstances under which they
were made, not misleading, unless corrected
by a subsequent filing made (y)
prior to the date of this Agreement for
reports and documents filed before the
date of this Agreement and (z) by the
earlier of (A) 15
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days of the filing date of the report or
document being corrected or (B) 15 days
prior to the Effective Time, for reports
and documents filed after the date of
this Agreement.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) of
the Company and the Company
Subsidiaries contained in the Company Bank
Reports, including any Company Bank
Reports filed since the date of this
Agreement and prior to or on the Effective
Time, have been prepared in accordance with
accounting principles generally
accepted in the United States ("GAAP")
applied on a consistent basis throughout
the periods involved (except as may be
indicated in the notes thereto), and each
fairly presents the consolidated financial
position of the Company and the
Company Subsidiaries as of the respective
dates thereof and the consolidated
results of their operations and changes in
financial position for the periods
indicated, except any unaudited interim
financial statements were or are subject
to normal and recurring year-end
adjustments which were not or are not expected
to be material in amount or effect. With
respect to the Company and the Company
Subsidiaries, for purposes of this Section
2.07, any amount or effect in excess
of $1 million shall be deemed material.
(c) The Company has on a timely basis filed all forms,
reports, and documents required to be filed
by it with the Securities and
Exchange Commission ("SEC") since January
1, 2001. The Company Disclosure
Schedule at Section 2.07(c) lists and
(except to the extent available in full
without redaction on the SEC's web site
through the Electronic Data Gathering,
Analysis and Retrieval System ("EDGAR") two
days prior to the date of this
Agreement) the Company has delivered to
Associated true and complete copies in
the form filed with the SEC of (i) the
Company's Annual Reports on Form 10-K for
each fiscal year of the Company ending on
or after December 31, 1999; (ii) its
Quarterly Reports on Form 10-Q for each of
the first three fiscal quarters in
each of the fiscal years of the Company
referred to in clause (i) above; (iii)
all proxy statements relating to the
Company's meetings of shareholders (whether
annual or special) held, and all
information statements relating to shareholder
consents since the beginning of the first
fiscal year referred to in clause (i)
above; (iv) all certifications and
statements required by (A) Rule 13a-14 or
15d-14 under the Exchange Act or (B) 18
U.S.C. Section 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002 ("SOX")) with
respect to any report referred to in
clause (i) or (ii) above; (v) all other
forms, reports, registration statements,
and other documents (other than preliminary
materials if the corresponding
definitive materials have been provided to
Associated pursuant to this Section
2.07(c)) filed by the Company with the SEC
since the beginning of the first
fiscal year referred to in clause (i) above
(the forms, reports, registration
statements, and other documents referred to
in clauses (i), (ii), (iii), (iv),
and (v) above are, collectively, the
"Company SEC Reports" and, to the extent
available in full without redaction on the
SEC's web site through EDGAR two days
prior to the date of this Agreement, are,
collectively, the "Filed Company SEC
Reports"); and (vi) all comment letters
received by the Company from the staff
of the SEC since January 1, 2001, and all
responses to such comment letters by
or on behalf of the Company. All matters
and statements made in the
certifications and statements referred to
in clause (iv) above are accurate. The
Company SEC Reports (x) were or will be
prepared in accordance with the
requirements of the Securities Act and the
Exchange Act, as applicable, and the
rules and regulations thereunder and (y)
did not at the time they were filed
with the SEC, or will not at the time they
are filed with the SEC, contain any
untrue statement of a material fact or omit
to state a material fact required to
be stated therein or necessary in order to
make the statements made therein, in
the light of the circumstances under which
they were made, not
14
<PAGE>
misleading. No Company Subsidiary is or has
been required to file any form,
report, registration statement, or other
document with the SEC or any state
authority. The Company maintains disclosure
controls and procedures as required
by Rule 13a-15 or 15d-15 under the Exchange
Act. The Company Disclosure Schedule
at Section 2.07(c) lists, and the Company
has delivered to Associated, true and
complete copies of all written descriptions
of and all policies, manuals, and
other documents promulgating such
disclosure controls and procedures. Except as
disclosed in Filed Company SEC Reports,
each director and executive officer of
the Company has filed with the SEC on a
timely basis complete and accurate
versions of all statements required by
Section 16(a) of the Exchange Act and the
rules and regulations thereunder since
January 1, 2001. As used in this Section
2.07(c), the term "filed" shall be broadly
construed to include any manner in
which a document or information is
furnished, supplied, or otherwise made
available to the SEC, including, but not
limited to, as may be required pursuant
to Item 9 or 12 of Form 8-K.
(d) The consolidated financial statements of the Company and
the Company Subsidiaries included or
incorporated by reference in any Company
SEC Reports (including the related notes)
complied as to form, as of the
respective dates of filing of such Company
SEC Reports with the SEC, in all
material respects with applicable
accounting requirements and the rules and
regulations of the SEC with respect thereto
(including, without limitation,
Regulation S-X), have been prepared in
accordance with GAAP (except, in the case
of unaudited financial statements, to the
extent permitted by Regulation S-X for
Quarterly Reports on Form 10-Q) applied on
a consistent basis throughout the
periods involved (except as may be
indicated in the notes thereto) and fairly
present the consolidated financial
condition of the Company and the Company
Subsidiaries at the dates thereof and the
consolidated results of operations and
cash flows for the periods then ended
(subject, in the case of unaudited
statements, to notes and normal year-end
audit adjustments that were not, or
with respect to any such financial
statements contained in any Company SEC
Reports to be filed subsequent to the date
hereof are not expected to be,
material in amount or effect). The Company
Disclosure Schedule at Section
2.07(d) lists, and the Company has
delivered to Associated copies of the
documentation creating or governing, all
"off-balance sheet arrangements" (as
defined in Item 303(a)(4) of Regulation
S-K) in effect with respect to the
Company or any of the Company Subsidiaries
during any period covered by any of
the Company SEC Reports that was required
to be disclosed in any Company SEC
Report. Deloitte & Touche LLP, which
has expressed its opinion with respect to
the consolidated financial statements of
the Company and the Company
Subsidiaries included in Company SEC
Reports (including the related notes) filed
after June 30, 2003, (x) is a registered
public accounting firm (as defined in
Section 2(a)(12) of SOX), (y) to the
Company's knowledge, after reasonable
inquiry, is and has been throughout the
periods covered by such financial
statements "independent" with respect to
the Company within the meaning of
Regulation S-X, and (z) to the Company's
knowledge, after reasonable inquiry,
is, and has been throughout the periods
covered by such financial statements,
with respect to the Company, in compliance
with subsections (g) through (l) of
Section 10A of the Exchange Act. Ernst
& Young LLP, which expressed its opinion
with respect to the consolidated financial
statements of the Company and the
Company Subsidiaries included in Company
SEC Reports (including the related
notes) filed prior to June 30, 2003, (y) to
the Company's knowledge, after
reasonable inquiry, was throughout the
periods covered by such financial
statements "independent" with respect to
the Company within the meaning of
Regulation S-X, and (z) to the Company's
knowledge, after reasonable inquiry,
was throughout the periods covered by such
financial
15
<PAGE>
statements, with respect to the Company, in
compliance with subsections (g)
through (l) of Section 10A of the Exchange
Act. The Company Disclosure Schedule
at Section 2.07(d) lists all non-audit
services performed by Deloitte & Touche
LLP or Ernst & Young LLP for the
Company or any of the Company Subsidiaries
since January 1, 2003.
(e) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the
Company Subsidiaries as of December 31,
2003, including all notes thereto (the
"Company Balance Sheet"), neither the
Company nor the Company Subsidiaries has
any liabilities or obligations of any
nature (whether accrued, absolute,
contingent, or otherwise) that would be
required to be reflected on a balance
sheet, or in the notes thereto, prepared
in accordance with GAAP, except (i) for
liabilities or obligations incurred in
the ordinary course of business since
December 31, 2003, that would not have a
Material Adverse Effect on the Company, or
(ii) as otherwise reflected in the
Filed Company SEC Reports.
SECTION 2.08. Absence of Certain Changes or Events. Except as
disclosed
in the Filed Company SEC Reports, since
December 31, 2003 to the date of this
Agreement, the Company and each of the
Company Subsidiaries have conducted their
respective businesses only in the ordinary
course and in a manner consistent
with past practice and, since December 31,
2003, there has not been (a) any
change in the financial condition, results
of operations, or business of the
Company or any of the Company Subsidiaries
that would have a Material Adverse
Effect on the Company; (b) any damage,
destruction, or loss (whether or not
covered by insurance) with respect to any
assets of the Company or any of the
Company Subsidiaries that would have a
Material Adverse Effect on the Company;
(c) any change by the Company or any of the
Company Subsidiaries in their
respective accounting methods, principles,
or practices, except for compliance
with applicable new requirements of the
Financial Accounting Standards Board or
GAAP; (d) any revaluation by the Company or
any of the Company Subsidiaries of
any of their respective material assets in
any material respect; (e) except in
the ordinary course of business, any entry
by the Company or any of the Company
Subsidiaries into any commitment or
transaction material to the Company; (f)
except as set forth in the Company
Disclosure Schedule at Section 2.08(f), any
declaration, setting aside, or payment of
any dividends or distributions in
respect of shares of the Company Common
Stock or any redemption, purchase, or
other acquisition of any of its securities
or any of the securities of any of
the Company Subsidiaries; or (g) any
increase in or establishment of any bonus,
insurance, severance, deferred
compensation, pension, retirement, profit
sharing, stock option (including, without
limitation, the granting of stock
options, stock appreciation rights,
performance awards, or restricted stock
awards), stock purchase, or other employee
benefit plan, or any other increase
in compensation payable or to become
payable to any officers or key employees of
the Company or any of the Company
Subsidiaries.
SECTION 2.09. Absence of Litigation. Except as disclosed in the
Filed
Company SEC Reports or as set forth at
Section 2.09 of the Company Disclosure
Schedule with respect to any resolution or
developments: (a) neither the Company
nor any of the Company Subsidiaries is or
has been since January 1, 2001,
subject to any continuing order of, or
written agreement or memorandum of
understanding with, or investigation by,
any federal or state banking authority,
the SEC, or other governmental entity or
the Board of Directors of the Company
or any committee thereof, or any judgment,
order, writ, injunction, decree, or
award of any governmental entity or
arbitrator, including, without limitation,
cease-and-desist or other orders
16
<PAGE>
of any bank regulatory authority or the
SEC; (b) there is no claim of any kind,
action, suit, litigation, proceeding,
arbitration, investigation, or controversy
affecting the Company or any of the Company
Subsidiaries, or any officers,
directors, or employees thereof in their
capacity as such, pending or, to the
knowledge of the Company, threatened,
except for matters which individually seek
damages not in excess of $100,000 which
otherwise will not have, and cannot
reasonably be expected to have, a Material
Adverse Effect on the Company; and
(c) there are no uncured material
violations, or violations with respect to
which material refunds or restitutions may
be required, cited in any compliance
report to the Company or any of the Company
Subsidiaries as a result of the
examination by any federal or state banking
authority, the SEC, or other
governmental entity.
SECTION 2.10. Employee Benefit Plans.
(a) The
following definitions will apply for purposes of
this Agreement:
(i) ADA. Americans with Disabilities Act.
(ii) ADEA. Age Discrimination in Employment Act.
(iii) COBRA. Part 6 of Subtitle B of Title I of ERISA
and section 4980B of the Code.
(iv) Code. The Internal Revenue Code of 1986, as
amended, and the regulations, rulings, and
forms issued thereunder.
(v) DOL. The United States Department of Labor.
(vi) EGTRRA. The Economic Growth and Tax Relief
Reconciliation Act of 2001.
(vii) Employee Benefit Plan. Any Pension Plan,
Welfare Plan, or Fringe Benefit Plan,
whether written or oral and whether
qualified or non-qualified, and any trust,
escrow, or other agreement covering
any present or former directors, officers,
employees, or their respective
dependents.
(viii) ERISA. The Employee Retirement Income Security
Act of 1974, as amended, and the rules,
regulations, and forms issued
thereunder.
(ix) ERISA Affiliate. Any entity (whether or not
incorporated) which is or was, together
with the Company (for purposes of
Section 2.10) or Associated (for purposes
of Section 3.18), treated as a single
employer under section 414(b), (c), (m), or
(o) of the Code.
(x) Fringe Benefit Plans. Any fringe benefit plan
under Code sections 125, 127, 129, 132, or
137 and any bonus, incentive
compensation, restricted stock, other
stock-based incentive, salary
continuation, bonus plan,
employment-related change in control benefit, and any
other payment or benefit which is not
within the meaning of a Pension Plan or
Welfare Plan. The term "Fringe Benefit
Plan" shall also include any terminated
fringe
17
<PAGE>
benefit plan previously maintained,
sponsored, or contributed to by the Company
(for purposes of Section 2.10) or
Associated (for purposes of Section 3.18) or
any ERISA Affiliate which, as of the
signing of this Agreement, has not
distributed all of its assets or satisfied
all of its Liabilities.
(xi) GUST. Collectively, the Uruguay Round Agreements
Act ("GATT"), the Uniformed Services
Employment and Reemployment Rights Act of
1994, the Small Business Job Protection Act
of 1996, the Taxpayer Relief Act of
1997, the Internal Revenue Service
Restructuring and Reform Act of 1998 and the
Community Renewal Tax Relief Act of
2001.
(xii) HIPAA. The Health Insurance Portability and
Accountability Act of 1996.
(xiii) IRS. The United States Internal Revenue
Service.
(xiv) Liability. Any direct or indirect obligation,
indebtedness, commitment, expense, claim,
deficiency, guaranty, endorsement, or
other liability of any kind, whether known
or unknown, direct or indirect,
accrued or unaccrued, absolute or
contingent, disputed or undisputed, and
whether or not the same is required to be
accrued on financial statements.
(xv) Pension Plan. Each "employee pension benefit
plan" as defined in section 3(2) of ERISA.
The term "Pension Plan" includes an
"employee pension benefit plan" which is
subject to an exemption under ERISA.
The term "Pension Plan" shall also include
any terminated "employee pension
benefit plan" previously maintained,
sponsored, or contributed to by the Company
(for purposes of Section 2.10) or
Associated (for purposes of Section 3.18) or
an ERISA Affiliate which, as of the signing
of this Agreement, has not
distributed all of its assets in full
satisfaction of accrued benefits or
satisfied all of its Liabilities.
(xvi) Welfare Plan. Each "employee welfare plan" as
defined in ERISA section 3(1), including
medical reimbursement benefits provided
under a Fringe Benefit Plan subject to Code
section 125 and health reimbursement
arrangements. The term "Welfare Plan"
includes an "employee welfare plan" which
is subject to an exemption under ERISA. The
term "Welfare Plan" shall include
any terminated "employee welfare plan"
previously maintained, sponsored, or
contributed to by the Company (for purposes
of Section 2.10) or Associated (for
purposes of Section 3.18) or any ERISA
Affiliate which, as of the signing of
this Agreement, has not distributed all of
its assets or satisfied all of its
Liabilities.
(b) The Company Disclosure Schedule at Section 2.10 lists all
Employee Benefit Plans maintained,
sponsored, or contributed to by the Company
or any ERISA Affiliate or under which the
Company or any ERISA Affiliate has any
Liability.
(c) The Company has made available to Associated true and
complete copies of (i) each Employee
Benefit Plan and a written summary of any
Employee Benefit Plan not in writing; (ii)
the most recent opinion letter
received from the IRS with respect to any
Employee Benefit Plan; (iii) the
summary plan description, all summaries of
material modifications, employee
booklets, and all other material
communications to employees with respect to any
18
<PAGE>
Employee Benefit Plan; (iv) any service
agreement, including third-party
administration agreements or other
contracts related to each Employee Benefit
Plan; (v) the three most recent annual
reports on Form 5500 required to be filed
for each Employee Benefit Plan including
required attachments; (vi) the three
most recent actuarial reports, if
applicable; (vii) all related trust
agreements, annuity contracts, insurance
contracts, including stop-loss
insurance contracts or other funding
arrangements which relate to any Employee
Benefit Plan, and the most recent periodic
accounting of related plan assets;
(viii) a description of the investments in
which the assets of each Pension Plan
and funded Welfare Plan are invested,
including any agreements with investment
managers, agreements with investment
advisors, group annuity contracts, and a
listing of all mutual funds or other
investment vehicles; and (ix) in the case
of stock options, phantom stock, restricted
stock, stock appreciation rights, or
other equity rights issued under any
Employee Benefit Plan, a list of holders,
dates of grant, number of shares, exercise
price per share, and dates
exercisable.
(d) Each Pension Plan that is intended to be a qualified plan
under Code section 401(a) has received and
maintains a current favorable
determination letter issued by the IRS.
There are no existing circumstances or
events that have occurred that could
reasonably be expected to adversely affect
the qualified status of any such Pension
Plan. Each such qualified Pension Plan
was timely amended for all applicable
legislation, including GUST and EGTRRA,
and there are no additional amendments
necessary to maintain each such qualified
Pension Plan as a qualified plan under Code
section 401(a). Each Pension Plan
has been operated in accordance with the
applicable Pension Plan document and
the requirements of ERISA, the Code, and
applicable regulations in all respects.
There are no pending or prior applications
that have been filed on behalf of a
Pension Plan with the IRS under the
Employee Plans Compliance Resolution System
("EPCRS") that have not been fully resolved
and corrected as required by the
IRS, and the Company has provided
Associated copies of any closing agreement or
other documentation describing the
resolution of such prior EPCRS applications.
Except as set forth in Section 2.10(d) of
the Company Disclosure Schedule, none
of the Pension Plans that are intended to
be qualified retirement plans under
Code section 401(a) hold Company Common
Stock or the stock of any ERISA
Affiliates as an investment.
(e) The Company and ERISA Affiliates have maintained and
operated each Employee Benefit Plan in
compliance with the applicable plan
documents and all applicable Laws relating
to the Employee Benefit Plans
(including, without limitation, the Code,
ERISA, HIPAA, USERRA, ADEA, FMLA, and
ADA and the applicable regulations and
rulings under each of these laws), except
for any failure to comply which would not
result in liability to the Company or
any Company Subsidiary in excess of
$250,000, individually or in the aggregate.
The Company and ERISA Affiliates have
incurred no Liability to any governmental
agency in connection with any Employee
Benefit Plan.
(f) The Company or ERISA Affiliates, as applicable, have made
all contributions required to be made
pursuant to the terms of any Employee
Benefit Plan or any collective bargaining
agreement to which it is a party or as
otherwise required by applicable Law.
Amounts accrued to date as Liabilities in
connection with any Employee Benefit Plan
of the Company or any ERISA Affiliate
which have not been paid have been properly
recorded on the books of the Company
in accordance with GAAP and, if applicable,
Code section 412. With respect to
each Employee Benefit Plan, all insurance
premiums have been paid in full and on
a
19
<PAGE>
timely basis for all periods ending on or
prior to the signing of this
Agreement. No contribution made to an
Employee Benefit Plan was subject to an
excise tax under Code section 4972 that has
not been satisfied in full. All
contributions and payments by the Company
and any ERISA Affiliate in respect of
any Employee Benefit Plan have been or are
fully deductible under the Code.
(g) Except as set forth in Section 2.10(g) of the Company
Disclosure Schedule, the Company and ERISA
Affiliates do not (at this time or
any prior time) sponsor, maintain, or
contribute to any defined benefit plan or
any multi-employer plan within the meaning
of ERISA section 3(37).
(h) With respect to any insurance policy providing funding or
benefits under any Employee Benefit Plan,
(i) there is no actual or potential
Liability of the Company or ERISA
Affiliates in the nature of a retroactive or
retrospective rate adjustment, loss sharing
arrangement, or other actual or
contingent liability, nor would there be
any such liability if such insurance
policy was terminated at the signing of
this Agreement; and (ii) no insurance
company issuing any such policy is in
receivership, conservatorship,
liquidation, or similar proceeding and, to
the knowledge of the Company, no such
proceedings with respect to any insurer are
imminent. If an Employee Benefit
Plan is self-funded and the Company or an
ERISA Affiliate is party to a
stop-loss insurance policy with respect to
such Employee Benefit Plan, the
Company or ERISA Affiliate has complied
with all terms of the stop-loss policy
and has timely paid all premiums owing with
respect to such stop-loss policy
through the signing of this Agreement. The
transactions contemplated by this
Agreement will not cancel, impair, or
reduce amounts payable under any such
stop-loss insurance policy.
(i) All reports, notices, and descriptions of the Employee
Benefit Plans (including, without
limitation, Form 5500 annual reports, summary
annual reports, summary plan descriptions,
summaries of material modifications,
and employee notices) required to be filed
or distributed by the Company or any
ERISA Affiliate have been timely filed with
the IRS or the DOL, as applicable,
and, as appropriate, have been timely
provided to the participants and
beneficiaries in the Employee Benefit
Plans. Any Pension Plan which is a
retirement plan exempt from Parts 2, 3, and
4 of Subtitle B of ERISA as an
unfunded retirement plan established for a
select group of management or highly
compensated employees has timely filed the
one-time notice with the DOL required
pursuant to DOL Regulation section
2520.104-23. There are no pending or prior
applications that have been filed on behalf
of an Employee Benefit Plan with the
DOL under the Delinquent Filer Voluntary
Compliance program ("DFVC") that have
not been fully resolved and corrected as
required by the DOL, and the Company
has provided Associated copies of any
closing agreement or other documentation
describing the resolution of such prior
DFVC applications.
(j) With respect to each Employee Benefit Plan (i) no
non-exempt prohibited transaction, as
defined in ERISA section 406 or Code
section 4975, has occurred, (ii) neither
the Company, any ERISA Affiliate, nor
any of their current or former directors,
officers, employees, or any other
"fiduciary," within the meaning of ERISA
section 3(21), has committed any breach
of fiduciary responsibility imposed by
ERISA or any other applicable law, or has
any Liability for failure to comply with
ERISA or the Code for any action or
failure to act in connection with the
operation, administration, or investment
of the assets of any Employee Benefit Plan.
There is
20
<PAGE>
no pending, threatened, or anticipated
action, audit, suit, grievance,
arbitration, or other manner of litigation
or claim relating to any Employee
Benefit Plan (other than routine claims for
benefits). Neither the Company,
ERISA Affiliates, nor any of their
directors, officers, employees, or any
fiduciary of any Employee Benefit Plan has
any knowledge of any facts that could
give rise to arbitration, litigation, or
claims with respect to any Employee
Benefit Plan. Each "fiduciary" and every
"plan official" (as defined in section
412 of ERISA) of each Employee Benefit Plan
is bonded or otherwise insured to
the extent required by section 412 of
ERISA. The Company and ERISA Affiliates
are not subject to an excise tax under Code
section 4977, 4978, 4979, 4979A,
4980, 4980D, or 4980F that has not been
satisfied in full. There have been no
investigations or audits of any Employee
Benefit Plan by any governmental
authority that have been concluded that
resulted in any Liability to the Company
or ERISA Affiliates that has not been fully
discharged, and the Company has
provided Associated copies of any closing
letter, closing agreement, or other
documentation describing the resolution of
such prior audits or investigations.
(k) Following the adoption, restatement, or amendment of all
Employee Benefit Plans as provided to
Associated, the Company, ERISA Affiliates,
and any of their officers or directors have
taken no action directly or
indirectly which obligates the Company or
ERISA Affiliates to institute or
modify or change any Employee Benefit Plan,
any actuarial or other assumption
used to calculate funding obligations with
respect to any of the Company's and
ERISA Affiliate's Employee Benefit Plans,
or the manner in which contributions
to any of the Employee Benefit Plans are
made or the basis on which such
contributions are determined.
(l) No Employee Benefit Plan is funded through a "welfare
benefit fund" as defined in Code section
419(e), and neither the Company nor any
ERISA Affiliate has established or
maintained any arrangement that could be
deemed to qualify as a funded welfare plan.
The Company and ERISA Affiliates
have not incurred any liability under Code
section 4976 that has not been
satisfied in full.
(m) Except as set forth in Section 2.10(m) of the Company
Disclosure Schedule, no Employee Benefit
Plan provides medical, life, or other
welfare benefits (whether or not insured),
with respect to persons who are not
current employees of the Company or ERISA
Affiliates (other than coverage
mandated by COBRA). With respect to any
Employee Benefit Plan required to be
disclosed in Section 2.10(m) of the Company
Disclosure Schedule, the Company has
disclosed to Associated all documents
relating to the Employee Benefit Plan that
have been provided to participants.
Further, with respect to any Employee
Benefit Plan required to be disclosed in
Section 2.10(m) of the Company
Disclosure Schedule, documents relating to
the Employee Benefit Plan that have
been provided to participants have, from
the inception of the Employee Benefit
Plan to the present, informed participants
that the Company reserves the right
to terminate or amend the Employee Benefit
Plan at any time. Each Employee
Welfare Plan that is a "group health plan"
within the meaning of Code section
5000 has been operated in compliance with
the applicable plan document, COBRA,
ERISA, the administrative simplification
provisions of HIPAA, as applicable, the
secondary payor requirements of section
1862(b) of the Social Security Act, and
applicable state law requirements, except
for any failure to comply which would
not result in liability to the Company or
any Company Subsidiary in excess of
$250,000, individually or in the aggregate.
No Employee Welfare Plan or Fringe
Benefit Plan provides benefits for persons
who are not eligible for coverage
under the terms of
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<PAGE>
such plans. No claim for medical benefits
has been incurred (but not reported)
under any Employee Welfare Plan (subject to
the Company's knowledge with respect
to claims incurred after January 27, 2004)
with respect to any current or former
employee (or the spouse or dependent of
such employee) that is in excess of
$25,000. The Company's financial
statements, as of the signing of this
Agreement, will contain adequate accruals
for incurred or continuing but unpaid
claims under Employee Benefit Plans not
funded by insurance.
(n) Except as disclosed in the Company Disclosure Schedule at
Section 2.10(n), the consummation of the
transactions contemplated by this
Agreement will not (i) entitle any present
or former director, officer, or
employee of the Company or ERISA Affiliates
to severance pay, unemployment
compensation, excess parachute payments
(within the meaning of section 280G of
the Code), or any other payment; (ii)
accelerate the time of payment or vesting
of benefits under any of the Employee
Benefit Plans; or (iii) increase the
amount of compensation or benefits due
under any of the Employee Benefit Plans
with respect to any such present or former
director, officer, or employee of the
Company or any of the Company
Subsidiaries.
SECTION 2.11. Employment Contracts; Material Contracts. Except as
set
forth in the Company Disclosure Schedule at
Section 2.11 or filed as an exhibit
in the Filed Company SEC Reports, as of the
date of this Agreement, neither the
Company nor any of the Company Subsidiaries
is a party to or bound by (a) any
employment or consulting contract which
provides for a base or guaranteed annual
level of compensation in excess of $100,000
(without regard to any commissions),
(b) any contract or commitment for capital
expenditures in excess of Two-Hundred
Fifty Thousand Dollars ($250,000) for any
one (1) project, or (c) contracts or
commitments for the purchase of materials
or supplies or for the performance of
services that require the Company to make
payments in excess of Two-Hundred
Fifty Thousand Dollars ($250,000) in any
twelve-month period.
SECTION 2.12. Registration Statement; Proxy Statement. None of
the
information supplied or to be supplied by
the Company for inclusion in (a) the
Registration Statement (as defined in
Section 6.01), (b) the Proxy
Statement/Prospectus (as defined in Section
6.01), or (c) any other document to
be filed with the SEC or other regulatory
authority in connection with the
transactions contemplated hereby, at the
respective times such documents are
filed and, in the case of the Registration
Statement, when it becomes effective
and at the Effective Time, and with respect
to the Proxy Statement/Prospectus,
when mailed, shall be false or misleading
with respect to any material fact, or
omit to state any material fact necessary
in order to make the statements
therein not misleading. In the case of the
Proxy Statement/Prospectus or any
amendment thereof or supplement thereto,
none of such information at the time of
the Company's shareholders meeting pursuant
to Section 6.02 (the "Meeting")
shall be false or misleading with respect
to any material fact or omit to state
any material fact necessary to correct any
statement in any earlier
communication with respect to the
solicitation of any proxy for the Meeting. The
Company has received from Sandler O'Neill
& Partners, L.P. an opinion (the
"Fairness Opinion") to the effect that the
consideration the Company's
shareholders will receive pursuant to the
Merger is fair to the Company's
shareholders from a financial point of
view, and such Fairness Opinion, if
updated by Sandler O'Neill & Partners,
L.P. as of the date of mailing of the
Proxy Statement/Prospectus, may be included
therein.
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<PAGE>
SECTION 2.13. Title to Property. The Company Disclosure Schedule
at
Section 2.13 correctly identifies all real
property owned, leased, or used by
the Company or any of the Company
Subsidiaries. The Company and each of the
Company Subsidiaries have good and
defensible title to all of their properties
and assets, real and personal, tangible and
intangible, free and clear of all
mortgage liens, and free and clear of all
other liens, charges, and encumbrances
except liens for taxes not yet due and
payable, pledges to secure deposits,
liens as set forth in the Company
Disclosure Schedule at Section 2.13, and such
minor imperfections of title, if any, as to
not materially detract from the
value of or interfere with the present use
of the property affected thereby or
which, individually or in the aggregate,
would not have a Material Adverse
Effect on the Company and the Company
Subsidiaries, individually or when taken
as a whole. All leases pursuant to which
the Company or any of the Company
Subsidiaries lease from others real or
personal property including, without
limitation, leases for branch offices, are
in good standing, valid, effective,
binding, and enforceable in accordance with
their respective terms, and there is
not or there has not occurred, under any of
such leases, any existing material
default or event of default (or event which
with notice or lapse of time, or
both, would constitute a material default
and in respect of which the Company or
any of the Company Subsidiaries have not
taken adequate steps to prevent such a
default from occurring). The Company's and
each of the Company Subsidiaries'
buildings and equipment in regular use have
been reasonably maintained
and are in good and serviceable condition,
reasonable wear and tear excepted.
None of the buildings, structures, or
appurtenances owned or leased by the
Company or any of the Company Subsidiaries
for their operation or maintenance as
now operated or maintained, contravenes any
zoning ordinances or other
administrative regulations (whether or not
permitted because of prior
non-conforming use), or violates any
restrictive covenant or any provision of
Law, the effect of which would materially
interfere with or prevent the
continued use of such properties for the
purposes for which they are now being
used or would materially and adversely
affect the value thereof.
SECTION 2.14. Compliance with Environmental Laws.
(a) The term "Company's Property" shall mean any real property
and improvements currently owned, leased,
used, operated, or occupied by the
Company or any of the Company Subsidiaries.
The term "Company's Property" shall
also include any real property or
improvements acquired by foreclosure, property
which the Bank has a present right to
acquire upon foreclosure and which are
owned by customers of the Bank who have
received written notification of default
and for which the Company or any Company
Subsidiary has obtained an
environmental evaluation or report, and
properties held or operated in a
fiduciary or managerial capacity.
(b) The term "Environmental Claims" shall mean any and all
administrative, regulatory, or judicial
actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or
violation, investigations, or
proceedings relating in any way to any
applicable Environmental Law or
Environmental Permit.
(c) The term
"Environmental Laws" shall mean all federal,
state, and local Laws including statutes,
regulations, and other governmental
restrictions and requirements relating to
the discharge of air pollutants, water
pollutants, or process wastewater or the
disposal
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of solid or hazardous waste or otherwise
relating to the environment or
hazardous substances or employee health and
safety.
(d) The term "Environmental Permits" shall mean all permits,
approvals, identification numbers,
licenses, and other authorizations required
under any applicable Environmental Law.
(e) The term "Hazardous Substances" shall mean all hazardous
and toxic substances, wastes, and
materials; any pollutants or contaminants
(including, without limitation, petroleum
products, asbestos, and raw materials,
which include hazardous constituents); and
any other similar substances or
materials which are regulated under
applicable Environmental Laws.
(f) To the Company's Knowledge, the Environmental Permits (if
any) are in full force and effect and
constitute all permits, licenses,
approvals, and consents relating to
Environmental Laws or Hazardous Substances
required for the conduct of the Company's
and each of the Company Subsidiaries'
respective businesses and the use of the
Company's Property (as presently
conducted and used) in compliance with
applicable Environmental Laws.
(g) The Company and each of the Company Subsidiaries have
filed all reports, returns, and other
filings required to be filed with respect
to the Company's Property under
Environmental Laws and the Environmental Permits
except where the failure to do so would not
have a Material Adverse Effect on
the Company. Except as set forth at Section
2.14(g) of the Company Disclosure
Schedule, neither the Company nor any of
the Company Subsidiaries has made any
environmental filings after December 31,
2003.
(h) To the Company's knowledge, the business of the Company
and each of the Company Subsidiaries and
the Company's Property have been and
are being operated in accordance with all
applicable Environmental Laws and
Environmental Permits. Neither the Company
nor any of the Company Subsidiaries
has received any written notice nor does
the Company or any of the Company
Subsidiaries have knowledge that any of the
Company's Property is not in
material compliance with all Environmental
Laws and Environmental Permits and no
proceeding for the suspension, revocation,
or cancellation of any Environmental
Permit is pending or, to the knowledge of
the Company, threatened.
(i) There are no actions pending, or to the knowledge of the
Company, threatened against the Company or
any of the Company Subsidiaries which
in any case assert or allege (i) the
Company or any of the Company Subsidiaries
violated any Environmental Law or
Environmental Permit or is in default with
respect to any Environmental Permit or any
order, writ, judgment, variance,
award, or decree of any government
authority issued under any Environmental Law;
(ii) the Company or any of the Company
Subsidiaries is required to clean up or
take remedial or other response action due
to the disposal, discharge, or other
release of any Hazardous Substance on the
Company's Property or elsewhere; or
(iii) the Company or any of the Company
Subsidiaries are required to contribute
to the cost of any past, present, or future
cleanup or remedial or other
response action which arises out of or is
related to the disposal, discharge, or
other release of any Hazardous Substance by
the Company, the Company
Subsidiaries, or others. None of the
Company, any of the Company Subsidiaries,
or any of the
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Company's Property is subject to any
judgment, stipulation, order,
