AGREEMENT AND PLAN OF MERGER

BETWEEN

ASSOCIATED BANC-CORP

AND

STATE FINANCIAL SERVICES CORPORATION

March 21, 2005

TABLE OF CONTENTS

ARTICLE I

THE MERGER

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF ASSOCIATED

ARTICLE IV

COVENANTS OF THE COMPANY

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ARTICLE V

COVENANTS OF ASSOCIATED

ARTICLE VI

ADDITIONAL AGREEMENTS

ARTICLE VII

CONDITIONS OF MERGER

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

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ARTICLE IX

GENERAL PROVISIONS

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AGREEMENT AND PLAN OF MERGER

        AGREEMENT AND PLAN OF MERGER, dated as of March 21, 2005 (the “Agreement”), between ASSOCIATED BANC-CORP, a Wisconsin corporation (“Associated”), and STATE FINANCIAL SERVICES CORPORATION, a Wisconsin corporation (the “Company”).

W I T N E S S E T H:

        WHEREAS, the Company is a bank holding company, the wholly owned subsidiary of which is State Financial Bank, National Association (the “Bank”), and the Bank has wholly owned subsidiaries consisting of Hales Corners Development Corporation (“HCDC”), Hales Corners Investment Corporation (“HCIC”) and State Financial Funding Corporation (“SFFC”), and SFFC has wholly owned subsidiaries consisting of State Financial Real Estate Investment Corporation (“SFREIC”) and Lokken, Chesnut & Cape Incorporated (“LCCI”) and a majority owned subsidiary, m2 Lease Funds LLC (“M2”) (such subsidiaries collectively with the Bank or any other direct or indirect subsidiary of the Company are collectively 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 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 reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).

        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:

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 following the latest of the following dates:

        The date and time of the filing of the Articles of Merger with the Wisconsin Department of Financial Institutions, or such later date or later time as specified in such filing, is hereinafter referred to as the “Effective Time.”

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        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 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 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”, which term, as the context requires, shall be deemed to include the Preferred Share Purchase Rights (the “Rights”) issued under the terms of the Company Rights Agreement (as defined in Section 2.05(c)) issued and outstanding immediately prior to the Effective Time (other than any Shares to be canceled pursuant to Section 1.06(b)) shall be converted, in accordance with Section 1.07, into the right to receive 1.20 (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”). As of the Effective Time, all 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(b)) shall thereafter represent the right to receive a certificate representing shares of Associated Common Stock into which such Shares are convertible and any cash payment in lieu of Fractional Shares (as defined in Section 1.07(e)). Certificates shall be exchanged for certificates representing whole shares of Associated Common Stock issued in consideration therefor and cash in lieu of 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(e) hereof.

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            (b)        Each share of Company Common Stock held in the treasury of the Company and each Share owned by Associated for its own account or any direct or indirect wholly owned Associated Subsidiaries (as defined in Section 3.01) for their own respective accounts immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof and no payment shall be made with respect thereto.

        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, certificates representing the shares of Associated Common Stock and cash to be paid in lieu of Fractional Shares (if any) (such 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(e) (if any) in exchange for Shares.

            (b)        Exchange Procedures. As soon as reasonably practicable after the Effective Time (but in no event later than 10 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 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 an affidavit of lost certificate in a form reasonably acceptable to the Exchange Agent and, if reasonably required by the Exchange Agent, the posting of a bond, in such amount as the Exchange Agent may require, as indemnity against any claim made against it with respect to such lost certificate) 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 cash in lieu of Fractional Shares (if any). The foregoing letter of transmittal and instructions shall be subject to prior approval of the Company, which approval shall not be unreasonably withheld. 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 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), (after taking into account all Shares then held by such holder) and the Certificate so surrendered shall forthwith be canceled and a 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, 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 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 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 cash in lieu of Fractional Shares (if any) as contemplated by Section 1.07(e).

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            (c)        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 payment in lieu of Fractional Shares (if any) shall be paid to any such holder pursuant to Section 1.07(e), 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(c) 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(f) 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(e) 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.

            (d)        No Further Rights in the Shares. All 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(e)) shall be deemed to have been issued in full satisfaction of all rights pertaining to such Shares.

            (e)        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 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 Average Price (as defined in Section 8.01(a)(xiv).

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            (f)        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 Associated Common Stock, any cash in lieu of Fractional Shares (if any), and any dividends or distributions with respect to Associated Common Stock.

            (g)        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.

            (h)        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 shares of Associated Common Stock and if applicable cash 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 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.

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        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 be converted into the right to receive cash in an amount equal to the product of (i) the number of shares of Company Common Stock subject to the Company Stock Option multiplied by (ii) the amount by which the Exchange Ratio multiplied by Associated Average Price (as defined in Section 8.01(a)(xiv)) exceeds the exercise price for such Company Stock Option (the aggregate amount of such payments, the “Company Option Payments”). 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. To the extent reasonably requested, the Company shall provide to Associated not less than five business days prior to the Effective Time, copies of an agreement in the form of Exhibit 1.10 attached hereto (the “Option Conversion Agreement”), duly executed by each of the holders of the Company Stock Options acknowledging their agreement and consent to the terms of such conversion set forth in this Section 1.10.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company hereby represents and warrants to Associated that:

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        SECTION 2.01. Organization and Qualification of the Company, the Bank and the Other 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 nationally chartered bank headquartered in Milwaukee, Wisconsin, and a wholly owned subsidiary of the Company. HCDC is a duly organized and validly existing Wisconsin corporation and wholly owned subsidiary of the Bank. HCIC is a duly organized and validly existing Nevada corporation and a wholly owned subsidiary of the Bank. SFFC is a duly organized and validly existing Nevada corporation and wholly owned subsidiary of the Bank. SFREIC is a duly organized and validly existing Wisconsin corporation and wholly owned subsidiary of SFFC. LCCI is a duly organized and validly existing Minnesota corporation and wholly owned subsidiary of the Company. M2 is a duly organized and validly existing Wisconsin limited liability company and majority owned subsidiary of the Company. The Bank, HCDC, HCIC, SFFC, SFREIC, LCCI and M2 are the only direct or indirect subsidiaries of the Company. The Company and the Company Subsidiaries each has the requisite corporate power and authority and is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals, and orders (“Company Approvals”) necessary to own, lease, and operate its respective properties and to carry on its respective business as it is 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. 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 in any material respect and shall be deemed to include, without limitation, (a) with respect to the Company or any of the Company Subsidiaries, 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 $6.0 million or greater on the Company and the Company Subsidiaries, when taken as a whole, or an effect, individually or in the aggregate, of $3.0 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 $60.0 million or greater on Associated and the Associated Subsidiaries, when taken as a whole, or an effect, individually or in the aggregate, of $35.0 million or more on Associated’s consolidated earnings on an after-tax basis; provided, however, that Material Adverse Effect shall not be deemed to include the impact of (a) actions contemplated by this Agreement; (b) changes in laws and regulations or interpretations thereof that are generally applicable to the banking or savings industries, provided that such changes do not affect the party and its subsidiaries in a materially disproportionate manner; (c) changes in generally accepted accounting principles that are generally applicable to the banking and savings industries, provided that such changes do not affect the party and its subsidiaries in a materially disproportionate manner; and (d) changes attributable to or resulting from changes in general economic conditions affecting banks, savings institutions or their holding companies generally, including changes in the prevailing level of interest rates, provided that such changes do not affect the party and its subsidiaries in a materially disproportionate manner. 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 the Company Subsidiaries each is 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 nature of its 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 Federal Reserve Board as a Bank Holding Company as defined under the Bank Holding Company Act. 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 equity interest, either directly or indirectly, in any entity except the Bank, HCDC, HCIC, SFFC, SFREIC, LCCI and M2. Except as set forth in the Company Disclosure Schedule at Section 2.01, the Bank holds no equity interest, either directly or indirectly, in any entity except HCDC, HCIC, SFFC and SFREIC.

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        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 the Company Subsidiaries and such Articles of Incorporation and Bylaws of the Company and 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 . The authorized capital stock of the Company consists of 25,000,000 shares of Company Common Stock, par value $0.10 per share and 100,000 shares of Preferred Stock, par value $1.00 per share (the “Company Preferred Stock”), of which 100,000 shares have been designated as Class A Preferred Stock. As of the date of this Agreement, (i) 6,922,626 shares of Company 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 (such section, including judicial interpretations thereof and Section 180.40(6) its predecessor statute, are referred to herein as “Section 180.622(2)(b) of Wisconsin Law”), (ii) 2,722,840 shares of Company Common Stock are held in the Company’s treasury, and (iii) no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of capital stock or other equity interests of each of the Company Subsidiaries are duly authorized, validly issued, fully paid and non-assessable (except, as to Wisconsin corporations, as provided in Section 180.0622(2)(b) of Wisconsin Law), and, except as set forth at Section 2.03 of the Company Disclosure Schedule, the Company owns (beneficially and of record), either directly or through a wholly owned Company Subsidiary, all issued and outstanding shares of capital stock or other equity interests of each of the Company Subsidiaries. Except as set forth at Section 2.03 of the Company Disclosure Schedule, there are no options, warrants, or other rights, agreements, arrangements, or commitments of any character relating to the issued or unissued capital stock or other equity securities of the Company or any Company Subsidiary or obligating the Company or any Company Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Company Subsidiary. Except as set forth at Section 2.03 of the Company Disclosure Schedule, there are no obligations, contingent or otherwise, of the Company or any Company Subsidiary to repurchase, redeem, or otherwise acquire any shares of the capital stock or other equity securities of the Company or any Company Subsidiary 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 (other than, with respect to the Merger, the approval and adoption of this Agreement by the Company’s shareholders). 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 by the unanimous vote of all directors present at a properly called meeting of the Board of Directors on March 21, 2005 approved and adopted this Agreement and the transactions contemplated by this Agreement and by the unanimous vote of all directors present at a properly called meeting of the Board of Directors on March 21, 2005 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, except as enforcement may be limited by laws affecting insured depository institutions, general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency or similar laws affecting creditors’ rights and remedies generally.

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        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, 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 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.

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            (c)        The Company has taken all actions necessary or appropriate so that the execution of this Agreement and any agreements contemplated by this Agreement and the consummation of the transactions contemplated by this Agreement (individually or in conjunction with any other event contemplated by this Agreement), do not and will not result in the ability of any person to exercise any Rights under the Rights Agreement, dated as of July 27, 1999, between the Company and American Stock Transfer & Trust Company, as Rights Agent thereunder (the “Company Rights Agreement”), or enable or require the Rights to separate from the shares of Company Common Stock to which they are attached or to become exercisable or redeemable. The Company has duly adopted an amendment to the Company Rights Agreement substantially in the form attached hereto as Exhibit 2.05 which prevents Associated from becoming an “Acquiring Person” (as such term is defined in the Company Rights Agreement) as a result of the execution of this Agreement or any agreements contemplated by this Agreement or the consummation of the transactions contemplated by this Agreement (individually or in conjunction with any other event contemplated by this Agreement).

        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)        Since January 1, 2003, the Company and the Company Subsidiaries have timely filed all forms, reports, and documents required to be filed with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Wisconsin Department of Financial Institutions, the Federal Deposit Insurance Corporation, 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, were or will be prepared in all material respects in accordance with the requirements of applicable Law.

            (b)        Each of the consolidated financial statements (including, in each case, any related notes thereto) of the Company 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 or will be 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 except for the inclusion of footnotes in quarterly reports), and each fairly presents or will fairly present 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 that 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.

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            (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, 2003. 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, 2003; (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. § 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, 2003, and all responses to such comment letters by or on behalf of the Company. The Company SEC Reports (x) were or will be prepared in all material respects 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 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 securities authority. The Company maintains disclosure controls and procedures as required by Rule 13a-15 or 15d-15 under the Exchange Act. 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 2.02 or 7.01 of Form 8-K.

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            (d)        The consolidated financial statements of the Company 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). Ernst & Young LLP, which has expressed its opinions with respect to the consolidated financial statements of the Company and the Company Subsidiaries included in Company SEC Reports (including the related notes), management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, (x) is a registered public accounting firm (as defined in Section 2(a)(12) of SOX), (y) to the Company’s knowledge, 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, 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. All non-audit services performed by Ernst & Young LLP for the Company or any of the Company Subsidiaries since January 1, 2003 have been duly approved by the Audit Committee of the Company’s Board of Directors, or pursuant to pre-approval procedures established by the Audit Committee, in compliance with SOX and the rules and regulations thereunder.

            (e)        Except as and to the extent set forth on the consolidated balance sheet of the Company as of December 31, 2004 or fully reserved against thereon, including all notes thereto (the “Company Balance Sheet”), neither the Company nor any of the Company Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent, or otherwise required to be disclosed in accordance with GAAP), except (i) for liabilities or obligations incurred in the ordinary course of business since December 31, 2004, that would not have a Material Adverse Effect on the Company or (ii) liabilities or obligations (for which the stated due date has not passed and which do not relate to any breach or violation of the terms thereof by the Company or any of the Company Subsidiaries) pursuant to operating contracts or leases entered into in the ordinary course of business that would not have a Material Adverse Effect on the Company.

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        SECTION 2.08. Absence of Certain Changes or Events . Except as disclosed in the Filed Company SEC Reports since December 31, 2004, to the date of this Agreement, the Company and 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, 2004, 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 or as set forth in the Company Disclosure Schedule at Section 2.08(e), any entry by the Company or any of the Company Subsidiaries into any commitment or transaction material to the Company or any of the Company Subsidiaries; (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 (other than regular, quarterly cash dividends paid thereon not in excess of $0.17 per share) 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) except as set forth in the Company Disclosure Schedule at Section 2.08(g) other than in the ordinary course of business for employees other than officers of the Company, 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 employees of the Company or any of the Company Subsidiaries.

        SECTION 2.09. Absence of Litigation . Except as set forth at Section 2.09 of the Company Disclosure Schedule or in the Filed Company SEC Reports: (a) neither the Company nor any of the Company Subsidiaries is or has been since January 1, 2003, subject to any continuing order of, or written agreement or memorandum of understanding with, or investigation by, any federal or state banking authority, 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 of any bank regulatory authority, which may result in a material limit or material restriction on the business or operations of the Company or any Company Subsidiary or otherwise have, or reasonably be expected to have, a Material Adverse Effect on the Company; (b) there is no claim, action, suit, litigation, proceeding, arbitration, investigation, or controversy of any kind 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 in writing, 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 an examination by any bank regulatory authority.

        SECTION 2.10. Employee Benefit Plans .

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            (a)        The following definitions will apply for purposes of this Agreement:

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            (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 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.

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            (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 all material respects 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. Except as disclosed in the Company Disclosure Schedule at Section 2.10(d), neither the Company nor any of the Company Subsidiaries has paid any compensation for which a deduction has been or would be disallowed under Section 162(m) of the Code.

            (e)        The Company and any ERISA Affiliate 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 of the Company Subsidiaries in excess of $100,000, individually or in the aggregate. The Company and any ERISA Affiliate have incurred no Liability to any governmental agency in connection with any Employee Benefit Plan.

            (f)        The Company or any ERISA Affiliate, 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 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.

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            (g)        Except as set forth in Section 2.10(g) of the Company Disclosure Schedule, neither the Company nor any ERISA Affiliate (at this time or any prior time) sponsors, maintains, or contributes 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 any ERISA Affiliate 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 any ERISA Affiliate is party to a stop-loss insurance policy with respect to such Employee Benefit Plan, the Company or any such 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, nor 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 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, any ERISA Affiliate, nor any of their directors, officers, employees, nor 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. Neither the Company nor any ERISA Affiliate is 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 any ERISA Affiliate 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.

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            (k)        Following the adoption, restatement, or amendment of all Employee Benefit Plans as provided to Associated, the Company, any ERISA Affiliate, and any of their officers or directors have taken no action directly or indirectly which obligates the Company or any ERISA Affiliate 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 any 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)        Except as set forth in the Company Disclosure Schedule at Section 2.10(1), 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. Neither the Company nor any ERISA Affiliate 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 any ERISA Affiliate (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 material 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 of the Company Subsidiaries in excess of $100,000, 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 such plans. To the Company’s knowledge, no claim for medical benefits has been incurred (but not reported) under any Employee Welfare Plan 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’ Financial Statements contain adequate accruals for incurred or continuing but unpaid claims under Employee Benefit Plans not funded by insurance.

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            (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 any ERISA Affiliate to severance pay, unemployment compensation, excess parachute payments (within the meaning of Section 280G of the Code), the payment of any amount for which a deduction will be disallowed pursuant to Section 162(m) 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.

            (o)        The Company Disclosure Schedule at Section 2.10(o) lists all Employee Benefit Plans that may be subject to Code Section 409A. No steps have been taken with respect to any such Employee Benefit Plan that result in a “material modification” (as that term is defined in IRS Notice 2005-1) after October 3, 2004. Execution of this Agreement will not result in the material modification of any such Employee Benefit Plan. With respect to all amounts accrued or deferred under such Employee Benefit Plans to which Code Section 409A applies, the plans have been maintained in good faith compliance with Code Section 409A and IRS Notice 2005-1.

        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 to any of 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 $50,000 (without regard to any commissions), (b) any contract or commitment for capital expenditures in excess of $100,000 for any one 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 $100,000 in any twelve-month period.

        SECTION 2.12. Registration Statement; Proxy Statement/Prospectus . None of the information supplied or to be supplied by the Company in writing 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 required 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 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 required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. 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 “Company Shareholders 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 Company Shareholders Meeting. The Company has received from Sandler O’Neill & Partners, L.P. an opinion (the “Fairness Opinion”) to the effect that the Exchange Ratio in the Merger is fair to the Company’s shareholders from a financial point of view, and such Fairness Opinion, (or, if updated by Sandler O’Neill & Partners, L.P. as of the date of mailing of the Proxy Statement/Prospectus, such updated opinion) may be included in the Proxy Statement/Prospectus.

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        SECTION 2.13. Title to Property . The Company and the Company Subsidiaries have good and marketable title to all of their respective 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 and which, individually or in the aggregate, would not have a Material Adverse Effect on the Company. All leases pursuant to which the Company or any of the Company Subsidiaries lease from others material real or personal property including, without limitation, leases for branch offices, are valid and effective, and, to the Company’s knowledge, 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 the Company Subsidiaries’ material 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 material 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 report or evaluation, and properties currently held or operated by the Company or any of the Company Subsidiaries in a managerial capacity.

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            (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 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)        The Environmental Permits (if any) of the Company or any of the Company Subsidiaries are in full force and effect and constitute all material permits, licenses, approvals, and consents relating to Environmental Laws or Hazardous Substances required for the conduct of the Company’s and the Company Subsidiaries’ respective businesses and the use of the Company’s Property (as presently conducted and used) in compliance in all material respects with applicable Environmental Laws.

                (g)        The Company and 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, 2004 but before the date of this Agreement.

            (h)        The business of the Company and the Company Subsidiaries and, to the knowledge of the Company, the Company’s Property are being operated in all material respects 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 in writing.

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            (i)        There are no material actions pending, or to the knowledge of the Company, threatened in writing 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, any of the Company Subsidiaries, or others. None of the Company, any of the Company Subsidiaries, or any of the Company’s Property is subject to any judgment, stipulation, order, decree, or agreement arising under Environmental Laws.

            (j)        With respect to the Company’s Property, (i) no Hazardous Substances have been treated, recycled, or disposed of by the Company or any of the Company Subsidiaries (intentionally or unintentionally) on, under, or at the Company’s Property; (ii) there has been no release or threatened release by the Company or any of the Company Subsidiaries of any Hazardous Substance on or from the Company’s Property; and (iii) there have been no activities on the Company’s Property which would subject Associated, any of the Associated Subsidiaries, or any subsequent occupier of the Company’s Property to material damages, penalties, injunctive relief, or cleanup costs under any Environmental Laws or common law theory of liability.

        SECTION 2.15. Absence of Agreements . Neither the Company nor any of the Company Subsidiaries is a party to any written agreement or memorandum of understanding with, or a party to any commitment letter or similar undertaking, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter which restricts materially the conduct of its business (including any contract containing covenants which limit the ability of the Company or any of the Company Subsidiaries to compete in any line of business or with any person or which involve any restriction of the geographical area in which, or method by which the Company or any of the Company Subsidiaries may carry on their business) or in any manner relates to their capital adequacy, credit policies, or management, nor has the Company or any of the Company Subsidiaries been advised that any federal, state, or governmental agency is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter, or similar submission.

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        SECTION 2.16. Taxes . The Company and the Company Subsidiaries have timely filed all Tax Returns (as defined below) required to be filed by them, and the Company and the Company Subsidiaries have timely paid and discharged all Taxes (as defined below) due in connection with or with respect to the filing of such Tax Returns and have timely paid all other Taxes as are due, except such as are being contested in good faith by appropriate proceedings and with respect to which the Company is maintaining reserves as required by GAAP. The liability for Taxes set forth on each such Tax Return adequately reflects the Taxes required to be reflected on such Tax Return. For purposes of this Agreement, “Tax” or “Taxes” shall mean taxes, charges, fees, levies, and other governmental assessments and impositions of any kind, payable to any federal, state, local, or foreign governmental entity or taxing authority or agency, including, without limitation, (a) income, franchise, profits, gross receipts, estimated, ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, disability, employment, social security, workers compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer, and gains taxes; (b) customs, duties, imposts, charges, levies, or other similar assessments of any kind; and (c) interest, penalties, and additions to tax imposed with respect thereto; and “Tax Returns” shall mean returns, reports, and information statements with respect to Taxes required to be filed with the United States Internal Revenue Service (the “IRS”) or any other governmental entity or taxing authority or agency, domestic or foreign, including, without limitation, consolidated, combined, and unitary tax returns. For purposes of this Section 2.16, references to the Company and the Company Subsidiaries include former subsidiaries of the Company for the periods during which any such entities were owned, directly or indirectly, by the Company. Other than as listed at Section 2.16 of the Company Disclosure Schedule, neither the IRS nor any other governmental entity or taxing authority or agency is now asserting, either through audits, administrative proceedings, court proceedings, or otherwise, or, to the knowledge of the Company, threatening to assert against the Company or any of the Company Subsidiaries, any deficiency or claim for additional Taxes. Other than as listed at Section 2.16 of the Company Disclosure Schedule, neither the Company nor any of the Company Subsidiaries has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax for which such extension or waiver has not expired. There are no tax liens on any assets of the Company or any of the Company Subsidiaries other than for Taxes not yet due and payable. Other than as listed at Section 2.16 of the Company Disclosure Schedule, neither the Company nor any of the Company Subsidiaries has received a ruling or entered into an agreement with the IRS or any other governmental entity or taxing authority or agency that would have a Material Adverse Effect on the Company after the Effective Time. The accruals