AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
THIS AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
(hereinafter referred to as the "AGREEMENT") is made and entered
into this 6th day of August, 1999, by and among Camco Financial
Corporation, a Delaware corporation (hereinafter referred to as
"CAMCO"); Westwood Homestead Financial Corporation, an Indiana
corporation (hereinafter referred to as "WHFC"), and The
Westwood Homestead Savings Bank, a savings bank organized under
Chapter 1161 of the laws of the State of Ohio (hereinafter
referred to as the "BANK");
WITNESSETH:
WHEREAS, the authorized capital of CAMCO consists of
8,900,000 shares of common stock, par value One Dollar ($1.00)
per share (hereinafter referred to as the "CAMCO SHARES"),
5,720,888 of which are issued and outstanding, 369,521 of which
are reserved for issuance upon the exercise of outstanding stock
options and 100,000 preferred shares, par value One Dollar
($1.00) per share, none of which is issued or outstanding;
WHEREAS, the authorized capital of WHFC consists of
15,000,000 common shares, par value One Cent ($0.01) per share,
2,168,818 of which are issued and outstanding and held of record
by approximately 425 shareholders (hereinafter referred to as
the "WHFC SHARES"), and 279,192 of which are reserved for
issuance upon the exercise of outstanding stock options
(hereinafter referred to as the "WHFC OPTIONS"), and 1,000,000
preferred shares, par value One Cent ($0.01) per share, none of
which is issued or outstanding;
WHEREAS, the authorized capital of the BANK consists
of 5,000,000 common shares, par value One Dollar ($1.00) per
share, 100,000 of which are issued and outstanding and are owned
of record by WHFC;
WHEREAS, the Boards of Directors of CAMCO, WHFC and
the BANK believe that the merger of WHFC with and into CAMCO is
in the best interest of each party and its respective
shareholders; and
WHEREAS, as a condition and inducement to CAMCO's
willingness to enter into the AGREEMENT: (i) WHFC is
concurrently entering into a stock option agreement with CAMCO
(the "WHFC STOCK OPTION AGREEMENT") in substantially the form
attached hereto as Exhibit "A", pursuant to which WHFC is
granting to CAMCO the option to purchase WHFC SHARES under
certain circumstances, and (ii) certain shareholders of WHFC are
concurrently entering into a shareholder agreement with CAMCO
(the "WHFC SHAREHOLDER AGREEMENT") in substantially the form
attached hereto as Exhibit "B", pursuant to which, among other
things, such shareholders will agree to vote their WHFC SHARES
in favor of this AGREEMENT and the transactions contemplated
hereby;
NOW THEREFORE, in consideration of the premises and
the mutual covenants and agreements hereinafter set forth,
CAMCO, WHFC and the BANK, each intending to be legally bound,
hereby agree as follows:
ARTICLE ONE
THE MERGER
SECTION 1.01. MERGER; SURVIVING CORPORATION.
Subject to the terms and conditions of this AGREEMENT, and
pursuant to the provisions of the Delaware General Corporation
Law (hereinafter referred to as the "DGCL"), the Indiana
Business Corporation Law (hereinafter referred to as the
"IBCL"), and applicable federal laws and regulations, WHFC shall
merge with and into CAMCO (hereinafter referred to as the
"MERGER") at the EFFECTIVE TIME (hereinafter defined). CAMCO
shall be the continuing, surviving and resulting corporation in
the MERGER and shall continue to exist as a Delaware
corporation. CAMCO shall be the only one of CAMCO and WHFC to
continue its separate corporate existence after the EFFECTIVE
TIME. The name of the continuing, surviving and resulting
corporation shall remain "Camco Financial Corporation". From
and after the MERGER, CAMCO, as the surviving corporation, shall
possess all assets and property of every description, and every
interest in the assets and property, wherever located, and the
rights, privileges, immunities, powers, franchises and
authority, of a public as well as a private nature, of CAMCO and
WHFC and all obligations belonging or due to each of them.
SECTION 1.02. CLOSING. (a) The closing of the
MERGER pursuant to this AGREEMENT (hereinafter referred to as
the "CLOSING") shall take place at a date and time agreed to by
CAMCO and WHFC as soon as practicable after the satisfaction or
waiver of the last of the conditions to the MERGER set forth in
Article Seven of this AGREEMENT, but in no event prior to
January 2, 2000.
(b) On the day of the CLOSING, CAMCO and WHFC
shall cause Certificates of Merger in respect of the MERGER to
be filed in the Office of the Delaware Secretary of State and
the Office of the Indiana Secretary of State. The MERGER shall
become effective at the latest to occur of the time (i) the
Delaware Certificate of merger is filed with the Delaware
Secretary of State, (ii) the Indiana Certificate of Merger is
filed with the Indiana Secretary of State or (iii) the date and
time indicated on such filings (hereinafter referred to as the
"EFFECTIVE TIME").
SECTION 1.03. ADOPTION BY SHAREHOLDERS. (a)
This AGREEMENT shall be submitted for consideration and adoption
by the shareholders of WHFC and CAMCO entitled to vote at an
annual meeting of shareholders or a special meeting of
shareholders called for such purpose to be held at a time, date
and place to be determined by the Board of Directors of WHFC and
CAMCO, respectively, subject to applicable laws and regulations.
(b) This AGREEMENT shall be considered and adopted
by WHFC, as the sole shareholder of the BANK.
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SECTION 1.04. REGULATORY FILINGS. (a) CAMCO
shall prepare and cause to be filed with the Office of Thrift
Supervision (hereinafter referred to as the "OTS"), and the
Superintendent of the Division of Financial Institutions of the
Ohio Department of Commerce (hereinafter referred to as the
"DIVISION") such applications, notices or other instruments as
may be required for approval of the MERGER (hereinafter referred
to collectively as the "REGULATORY APPLICATIONS"). WHFC and the
BANK shall have the right to review and approve in advance all
characterizations of the information relating to WHFC or the
BANK, as the case may be, which appear in any REGULATORY
APPLICATION. In addition, CAMCO shall furnish to WHFC for
review a copy of each REGULATORY APPLICATION prior to its
filing.
(b) CAMCO shall prepare and cause to be filed with
the Securities and Exchange Commission (hereinafter referred to
as the "SEC") a registration statement on Form S-4, or such
other form as may be required by the SEC (hereinafter referred
to as the "REGISTRATION STATEMENT"), to register under the
Securities Act of 1933 the CAMCO SHARES to be issued to
shareholders of WHFC in the MERGER as provided in Section 2.01
of this AGREEMENT and shall use all reasonable efforts to have
the REGISTRATION STATEMENT, as amended, declared effective by
the SEC as promptly as possible. CAMCO shall provide copies of
the REGISTRATION STATEMENT and all amendments to WHFC upon
filing, keep WHFC reasonably informed as to the status of the
REGISTRATION STATEMENT and provide WHFC with copies of all
responses from the SEC. CAMCO shall also use its best efforts
to obtain all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the transactions
contemplated by this AGREEMENT, and WHFC shall furnish all
information concerning WHFC as may be reasonably requested in
connection with any such action.
(c) CAMCO and WHFC shall prepare a joint proxy
statement (the "JOINT PROXY STATEMENT") for use in connection
with the CAMCO and the WHFC shareholder meetings. The parties
hereto shall provide each other with any information concerning
itself that the other party may reasonably request in connection
with the JOINT PROXY STATEMENT and CAMCO shall notify WHFC
promptly of the receipt of any comments from the SEC with
respect to the JOINT PROXY STATEMENT and any requests by the SEC
for any amendment or supplement thereto for additional
information and shall provide to WHFC promptly copies of all
correspondence between CAMCO or any of its representatives and
the SEC. CAMCO shall give WHFC and its counsel the opportunity
to review and comment on the JOINT PROXY STATEMENT prior to its
being filed with the SEC and shall give WHFC and its counsel the
opportunity to review and comment on all amendments and
supplements to the JOINT PROXY STATEMENT and all responses to
requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of
WHFC and CAMCO agrees to use all reasonable efforts, after
consultation with the other party hereto, to respond promptly to
all such comments of and requests by the SEC and to cause the
JOINT PROXY STATEMENT and all required amendments and
supplements thereto to be mailed to the respective stockholders
of WHFC and CAMCO at the earliest practicable time.
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(d) The BANK shall coordinate with CAMCO the
BANK's filing of an application with the OTS pursuant to 12
U.S.C. 1467(a)(L) (the "10-L Election") for election to be
deemed a savings association for purposes of Section 12 U.S.C.
1467(a), such application to be effective concurrently with the
EFFECTIVE TIME.
(e) WHFC shall take all steps necessary to de-
register as a bank holding company under the Bank Holding
Company Act, such de-registration to be effective concurrently
with the EFFECTIVE TIME.
SECTION 1.05. CERTIFICATE OF INCORPORATION AND
BYLAWS OF CAMCO AS THE SURVIVING CORPORATION. The Certificate
of Incorporation and Bylaws of Camco Financial Corporation, as
in effect immediately prior to the EFFECTIVE TIME, shall be the
Certificate of Incorporation and Bylaws of the surviving
corporation of the MERGER, until either is thereafter amended in
accordance with applicable law.
ARTICLE TWO
CONVERSION AND CANCELLATION OF WHFC SHARES
SECTION 2.01. CONVERSION AND CANCELLATION OF
WHFC SHARES. At the EFFECTIVE TIME and as a result of the
MERGER, automatically and without further act of CAMCO, WHFC,
the BANK or the holders of CAMCO SHARES or WHFC SHARES, the
following shall occur:
(a) Each WHFC SHARE shall be cancelled and
extinguished and, in substitution and exchange therefor, the
holders thereof shall be entitled, subject to and upon
compliance with Section 2.03 of this AGREEMENT, to receive from
CAMCO $5.20 and 0.611 CAMCO SHARE (subject to possible
adjustment as set forth in Section 2.01(a)(i) and Section
2.01(a)(ii),below (the "PER SHARE MERGER CONSIDERATION") without
any interest thereon from the EFFECTIVE TIME until the time of
payment,
(i) The CAMCO share portion of the PER
SHARE MERGER CONSIDERATION shall be
adjusted to reflect any stock split,
stock dividend or distributions in, or
combinations or subdivisions of, CAMCO
SHARES, between the date hereof and the
EFFECTIVE TIME.
(ii) No fractional shares will be issued,
and cash will be paid in lieu of
fractional shares based on the average
of the bid and asked price quotes of
the CAMCO SHARES as reported on The
Nasdaq National Market System by a
mutually agreed upon authoritative
source on the last day of trading of
CAMCO SHARES prior to the date of
CLOSING ("CAMCO SHARES MARKET VALUE").
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(b) CAMCO SHARES issued and outstanding before the
EFFECTIVE TIME shall remain issued and outstanding after the
EFFECTIVE TIME.
(c) Any treasury shares held by WHFC and any WHFC
SHARES owned by CAMCO for its own account shall be cancelled and
retired at the EFFECTIVE TIME and no consideration shall be
issued in exchange therefor.
SECTION 2.02. WHFC OPTIONS.
(a) At the EFFECTIVE TIME, the Westwood Homestead
Financial Corporation 1997 Stock Option Plan (the "OPTION PLAN")
and WHFC OPTIONS not yet exercised at such time, shall be
assumed by CAMCO. No option to purchase WHFC SHARES granted
under the OPTION PLAN after December 31, 1998 shall be valid in
any respect.
The number of CAMCO SHARES to be issued upon the
exercise of a WHFC OPTION which is exercised after the EFFECTIVE
TIME shall be equal to the number of WHFC SHARES subject to such
WHFC OPTIONS immediately prior to the date of the CLOSING
multiplied by the OPTION EXCHANGE RATIO (as hereinafter defined)
(with the product rounded down to the next whole share), and the
per share exercise price shall be adjusted by dividing the per
share exercise price under each such WHFC OPTION by the OPTION
EXCHANGE RATIO (with the quotient rounded up to the next whole
cent). CAMCO and its Compensation Committee shall be
substituted for WHFC and the Committee of the WHFC Board of
Directors administering the OPTION PLAN. Each WHFC OPTION
shall, in accordance with its terms, be subject to further
adjustment as appropriate to reflect any stock split, dividends
payable in stock, recapitalization or other similar transaction
subsequent to the EFFECTIVE TIME. The OPTION EXCHANGE RATIO is
the value of the PER SHARE MERGER CONSIDERATION (the CAMCO share
portion determined by using the CAMCO SHARES MARKET VALUE)
divided by the CAMCO SHARES MARKET VALUE.
(b) The CAMCO SHARES covered by the WHFC OPTIONS
to be issued pursuant to Section 2.02(a) shall be covered by a
registration statement filed with the SEC and effective at the
EFFECTIVE TIME, and CAMCO shall take all actions necessary to
maintain the effectiveness of such registration statement until
all WHFC OPTIONS have been exercised or terminated. When CAMCO
SHARES are issued upon the exercise of WHFC OPTIONS, such CAMCO
SHARES shall be duly authorized, validly issued, fully paid and
non-assessable and not subject to or in violation of any
preemptive rights. CAMCO shall reserve sufficient CAMCO SHARES
for issuance with respect to such options. CAMCO shall also
take any reasonable action required to be taken under any
applicable state blue sky or securities laws in connection with
the issuance of such shares.
(c) Except as provided in this Section 2.02, all
other terms and conditions of the OPTION PLAN and award grants
thereunder shall remain as now existing.
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(d) In respect of any stock option which is an
"Incentive Stock Option" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (hereinafter
referred to as the "CODE"), the conversion hereby provided for
shall comply with the requirements of Section 424(a) of the
CODE, including the requirement that such converted options
shall not give to the holder thereof any benefits additional to
those which such holder had prior to such conversion under the
option as originally granted. It is intended that the foregoing
assumption shall be undertaken in a manner that will not
constitute a "modification" as defined in Section 424(h) of the
CODE as to any stock option which is an "Incentive Stock
Option".
(e) Any holder of any WHFC OPTION may exercise
such options at any time, prior to the date of the CLOSING as
provided in the OPTION PLAN.
SECTION 2.03. SHARE CERTIFICATES IN THE MERGER.
(a) Seven business days after the EFFECTIVE TIME or as soon
thereafter as practicable after the EFFECTIVE TIME, and CAMCO
shall use its reasonable best efforts to accomplish such within
seven business days, CAMCO shall mail to each holder of record
of WHFC SHARES a form letter of transmittal and instructions for
use in effecting the surrender for exchange of the certificates
formerly evidencing the WHFC SHARES cancelled and extinguished
as a result of the MERGER (hereinafter referred to collectively
as the "CERTIFICATES" and individually as the "CERTIFICATE").
Such letter of transmittal shall specify that the risk of loss
and title to CERTIFICATES shall pass only upon delivery of such
certificates as specified in the Letter of Transmittal. Upon
surrender of a CERTIFICATE for cancellation, together with such
letter of transmittal, duly executed, the holder of such
CERTIFICATE shall be entitled to receive in exchange therefor
the consideration to which the holder is entitled in accordance
with the provisions of this AGREEMENT, and the CERTIFICATE so
surrendered shall thereafter be cancelled forthwith. CAMCO may,
at its election, designate an exchange agent to discharge its
duties pursuant to this Section 2.03.
(b) In the event that any holder of WHFC SHARES
cancelled and extinguished in accordance with this AGREEMENT is
unable to deliver the CERTIFICATE which evidences such WHFC
SHARES, CAMCO, in the absence of actual notice that any WHFC
SHARES theretofore evidenced by any such CERTIFICATE have been
acquired by a bona fide purchaser, shall deliver to such holder
the consideration to which such holder is entitled in accordance
with the provisions of this AGREEMENT upon the presentation of
all of the following:
(i) Evidence to the reasonable satisfaction
of CAMCO that any such CERTIFICATE has
been lost, wrongfully taken or
destroyed;
(ii) Such security or indemnity as may be
reasonably requested by CAMCO to
indemnify and hold CAMCO harmless; and
(iii) Evidence to the reasonable satisfaction
of CAMCO that such person is the owner
of the WHFC SHARES theretofore
represented by each CERTIFICATE claimed
by him to be lost, wrongfully taken or
destroyed and that he is the person who
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would be entitled to present each such
CERTIFICATE for exchange pursuant to
this AGREEMENT.
(c) In the event that delivery of the consideration
provided for herein is to be made to a person other than the
person in whose name the CERTIFICATE surrendered is registered,
the CERTIFICATE so surrendered shall be properly endorsed or
otherwise in proper form for transfer and the person requesting
such issuance or payment shall pay any transfer or other taxes
required by reason of the issuance or payment to a person other
than the registered holder of the CERTIFICATE surrendered or
establish to the satisfaction of CAMCO that such tax has been
paid or is not applicable. Until surrendered in accordance with
the provisions of this Section 2.03, each CERTIFICATE shall
represent for all purposes only the right to receive the number
of CAMCO SHARES and cash consideration determined pursuant to
this AGREEMENT.
(d) No dividends or other distributions declared
after the EFFECTIVE TIME with respect to CAMCO SHARES and
payable to the holders of record thereof after the EFFECTIVE
TIME shall be paid to the holder of any unsurrendered
CERTIFICATE until the holder thereof shall surrender such
CERTIFICATE. Subject to the effect, if any, of applicable law,
after the subsequent surrender and exchange of a CERTIFICATE,
the record holder thereof shall be entitled to receive any such
dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to the CAMCO
SHARES represented by such CERTIFICATE.
(e) No consideration provided for herein shall be
delivered by CAMCO to any former holder of WHFC SHARES in
accordance with this AGREEMENT until such holder shall have
complied with this Section 2.03.
SECTION 2.04. PAYMENT IN SATISFACTION OF RIGHTS.
All payments made upon the surrender of CERTIFICATES pursuant to
this Article Two shall be deemed to have been made in full
satisfaction of all rights pertaining to the shares evidenced by
such CERTIFICATES.
SECTION 2.05. NO FURTHER REGISTRATION OR TRANSFER.
After the EFFECTIVE TIME, there shall be no further registration
or transfer of WHFC SHARES on the stock transfer books of WHFC.
In the event that, after the EFFECTIVE TIME, CERTIFICATES
evidencing such WHFC SHARES are presented for transfer, they
shall be cancelled and exchanged as provided in this Article
Two.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF WHFC AND THE BANK
WHFC and the BANK represent and warrant to CAMCO
that each of the following statements is true and accurate in
all material respects, except as otherwise disclosed in a
schedule provided by WHFC and the BANK to CAMCO prior to the
execution of this AGREEMENT (hereinafter referred to as the
"WHFC DISCLOSURE SCHEDULE"):
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SECTION 3.01. ORGANIZATION AND STANDING. (a) WHFC is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana and has the
corporate power and authority to own or hold under lease all of
its properties and assets and to conduct its business and
operations as presently conducted. WHFC is registered as a bank
holding company under the Bank Holding Company Act. WHFC is in
compliance in all material respects with all applicable local,
state or federal laws and regulations, except to the extent that
failure to be in compliance would not have a material adverse
effect on WHFC and the BANK taken as a whole.
(b) The BANK is a savings bank duly organized and
validly existing under the laws of the State of Ohio and has the
corporate power and authority to own or hold under lease all of
its properties and assets and to conduct its business and
operations as presently conducted. The BANK is a member of the
Federal Home Loan Bank of Cincinnati (hereinafter referred to as
the "FHLB"). The deposit accounts of the BANK are insured up to
applicable limits by the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation (the
"FDIC") (hereinafter referred to as the "SAIF"). The BANK is in
compliance in all material respects with all applicable local,
state or federal banking laws and regulations, including,
without limitation, the regulations of the FDIC and the
DIVISION, except to the extent that failure to be in compliance
would not have a material adverse effect on WHFC and the BANK,
taken as a whole. The BANK is a "qualified thrift lender" as
defined in 12 U.S.C. 1467(a)(m) and applicable regulations.
SECTION 3.02. QUALIFICATION. WHFC and the BANK
are each either duly qualified to do business and in good
standing in each jurisdiction in which such qualification is
required or the failure to so qualify would not have a material
adverse effect on the business of WHFC or the BANK.
SECTION 3.03. AUTHORITY OF WHFC AND THE BANK. This
AGREEMENT has been duly executed and delivered by WHFC and the
BANK. Subject to the adoption of this AGREEMENT by the WHFC
shareholders, to the adoption of this AGREEMENT by WHFC as the
sole shareholder of the BANK, and to the filing of all requisite
regulatory notices and the receipt of all requisite regulatory
approvals, (a) WHFC has all requisite corporate power and
authority to enter into this AGREEMENT and to perform all of its
obligations hereunder; (b) the BANK has all requisite corporate
power and authority to enter into this AGREEMENT and to perform
all of its obligations hereunder and thereunder; (c) the
execution and delivery of this AGREEMENT and the consummation of
the transactions contemplated hereby have been duly authorized
by all necessary corporate action by WHFC and the BANK; and (d)
subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general applicability
affecting the enforcement of creditors' rights generally, and
the effect of rules of law governing specific performance,
injunctive relief and other equitable remedies on the
enforceability of such documents, and except to the extent such
enforceability may be limited by laws relating to safety and
soundness of insured depository institutions as set forth in 12
U.S.C. Section 1818(b) or by the appointment of a conservator by
the FDIC, (i) this AGREEMENT is the valid and binding agreement
of WHFC, enforceable against WHFC in accordance with its terms,
and
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(ii) this AGREEMENT is the valid and binding agreement of the
BANK, enforceable against the BANK in accordance with its terms.
SECTION 3.04. GOVERNING DOCUMENTS. WHFC has
made available, or will promptly make available, to CAMCO true
and accurate copies of its Articles of Incorporation and Bylaws
and has granted CAMCO access to all records of all meetings and
other corporate actions occurring before the EFFECTIVE TIME by
the shareholders, Board of Directors and Committees of the Board
of Directors of WHFC. The BANK has made available, or will
promptly make available, to CAMCO true and accurate copies of
its Articles of Incorporation, Constitution and Bylaws and has
granted or will grant to CAMCO access to all records of all
meetings and other corporate actions occurring before the
EFFECTIVE TIME by the shareholders, Board of Directors and
Committees of the Board of Directors of the BANK. The minute
books of WHFC and the BANK contain, in all material respects,
complete and accurate records of all meetings and other
corporate actions of their shareholders, Boards of Directors and
Committees of the Boards of Directors.
SECTION 3.05. NO CONFLICTS. The execution and
delivery of this AGREEMENT and, subject to the adoption of this
AGREEMENT by the shareholders of WHFC and to the regulatory
filings and approvals referenced in Section 1.04 of this
AGREEMENT, the consummation of the transactions contemplated
hereby will not (a) conflict with or violate any provision of or
result in the breach of any provision of the Articles of
Incorporation or Bylaws of WHFC or the Articles of Incorporation
or Constitution of the BANK; (b) conflict with or violate any
provision of or result in the breach or the acceleration of or
entitle any party to accelerate (whether upon or after the
giving of notice or lapse of time or both) any obligation under,
or otherwise materially affect the terms of, any mortgage, lien,
lease, agreement, license, instrument, order, arbitration award,
judgment or decree to which WHFC or the BANK is a party or by
which WHFC or the BANK or their property or assets are bound;
(c) require the consent of any party to any agreement or
commitment to which WHFC or the BANK is a party or by which WHFC
or the BANK or their property or assets are bound, the failure
to obtain which could, individually or in the aggregate with all
the other failures to obtain required consents, have a material
adverse effect on the business, operations, condition (financial
or otherwise) or prospects of WHFC or the BANK; (d) result in
the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any property or assets of
WHFC or the BANK; or (e) violate or conflict with any applicable
law, ordinance, rule or regulation, including, without
limitation, the rules and regulations of, or conditions of
approval of applications or notices to, the Federal Reserve
Board, the FDIC or the DIVISION.
SECTION 3.06. CONSENTS. No consent, approval,
order or authorization of, or registration, declaration or
filing with, any governmental authority is required in
connection with the execution and delivery of this AGREEMENT by
WHFC or the BANK or the consummation by WHFC or the BANK of the
transactions contemplated hereby, except for the filings,
authorizations consents or approvals referenced in Sections
1.02, 1.03 and 1.04 of this AGREEMENT.
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SECTION 3.07. CAPITALIZATION. (a) The authorized
capital of WHFC consists solely of (i) 15,000,000 common shares,
One Cent ($0.01) par value per share, 2,168,818 of which are
issued and outstanding and held of record by approximately 425
shareholders and 279,192 of which are reserved for issuance upon
the exercise of WHFC OPTIONS, and (ii) 1,000,000 preferred
shares, One Cent ($0.01) par value, none of which is issued or
outstanding. All of the outstanding WHFC SHARES are duly
authorized, validly issued, fully paid and nonassessable, were
issued in full compliance with all applicable laws and
regulations, and were not issued in violation of the preemptive
right of any shareholder of WHFC. Upon the exercise of the WHFC
OPTIONS prior to the date of the CLOSING, the WHFC SHARES to be
issued in connection with the exercise of such WHFC OPTIONS will
be duly authorized, validly issued, fully paid and
nonassessable, will be issued in full compliance with all
applicable laws and regulations, and will not be issued in
violation of the preemptive right of any shareholder of WHFC.
Except for the WHFC OPTIONS, each of which is identified by type
(e.g. incentive stock options or non-qualified stock options),
name of recipient, award date, expiration date, number of shares
and exercise price per share (as such price may have been
adjusted) in Section 3.07 of the WHFC DISCLOSURE SCHEDULE, and
the WHFC STOCK OPTION AGREEMENT with CAMCO provided for herein,
there are no outstanding subscription rights, options,
conversion rights, warrants or other agreements or commitments
of any nature whatsoever (either firm or conditional) obligating
WHFC to issue, deliver or sell, cause to be issued, delivered or
sold, or restricting WHFC from selling any additional WHFC
SHARES, or obligating WHFC to grant, extend or enter into any
such agreement or commitment.
(b) The authorized capital of the BANK consists of
5,000,000 common shares, par value One Dollar ($1.00) per share,
100,000 of which are issued and outstanding and held of record
by WHFC. All of the outstanding common shares of the BANK are
duly authorized, validly issued, fully paid and nonassessable,
were issued in full compliance with all applicable laws and
regulations, and were not issued in violation of the preemptive
right of any shareholder of the BANK. There are no outstanding
subscription rights, options, conversion rights, warrants or
other agreements or commitments of any nature whatsoever (either
firm or conditional) obligating the BANK to issue, deliver or
sell, or to cause to be issued, delivered or sold, any
additional BANK SHARES.
SECTION 3.08. SEC DOCUMENTS AND REGULATORY REPORTS.
(a) WHFC has delivered or made available to CAMCO a complete
copy of all reports, prospectuses, offering circulars, proxy
statements, registration statements and all similar documents
filed, or required to be filed, pursuant to the Securities Act
of 1933, as amended, and the Securities Act of 1934, as amended,
and regulations issued pursuant thereto or mailed by WHFC or the
BANK to the members or shareholders since August 15, 1996
("SECURITIES DOCUMENTS"). The SECURITIES DOCUMENTS were timely
filed, did not, as of the dates on which such reports were filed
with the SEC, contain any untrue statement of a material fact or
omit any material fact required to be stated therein or
necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
(b) Since August 15, 1996 each of WHFC and the
BANK has duly filed with the Federal Reserve Board, the FDIC and
the Division, as the case may be, in correct form the
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reports required to be filed under applicable law and
regulations and such reports were in all material respects
complete and accurate and in compliance with the requirements of
applicable law and regulation, and WHFC has previously delivered
or made available to CAMCO accurate and complete copies of all
such reports. In connection with the most recent examination of
WHFC or the BANK by the Federal Reserve Board, the FDIC and the
Division, neither WHFC nor the BANK was required to correct or
change any action, procedure or proceeding which has not been
corrected or changed as required.
SECTION 3.09. FINANCIAL STATEMENTS. (a) The
consolidated statements of financial condition of WHFC and its
subsidiaries as of December 31, 1998 and 1997 and the related
consolidated statements of income, statements of stockholder
equity and cash flows for each of the three fiscal years ended
December 31, 1998, 1997 and 1996 together with the notes
thereto, examined and reported upon by KPMG LLP, independent
certified public accountants, complete copies of which have
previously been delivered to CAMCO (hereinafter referred to as
the "WHFC Audited Financials") have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied
on a consistent basis, except as stated therein, and fairly
present the consolidated financial position of WHFC at such date
and the consolidated results of its operations and cash flows
for such periods.
(b) The unaudited consolidated statements of
financial condition of WHFC as of March 31, 1999 and March 31,
1998 and related unaudited consolidated statements of income,
statements of stockholders equity and cash flow for the three
months then ended included in the WHFC Quarterly Report on Form
10-Q for the quarter ended March 31, 1999 as currently on file
with the SEC, and previously delivered to CAMCO, (hereinafter
referred to as the "WHFC INTERIM FINANCIALS") fairly present the
financial position of WHFC at such dates and the results of its
operations and cash flows for such periods and have been
prepared in accordance with GAAP applied on a consistent basis,
subject to normal recurring year-end adjustments, or as
otherwise may be specified therein.
(c) The audits of WHFC and the BANK have been
conducted in all material respects in compliance with generally
accepted auditing standards. The book and records of WHFC and
the BANK are being maintained in material compliance with
applicable legal and accounting requirements, and such books and
records accurately reflect in all material respects all dealings
and transactions in respect of the business, assets, liabilities
and affairs of WHFC and the BANK.
(d) Except as disclosed in the WHFC INTERIM
FINANCIALS, as of March 31, 1999, WHFC had no liabilities or
obligations material to the business condition (financial or
otherwise) of WHFC and its consolidated subsidiaries taken as a
whole, whether accrued, absolute, contingent or otherwise, and
whether due or to become due.
(e) The WHFC AUDITED FINANCIALS and WHFC INTERIM
FINANCIALS did not, as of the dates thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the information contained therein, in light of
the circumstances under which they were made, not misleading.
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SECTION 3.10. ABSENCE OF MATERIAL ADVERSE CHANGE:
CONDUCT OF BUSINESS. Since March 31, 1999, there have been no
material adverse changes in the financial condition, assets,
liabilities, obligations, properties, business or prospects of
WHFC or the BANK, taken as a whole; WHFC and the BANK have
conducted business only in the ordinary and usual course; and
WHFC and the BANK have not:
(a) Except for the WHFC STOCK OPTION AGREEMENT,
authorized the creation or issuance of,
issued, sold or disposed of, or created any
obligation to issue, sell or dispose of, any
stock, notes, bonds or other securities, or
any obligation convertible into or
exchangeable for, any shares of their capital
stock;
(b) Declared, set aside, paid or made any dividend or
other distributions on their capital stock or
directly or indirectly redeemed, purchased or
acquired any shares thereof or entered into
any agreement in respect of the foregoing;
except a cash dividend paid by WHFC on May 24,
1999 in the amount of $0.11 per share and a
cash dividend of $.12 per share declared by
the Board of Directors on July 26, 1999;
(c) Effected any stock split, recapitalization,
combination, exchange of shares, readjustment
or other reclassification;
(d) Amended their Articles of Incorporation,
Constitution or Bylaws;
(e) Purchased, sold, assigned or transferred any
material tangible asset or any material
patent, trademark, trade name, copyright,
license, franchise, design or other intangible
asset or property;
(f) Mortgaged, pledged or granted or suffered to exist
any lien or other encumbrance or charge on any
assets or properties, tangible or intangible,
except for liens for taxes not yet due and
payable and such other liens, encumbrances or
charges which do not materially adversely
affect their financial position;
(g) Cancelled any material debts or waived any material
claims other than for adequate consideration;
(h) Incurred any material obligation or liability
(absolute or contingent), including, without
limitation, any tax liability, or paid any
material liability or obligation (absolute or
contingent) other than liabilities and
obligations incurred or paid in the ordinary
course of business and consistent with past
practice, and liabilities incurred in
connection with the transaction, contemplated
by this AGREEMENT or the WHFC STOCK OPTION
AGREEMENT;
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(i) Experienced any material change in the amount or
general composition of their deposit
liabilities;
(j) Entered into or amended any employment contract
with any of their employees, increased the
compensation payable to any officer or
director or any relative of any such employee
or director, or become obligated to increase
any such compensation;
(k) Adopted or amended in any material respect any
employee benefit plan, severance plan or
collective bargaining agreement or made any
awards or distributions under any employee
benefit plan not consistent with past practice
or custom;
(l) Incurred any damage, destruction or similar loss,
whether or not covered by insurance,
materially affecting their businesses or
properties;
(m) Acquired any stock or other equity interest in any
corporation, partnership, trust, joint venture
or other entity;
(n) Made any (i) material investment (except
investments made in the ordinary course of business
and consistent with past practice) or (ii)
material capital expenditure or commitment for
any material addition to property, plant or
equipment; or
(o) Agreed, whether in writing or otherwise, to take
any action described in this Section 3.10.
SECTION 3.11. PROPERTIES. (a) A list and brief
description of all material fixed assets owned by WHFC or the
BANK (hereinafter referred to as the "PERSONAL PROPERTY")
carried on the books of WHFC or the BANK as of the date hereof,
is set forth in Section 3.11(a) of the WHFC DISCLOSURE SCHEDULE.
All PERSONAL PROPERTY has been maintained in good working order,
ordinary wear and tear excepted. WHFC or the BANK owns and has
good title to all of the PERSONAL PROPERTY, free and clear of
any mortgage, lien, pledge, charge, claim, conditional sales or
other agreement, lease, right or encumbrance, except (i) to the
extent stated or reserved against in the WHFC AUDITED FINANCIALS
and (ii) such other exceptions which are not material in
character, amount or extent and do not materially detract from
the value of or interfere with the use of the properties or
assets subject thereto or affected thereby.
(b) To the knowledge of the BANK, the
documentation governing or relating to the loan and credit-
related assets (hereinafter referred to as the "LOAN ASSETS")
representing the loan portfolio of the BANK (hereinafter
referred to as "LOAN DOCUMENTATION") is legally sufficient in
all material respects for the purposes intended thereby and
creates enforceable rights of the BANK in accordance with the
terms of such LOAN
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DOCUMENTATION, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general
applicability affecting the enforcement of creditors' rights
generally, and the effect of rules of law governing specific
performance, injunctive relief and other equitable remedies on
the enforceability of such documents. To the knowledge of the
BANK, no debtor under any of the LOAN DOCUMENTATION has asserted
any claim or defense with respect to the subject matter thereof.
(c) A description of each parcel of real property
owned by WHFC or the BANK (hereinafter referred to as the "REAL
PROPERTIES") is set forth in Section 3.11(c) of the WHFC
DISCLOSURE SCHEDULE. WHFC or the BANK is the owner of the REAL
PROPERTIES in fee simple and has good and marketable title to
the REAL PROPERTIES free of any liens, claims, charges,
encumbrances or security interests of any kind, except (i) liens
for real estate taxes and assessments not yet delinquent and
(ii) utility, access and other easements, rights of way,
restrictions and exceptions which do not impair the REAL
PROPERTIES for the use and business being conducted thereon. No
party leases any of the REAL PROPERTIES from WHFC or the BANK.
(d) Neither WHFC nor the BANK has received
notification from any governmental entity within the two-year
period immediately preceding the date hereof of contemplated
improvements to the REAL PROPERTIES or surrounding area or
community by a public authority, the costs of which are to be
assessed as special taxes against the REAL PROPERTIES in the
future.
(e) A description of all real property leased by
WHFC or the BANK from a third party (hereinafter referred to as
the "LEASED REAL PROPERTY") is set forth in Section 3.11(e) of
the WHFC DISCLOSURE SCHEDULE. True and correct copies of all
leases in respect of the LEASED REAL PROPERTY (hereinafter
referred to as the "REAL PROPERTY LEASES") and all attachments,
amendments and addenda thereto have been delivered by WHFC and
the BANK to CAMCO. The REAL PROPERTY LEASES create, in
accordance with their terms, valid, binding leasehold interests
of WHFC or the BANK in all of the LEASED REAL PROPERTY, free and
clear of all liens, claims, charges, encumbrances or security
interests of any kind. WHFC and the BANK have complied in all
material respects with all of the provisions of the REAL
PROPERTY LEASES required on their part to be complied with and
are not in default with respect to any of their obligations
(including payment obligations) under any of the REAL PROPERTY
LEASES.
(f) A description of all personal property leased
by WHFC or the BANK from a third party (hereinafter referred to
as the "LEASED PERSONAL PROPERTY") is set forth in Section
3.11(f) of the WHFC DISCLOSURE SCHEDULE. The PERSONAL PROPERTY
LEASES create, in accordance with their terms, valid and binding
leasehold interests of WHFC or the BANK in all of the LEASED
PERSONAL PROPERTY, free and clear of all liens, claims, charges,
encumbrances or security interests of any kind. WHFC and the
BANK have complied in all material respects with all of the
provisions under the PERSONAL PROPERTY LEASES required on their
part to be complied with and are not in default with respect to
any of their
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obligations (including payment obligations) under any of the
PERSONAL PROPERTY LEASES.
SECTION 3.12. ALLOWANCE FOR LOAN LOSSES. The
allowance for loan losses reflected on the WHFC AUDITED
FINANCIALS is adequate as of the date hereof in all material
respects under the requirements of GAAP to provide for
reasonably anticipated losses on outstanding loans.
SECTION 3.13. INVESTMENTS. Section 3.13 of the
WHFC DISCLOSURE SCHEDULE sets forth (a) a true, accurate and
complete list of all investments, other than investments in the
PERSONAL PROPERTY, LOAN ASSETS and REAL PROPERTIES, owned by
WHFC or the BANK (hereafter referred to as the "INVESTMENTS") as
of the date hereof, the name of the registered holder thereof,
the location of the certificates therefor or other evidence
thereof and any stock powers or other authority for transfer
granted with respect thereto and (b) a true, accurate and
complete list of the names of each bank or other depository in
which either WHFC or the BANK has an account or safe deposit
box, including, without limitation, accounts with the FHLB, and
the names of all persons authorized to draw thereon or to have
access thereto. The INVESTMENTS are owned by WHFC or the BANK
free and clear of all liens, pledges, claims, security
interests, encumbrances, charges or restrictions of any kind and
may be freely disposed of by WHFC or the BANK at any time.
Neither WHFC nor the BANK is a party to or has any interest in
any repurchase agreements or reverse repurchase agreements.
There are no outstanding letters of credit issued by the BANK.
SECTION 3.14. DERIVATIVE TRANSACTIONS. Neither
WHFC nor the BANK is a party to any futures contract, option
contract, interest rate caps, interest rate floors, interest
rate exchange agreements or other derivative instruments.
SECTION 3.15. TAXES. (a) WHFC and the BANK have
duly and timely filed all federal, state, county and local
income, profits, franchise, excise, sales, customs, property,
use, occupation, withholding, social security and other tax and
information returns and reports required to have been filed by
them through the date hereof, except to the extent that all such
failures to file, taken together, are not reasonably likely to
have a material adverse effect on WHFC and the BANK taken as a
whole, and have paid or accrued all taxes and duties (and all
interest and penalties with respect thereto) due or claimed to
be due by WHFC or the BANK. Neither WHFC nor the BANK has, to
their knowledge, any liability for any taxes or duties (or
interest or penalties with respect thereto) of any nature
whatsoever, and there is no basis for any additional material
claims or assessments. True copies of the federal, state and
local income tax returns of WHFC or the BANK for each of the
three tax years ended December 31, 1998, 1997 and 1996, have
been delivered to CAMCO.
(b) There are no federal, state or local tax returns or
reports not filed which would be due but for an extension of
time for filing having been granted, except as disclosed in
Section 3.15(b) of the DISCLOSURE SCHEDULE. Neither WHFC nor
the BANK has executed or filed with the Internal Revenue Service
(hereinafter referred to as the "IRS") or any state or local tax
authority any agreement extending the period for assessment and
collection of any tax, nor is
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WHFC or the BANK a party to any action or proceeding of any
governmental authority for assessment or collection of taxes,
except tax liens or levies against customers of the BANK. There
is no outstanding assessment or claim for collection of taxes
against WHFC or the BANK. Neither WHFC nor the BANK has
received any notice of deficiency, proposed deficiency or
assessment from the IRS or any other governmental agency with
respect to any federal, state or local taxes. No tax return of
WHFC or the BANK is currently the subject of any audit by the
IRS or any other governmental agency. No material deficiencies
have been asserted in connection with the tax returns of WHFC or
the BANK, and WHFC and the BANK have no reason to believe that
any deficiency would be asserted relating thereto. Except as
disclosed in Section 3.15(b) of the DISCLOSURE SCHEDULE: (i)
neither WHFC nor the BANK has ever been a member of an
"affiliated group of corporations" (within the meaning of
Section 1504(a) of the CODE) filing consolidated returns, other
than the affiliated group of which WHFC is the parent; and (ii)
neither WHFC nor the BANK is a party to any tax sharing
agreement.
SECTION 3.16. MATERIAL CONTRACTS. (a) Except as
set forth in Section 3.16(a) of the WHFC DISCLOSURE SCHEDULE,
neither WHFC nor the BANK is a party to or bound by any written
or oral (i) contract or commitment for capital expenditures in
excess of $15,000 for any one project or $30,000 in the
aggregate; (ii) contract or commitment made in the ordinary
course of business for the purchase of materials or supplies or
for the performance of services involving payments to or by WHFC
or the BANK of an amount exceeding $15,000 in the aggregate or
extending for more than six months from the date hereof; (iii)
contract or option for the purchase of any property, real or
personal, for an amount exceeding $15,000; (iv) letter of credit
or indemnity calling for payment of more than $15,000; (v)
guarantee agreement; (vi) instrument granting any person
authority to transact business on behalf of WHFC or the BANK;
(vii) contracts or commitments to make loans (including unfunded
commitments and lines of credit) to any one person (together
with "affiliates" of that person) in excess of $100,000 in the
aggregate, except for contracts or commitments entered into in
the ordinary course of business; (viii) employment, management,
consulting, deferred compensation, severance or other similar
contract with any director, officer or employee of WHFC or the
BANK; (ix) note, debenture or loan agreement pursuant to which
WHFC or the BANK has incurred indebtedness other than deposit
liabilities and advances from the FHLB; (x) loan participation
agreement; (xi) loan servicing agreement; (xii) contract or
commitment relating to a real estate development project
consisting of the development of more than one single family
dwelling; (xiii) commitment to make any acquisition, development
and construction loan; (xiv) commitment or agreement to do any
of the foregoing; or (xv) other contract, agreement or
commitment made outside the ordinary course of business. (The
contracts, agreements, commitments and other arrangements
described in clauses (i) through (xv) of this Section 3.16(a)
are hereinafter collectively referred to as the "CONTRACTS").
(b) Except as set forth in the DISCLOSURE
SCHEDULE, WHFC or the BANK has previously delivered to CAMCO (i)
copies of all of the CONTRACTS and (ii) all form lending
agreements and deposit forms used by the BANK in the ordinary
course of business.
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(c) Neither WHFC nor the BANK is in material
default under any CONTRACT and no claim of such default by any
party has been made or is now, to the knowledge of WHFC or the
BANK, threatened, except to the extent such a default would not
have a material adverse effect on WHFC and the BANK taken as a
whole. To the knowledge of WHFC and the BANK there does not
exist any event which, with notice or lapse of time or both,
would constitute a material default by WHFC or the BANK under,
or would excuse performance by any party thereto from, any
CONTRACT, except to the extent such a default would not have a
material adverse effect on WHFC and the BANK taken as a whole.
SECTION 3.17. INSURANCE. All material properties and
operations of WHFC and the BANK are insured in amounts and types
as are customary for savings banks similarly situated. The
performance by the officers and employees of WHFC and the BANK
of their duties is bonded in such amounts and against such risks
as are usually insured against or bonded by entities similarly
situated, under valid and enforceable policies of insurance or
bonds issued by insurers or bonding companies of recognized
responsibility, financial or otherwise.
SECTION 3.18. LITIGATION. Except as set forth in
Section 3.18 of the WHFC DISCLOSURE SCHEDULE, (a) there are no
material actions, suits, proceedings or investigations pending
or threatened against or affecting the business, operations or
financial condition of WHFC or the BANK in any court or before
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, (b)
neither the management of WHFC nor the BANK has any knowledge of
any basis for any such action, suit, proceeding or
investigation, and (c) neither WHFC nor the BANK is in default
in respect of any judgment, order, writ, injunction or decree of
any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality.
SECTION 3.19. PERMITS AND LICENSES. WHFC and the
BANK each has all material permits, licenses, orders and
approvals of all federal, state or local governmental or
regulatory bodies required for it to conduct its business as
presently conducted, and all such material permits, licenses,
orders and approvals are in full force and effect, without the
threat of suspension or cancellation. None of such permits,
licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated by this AGREEMENT.
SECTION 3.20. EMPLOYEE BENEFIT PLANS; ERISA. (a)
Section 3.20(a) of the WHFC DISCLOSURE SCHEDULE sets forth a
true and complete list of all qualified pension or profit-
sharing plans, deferred compensation, consulting, bonus, group
insurance plans or agreements and all other incentive, welfare
or employee benefit plans or agreements maintained for the
benefit of employees or former employees of WHFC or the BANK.
Copies of such plans and agreements, together with (i) , when
applicable, the most recent actuarial and financial reports
prepared with respect to any such plan, (ii) the most recent
annual reports filed with any government agency and (iii) all
rulings and determination letters received from governmental
agencies and any open requests for rulings or letters that
pertain to any such plan, have been delivered to CAMCO.
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(b) Except as may be disclosed in Section 3.20(b)
of the WHFC DISCLOSURE SCHEDULE, WHFC and the BANK do not
currently maintain any "employee pension benefit plan," as
defined in Section 3(2) of ERISA, (each such plan, together with
any related trust or other funding mechanism, as maintained by
WHFC or the BANK, hereinafter referred to as a "PENSION BENEFIT
PLAN"), which is intended to be qualified under Section 401(a)
of the CODE.
(c) Neither WHFC nor the BANK currently maintains,
nor have they ever maintained, any PENSION BENEFIT PLAN subject
to the provisions of Title IV of The Employee Retirement Income
Security Act of 1974, as amended (hereinafter referred to as
"ERISA").
(d) WHFC and the BANK do not currently participate
in, nor have they ever participated in, any multiemployer plan,
as such term is defined in Section 3(37) of ERISA.
(e) All of the PENSION BENEFIT PLANS have complied
and comply currently in all material respects, both as to form
and operation, with the provisions of ERISA and the CODE, where
required in order to be tax-qualified under Section 401(a) of
the CODE, and all other applicable laws, rules and regulations.
Neither WHFC nor the BANK is aware of any event which might
jeopardize the tax qualified status of any PENSION BENEFIT PLAN.
Each PENSION BENEFIT PLAN which is intended to be qualified
under Section 401(a) of the CODE has received a determination
letter from the IRS which considers amendments made to the CODE
by the Tax Reform Act of 1986. All reports required by any
governmental agency with respect to each PENSION BENEFIT PLAN
have been timely filed with such agency and, where required,
distributed to participants and beneficiaries of such PENSION
BENEFIT PLAN within the time required by law.
(f) Each "employee welfare benefit plan," as
defined in Section 3(1) of ERISA, (each such plan together with
any related trust or other funding mechanism, as maintained by
WHFC or the BANK, hereinafter referred to as a "WELFARE BENEFIT
PLAN") has been administered to date in all material respects in
compliance with the requirements of the CODE and ERISA, and,
where applicable, all state insurance laws, and all reports
required by any governmental agency with respect to each WELFARE
BENEFIT PLAN has been timely filed with such agency and, where
required, distributed to participants and beneficiaries of such
WELFARE BENEFIT PLAN within the time required by law, and each
Plan which constitutes a "group health plan" as defined in
Section 5000(b)(1) of the CODE, is and has been administered in
material compliance with the continuation of coverage provisions
contained in Section 4980B of the CODE.
(g) Neither WHFC nor the BANK nor, to the
knowledge of WHFC or the BANK, any plan fiduciary of any WELFARE
BENEFIT PLAN or PENSION BENEFIT PLAN has engaged in any
transaction in violation of Section 406(a) or (b) of ERISA (for
which no exemption exists under Section 408 of ERISA) or any
"prohibited transaction" (as defined in Section 4975(c)(1) of
the CODE) for which no exemption exists under Section 4975(c)(1)
of the CODE.
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(h) Each PENSION BENEFIT PLAN which is intended to
be an employee stock ownership plan ("ESOP"), or defined in
Section 4975(e)(7) of the CODE, is and has been administered in
substantial compliance with the applicable provisions of
Sections 4975 and 409 of the CODE and the regulations
thereunder; and any outstanding loan to which any such ESOP is a
party constitutes an "exempt loan" as described in Section
54.4975-7 of the IRS Regulations.
(i) The ESOP is in compliance with all applicable
laws, including the Change in Bank Control Act of 1978, 12 USC
1817(j).
SECTION 3.21. ENVIRONMENTAL MATTERS. (a) WHFC and
the BANK, to the knowledge of WHFC or the BANK, are in material
compliance with all applicable ENVIRONMENTAL LAWS (hereinafter
defined). WHFC and the BANK have not received any written or
oral communication from any organization, person or otherwise,
which alleges that either (i) WHFC or the BANK is not in
compliance with all applicable ENVIRONMENTAL LAWS or (ii) any
properties or assets of WHFC or the BANK may have been affected
by any MATERIALS OF ENVIRONMENTAL CONCERN (hereinafter defined).
All permits and other governmental authorizations currently held
or being applied for by WHFC or the BANK pursuant to the
ENVIRONMENTAL LAWS are set forth in Section 3.21(a) of the WHFC
DISCLOSURE SCHEDULE.
(b) There is no ENVIRONMENTAL CLAIM (hereinafter
defined) pending or, to the knowledge of WHFC or the BANK,
threatened (i) against WHFC or the BANK, (ii) against any person
or entity whose liability for any ENVIRONMENTAL CLAIM has or may
have been retained or assumed by WHFC or the BANK either
contractually or by operation of law, or (iii) against any real
or personal property which WHFC or the BANK owns, leases,
manages, supervises or participates in the management of, or, to
the knowledge of WHFC or the BANK, in which WHFC or the BANK
holds a security interest in connection with a loan or loan
participation, other than such as would not, either individually
or in the aggregate, have a material adverse effect on WHFC or
the BANK.
(c) There are no present or, to the knowledge of
WHFC and the BANK, past activities, conditions, or incidents,
including, without limitation, the release or disposal of any
MATERIAL OF ENVIRONMENTAL CONCERN, that could reasonably form
the basis of any ENVIRONMENTAL CLAIM against WHFC or the BANK or
against any person or entity whose liability for any
ENVIRONMENTAL CLAIM has or may have been retained or assumed by
WHFC or the BANK, either contractually or by operation of law,
other than such as would not, either individually or in the
aggregate, have a material adverse effect on WHFC or the BANK.
(d) Section 3.21(d) of the WHFC DISCLOSURE
SCHEDULE sets forth an accurate and complete list of outstanding
loans of the BANK as to which the borrower has submitted (or is
required to submit) to the BANK any environmental audits or
reports regarding any real property securing such loan and a
brief description of the environmental audit or report,
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to the extent applicable. WHFC and the BANK will make available
to CAMCO all such environmental audits and reports.
(e) As used in this AGREEMENT:
(i) "ENVIRONMENTAL CLAIM" means any claim,
cause of action or notice (written or oral) by any person or
entity alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resources damages,
property damages, personal injuries or penalties) arising out
of, based on or resulting from (I) the presence, or release into
the environment, of any MATERIAL OF ENVIRONMENTAL CONCERN at any
location, whether or not owned by WHFC or the BANK or (II)
circumstances forming the basis of any violation, or alleged
violation, of any ENVIRONMENTAL LAW;
(ii) "ENVIRONMENTAL LAWS" means all laws and
regulations relating to pollution or protection of human health
or the environment including, without limitation, laws and
regulations relating to emissions, discharges, releases or
threatened releases of MATERIALS OF ENVIRONMENTAL CONCERN, or
otherwise relating to the use, treatment, storage, disposal,
transport or handling of MATERIALS OF ENVIRONMENTAL CONCERN; and
(iii) "MATERIALS OF ENVIRONMENTAL CONCERN"
shall mean (I) any "hazardous waste" as defined in 42 U.S.C.
Section 6903, as amended from time to time, and regulations
promulgated thereunder from time to time; (II) any "hazardous
substance" as defined in 42 U.S.C. Section 9601, as amended from
time to time, and regulations promulgated thereunder from time
to time; (III) asbestos; (IV) PCB's; (V) any substance the
presence of which on WHFC's or the BANK's property is prohibited
by any applicable law, ordinance, or regulation; (VI) petroleum
products; and (VII) underground storage tanks and above ground
storage tanks.
SECTION 3.22. EMPLOYMENT MATTERS. WHFC and the
BANK are in compliance with all federal, state or other
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours and have
not and are not engaged in any unfair labor practice, except
where such failure to comply or such practice would not have a
material adverse effect on the financial condition, results of
operations, business or prospects of WHFC and the BANK taken as
a whole. No unfair labor practice complaint against WHFC or the
BANK is pending before any governmental agency or court and
there is no labor strike, dispute, slowdown or stoppage actually
pending, or to the knowledge of WHFC and the BANK, threatened
against or involving WHFC or the BANK. No representation
question exists in respect of the employees of WHFC or the BANK
and no labor grievance which might have a material adverse
effect upon WHFC or the BANK or the conduct of their businesses
is pending or, to the knowledge of WHFC or the BANK, threatened.
Neither WHFC nor the BANK has entered into any collective
bargaining agreement with any labor organization with respect to
any group of employees of WHFC or the BANK, and, to the
knowledge of WHFC and the BANK, there is no present effort nor
existing proposal to attempt to unionize any group of employees
of WHFC or the BANK.
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SECTION 3.23. UNTRUE STATEMENTS AND OMISSIONS. The
certificates, statements and other information furnished to
CAMCO in writing by or on behalf of WHFC and the BANK in
connection with the transactions contemplated hereby, including,
but not limited to, disclosures and information set forth in the
WHFC DISCLOSURE SCHEDULE, but excluding statements or
information pertaining to parties unrelated to WHFC or the BANK,
do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
SECTION 3.24. PROXY MATERIALS. None of the
information relating to WHFC or the BANK included in the JOINT
PROXY STATEMENT which is to be mailed to the shareholders of
WHFC and CAMCO in connection with any meeting of shareholders
convened in accordance with Sections 1.03, 6.02 and 6.03 of this
AGREEMENT will, at the time the JOINT PROXY STATEMENT is mailed
or at the time of the meeting to which the JOINT PROXY STATEMENT
relates, contain any untrue statement of a material fact, or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not false or misleading, except to the extent it
contains information about CAMCO provided in writing to WHFC or
the BANK by CAMCO.
SECTION 3.25. BROKERS. Except for amounts payable to
Xxxxxxx Xxxx & Company, a division of Xxxxx, Xxxxxxxx & Xxxx,
Inc. (hereinafter referred to as "XXXX"), as disclosed in
Section 3.25 of the WHFC DISCLOSURE SCHEDULE, there are no
claims or agreements for brokerage commission, finder's fees, or
similar compensation in connection with the transactions
contemplated by this AGREEMENT payable by WHFC or the BANK.
SECTION 3.26. REGULATORY ENFORCEMENT. Neither
WHFC nor the BANK is subject to, or has received any notice or
advice that it is or may become subject to, any order, agreement
or memorandum of understanding of any federal or state agency
charged with the supervision or regulation of banks or savings
banks or engaged in the insurance of deposits or any other
governmental agency having supervisory or regulatory authority
with respect to WHFC or the BANK; neither WHFC nor the BANK has
received any notice or advice that it is not in substantial
compliance with any statute or regulation, except where failure
to comply would not have a material adverse effect upon WHFC and
the BANK taken as a whole; and WHFC and the BANK have received
no notice from any governmental authority threatening to revoke
any license, franchise, permit or governmental authorization.
SECTION 3.27. TAX TREATMENT OF MERGER. Neither
WHFC nor the BANK has taken any action that is reasonably likely
to prevent the transactions contemplated hereby, including the
MERGER, from qualifying as a reorganization within the meaning
of Section 368(a) of the CODE.
SECTION 3.28. SUBSIDIARIES: EQUITY INTEREST.
The term "subsidiary" means an organization or entity which is
consolidated or is eligible to be consolidated with a party to
this AGREEMENT for financial reporting purposes. Except for the
BANK, WHFC has no subsidiaries. Except for shares of the BANK
owned by WHFC and of the Federal Home Loan
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Bank of Cincinnati owned by the BANK or as set forth in Section
3.28 of the WHFC DISCLOSURE SCHEDULE, neither WHFC nor the BANK
owns, beneficially or otherwise, any shares of EQUITY SECURITIES
(as defined below) or similar interest of any corporation, bank,
business trust, association or similar organization. "EQUITY
SECURITIES" of an issuer means capital stock or other equity
securities of such issuer, options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of
any capital stock or other equity securities of any issuer, or
contracts, commitments, understandings or arrangements by which
such issuer is or may become bound to issue additional shares of
its capital stock or other equity securities of such issuer, or
options, warrants, scrip or rights to purchase, acquire,
subscribe to, calls on or commitments for any shares of its
capital stock or other equity securities. Neither WHFC nor the
BANK is a party to any partnership or joint venture.
SECTION 3.29. MANAGEMENT RECOGNITION PLAN. The
WHFC DISCLOSURE SCHEDULE lists the names of the recipients,
award dates, forfeitures, distribution dates and number of
shares awarded and unawarded relating to and arising out of the
Management Recognition Plan of WHFC. Thirty-three thousand,
sixty (33,060) WHFC SHARES are unawarded and may be returned to
WHFC at the direction of the WHFC Board of Directors. No
trustee reports or accounts have ever been made.
SECTION 3.30. YEAR 2000. WHFC and the BANK have
delivered to CAMCO a complete and accurate copy of its year 2000
plan, including an estimate of the anticipated associated costs
for addressing the issues set forth in the applicable statements
of the Federal Financial Institutions Examination Council and
such plan is in material compliance with the schedule set forth
in such statements.
SECTION 3.31. FAIRNESS OPINION. WHFC has received an
opinion of Xxxx to the effect that, as of the date hereof, the
consideration to be received by the shareholders of WHFC
pursuant to this AGREEMENT is fair from a financial point
of view to the shareholders of WHFC.
SECTION 3.32. REQUIRED VOTE; ANTI-TAKEOVER
PROVISIONS. (a) The affirmative vote of the holders of a
majority of the issued and outstanding shares of WHFC is the
only vote of shareholders of WHFC required to approve this
AGREEMENT and the transactions contemplated hereby on behalf of
WHFC.
(b) Neither WHFC nor the BANK is an "interested
shareholder" of CAMCO within the meaning of Section 203(c)5 of
the DGCL.
(c) The Board of Directors of WHFC has taken all
necessary steps by all required votes so that the provisions of
Article XIV of WHFC's Articles of Incorporation do not and will
not apply to this AGREEMENT and the WHFC STOCK OPTION AGREEMENT
and the transactions contemplated hereby and thereby.
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(d) This AGREEMENT and the WHFC STOCK OPTION
AGREEMENT have been approved by more than two-thirds of WHFC's
"continuing directors" as defined in WHFC's Articles of
Incorporation.
SECTION 3.33. NO APPRAISAL RIGHTS. Shareholders
of WHFC are not entitled to the rights described in Section
23-1-44-8 of the IBCL.
SECTION 3.34. DISABILITY PLANS. WHFC and the BANK
are parties to or participant in or sponsor only one disability
benefit plan or disability salary continuation plan.
SECTION 3.35. GRANTOR TRUST AGREEMENT. The Grantor
Trust of June 22, 1998 has never been funded with cash or other
assets by WHFC or the BANK and no reports or accounts have ever
been made by the Trustee.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF CAMCO
CAMCO represents and warrants to WHFC and the BANK
that each of the following statements is true and accurate in
all material respects:
SECTION 4.01. ORGANIZATION AND STANDING. CAMCO
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the
corporate power and authority to own or hold under lease all of
its properties and assets and to conduct its business and
operations as presently conducted. CAMCO is registered as a
savings and loan holding company under the Home Owners Loan Act
("HOLA"). CAMCO is in compliance in all material respects with
all applicable local, state and federal laws and regulations,
including without limitation, the OTS Regulations.
SECTION 4.02. QUALIFICATION. CAMCO is either
duly qualified to do business and in good standing in each
jurisdiction in which such qualification is required or the
failure to so qualify would not have a material adverse effect
on the business of CAMCO.
SECTION 4.03. AUTHORITY OF CAMCO. This AGREEMENT has
been duly executed and delivered by CAMCO. Subject to the
adoption of this AGREEMENT by the CAMCO shareholders and to the
filing of all requisite regulatory notices and the receipt of
all requisite regulatory approvals,(a) CAMCO has all requisite
corporate power and authority to enter into this AGREEMENT and
to perform its obligations hereunder; (b) the execution and
delivery of this AGREEMENT and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary corporate action by CAMCO; and (c) subject to
applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general applicability affecting the
enforcement of creditors' rights generally, and the effect of
rules of law governing specific performance, injunctive relief
and other equitable remedies on the enforceability of such
documents, and except to the extent such enforceability may be
limited by laws relating to safety and soundness of insured
depository institutions as set forth in 00 X.X.X
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Xxxxxxx 0000(x) or by the appointment of a conservator by the
FDIC, this AGREEMENT is the valid and binding agreement of
CAMCO, enforceable against CAMCO in accordance with its terms.
SECTION 4.04. GOVERNING DOCUMENTS. CAMCO has
made available, or will promptly make available, to WHFC true
and accurate copies of the CAMCO Certificate of Incorporation
and Bylaws and has granted WHFC access to all records of all
meetings and other corporate actions occurring before the
EFFECTIVE TIME by the stockholders, Board of Directors and
Committees of the Board of Directors of CAMCO. The minute books
of CAMCO contain, in all material respects, complete and
accurate records of all meetings and other corporate actions of
their shareholders, Boards of Directors and Committees of the
Boards of Directors.
SECTION 4.05. NO CONFLICTS. The execution and
delivery of this AGREEMENT and, subject to the adoption of this
AGREEMENT by the shareholders of CAMCO and the regulatory
filings and approvals referenced in Section 1.04 of this
AGREEMENT, the consummation of the transactions contemplated
hereby will not (a) conflict with or violate any provision of or
result in the breach of any provision of the Certificate of
Incorporation or Bylaws of CAMCO; (b) conflict with or violate
any provision of or result in the breach or the acceleration of
or entitle any party to accelerate (whether upon or after the
giving of notice or lapse of time or both) any obligation under,
or otherwise materially affect the terms of, any mortgage, lien,
lease, agreement, license, instrument, order, arbitration award,
judgment or decree to which CAMCO is a party or by which CAMCO
or its property or assets is bound; (c) require the consent of
any party to any agreement or commitment to which CAMCO is a
party or by which CAMCO or its property or assets is bound, the
failure to obtain which could, individually or in the aggregate
with all the other failures to obtain required consents, have a
material adverse effect on the business, operations, condition
(financial or otherwise) or prospects of CAMCO; (d) result in
the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any property or assets of
CAMCO; or (e) violate or conflict with any applicable law,
ordinance, rule or regulation, including, without limitation,
the rules and regulations of or conditions of approval of
applications or notices to the OTS or the FDIC.
SECTION 4.06. CONSENTS. No consent, approval,
order or authorization of, or registration, declaration or
filing with, any governmental authority is required in
connection with the execution and delivery of this AGREEMENT by
CAMCO or the consummation by CAMCO of the transactions
contemplated hereby, except for filings, authorizations,
consents or approvals referenced in Sections 1.02, 1.03 and 1.04
of this AGREEMENT.
SECTION 4.07. CAPITALIZATION. The authorized
capital of CAMCO consists solely of (i) 8,900,000 shares of
common stock, par value One Dollar ($1.00) per share, 5,720,888
of which are issued and outstanding and 369,521 of which are
reserved for issuance upon the exercise of outstanding stock
options (the "CAMCO OPTIONS"), and (ii) 100,000 preferred
shares, One Dollar ($1.00) par value per share, none of which is
issued or outstanding. All of the outstanding CAMCO SHARES are,
and, when issued in accordance with this AGREEMENT, the CAMCO
SHARES to be issued upon exchange for the WHFC SHARES shall be,
duly authorized, validly issued, fully paid and nonassessable,
issued in full compliance with all
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applicable laws, and not issued in violation of the preemptive
right of any person. Except for the CAMCO OPTIONS, there are no
outstanding subscription rights, options, conversion rights,
warrants or other agreements or commitments of any nature
whatsoever (either firm or conditional) obligating CAMCO to
issue, deliver or sell, cause to be issued, delivered or sold,
or restricting CAMCO from selling any additional CAMCO SHARES,
or obligating CAMCO to grant, extend or enter into any such
agreement or commitment.
SECTION 4.08. SEC REPORTS. CAMCO has delivered
to WHFC copies of the following documents, each of which has
been filed with the SEC (hereinafter referred to as the "CAMCO
SEC FILINGS"):
(a) The Annual Reports on Form 10-K for each of
the fiscal years ended December 31, 1998, 1997
and 1996;
(b) The Annual Report to Stockholders for each of
the fiscal years ended December 31, 1998, 1997
and 1996;
(c) The Proxy Statement for use in connection with
each of the 1999, 1998 and 1997 Annual
Meetings of Stockholders; and
(d) The Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999.
The CAMCO SEC FILINGS did not, as of the dates on which such
reports were filed with the SEC, contain any untrue statement of
a material fact or omit any material fact required to be stated
therein or necessary to make the statements contained therein,
in light of the circumstances under which they were made, not
misleading.
SECTION 4.09. FINANCIAL STATEMENTS. (a) The
consolidated statements of financial condition of CAMCO as of
December 31, 1998 and 1997, and the related consolidated
statements of earnings, stockholders' equity and cash flows for
each of the three fiscal years ended December 31, 1998, 1997 and
1996, together with notes thereon, examined and reported upon by
Xxxxx Xxxxxxxx, L.L.P., (hereinafter referred to as "GRANT")
complete copies of which have previously been delivered to WHFC
(hereinafter referred to as the "CAMCO AUDITED FINANCIALS"),
have been prepared in conformity with GAAP applied on a
consistent basis and fairly present the financial position of
CAMCO at such dates and the results of its operations and cash
flows for such periods.
(b) The unaudited consolidated statements of
financial condition of CAMCO as of March 31, 1999 and March 31,
1998, and the related unaudited consolidated statements of
earnings, stockholders' equity and cash flows for each of the
three months ended March 31, 1999 and 1998, complete copies of
which have previously been delivered to WHFC (hereinafter
referred to as the "CAMCO INTERIM FINANCIALS"), have been
prepared in conformity with GAAP applied on a consistent basis
and fairly present the financial position of CAMCO at such dates
and the results of its operations and cash flows for such
periods.
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(c) The audits of CAMCO have been conducted in all
material respects in accordance with GAAP. The books and
records of CAMCO are being maintained in material compliance
with applicable legal and accounting requirements and such books
and records accurately reflect in all material respects all
dealings and transactions in respect of the business, assets,
liabilities and affairs of CAMCO.
(d) Except as disclosed in the CAMCO INTERIM
FINANCIALS, as of March 31, 1999, CAMCO had no liabilities or
obligations material to the business condition (financial or
otherwise) of CAMCO taken as a whole, whether accrued, absolute,
contingent or otherwise, and whether due or to become due.
(e) The CAMCO AUDITED FINANCIALS and the CAMCO
INTERIM FINANCIALS did not, as of the dates thereof, contain any
untrue statement of a material fact or omit to state any
material fact necessary to make the information contained
therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.10. ABSENCE OF MATERIAL ADVERSE CHANGE.
Since March 31, 1999, there have been no material adverse
changes in the financial condition, assets, liabilities,
obligations, properties, business or prospects of CAMCO and its
consolidated subsidiaries, taken as a whole.
SECTION 4.11. ALLOWANCE FOR LOAN LOSSES. The
allowance for loan losses reflected on the CAMCO AUDITED
FINANCIALS is adequate as of the date hereof in all material
respects under the requirements of GAAP to provide for
reasonably anticipated losses on outstanding loans.
SECTION 4.12. REPORTS AND RECORDS. CAMCO has
filed all reports and maintained all records required to be
filed or maintained by them under various rules and regulations
of the SEC, the OTS or the FDIC. All such documents and reports
complied in all material respects with applicable requirements
of laws and regulations in effect at the time of the filing of
such documents and contained in all material respects the
information required to be stated therein. None of such
documents, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.13. TAXES. CAMCO has duly and timely
filed all federal, state, county and local income, profits,
franchise, excise, sales, customs, property, use, occupation,
withholding, social security and other tax and information
returns and reports required to have been filed by them through
the date hereof, and has paid or accrued all taxes and duties
(and all interest and penalties with respect thereto) due or
claimed to be due by CAMCO. CAMCO has no liability for any
taxes or duties (or interest or penalties with respect thereto)
of any nature whatsoever, and there is no basis for any
additional material claims or assessments, other than with
respect to liabilities for taxes and duties which may have
accrued since December 31, 1999, in the ordinary course of
business. No proposed additional taxes, interest or penalties
have been asserted by applicable taxing authorities.
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SECTION 4.14. PERMITS AND LICENSES. CAMCO has
all material permits, licenses, orders and approvals of all
federal, state or local governmental or regulatory bodies
required for it to conduct its business as presently conducted
and all such material permits, licenses, orders and approvals
are in full force and effect, without the threat of suspension
or cancellation. None of such permits, licenses, orders or
approvals will be adversely affected by the consummation of the
transactions contemplated by this AGREEMENT.
SECTION 4.15. UNTRUE STATEMENTS AND OMISSIONS.
The certificates, statements and other information furnished to
WHFC in writing by or on behalf of CAMCO in connection with the
transactions contemplated hereby do not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
SECTION 4.16. PROXY MATERIALS. None of the
information relating to CAMCO or included in the JOINT PROXY
STATEMENT will, at the time the JOINT PROXY STATEMENT is mailed
or at the time of the meetings to which the JOINT PROXY
STATEMENT relates, 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, in light of the
circumstances under which they were made, not false or
misleading.
SECTION 4.17. BROKERS. Except for amounts
payable to Tucker, Anthony, Cleary, Gull, there are no claims or
agreements for brokerage commissions, finder's fees, or similar
compensation in connection with the transactions contemplated by
this AGREEMENT payable by CAMCO.
SECTION 4.18. REGULATORY ENFORCEMENT. CAMCO is
not subject to, nor has it received any notice or advice that it
is not in substantial compliance with any statute or regulation,
or that it is or may become subject to, any order, agreement or
memorandum of understanding of any federal or state agency
charged with the supervision or regulation of savings banks,
savings associations or holding companies of savings banks or
savings associations or engaged in the insurance of deposits or
any other governmental agency having supervisory or regulatory
authority with respect to CAMCO, and CAMCO has received no
notice from any governmental agency threatening to revoke any
license, franchise, permit or governmental authority.
SECTION 4.19. TAX TREATMENT OF MERGER. CAMCO
has taken no action or has any knowledge of any fact or
circumstance that is reasonably likely to prevent the
transactions contemplated hereby, including the MERGER, from
qualifying as a "reorganization" within the meaning of Section
368(a) of the CODE.
SECTION 4.20. WHFC SHARES OWNED BY CAMCO. Except as
provided in the WHFC STOCK OPTION AGREEMENT, neither CAMCO nor
any of its subsidiaries beneficially own any WHFC SHARES.
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SECTION 4.21. FAIRNESS OPINION. CAMCO has received
an opinion of Tucker, Anthony, Xxxxxx, Gull to the effect that
as of the date hereof the consideration to be paid to the
shareholders of WHFC pursuant to this AGREEMENT is fair from a
financial point of view to the shareholders of CAMCO.
SECTION 4.22. LITIGATION. Except as disclosed
in the CAMCO SEC FILINGS, (a) there are no material actions,
suits, proceedings or investigations pending or threatened
against or affecting the business, operations or financial
condition of CAMCO in any court or before any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, (b) the management of CAMCO
has no knowledge of any basis for any such action, suit,
proceeding or investigation, and (c) CAMCO is not in default in
respect of any judgment, order, writ, injunction or decree of
any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality.
SECTION 4.23. REQUIRED VOTE. The affirmative vote of
the holders of a majority of the issued and outstanding shares
of CAMCO is the only vote of shareholders of CAMCO required to
approve this AGREEMENT and the transactions contemplated hereby
on behalf of CAMCO.
SECTION 4.24. MATERIAL CONTRACTS. CAMCO is not in
material default under any material contract and no claim of
such default by any party has been made or is now, to the
knowledge of CAMCO, threatened. There does not exist any event
which, with notice or lapse of time or both, would constitute a
material default by CAMCO under, or would excuse performance by
any party thereto from, any material contract.
SECTION 4.25. INSURANCE. All material properties and
operations of CAMCO are adequately insured for its benefit. The
performance by the officers and employees of CAMCO of their
duties is bonded in such amounts and against such risks as are
usually insured against or bonded by entities similarly
situated, under valid and enforceable policies of insurance or
bonds issued by insurers or bonding companies of recognized
responsibility, financial or otherwise.
SECTION 4.26. ENVIRONMENTAL MATTERS. (a) CAMCO,
to its knowledge, is in material compliance with all applicable
ENVIRONMENTAL LAWS. CAMCO has not received any written or oral
communication from any organization, person or otherwise, which
alleges that either (i) CAMCO is not in compliance with all
applicable ENVIRONMENTAL LAWS or (ii) any properties or assets
of CAMCO may have been affected by any MATERIALS OF
ENVIRONMENTAL CONCERN.
(b) There is no ENVIRONMENTAL CLAIM pending or, to
the knowledge of CAMCO, threatened (i) against CAMCO, (ii)
against any person or entity whose liability for any
ENVIRONMENTAL CLAIM has or may have been retained or assumed by
CAMCO either contractually or by operation of law, or (iii)
against any real or personal property which CAMCO owns, leases,
manages, supervises or participates in the management of, or, to
the knowledge of CAMCO, in which CAMCO holds a security interest
in connection with a loan or loan
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participation, other than such as would not, either individually
or in the aggregate, have a material adverse effect on CAMCO.
(c) There are no present or, to the knowledge of
CAMCO, past activities, conditions, or incidents, including,
without limitation, the release or disposal of any MATERIAL OF
ENVIRONMENTAL CONCERN that could reasonably form the basis of
any environmental claim against CAMCO or against any person or
entity whose liability for any environmental claim has or may
have been retained or assumed by CAMCO, either contractually or
by operation of law, other than such as would not, either
individually or in the aggregate, have a material adverse effect
on CAMCO.
SECTION 4.27. YEAR 2000. CAMCO's Year 2000 Plan
is in material compliance with the applicable statements of the
Federal Financial Institutions Examination Council.
ARTICLE FIVE
COVENANTS
SECTION 5.01. CONDUCT OF WHFC'S AND THE BANK'S
BUSINESS. From the date of this AGREEMENT until the EFFECTIVE
TIME, WHFC and the BANK, except with the prior written consent
of CAMCO, which shall not be unreasonably withheld, will each
conduct its business only in the ordinary course, in accordance
with past practices and policies and in compliance with all
applicable statutes, rules and regulations. Notwithstanding the
foregoing, without the prior written consent of CAMCO, which
shall not be unreasonably withheld, neither WHFC nor the BANK
will:
(a) Except for the WHFC STOCK OPTION AGREEMENT,
authorize or agree to authorize the creation
or issuance of, or issue, sell or dispose of,
or create any obligation to issue, sell or
dispose of, any stock, notes, bonds or other
securities of which WHFC or the BANK is the
issuer, or any obligations convertible into or
exchangeable for any shares of its capital
stock, other than WHFC SHARES issued in
connection with the exercise of WHFC OPTIONS;
(b) Declare, set aside, pay or make any dividend
or other distribution on its capital stock, or
directly or indirectly redeem, purchase or
otherwise acquire any shares thereof or enter
into any agreement with respect to the
foregoing, except that WHFC may declare and
pay a regular quarterly cash dividend of $0.12
per share in each calendar quarter between the
date of this AGREEMENT and the EFFECTIVE TIME.
CAMCO and WHFC will coordinate dividends so
that only one dividend will be paid in each
calendar quarter.
(c) Effect any stock split, recapitalization,
combination, exchange of shares, readjustment
or other reclassification;
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(d) Amend their Articles of Incorporation,
Constitution or Bylaws;
(e) Purchase, sell, assign or transfer any
material tangible asset or any material
patent, trademark, trade name, copyright,
license, franchise, design or other intangible
assets or property, other than in the ordinary
course of business and in accordance with past
practice;
(f) Mortgage, pledge, grant or suffer to exist any
lien or other encumbrance or charge on any
assets or properties, tangible or intangible,
except for liens for taxes not yet delinquent,
assets pledged as collateral to secure
borrowings from the FHLB or to secure public
deposits and such other liens, encumbrances or
charges which do not materially or adversely
affect its financial position;
(g) Waive any rights of material value or cancel
any material debts or claims;
(h) Incur any material obligation or liability
(absolute or contingent), including, without
limitation, any tax liability, or pay any
material liability or obligation (absolute or
contingent), other than liabilities and
obligations incurred in the ordinary course of
business and borrowings from the FHLB;
(i) Cause any material adverse change in the
amount or general composition of deposit
liabilities or other liabilities;
(j) Except as specifically provided herein, enter
into or amend any employment contract with any
of its employees, increase the compensation
payable to any officer or director or any
relative of any such officer or director or
become obligated to increase any such
compensation, provided, that officers who are
not a party to an employment contract or
severance agreement may receive increases in
compensation consistent with past practice;
(k) Except as specifically provided herein, adopt
or amend in any material respect any employee
or director benefit plan, severance plan or
collective bargaining agreement or make awards
or distributions under any employee benefit
plan not consistent with past practice or
custom;
(l) Acquire any stock or other equity interest in
any corporation, partnership, trust, joint
venture or other entity, except FHLB stock;
(m) Make any material capital expenditure or
commitment for any material addition to
property, plant, or equipment;
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(n) Originate or issue a commitment to originate
any loan secured by one- to four-family
residential real estate in a principal amount
of $400,000 or more or any loan secured by
nonresidential real estate in a principal
amount of $400,000 or more;
(o) Except for FHLB advances, the aggregate amount
of which at any time shall not exceed Thirty-
three Million Dollars ($33,000,000), plus such
additional amount as may be obtained with the
right of prepayment at any time without
penalty or premium, and deposit taking in the
ordinary course of its business, borrow or
agree to borrow any funds, including but not
limited to repurchase transactions, or
indirectly guarantee or agree to guarantee any
obligations of others;
(p) Establish any new lending programs or make any
changes in its policies concerning which
persons may approve loans;
(q) Enter into any securities transactions for its
own account or purchase or otherwise acquire
any investment security for its own account
other than U.S. government and U.S. agency
obligations and deposits in an overnight
account at the FHLB;
(r) Increase or decrease the rate of interest paid
on time deposits or certificates of deposits,
except in a manner and pursuant to policies
consistent with past practices in relation to
rates prevailing in the BANK's market;
(s) Foreclose upon or otherwise take title to or
possession or control of any real property
without first obtaining a Phase I
Environmental Report thereon which indicates
that the property is free of pollutants,
contaminants or hazardous or toxic waste
materials including asbestos and petroleum
products; provided, however, that the BANK
shall not be required to obtain such a report
with respect to single-family, non-agriculture
residential property of one acre or less to be
foreclosed upon unless it has reason to
believe such property may contain any such
pollutants, contaminants, waste materials
including asbestos or petroleum products; or
(t) Agree, whether in writing or otherwise, to
take any action described in this Section
5.01.
SECTION 5.02. ACQUISITION TRANSACTIONS. WHFC
and the BANK shall (i) not, directly or indirectly, solicit or
initiate any proposals or offers from any person or entity, or
negotiate with any such person or entity, regarding any
acquisition or purchase of all or a material amount of the
assets of, any equity securities of, or any merger,
consolidation or business combination with, WHFC or the BANK
(hereinafter collectively referred to as
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"ACQUISITION TRANSACTIONS"), (ii) not disclose to any person any
information not customarily disclosed publicly or provide access
to its properties, books or records or otherwise assist or
encourage any person in connection with any of the foregoing,
and (iii) give CAMCO prompt notice of any such inquiries, offers
or proposals. The foregoing shall not apply however to the
consideration of an inquiry, offer or proposal not solicited by
WHFC or the BANK or any of their respective officers, directors,
agents or affiliates which relates to the possible sale or other
disposition of WHFC SHARES or the BANK SHARES by shareholders or
the possible sale or other disposition of all or substantially
all of WHFC's or the BANK's assets to, or merger or
consolidation with, another corporation or association if and to
the extent that the board of directors of WHFC reasonably
determines in good faith after consultation with Xxxx and
counsel to WHFC that failure to consider such ACQUISITION
TRANSACTION could reasonably be expected to constitute a breach
of its fiduciary duties to the shareholders of WHFC; provided,
however, that WHFC shall give CAMCO prompt notice of any such
proposal of an ACQUISITION TRANSACTION and keep CAMCO promptly
informed regarding the substance thereof and the response of the
board of directors of WHFC thereto.
SECTION 5.03. ACCOUNTING POLICIES. Before the
EFFECTIVE TIME and at the request of CAMCO, WHFC or the BANK
shall promptly (a) establish and take such reserves and accruals
to conform the BANK's loan, accrual and reserve policies to
CAMCO's policies; (b) establish and take such accruals, reserves
and charges in order to implement such policies in respect of
excess facilities and equipment capacity, severance costs,
litigation matters, write-off or write-down of various assets
and other appropriate accounting adjustments; and (c) recognize
for financial accounting purposes such expenses of the MERGER
and restructuring charges related to or to be incurred in
connection with the MERGER, to the extent permitted by law and
consistent with GAAP and with the fiduciary duties of the
officers and directors of WHFC and the BANK; provided, however,
that neither WHFC nor the BANK shall be obligated to make any
such changes or adjustments unless they have received a written
certification from CAMCO that all conditions set forth in
Sections 7.01(a) through (e), have been satisfied or waived and
further provided that no basis for termination of this AGREEMENT
by any party pursuant to Article Eight is then extant.
. SECTION 5.04 TAX REPRESENTATION. WHFC and the
BANK will use their reasonable efforts to cause the MERGER, and
will take no action which would cause the MERGER not, to qualify
for treatment as a "reorganization" within the meaning of
Section 368(a) of the CODE for federal income tax purposes.
ARTICLE SIX
FURTHER AGREEMENTS
SECTION 6.01. REGULATORY APPROVALS; COOPERATION.
(a) CAMCO shall use its best efforts to file within 45 days of
the date hereof all REGULATORY APPLICATIONS required in order to
consummate the MERGER. CAMCO shall keep WHFC reasonably
informed as to the status of such applications and make
available to WHFC copies of such
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applications as filed and any supplementary filed materials and
all responses from the regulatory authorities. WHFC and the
BANK shall have the right to review and approve in advance all
characterizations of the information relating to WHFC or the
BANK, as the case may be, which appear in any REGULATORY
APPLICATION. In addition, CAMCO shall furnish to WHFC for
review a copy of each REGULATORY APPLICATION prior to its
filing.
(b) WHFC and the BANK will cooperate and will
cause their respective directors, officers, employees, agents
and advisors to cooperate, to the extent reasonable or
necessary, with CAMCO in connection with the preparation of the
REGULATORY APPLICATIONS and the REGISTRATION STATEMENT.
(c) CAMCO will cooperate and will cause its
directors, officers, employees, agents and advisors to
cooperate, to the extent reasonable or necessary, with WHFC in
connection with the preparation of the REGISTRATION STATEMENT
and the JOINT PROXY STATEMENT.
SECTION 6.02. SPECIAL MEETING OF SHAREHOLDERS OF
WHFC. WHFC shall take all steps necessary to duly call, give
notice of, convene and hold a meeting of its shareholders for
the purpose of voting upon this AGREEMENT as required by
applicable law. WHFC shall use its reasonable efforts to hold
such meeting as soon as practicable following the date of this
AGREEMENT. The Board of Directors of WHFC shall (i) to the
extent consistent with their fiduciary duties, recommend to its
shareholders the adoption of this AGREEMENT and the approval of
the transactions contemplated hereby and any other matters to be
submitted to the shareholders in connection therewith and (ii)
use their reasonable efforts to obtain the necessary adoptions
by the shareholders of this AGREEMENT, any amendments hereto,
and the transactions contemplated hereby. Notwithstanding the
foregoing, if the Board of Directors of WHFC shall have
reasonably determined in good faith in accordance with Section
5.02 of this AGREEMENT that such recommendation is reasonably
likely to constitute a breach of its fiduciary duties to the
shareholders of WHFC, then the Board of Directors of WHFC shall
not be obligated to recommend to its shareholders adoption of
this AGREEMENT or to present this AGREEMENT to the shareholders
of WHFC for their adoption at a meeting or to hold a meeting for
such purpose.
SECTION 6.03. SPECIAL MEETING OF SHAREHOLDERS OF
CAMCO. CAMCO shall take all steps necessary to duly call, give
notice of, convene and hold a meeting of its shareholders for
the purpose of voting upon this AGREEMENT as required by
applicable law. CAMCO shall use its reasonable efforts to hold
such meeting as soon as practicable following the date of this
AGREEMENT. The Board of Directors of CAMCO shall (i) recommend
to its stockholders the adoption of this AGREEMENT and the
approval of the transactions contemplated hereby and any other
matters to be submitted to the shareholders in connection
therewith and (ii) use their reasonable efforts to obtain the
necessary adoption by the shareholders of this AGREEMENT, any
amendments hereto, and the transactions contemplated hereby.
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SECTION 6.04. AFFILIATES COMPLIANCE WITH THE
1933 ACT. (a) Within 45 days after the date of this AGREEMENT,
WHFC shall identify to CAMCO all persons who WHFC reasonably
believes to be "affiliates," as defined in paragraphs (c) and
(d) of Rule 145 under the 1933 ACT (hereinafter referred to as
the "AFFILIATES"). Thereafter and until the EFFECTIVE TIME,
WHFC shall identify to CAMCO each additional person whom it
reasonably believes to have thereafter become its AFFILIATE.
(b) WHFC shall use its best efforts to obtain from
each person who is identified as an AFFILIATE for delivery to
CAMCO before the EFFECTIVE DATE a written agreement in which
such AFFILIATE confirms that the CAMCO SHARES received by such
AFFILIATE in the MERGER shall be transferable only in accordance
with Rule 145 of the 1933 ACT.
SECTION 6.05. EMPLOYEES. (a) All employees of
the BANK on July 1, 1999 who are actively employed at the
EFFECTIVE TIME shall, upon satisfactory review of employment
files and subject to CAMCO employee standards of performance,
continue as employees of the BANK at the EFFECTIVE TIME and,
with respect to employees who are not currently covered by a
written employment or severance agreement with the BANK, shall
be employed as at will employees at the same base compensation
they are receiving from the BANK. Any employee who is currently
covered by a written employment or severance agreement will
continue his employment in accordance with the terms of such
written agreement except as provided in this AGREEMENT. Except
as specifically provided in this AGREEMENT, no employee of the
BANK shall be entitled to be eligible for or participate in any
qualified or non-qualified employee benefit program or plan
maintained by CAMCO or its subsidiaries.
(b) Prior to the EFFECTIVE TIME and subject to
CAMCO's approval, CAMCO will authorize the BANK to enter into a
new employment agreement with Xxxxxxx X. Xxxxxxx effective at
such time for a term of three years and otherwise upon
substantially identical terms and conditions (including
compensation) as are contained in the employment agreement of
February 6, 1995 as amended on March 25, 1996, February 18, 1997
and June 22, 1998, except that: (i) the transactions
contemplated by this AGREEMENT will not be deemed a change of
control and the employee will waive all rights under the
existing or new contract with respect to this transaction as set
forth in this AGREEMENT, and will execute a written release of
all claims pursuant to his existing employment contract; and
(ii) the provisions of the 1998 amendment related to the
Westwood Homestead Grantor Trust shall not be applicable and the
Westwood Homestead Grantor Trust shall be terminated with
respect to said employment contract.
(c) Prior to the EFFECTIVE TIME, BANK will: (i)
enter into an employment agreement with Xxxxxx X. Xxxxxxx,
effective as of the EFFECTIVE TIME and upon substantially
identical terms and conditions as the new employment agreement
with Xxxxxxx X. Xxxxxxx entered into pursuant to Section 6.05(b)
hereof (other than compensation), except that the term of such
agreement shall be one year and Xx. Xxxxxxx'x compensation from
the BANK shall not be increased without prior consent of CAMCO;
and (ii) enter into a new severance agreement with Xxxxxx X.
Xxxxxxx effective upon the expiration of the employment
agreement
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for a term of two years and otherwise upon substantially
identical terms and conditions as are contained in the severance
agreement of September 27, 1996 as amended June 22, 1998,
provided that Paragraph 1(d) as amended shall be eliminated in
its entirety and no comparable provision shall be contained in
the new severance agreement. The obligations of CAMCO pursuant
to this Section 6.05(c) will be subject to Xx. Xxxxxxx'x
execution of a written release of all claims pursuant to his
existing severance agreement and the amendment or termination of
any applicable Grantor Trust to eliminate any funding obligation
associated with such severance agreement.
(d) Prior to the EFFECTIVE TIME, the BANK will
enter into a new three-year severance agreement effective at the
EFFECTIVE TIME with Xxxx X. Xxxxx upon substantially identical
terms and conditions as are contained in the severance agreement
of September 27, 1996 as amended June 22, 1998, provided that
Paragraph 1(d) as amended shall be eliminated in its entirety
and no comparable provision shall be contained in the new
severance agreement, and that the new severance agreement will
permit Mr. Essen to voluntarily terminate employment for any
reason during the twelve-month period after the EFFECTIVE TIME
and be paid, by the BANK, the maximum termination benefit
provided under Paragraph 1 of his existing agreement. The
obligations of CAMCO pursuant to this Section 6.05(d) will be
subject to Mr. Essen's execution of a written release of all
claims pursuant to his existing severance agreement and the
amendment or termination of any applicable Grantor Trust to
eliminate any funding obligation associated with such severance
agreement.
SECTION 6.06. EMPLOYEE BENEFITS. (a)(i) The health
insurance plan currently sponsored by the BANK for the benefits
of its employees and administered through the Ohio League of
Financial Institutions will continue to be the health insurance
plan of the BANK, provided, CAMCO may in its discretion in the
future provide coverage under the health insurance plan
maintained by CAMCO for the benefit of the employees of CAMCO
and its subsidiaries; provided, that all waiting periods and
pre-existing condition limitations shall be waived and employees
are given full credit for claims arising prior to the change in
health plans for purposes of deductibles, out-of-pocket
maximums, benefit maximums and all other similar limitations for
the applicable plan year in which any transition is made and
provided, further, that such plan shall permit the continued
coverage of all individuals entitled to purchase health
insurance through the plan of the BANK. If such waiting
periods, pre-existing condition limitations and other provisions
are not waived, CAMCO shall keep in place, so long as legally
possible, the health insurance plan currently maintained by the
BANK, provided that CAMCO may in its discretion keep the health
insurance plan maintained by the BANK in place, in lieu of
providing coverage to BANK employees under the health insurance
plan maintained by CAMCO for employees of CAMCO and its
subsidiaries.
(ii) The BANK will allow no new additions to
beneficiaries of its supplemental medical retirement health
insurance plan and the supplemental medical retirement health
insurance plan will be terminated or amended prior to the
EFFECTIVE TIME to allow only for the current one beneficiary to
be covered.
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(b) WHFC and the BANK shall take all steps
necessary to terminate WHFC's 401(k) Plan as promptly as
possible and prior to the EFFECTIVE TIME, and to file as soon as
possible, an Application for Determination with the Internal
Revenue Service (the "IRS") regarding tax qualification upon
termination. WHFC's Employee Stock Ownership Plan (the "ESOP")
shall be terminated and the ESOP's net assets shall be
distributed as promptly as possible. Subject to applicable law
and regulation, commencing as promptly as possible following
both the termination of WHFC's 401(k) Plan and the final
distribution under the ESOP pursuant to 6.06(c) of this
AGREEMENT, or such earlier date as may be required under the
CODE or ERISA, employees of the BANK shall become participants
in the CAMCO 401(k) Plan in accordance with the terms and
conditions of such Plan as then in effect, with prior service
credit given for their years of employment by the BANK for
eligibility and vesting purposes. Except as otherwise provided
herein, after the EFFECTIVE TIME, BANK employees shall be
entitled to participate in all CAMCO employee benefit plans and
programs generally available to employees of CAMCO and its
subsidiaries, including, without limitation, all vacation and
sick leave programs and the Return on Equity Cash Bonus Plan.
BANK employees shall be given full credit for prior service for
purposes of vesting, eligibility for participation and benefit
levels and all waiting periods shall be waived. CAMCO shall
honor all accrued vacation leave for employees of BANK following
the EFFECTIVE TIME.
(c)(i) WHFC and the BANK are authorized to commence
termination of the ESOP and to file as soon as possible an
Application for Determination with the IRS regarding tax
qualification upon termination. No additional contribution
shall be made to the ESOP by CAMCO, WHFC or the BANK except as
necessary to make the minimum required payment under the current
exempt loan (the "LOAN") between WHFC and the ESOP; provided,
however, that all such contribution shall be deductible by WHFC
and the BANK under Section 404 of the CODE and the allocations
of such contribution shall otherwise be in compliance with
Section 415 of the CODE. All WHFC SHARES held by the Trustee of
the ESOP at the EFFECTIVE TIME shall be exchanged by the Trustee
for the PER SHARE MERGER CONSIDERATION in accordance with this
AGREEMENT and the cash proceeds paid by CAMCO to the ESOP with
respect to the unallocated WHFC SHARES owned by the ESOP shall
be applied against the LOAN. To the extent that such cash
proceeds together with other cash owned by the ESOP are
insufficient to retire the LOAN, the Trustee for the ESOP shall
dispose of shares held in the suspense account of the ESOP for
the purpose of retiring the LOAN. Any shares and other assets
remaining in the suspense account following repayment of the
LOAN in full including interest will be available for allocation
and distribution as promptly as possible to participants (as
defined in the ESOP) in accordance with the provisions of the
ESOP and applicable law. It is the intent of the parties that
the ESOP be terminated and distributions made concurrently with
the CLOSING to the extent possible.
(ii) In the event that the IRS determines that the
allocation of assets remaining in the suspense account following
repayment of the LOAN in full is subject to the limits on annual
additions pursuant to Section 415 of the CODE, then CAMCO will
make all reasonable efforts, to the extent permissible under
applicable provisions of the CODE and related Treasury
Regulations to continue the ESOP trust through the last day of
the ESOP plan year following the ESOP plan year during which the
EFFECTIVE TIME occurs, solely for the benefit of those
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individuals who are participants in the ESOP immediately before
the EFFECTIVE TIME, and to allocate such remaining assets to
ESOP participants in accordance with the terms of the ESOP to
the full extent permissible under Section 415 of the CODE
between the EFFECTIVE TIME and the last day of the ESOP plan
year following the ESOP plan year during which the EFFECTIVE
TIME occurs. In the event that all assets held by the ESOP
trust are allocated prior to the last day of the ESOP plan year
during which the EFFECTIVE TIME occurs, the ESOP trust shall be
immediately terminated and participants' ESOP accounts will be
distributed as soon as practicable thereafter.
(iii) The provisions in this paragraph 6.06(c) are
expressly subject to (x) WHFC and the BANK making all necessary
amendments to the ESOP which amendments have been approved by
the IRS and are in effect at the EFFECTIVE TIME; (y) such
amendments include, without limitation, the amendment of Section
17.3 of the ESOP to eliminate the provisions of such section
added by the 1997 amendment to the ESOP dated November 10, 1997
and to make all provisions of the PLAN consistent with this
AGREEMENT; and (z) all amendments are satisfactory to CAMCO.
SECTION 6.07. BOARD OF DIRECTORS. (a) The
present members of the Board of Directors of the BANK will
continue as directors of the BANK following the EFFECTIVE TIME.
The BANK's non-employee directors' fees and health insurance
benefits for current directors will be maintained at the same
level as fixed by the shareholders at the 1999 Annual Meeting of
the BANK.
(b) The BANK will add two persons to its Board of
Directors at the EFFECTIVE TIME to be designated by CAMCO. If
necessary, WHFC as sole shareholder of the BANK will cause the
Constitution of the BANK to be amended prior to the EFFECTIVE
TIME to provide for the additional directors. CAMCO shall
modify the resolution adopted at the November 24, 1998 Board
meeting setting the maximum number of directors of a subsidiary
bank at seven to except out the BANK from these limitations.
(c) CAMCO will add Xxxxxxx X. Xxxxxxx to its Board
of Directors at the EFFECTIVE TIME subject to compliance with
Section 6.05(b). If necessary CAMCO shall take all actions
prior to the EFFECTIVE TIME to increase the size of its Board of
Directors from nine to ten. CAMCO agrees to re-nominate Xx.
Xxxxxxx for at least one additional three year term.
(d) Subject to the fiduciary duty of its Board of
Directors, CAMCO as sole shareholder of the BANK after the
EFFECTIVE TIME will vote the shares of the BANK for the re-
election of the current members of the Board of Directors (other
than Xxxx X. Xxxxxxxxxxxx who is retiring) to three-year terms
at the next annual meeting of shareholders at which their terms
expire.
(e) (i) Neither the directors to be selected by
CAMCO nor any other new directors of the BANK will be entitled
to benefits under the Westwood Homestead Savings Bank Directors
Retirement Plan (the "PLAN"), as amended, dated January 1, 1995,
provided, that the PLAN shall be amended so that Quarterly
Accruals under the PLAN shall be determined based
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on actuarial calculations of amounts required to fund targeted
benefits rather than on quarterly financial expense determined
under generally accepted accounting principles; (ii) except as
specifically provided in this Section 6.07(e) the PLAN shall be
honored by CAMCO in accordance with the terms of said PLAN;
(iii) the PLAN and the applicable Trust Agreement (either in
existence or to be established) shall provide for and
incorporate the provisions of this Section 6.07(e). WHFC or the
BANK shall obtain all necessary approvals or consents required
to be obtained to effect the provisions of this Section 6.07(e);
(iv) prior to the EFFECTIVE TIME, the amount by which the PLAN
is underfunded will be actuarially determined by the parties
using the payments required by Article VIII. Payment will be
made to the Trust provided for in the PLAN in accordance with
Article VIII in an amount not greater $204,541. No further
funds or other consideration of any type will be provided
thereafter by CAMCO, WHFC or the BANK. The BANK will provide to
CAMCO written agreements of all beneficiaries to this
satisfaction of all obligations of CAMCO, WHFC and the BANK
under the PLAN or otherwise; and (v) the existing Trustee shall
continue as Trustee. No person who is an officer, director or
employee of CAMCO shall become a Trustee and at all times the
selection of any replacement trustee shall be done by
individuals constituting the WHFC Board as of the date hereof.
SECTION 6.08. MANAGEMENT RECOGNITION PLAN. Except as
specifically provided in this Section 6.08, the existing
Management Recognition Plan (the "PLAN") and grants of award as
listed in Section 3.29 of the WHFC DISCLOSURE SCHEDULE in an
amount not to exceed 49,226 WHFC SHARES shall be honored
by CAMCO in accordance with the terms of said PLAN and grants of
award and applicable law and regulations. Prior to the CLOSING,
the PLAN shall be amended to delete Section 7.05 as added June
22, 1998 and, if lawful, to add a new Section 7.05 to provide
that a participant may elect, in the event of a change of
control, (i) to receive distribution as provided in 7.01(b) of
the PLAN or (ii) to receive distribution as provided in Section
7.01(a) of the PLAN. The Westwood Homestead Financial
Corporation "Grantor Trust Agreement" of June 22, 1998 shall be
terminated with respect to the PLAN and shall have no
application to the PLAN and the Trust of March 10, 1997. If
necessary the Trust of March 10, 1997 shall be re-established.
No awards granted subsequent to June 30, 1998 will be valid in
any respect except for awards to Xxxxxx X. Xxxxxxx and Xxxx X.
Xxxxx in an aggregate total of 5,000 WHFC SHARES and included in
the above-mentioned 49,226 WHFC SHARES and new directors of the
BANK will receive no awards. Prior to the EFFECTIVE TIME, WHFC
shall direct the Management Recognition Plan Committee and/or
the Trustee, if appropriate, to return the 33,060 unawarded WHFC
SHARES to WHFC and the Committee and/or the Trustee shall
promptly effect such directive. At the EFFECTIVE TIME the
persons composing the Trustee of the PLAN shall resign and
persons designated by CAMCO shall become the Trustee. At the
EFFECTIVE TIME, the Management Recognition Plan Committee shall
resign and CAMCO shall appoint a new committee.
SECTION 6.09. ACCESS. Until the EFFECTIVE TIME,
WHFC and the BANK shall afford to CAMCO, and CAMCO shall afford
to WHFC and the BANK, and to their respective officers and
representatives (including, without limitation, counsel,
financial advisers and independent accountants), reasonable
access to their properties, personnel, books, records and
affairs. Such access shall include, but shall not be limited
to, (i) permitting verification, by audit or otherwise, of any
representation or warranty made hereunder; (ii) authorizing
release of
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any information (including the work papers of such independent
auditors and financial consultants); (iii) consistent with
applicable regulations or procedures, furnishing regular and
special examination reports since the date of this AGREEMENT;
and (iv) delivering copies of all documents or reports or
correspondence filed and any correspondence with any federal
regulatory or supervisory agency from the date of this
AGREEMENT. Each party shall furnish the other party with such
additional financial and operating data and other information as
to its businesses and properties as may be reasonably requested.
SECTION 6.10. CONFIDENTIALITY. The parties
acknowledge the confidential and proprietary nature of the
information as hereinafter described which has heretofore been
exchanged and which will be received from each other hereunder
(hereinafter referred to as the "INFORMATION") and agree to hold
and keep the same confidential. Such INFORMATION will include
any and all financial, technical, commercial, marketing,
customer or other information concerning the business,
operations and affairs of a party that may be provided to the
other, irrespective of the form of the communications, by such
party's employees or agents. Such INFORMATION shall not include
information that is or becomes generally available to the public
other than as a result of a disclosure by a party or its
representatives in violation of this AGREEMENT, or INFORMATION
which is required to be furnished or used in connection with
legal proceedings. The parties agree that the INFORMATION will
be used solely for the purposes contemplated by this AGREEMENT
and that such INFORMATION will not be disclosed to any person
other than employees and agents of a party who are directly
involved in evaluating the transaction. The INFORMATION shall
not be used in any way detrimental to a party, including use
directly or indirectly in the conduct of the other party's
business or enterprise in which such party may have an interest,
now or in the future, and whether or not now in competition with
such other party. Upon the written request of the disclosing
party, upon termination of this AGREEMENT, the other parties
will promptly return or destroy INFORMATION in their possession
and certify to the disclosing party that the party has done so.
SECTION 6.11. PRESS RELEASES. CAMCO and WHFC shall
consult with each other before issuing any press release or
otherwise making any public statements with respect to the
MERGER and shall not issue any such press release or make any
such public statement without obtaining the prior consent of the
other party, except as may be required by law or by obligations
pursuant to any listing agreement with any national securities
association.
SECTION 6.12. COSTS AND EXPENSES; TERMINATION FEE.
Whether or not the MERGER is consummated, all costs and expenses
incurred in connection with this AGREEMENT, the JOINT
PROXY STATEMENT, the REGISTRATION STATEMENT and the transactions
contemplated hereby shall be paid by the party incurring such
costs and expenses. WHFC and the BANK hereby agree that if this
AGREEMENT is terminated as a result of a willful breach by WHFC
or the BANK, then WHFC or the BANK shall promptly (and in any
event within ten (10) business days after such termination) pay
all reasonable EXPENSES of CAMCO in an amount not to exceed
$250,000. CAMCO hereby agrees that if this AGREEMENT is
terminated as a result of a willful breach by CAMCO, then CAMCO
shall promptly (and in any event within ten (10) business days
after such termination) pay all reasonable EXPENSES of the WHFC
and the BANK in an amount not to exceed $250,000. For
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purposes of this Section 6.12, the "EXPENSES" of a party shall
include all reasonable out-of-pocket expenses of that party
(including all fees and expenses of counsel, accountants,
financial advisors, experts and consultants to that party)
incurred by it or on its behalf in connection with the
consummation of the transactions contemplated by this AGREEMENT.
SECTION 6.13. REASONABLE EFFORTS. Subject to the
terms and conditions herein provided, each of the parties hereto
agrees to use all reasonable efforts to take, or cause to be
taken, all action, and to do or cause to be done all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this AGREEMENT.
SECTION 6.14. NOTIFICATION OF EVENTS. At all times
from the date of this AGREEMENT until the EFFECTIVE TIME, each
party shall promptly notify the other in writing of any
materially adverse business conditions threatening its normal
business operations or of the occurrence of any event or the
failure of any event to occur which might reasonably be expected
to result in a breach of or a failure to comply with any
representation, warranty, covenant, condition or agreement
contained in this AGREEMENT or of the commencement of any
action, suit, proceeding or investigation against it.
SECTION 6.15. VOTING AGREEMENT. Concurrently with
the execution and delivery of this AGREEMENT, or not later than
ten days thereafter, and as a condition and material inducement
to CAMCO's willingness to enter into this AGREEMENT, each of the
directors and executive officers of WHFC and the BANK shall
enter into WHFC Shareholder Agreement in the form attached
hereto as Exhibit B.
SECTION 6.16. STOCK OPTION AGREEMENT. Concurrently
with the execution and delivery of this AGREEMENT and as a
condition and material inducement to CAMCO's willingness to
enter into this AGREEMENT, WHFC is entering into the WHFC STOCK
OPTION AGREEMENT.
SECTION 6.17. INDEMNIFICATION. Nothing in this
AGREEMENT is intended to affect any rights to indemnification to
which any officer or director of WHFC or the BANK may be
entitled pursuant to the Articles of Incorporation, Constitution
or Bylaws of WHFC or the BANK in effect prior to the EFFECTIVE
TIME. From the EFFECTIVE TIME and continuing for a period of
three years thereafter, the current and former officers and
directors of WHFC and the BANK shall be indemnified by CAMCO
from their acts and omissions occurring prior to the EFFECTIVE
TIME to the maximum extent permitted by the Certificate of
Incorporation and Bylaws of CAMCO but subject to any applicable
limitations of Delaware law. From the EFFECTIVE TIME and
continuing for a period of three years thereafter, the current
and former officers and directors of the BANK shall be
indemnified by the BANK for their acts and omissions occurring
prior to the EFFECTIVE TIME to the extent permitted by Ohio law.
As a condition to receiving such indemnification, the party
claiming indemnification shall assign to CAMCO, by separate
writing, all right, title and interest in and to the proceeds of
the claiming party's applicable insurance coverage, if any,
including insurance maintained or provided by CAMCO or WHFC or
the BANK to the extent of such indemnity. No person shall be
entitled to
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such indemnification with respect to a claim (i) if such person
fails to cooperate in the defense and investigation of such
claim as to which indemnification may be made, (ii) made by such
person against CAMCO, its subsidiaries, WHFC or the BANK arising
out of or in connection with this AGREEMENT, the transactions
contemplated hereby or the conduct of the business of CAMCO, its
subsidiaries, WHFC or the BANK, or (iii) if such person fails to
deliver such notices as may be required under any applicable
directors and officers liability insurance policy to preserve
any possible claims of which the claiming party is aware, to the
extent such failure results in the denial of payment under such
policy.
Subject to WHFC and the BANK providing all requested
information and representations to CAMCO's directors' and
officers' liability insurance carrier, CAMCO shall add a rider,
to be effective at the EFFECTIVE TIME, to CAMCO's existing
directors' and officers' liability insurance policy covering the
acts and omissions of the officers and directors of WHFC and the
BANK occurring prior to the EFFECTIVE TIME and to continue such
rider for a period of three years.
SECTION 6.18. CONDUCT OF CAMCO BUSINESS. From
the date of this AGREEMENT until the EFFECTIVE TIME, CAMCO
shall:
(a) Use all reasonable efforts to preserve intact
its business organization and assets and maintain its rights,
franchises and existing relationships with customer, suppliers,
employees and business associates;
(b) Notify WHFC in writing within five business
days of (i) the existence of any adverse business conditions
threatening the normal business operations of CAMCO, (ii) the
occurrence of any event or the failure of any event to occur
which might result in a breach of or a failure to comply with
any representations, warranty, covenant, condition or agreement
by or pertaining to CAMCO contained in this AGREEMENT, (iii) the
commencement of any material action, suit, proceeding, or
investigation against CAMCO and (iv) the tender of any offer to
acquire CAMCO by merger or otherwise;
(c) Take no action that would adversely affect the
ability of CAMCO to obtain any necessary approvals of
governmental authorities required for the transactions
contemplated hereby without the imposition of a burdensome
restriction or condition, or adversely affect the ability of
CAMCO to perform its covenants and agreements under this
AGREEMENT;
(d) Take all action necessary to cause to be
listed on The Nasdaq Stock Market the CAMCO SHARES to be issued
pursuant to this AGREEMENT; and
(e) Use all reasonable efforts to obtain any
consent, authorization or approval of, or waiver or exemption
by, any governmental entity or third party required to be
obtained or made by it in connection with the Merger.
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SECTION 6.19. ACTIONS BY WHFC OR THE BANK. (a)
If necessary, a notice or rebuttal of presumption, as
appropriate, shall be filed by the ESOP with the Federal Reserve
Board pursuant to 12 USC 1817(j) and the notice shall be
effective or the Federal Reserve Board shall approve the
rebuttal and find no control of WHFC prior to the CLOSING.
(b) WHFC or the BANK shall obtain, prior to
closing, an owners title insurance policy with respect to each
of the real properties listed in Section 3.11(c) of the WHFC
DISCLOSURE SCHEDULE showing title in WHFC or the BANK and as set
forth in Section 3.11(c) and in an appropriate amount of
coverage.
(c) The WHFC STOCK OPTION AGREEMENT will be
executed on a date subsequent to the date hereof.
ARTICLE SEVEN
CLOSING MATTERS
SECTION 7.01. CONDITIONS TO OBLIGATIONS OF CAMCO,
WHFC AND THE BANK. Notwithstanding any other provision
of this AGREEMENT, the obligations of CAMCO, WHFC and the BANK
to effect the MERGER shall be subject to the fulfillment of each
of the following conditions:
(a) This AGREEMENT shall have been validly adopted
by the affirmative vote of the holders of at
least the number of outstanding WHFC SHARES
required under Indiana law and WHFC's Articles
of Incorporation and Bylaws;
(b) The AGREEMENT shall have been validly adopted
by the affirmative vote of the holders of at
least the number of outstanding CAMCO SHARES
required under Delaware law and CAMCO's
Certificate of Incorporation and Bylaws;
(c) All permits, approvals, consents,
authorizations, exemptions or waivers of any
federal or state governmental body or agency
necessary or appropriate for consummation of
the MERGER shall have been obtained and all
notices required to be filed shall have been
filed and any objection or waiting period with
respect to such notice shall have expired
including the 10-L Election by the BANK and
the de-registering of WHFC as a Bank Holding
Company.
(d) All waivers, consents and approval of every
person, in addition to those required under
subsections (a), (b) and (c) of this Section
7.01, necessary or appropriate for the
consummation of the MERGER shall have been
obtained;
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(e) There shall not be in effect any federal or
state law, rule or regulation or any order or
decision of a court of competent jurisdiction
which prevents or materially delays the
consummation of the MERGER;
(f) CAMCO and WHFC shall have received an opinion
of Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP (which
opinion shall not have been withdrawn at or
prior to the CLOSING) to the effect that the
MERGER, when consummated in accordance with
the terms hereof, will constitute a
reorganization within the meaning of Section
368(a)(1)(A) of the CODE and that no gain or
loss will be recognized by WHFC shareholders
to the extent they receive CAMCO SHARES in
exchange for WHFC SHARES; and
(g) The REGISTRATION STATEMENT (including any
post-effective amendment thereto) shall have
been declared effective by the SEC, and no
proceeding shall be pending or, to the
knowledge of CAMCO or WHFC, threatened by the
SEC to suspend the effectiveness of the
REGISTRATION STATEMENT.
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF CAMCO. In
addition to the conditions contained in Section 7.01 of this
AGREEMENT, the obligations of CAMCO to effect the MERGER shall
also be subject to the fulfillment of each of the following
conditions unless fulfillment is waived by CAMCO in writing:
(a) The representations and warranties of WHFC and
the BANK contained in Article Three of this
AGREEMENT shall be true in all material
respects at and as of the date hereof and at
and as of the day of the CLOSING as if made at
and as of such time, except where such
representation or warranty is made as of a
specific date;
(b) WHFC and the BANK shall have duly performed
and complied in all material respects with all
agreements, covenants and conditions required
by this AGREEMENT to be performed or complied
with by WHFC and the BANK before or on the day
of the CLOSING;
(c) There shall not have been a material adverse
change in the financial condition, assets,
liabilities, obligations, properties, business
or prospects of WHFC or the BANK after the
date of this AGREEMENT, except changes
resulting from action taken by WHFC or the
BANK pursuant to Section 5.03 of this
AGREEMENT, changes resulting from or
attributable to expenses incurred in
connection with the transactions contemplated
by this AGREEMENT and changes resulting from
or attributable to (i) changes in laws and
regulations particularly affecting financial
institutions and their holding companies; (ii)
changes in GAAP or regulatory accounting
principles generally applicable to financial
institutions and
-43-
their holding companies; and (iii) changes in
economic conditions applicable to depository
institutions generally or in general levels of
interest rates.
(d) WHFC and the BANK shall each have delivered to
CAMCO a certificate dated the day of the
CLOSING and signed by the President and the
chief financial officer of each of WHFC and
the BANK to the effect set forth in
subsections (a), (b) and (c) of this Section
7.02;
(e) The contracts, amendments, agreements,
consents and actions required by Section
6.05(b), (c) and (d), Section 6.07(e) and
Section 6.08 shall have occurred to the
reasonable satisfaction of CAMCO;
(f) There shall not be any action or proceeding
commenced by or before any court or
governmental agency or authority in the United
States, that challenges or seeks to prevent
the consummation of the MERGER or seeks to
impose material limitations on the ability of
CAMCO to exercise full rights of ownership of
the assets or business of WHFC and the BANK;
(g) There shall not have been proposed, nor shall
there be in effect, any federal or state law,
rule, regulation, order or statement of policy
that, in the reasonable judgment of CAMCO,
would: (i) prevent or materially delay the
consummation of the MERGER or materially
interfere with the reasonable operation of the
business of WHFC or the BANK (ii) materially
adversely affect the ability of CAMCO to enjoy
the economic or other benefits of the MERGER
or (iii) impose any material adverse
condition, limitation or requirement on CAMCO
in connection with the MERGER;
(h) WHFC and the BANK shall not have incurred any
damage, destruction or similar loss, not
covered by insurance, materially affecting its
businesses or properties;
(i) The shareholders' equity of WHFC on the day of
the CLOSING and as calculated in accordance
with GAAP shall not be less than $22,778,105,
without giving effect to (i) reserves,
accruals and charges taken or established by
WHFC or the BANK at the request of CAMCO in
accordance with Section 5.03 of this
AGREEMENT, (ii) expenses incurred in
connection with the transactions contemplated
by this AGREEMENT; and (iii) realized or
unrealized losses on securities classified as
available for sale in the WHFC AUDITED
STATEMENTS;
(j) WHFC and the BANK shall have complied with
Section 5.03 hereof to the reasonable
satisfaction of CAMCO;
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(k) CAMCO shall have received the affiliate
letters required by Section 6.04 of this
AGREEMENT or WHFC shall have used its
reasonable best efforts to have obtained same;
(l) Section 6.19(a), 6.19(b)and 6.19(c) shall have
been complied with to the reasonable
satisfaction of CAMCO; and
(m) WHFC shall have obtained a determination
letter from the IRS satisfactory to CAMCO that
the ESOP is qualified upon its termination and
that the PER SHARE MERGER CONSIDERATION
received by the ESOP pursuant to this
AGREEMENT and the MERGER (including, if
necessary, the proceeds of the sale of CAMCO
SHARES) together with all other assets of the
ESOP may be immediately allocated to the
participants' accounts as of the date of
termination of the ESOP and the amendments to
the ESOP required by Section 6.06(c) have been
approved by the IRS, and are effective.
SECTION 7.03. CONDITIONS TO OBLIGATIONS OF WHFC
AND THE BANK. In addition to the conditions contained in Section
7.01 of this AGREEMENT, the obligations of WHFC and the BANK to
effect the MERGER shall also be subject to the fulfillment of
each of the following conditions:
(a) The representations and warranties of CAMCO
contained in Article Four of this AGREEMENT
shall be true in all material respects at and
as of the date hereof and at and as of the
date of the CLOSING as if made at and as of
such time;
(b) CAMCO shall have duly performed and complied
in all material respects with all agreements,
covenants and conditions required by this
AGREEMENT to be performed or complied with by
it before or at the CLOSING;
(c) There shall not have been a material adverse
change in the financial condition, assets,
liabilities, obligations, properties, business
or prospects of CAMCO after the date of this
AGREEMENT;
(d) CAMCO shall have delivered to WHFC a
certificate dated the day of the CLOSING and
signed by the President and the Chief
Financial Officer of CAMCO to the effect set
forth in subsections (a), (b) and (c) of this
Section 7.03;
(e) The CAMCO SHARES to be issued to holders of
WHFC SHARES shall have been approved for
listing on NASDAQ, subject to official notice
of issuance;
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(f) WHFC shall have received a written opinion of
XXXX, dated as of within three (3) days of the
JOINT PROXY STATEMENT, to the effect that the
PER SHARE MERGER CONSIDERATION to be received
by the holders of WHFC SHARES is fair from a
financial point of view; and
(g) WHFC shall have received reasonable evidence
that the cash needed for the fractional shares
and the cash portion of the aggregate PER
SHARE MERGER CONSIDERATION is available. Such
evidence includes a confirmation by a bank of
an available line of credit for CAMCO's use in
the appropriate amount.
ARTICLE EIGHT
TERMINATION
SECTION 8.01. TERMINATION. This AGREEMENT may
be terminated at any time prior to the date of the CLOSING,
whether before or after approval by the shareholders of CAMCO
and WHFC:
(a) By mutual consent of the Boards of Directors
of WHFC and CAMCO; or
(b) By the Board of Directors of WHFC or CAMCO if:
(i) The MERGER shall not have been
consummated on or before June 30, 2000;
or
(ii) Any event occurs which, in the
reasonable opinion of either Board,
would preclude satisfaction of any of
the conditions set forth in Section 7.01
of this AGREEMENT; or
(c) By the Board of Directors of CAMCO if any
event occurs which, in the reasonable opinion
of such Board, would preclude compliance with
any of the conditions set forth in Section
7.02 of this AGREEMENT; or
(d) By the Board of Directors of WHFC if any event
occurs which, in the reasonable opinion of
such Board, would preclude compliance with any
of the conditions set forth in Section 7.03 of
this AGREEMENT.
SECTION 8.02. WRITTEN NOTICE OF TERMINATION. In
order to terminate this AGREEMENT pursuant to Section 8.01(a),
(b), (c) and (d), the party so acting shall give written notice
of such termination to the other party. This AGREEMENT shall
terminate on the date such notice is given.
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SECTION 8.03. EFFECT OF TERMINATION. In the
event of the termination of this AGREEMENT, the provisions of
this AGREEMENT shall become void and have no effect; provided,
however, that (a) the provisions set forth in Sections 5.02,
6.10, 6.11 and 6.12 of this AGREEMENT and the WHFC STOCK OPTION
AGREEMENT shall survive such termination and shall remain in
full force and effect and (b) a termination of this AGREEMENT
shall not affect the liability of any party for an uncured
breach of any term or condition of this AGREEMENT.
SECTION 8.04. AMENDMENT. This AGREEMENT may be
amended at any time before or after approval of this AGREEMENT
by the shareholders of WHFC and CAMCO, but after such approval
no amendment shall be made which materially and adversely
affects the rights of such shareholders without the further
approval of such shareholders. This AGREEMENT may not be
amended except by an instrument in writing signed on behalf of
each of the parties hereto.
SECTION 8.05. WAIVER. Any term or provision of
this AGREEMENT (other than the requirement for shareholder
approval) may be waived in writing at any time by the party
which is, or whose shareholders are, entitled to the benefits
thereof.
ARTICLE NINE
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices and other
communications hereunder shall be in writing and shall be deemed
given if delivered personally or mailed by registered or
certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
If addressed to CAMCO:
Xxxxx X. Xxxxxxxx
President, Chief Executive Officer and Chairman of
the Board
Camco Financial Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
with a copy to:
Xxxxx X. Xxxxxxxx
or
Xxxxx Xxxxxxxx Xxxxx
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx Xxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
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If addressed to WHFC or the BANK:
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
Westwood Homestead Financial Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
with a copy to:
Xxxx X. Xxxxxxxxx
Housley Kantarian & Xxxxxxxxx, P.C.
0000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
SECTION 9.02. ENTIRE AGREEMENT. This AGREEMENT
(including the exhibits, documents and instruments referred to
herein or therein) (a) constitutes the entire agreement of the
parties and supersedes all other prior agreements and
understandings, including the Confidentiality Agreement of June
28, 1999, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof; (b) is not
intended to and shall not confer any rights or remedies
hereunder upon any person other than CAMCO, WHFC and the BANK;
(c) shall not be assigned by operation of law or otherwise; and
(d) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Delaware,
except to the extent that Indiana, Ohio or federal law may be
applicable.
SECTION 9.03. EXECUTION IN COUNTERPARTS. This
AGREEMENT may be executed in two or more counterparts which
together shall constitute a single AGREEMENT.
SECTION 9.04. HEADINGS. The headings of articles and
sections herein are for convenience of reference only, do not
constitute a part of this AGREEMENT and shall not be deemed to
limit or affect any of the provisions hereof.
SECTION 9.05. NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES. No representation or warranty shall survive the
EFFECTIVE TIME.
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IN WITNESS WHEREOF, CAMCO, WHFC and the BANK have
caused this AGREEMENT to be signed by their respective duly
authorized officers on the date first above written.
ATTEST: CAMCO FINANCIAL CORPORATION
___________________________ By: _____________________________
Xxxxxxx X. Xxxx Xxxxx X. Xxxxxxxx
Secretary President, Chief Executive
Officer and Chairman of the
Board
ATTEST: WESTWOOD HOMESTEAD FINANCIAL
CORPORATION
___________________________ By: _____________________________
Xxxx Xxx Xxxxxx Xxxxxxx X. Xxxxxxx
Secretary President and Chief Executive
Officer
ATTEST: WESTWOOD HOMESTEAD SAVINGS BANK
___________________________ By: _____________________________
Xxxx Xxx Xxxxxx Xxxxxxx X. Xxxxxxx
Secretary President and Chief
Executive Officer
ACKNOWLEDGMENT
STATE OF OHIO )
) SS:
COUNTY OF GUERNSEY )
BE IT REMEMBERED that on this 6th day of August,
1999, personally came before me, a Notary Public in and for the
State and County aforesaid, Xxxxx X. Xxxxxxxx, President of
Camco Financial Corporation, and duly executed the Agreement of
Merger and Plan of Reorganization before me and acknowledged the
same to be his act and deed and the act and deed of said
corporation and that the facts therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 6th day of August, 1999.
_______________________________
Notary Public
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STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX )
BE IT REMEMBERED that on this 6th day of August,
1999, personally came before me, a Notary Public in and for the
State and County aforesaid, Xxxxxxx X. Xxxxxxx, President of
Westwood Homestead Financial Corporation, and duly executed the
Agreement of Merger and Plan of Reorganization before me and
acknowledged the same to be his act and deed and the act and
deed of said corporation and that the facts therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 6th day of August, 1999.
_______________________________
Notary Public
STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX )
BE IT REMEMBERED that on this 6th day of August,
1999, personally came before me, a Notary Public in and for the
State and County aforesaid, Xxxxxxx X. Xxxxxxx, President of
Westwood Homestead Savings Bank, and duly executed the Agreement
of Merger and Plan of Reorganization before me and acknowledged
the same to be his act and deed and the act and deed of said
corporation and that the facts therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 6th day of August, 1999.
_______________________________
Notary Public
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EXHIBIT A
STOCK OPTION AGREEMENT
Stock Option Agreement, dated as of August __, 1999,
between Camco Financial Corporation, a Delaware corporation
("Grantee"), and Westwood Homestead Financial Corporation, an
Indiana corporation ("Issuer").
W I T N E S S E T H:
WHEREAS, Grantee and Issuer have entered into an Agreement
of Merger and Plan of Reorganization of even date herewith (the
"Merger Agreement"), providing for, among other things, the
merger of Issuer with and into Grantee (the "Merger");
WHEREAS, as a condition and an inducement to Grantee to
enter into the Merger Agreement, Issuer has agreed to grant
Grantee the Option (as hereinafter defined); and
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the
Merger Agreement, the parties hereto agree as follows:
1. (a) Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option
(the "Option") to purchase, subject to the terms hereof, up to
an aggregate of 431,595 fully paid and nonassessable shares (the
"Option Shares") of common stock, par value $0.01 per share, of
Issuer (the "Common Stock") at a price per share equal to $10.50
(the "Option Price"); provided, however, that in no event shall
the number of shares for which this Option is exercisable exceed
19.9% of the issued and outstanding shares of Common Stock
without giving effect to any shares subject to or issued
pursuant to the Option. The number of shares of Common Stock
that may be received upon the exercise of the Option and the
Option Price are subject to adjustment as herein set forth.
(b) In the event that any additional shares of
Common Stock are issued or otherwise become outstanding after
the date of this Agreement (other than pursuant to this
Agreement and other than pursuant to an event described in
Section 5(a) hereof), including, without limitation, pursuant to
stock option or other employee plans or as a result of the
exercise of conversion rights, the number of shares of Common
Stock subject to the Option shall be increased so that, after
such event, such number equals 19.9% of the number of shares of
Common Stock then issued and outstanding without giving effect
to any shares subject to or issued pursuant to the Option.
Nothing contained in this Section l(b) or elsewhere in this
Agreement shall be deemed to authorize Issuer to issue shares in
breach of any provision of the Merger Agreement.
2. (a) Subject to the terms and conditions set forth
herein, the Holder (as hereinafter defined) may exercise the
Option, in whole or part, and from time to time, if, but only
if, both an Initial Triggering Event (as hereinafter defined)
and a Subsequent Triggering Event (as hereinafter defined) shall
have occurred prior to the occurrence of an Exercise Termination
Event (as hereinafter defined), provided that the Holder shall
have sent the written notice of the
first exercise (as provided in paragraph (e) of this Section 2)
within 60 days following the first Subsequent Triggering Event
to occur (or such later period as provided in Section 10). Each
of the following shall be an Exercise Termination Event: (i) the
Effective Time (as defined in the Merger Agreement); (ii)
termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the
occurrence of an Initial Triggering Event, except a termination
by Grantee pursuant to Section 8.01(c) of the Merger Agreement
(unless the breach by Issuer giving rise to such right of
termination was non-volitional); or (iii) the passage of 12
months after termination of the Merger Agreement if such
termination follows the occurrence of an Initial Triggering
Event or is a termination by Grantee pursuant to Section 8.01(c)
of the Merger Agreement (unless the breach by Issuer giving rise
to such right of termination is non-volitional), provided that
if an Initial Triggering Event continues or occurs beyond such
termination and prior to the passage of such 12-month-period,
the Exercise Termination Event shall be 12 months from the
expiration of the Last Triggering Event but in no event more
than 18 months after such termination. The term "Last
Triggering Event" shall mean the last "Initial Triggering Event"
to expire, and the term "Holder" shall mean the holder or
holders of the Option pursuant to this Agreement.
Notwithstanding anything to the contrary contained herein, the
Option may not be exercised at any time when (i) Grantee shall
be in material breach of any of its covenants or agreements
contained in the Merger Agreement such that Issuer shall be
entitled to terminate the Merger Agreement pursuant to Section
8.01(d) thereof as a result of such a material breach and (ii)
no preliminary or permanent injunction or other order against
the delivery of shares covered by the Option issued by any court
of competent jurisdiction shall be in effect.
(b) The term "Initial Triggering Event" shall mean
any of the following events or transactions occurring on or
after the date hereof:
(i) Issuer or any Subsidiary of Issuer (an
"Issuer Subsidiary"), without having received Grantee's prior
written consent, shall have entered into an agreement to engage
in an Acquisition Transaction (as hereinafter defined) with any
person (the term "person" for purposes of this Agreement having
the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations thereunder), other than
Grantee or any Subsidiary of Grantee (a "Grantee Subsidiary") or
the Board of Directors of Issuer (the "Issuer Board") shall have
recommended that the shareholders of Issuer approve or accept
any Acquisition Transaction with any person other than Grantee
or a Grantee Subsidiary. For purposes of this Agreement, (a)
"Acquisition Transaction" shall mean (w) a merger or
consolidation, or any similar transaction, involving Issuer or
any Issuer Subsidiary (other than mergers, consolidations or
similar transactions (i) involving solely Issuer and/or one or
more wholly-owned Subsidiaries of Issuer, provided any such
transaction is not entered into in violation of the terms of the
Merger Agreement, or (ii) in which the shareholders of Issuer
immediately prior to the completion of such transaction own at
least 50% of the Common Stock of Issuer (or the resulting or
surviving entity in such transaction) immediately after
completion of such transaction, provided any such transaction is
not entered into in violation of the terms of the Merger
Agreement), (x) a purchase, lease or other acquisition of all or
any substantial part of the assets or deposits of Issuer or any
Issuer Subsidiary, (y) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting
power of Issuer or
-2-
any Issuer Subsidiary or (z) any substantially similar
transaction; and (b) "Subsidiary" shall have the meaning set
forth in Rule 12b-2 under the 1934 Act;
(ii) Any person, other than Grantee or a
Grantee Subsidiary, shall have acquired beneficial ownership or
the right to acquire beneficial ownership of 20% or more of the
outstanding shares of Common Stock (the term "beneficial
ownership" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder);
(iii) The Issuer Board, without having
received Grantee's prior written consent, shall have withdrawn
or modified, or publicly announced its interest to withdraw or
modify in any manner adverse in any respect to Grantee, its
recommendation that the stockholders of Issuer approve the
transactions contemplated by the Merger Agreement in
anticipation of engaging in an Acquisition Transaction, or
Issuer or any Issuer Subsidiary shall have authorized,
recommended or proposed, or publicly announced its intention to
authorize, recommend or propose, an agreement to engage in an
Acquisition Transaction with any person other than Grantee or a
Grantee Subsidiary;
(iv) Any person other than Grantee or a
Grantee Subsidiary shall have filed with the Securities and
Exchange Commission ("SEC") a registration statement or tender
offer materials with respect to a potential exchange or tender
offer that would constitute an Acquisition Transaction (or filed
a preliminary proxy statement with the SEC with respect to a
potential vote by its stockholders to approve the issuance of
shares to be offered in such an exchange offer);
(v) After a bona fide written proposal is
made by any person, other than Grantee or a Grantee Subsidiary,
to Issuer or its stockholders to engage in an Acquisition
Transaction, Issuer shall have breached any covenant or
obligation contained in the Merger Agreement and such breach (x)
would entitle Grantee to terminate the Merger Agreement (whether
immediately or after the giving of notice or passage of time or
both) and (y) shall not have been cured prior to the Notice Date
(as defined below); or
(vi) Any person other than Grantee or a
Grantee Subsidiary shall have filed an application or notice
with the Federal Reserve Board (the "FRB") or other federal or
state bank regulatory or antitrust authority, which application
or notice has been accepted for processing, for approval to
engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall
mean any of the following events or transactions occurring after
the date hereof:
(i) The acquisition by any person (other
than Grantee or any Grantee Subsidiary) of beneficial ownership
of 25% or more of the then outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering
Event described in clause (i) of subsection (b) of this Section
2, except that the percentage referred to in clause (y) of the
second sentence thereof shall be 25%.
-3-
(d) Issuer shall notify Grantee promptly in
writing of the occurrence of any Initial Triggering Event or
Subsequent Triggering Event (together, a "Triggering Event") of
which it has notice, it being understood that the giving of such
notice by Issuer shall not be a condition to the right of the
Holder to exercise the Option.
(e) In the event the Holder is entitled to and
wishes to exercise the Option (or any portion thereof), it shall
send to Issuer a written notice (the date of which being herein
referred to as the "Notice Date") specifying (i) the total
number of shares of Common Stock it will purchase pursuant to
such exercise and (ii) a place and date not earlier than three
business days nor later than 45 business days from the Notice
Date for the closing of such purchase (the "Closing"); provided
that if prior notification to or approval of the FRB or any
other regulatory or antitrust agency is required in connection
with such purchase, the Holder shall promptly file the required
notice or application for approval, shall promptly notify Issuer
of such filing and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such
approvals have been obtained and any requisite waiting period or
periods shall have passed. Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto. The term
"business day" for purposes of this Agreement means any day,
excluding Saturdays, Sundays and any other day that is a legal
holiday in the State of Ohio or a day on which banking
institutions in the State of Ohio are authorized by law or
executive order to close.
(f) At a Closing, the Holder shall (i) pay to
Issuer the aggregate purchase price for the shares of Common
Stock purchased pursuant to the exercise of the Option in
immediately available funds by wire transfer to a bank account
designated by Issuer, and (ii) present and surrender this
Agreement to Issuer at its principal executive offices, provided
that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not
preclude the Holder from exercising the Option.
(g) At a Closing, simultaneously with the delivery
of immediately available funds as provided in subsection (f) of
this Section 2, Issuer shall deliver to the Holder a certificate
or certificates representing the number of shares of Common
Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of
the Holder thereof to purchase the balance of the shares
purchasable hereunder, and the Holder shall deliver to Issuer a
copy of this Agreement and a letter agreeing that the Holder
will not offer to sell or otherwise dispose of such shares in
violation of applicable law or the provisions of this Agreement.
(h) Certificates for Common Stock delivered at a
Closing hereunder may be endorsed (in the sole discretion of
Issuer) with a restrictive legend that shall read substantially
as follows:
"The transfer of the shares represented by this
certificate is subject to certain provisions of an agreement
between the registered holder hereof and Issuer and to resale
restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the
-4-
principal office of Issuer and will be provided to the holder
hereof without charge upon receipt by Issuer of a written
request therefor."
It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933, as amended
(the "1933 Act"), in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if
the Holder shall have delivered to Issuer a copy of a letter
from the staff of the SEC, or an opinion of counsel, in form and
substance reasonably satisfactory to Issuer, to the effect that
such legend is not required for purposes of the 1933 Act; (ii)
the reference to the provisions of this Agreement in the above
legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement
and under circumstances that do not require the retention of
such reference in the reasonable written opinion of counsel to
the Holder; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii)
are both satisfied. In addition, such certificates shall bear
any other legend as may be required by law.
(i) Upon the giving by the Holder to Issuer
of the written notice of exercise of the Option provided for
under paragraph (e) of this Section 2, the tender of the
applicable purchase price in immediately available funds and the
tender of a copy of this Agreement to Issuer, the Holder shall
be deemed, subject to the receipt of any necessary regulatory
approvals, to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that
certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. Issuer shall pay all
expenses, and any and all United States federal, state and local
taxes and other charges that may be payable in connection with
the preparation, issue and delivery of stock certificates under
this Section 2 in the name of the Holder or its assignee,
transferee or designee.
3. Issuer agrees: (i) that it shall at all times
maintain, free from preemptive rights, sufficient authorized but
unissued or treasury shares of Common Stock so that the Option
may be exercised without additional authorization of Common
Stock after giving effect to all other options, warrants,
convertible securities and other rights to purchase Common
Stock; (ii) that it will not, by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act,
avoid or seek to avoid the observance or performance of any of
the covenants, stipulations or conditions to be observed or
performed hereunder by Issuer; (iii) promptly to take all action
as may from time to time be required (including without
limitation (x) complying with all applicable premerger
notification, reporting and waiting period requirements
specified in 15 U.S.C. Section 18a and regulations promulgated
thereunder and (y) in the event, under the Federal Reserve Act,
the Home Owners Loan Act ("HOLA"), or the Change in Bank Control
Act of 1978, as amended, or any state or other federal banking
law, prior approval of or notice to the FRB, the FDIC, the OTS
or to any state or other federal regulatory authority is
necessary before the Option may be exercised, cooperating fully
with the Holder in connection with the preparation of such
applications or notices and providing such information to the
FRB or the OTS or such state or other federal regulatory
authority as they may require) in order to permit the Holder to
exercise the Option and
-5-
Issuer duly and effectively to issue shares of Common Stock
pursuant hereto; and (iv) promptly to take all action provided
herein to protect the rights of the Holder against dilution.
4. This Agreement and the Option granted hereby are
exchangeable, without expense, at the option of the Holder, upon
presentation and surrender of this Agreement at the principal
office of Issuer, for other Agreements providing for Options of
different denominations entitling the holder thereof to purchase
on the same terms and subject to the same conditions as are set
forth herein in the aggregate the same number of shares of
Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any Stock Option Agreements and
related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if mutilated,
Issuer will execute and deliver a new Agreement of like tenor
and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of
Issuer, subject to the aforementioned indemnification, if
applicable, whether or not the Agreement so lost, stolen,
destroyed or mutilated shall at any time be enforceable by
anyone.
5. In addition to the adjustment in the number of
shares of Common Stock that are purchasable upon exercise of the
Option pursuant to Section 1 of this Agreement, the number of
Option Shares purchasable upon the exercise of the Option and
the Option Price shall be subject to adjustment from time to
time as provided in this Section 5.
(a) In the event of any change in, or
distributions in respect of, the Common Stock by reason of stock
dividend, split-up, merger, recapitalization, combination,
subdivision, conversion, exchange of shares, distribution on or
in respect of the Common Stock or similar transaction, the type
and number of Option Shares shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such
transaction, so that Grantee shall receive upon exercise of the
Option the number and class of Option Shares that Grantee would
have held immediately after such event if the Option had been
exercised immediately prior to such event, or the record date
therefor, as applicable.
(b) Whenever the number of Option Shares is
adjusted as provided in this Section 5, the Option Price shall
be adjusted by multiplying the Option Price by a fraction, the
numerator of which shall be equal to the number of Option Shares
purchasable prior to the adjustment and the denominator of which
shall be equal to the number of Option Shares purchasable after
the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event
that occurs prior to an Exercise Termination Event, Issuer
shall, at the request of Grantee delivered within four months
(or such later period as provided in Section 10) following such
Subsequent Triggering Event (whether on its own behalf or on
behalf of any subsequent holder of this Option (or part thereof)
or any of the Option Shares issued pursuant hereto), promptly
prepare, file and keep current, with respect to the Option and
the Option Shares, a registration statement under the 1933 Act
and qualify such Option and Option Shares for resale or other
disposition under applicable state securities laws, in each case
in accordance with any plan of disposition requested by Grantee.
-6-
Issuer will use all reasonable efforts to cause such
registration statement promptly to become effective and then to
remain effective for such period not in excess of 180 days from
the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such
sales or other dispositions. Grantee shall have the right to
demand two such registrations. The Issuer shall bear the costs
of such registrations (including, but not limited to, Issuer's
attorneys' fees, printing costs and filing fees, except for
underwriting discounts or commissions, brokers' fees and the
fees and disbursements of Grantee's counsel related thereto).
The foregoing notwithstanding, if, at the time of any request by
Grantee for registration of the Option or Option Shares as
provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common
Stock, and if in the good faith judgment of the managing
underwriter or managing underwriters, or, if none, the sole
underwriter or underwriters, of such offering, the inclusion of
the Option and/or Option Shares would interfere with the
successful marketing of the shares of Common Stock offered by
Issuer, the number of shares represented by the Option and/or
the number of Option Shares otherwise to be covered in the
registration statement contemplated hereby may be reduced;
provided, however, that after any such required reduction the
number of shares represented by the Option and/or the number of
Option Shares to be included in such offering for the account of
the Holder shall constitute at least 25% of the total number of
shares to be sold by the Holder and Issuer in the aggregate; and
provided further, however, that if such reduction occurs, then
Issuer shall file a registration statement for the balance as
promptly as practicable thereafter as to which no reduction
pursuant to this Section 6 shall be permitted or occur. Each
such Holder shall provide all information reasonably requested
by Issuer for inclusion in any such registration statement to be
filed hereunder. If requested by any such Holder in connection
with such registration, Issuer shall become a party to any
underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements
customarily included in secondary offering underwriting
agreements for Issuer. Upon receiving any request under this
Section 6 from any Holder, Issuer agrees to send a copy thereof
to any other person known to Issuer to be entitled to
registration rights under this Section 6, in each case by
promptly mailing the same, postage prepaid, to the address of
record of the persons entitled to receive such copies.
Notwithstanding anything to the contrary contained herein, in no
event shall the number of registrations that Issuer is obligated
to effect be increased by reason of the fact that there shall be
more than one Holder as a result of any assignment or division
of this Agreement.
7. (a) Upon the occurrence of a Subsequent Triggering
Event that occurs prior to an Exercise Termination Event, (i) at
the request of any Holder delivered within 90 days following
such occurrence (or such later period as provided in Section
10), Issuer (or any successor thereto) shall repurchase the
Option from the Holder at a price (the "Option Repurchase
Price") equal to the amount by which (A) the Market/Offer Price
(as defined below) exceeds (B) the Option Price, multiplied by
the number of shares for which the Option may then be exercised,
and (ii) at the request of the owner of Option Shares from time
to time (the "Owner"), delivered within 60 days following such
occurrence (or such later period as provided in Section 10),
Issuer (or any successor thereto) shall repurchase such number
of the Option Shares from the Owner as the Owner shall designate
at a price (the "Option Share Repurchase Price") equal to the
greater of (A) the Market/Offer Price and (B) the average
exercise price per share paid by the Owner for the Option Shares
so designated. The term "Market/Offer Price"
-7-
shall mean the highest of (i) the price per share of Common
Stock at which a tender offer or exchange offer therefor has
been made, (ii) the price per share of Common Stock to be paid
by any person, other than Grantee or a Grantee Subsidiary,
pursuant to an agreement with Issuer, (iii) the highest sale
price for shares of Common Stock within the six-month period
immediately preceding the date of such required repurchase of
the Option or Option Shares, as the case may be, or (iv) in the
event of a sale of all or any substantial part of Issuer's
assets or deposits, the sum of the price paid in such sale for
such assets or deposits and the current market value of the
remaining assets of Issuer as determined by a
nationally-recognized investment banking firm selected by a
majority in interest of the Holders or the Owners, as the case
may be, and reasonably acceptable to Issuer, divided by the
number of shares of Common Stock of Issuer outstanding at the
time of such sale. In determining the Market/Offer Price,
the value of consideration other than cash shall be determined
by a nationally-recognized investment banking firm selected by
the Holder or Owner, as the case may be, and reasonably
acceptable to Issuer.
(b) Each Holder and Owner, as the case may be, may
exercise its right to require Issuer to repurchase the Option
and any Option Shares pursuant to this Section 7 by surrendering
for such purpose to Issuer, at its principal office, a copy of
this Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that such
Holder or Owner, as the case may be, elects to require Issuer to
repurchase this Option and/or Option Shares in accordance with
the provisions of this Section 7. As promptly as practicable,
and in any event within five business days after the surrender
of the Option and/or certificates representing Option Shares and
the receipt of such notice or notices relating thereto, Issuer
shall deliver or cause to be delivered to the Holder the Option
Repurchase Price and/or to the Owner the Option Share Repurchase
Price therefor or the portion thereof that Issuer is not then
prohibited under applicable law and regulation from so
delivering.
(c) To the extent that Issuer is prohibited under
applicable law or regulation, or as a consequence of
administrative policy, or as a result of a written agreement or
other binding obligation with a governmental or regulatory body
or agency, from repurchasing the Option and/or the Option Shares
in full, Issuer shall immediately so notify each Holder and/or
each Owner and thereafter deliver or cause to be delivered, from
time to time, to such Holder and/or such Owner, as appropriate,
the portion of the Option Repurchase Price and the Option Share
Repurchase Price, respectively, that it is no longer prohibited
from delivering, within five business days after the date on
which Issuer is no longer so prohibited; provided, however, that
if Issuer at any time after delivery of a notice of repurchase
pursuant to paragraph (b) of this Section 7 is prohibited under
applicable law or regulation, or as a consequence of
administrative policy, or as a result of a written agreement or
other binding obligation with a governmental or regulatory body
or agency, from delivering to the Holder and/or the Owner, as
appropriate, the Option Repurchase Price and the Option Share
Repurchase Price, respectively, in part or in full (and Issuer
hereby undertakes to use all reasonable efforts to obtain all
required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to accomplish such
repurchase), such Holder or Owner may revoke its notice of
repurchase of the Option and/or the Option Shares either in
whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly (i) deliver to the Holder
and/or the Owner, as appropriate, that portion of the Option
Repurchase Price and/or the Option Share Repurchase Price that
Issuer is not prohibited from delivering with respect to Options
or Option Shares as to which the Holder
-8-
or the Owner, as the case may be, has not revoked its repurchase
demand; and (ii) deliver, as appropriate, either (A) to the
Holder, a new Agreement evidencing the right of the Holder to
purchase that number of shares of Common Stock obtained by
multiplying the number of shares of Common Stock for which the
surrendered Agreement was exercisable at the time of delivery of
the notice of repurchase by a fraction, the numerator of which
is the Option Repurchase Price less the portion thereof
theretofore delivered to the Holder and the denominator of which
is the Option Repurchase Price, and/or (B) to such Owner, a
certificate for the Option Shares it is then so prohibited from
repurchasing.
8. (a) In the event that prior to an Exercise
Termination Event, Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or
a Grantee Subsidiary, or engage in a plan of exchange with any
person, other than Grantee or a Grantee Subsidiary, and in
either case, Issuer shall not be the continuing or surviving
corporation of such consolidation or merger or the acquiror in
such plan of exchange, (ii) to permit any person, other than
Grantee or a Grantee Subsidiary, to merge into Issuer or be
acquired by Issuer in a plan of exchange and Issuer shall be the
continuing or surviving or acquiring corporation, but, in
connection with such merger or plan of exchange, the then
outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or
cash or any other property or the then outstanding shares of
Common Stock shall after such merger or plan of exchange
represent less than 50% of the outstanding shares and share
equivalents of the merged or acquiring company, or (iii) to sell
or otherwise transfer all or a substantial part of its or any
Issuer Subsidiary's assets or deposits to any person, other than
Grantee or a Grantee Subsidiary, then, and in each such case,
the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any
such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of any Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y)
any person that controls the Acquiring Corporation.
(b) The following terms have the meanings
indicated:
(i) "Acquiring Corporation" shall mean (i)
the continuing or surviving person of a consolidation or merger
with Issuer (if other than Issuer), (ii) the acquiring person in
a plan of exchange in which Issuer is acquired, (iii) Issuer in
a merger or plan of exchange in which Issuer is the continuing
or surviving or acquiring person, and (iv) the transferee of all
or a substantial part of Issuer's assets or deposits (or the
assets or deposits of an Issuer Subsidiary).
(ii) "Substitute Common Stock" shall mean the
common stock issued by the issuer of the Substitute Option upon
exercise of the Substitute Option.
(iii) "Assigned Value" shall mean the
Market/Offer Price, as defined in Section 7.
(iv) "Average Price" shall mean the average
closing price of a share of the Substitute Common Stock for the
one year immediately preceding the consolidation, merger, share
exchange or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the
day preceding such consolidation, merger, share exchange or
-9-
sale; provided that if Issuer is the issuer of the Substitute
Option, the Average Price shall be computed with respect to a
share of common stock issued by the person merging into Issuer
or by any company which controls or is controlled by such
person, as the Holder may elect.
(c) The Substitute Option shall have the same
terms as the Option, provided that if the terms of the
Substitute Option cannot, for legal reasons, be the same as the
Option, such terms shall, to the extent legally permissible, be
as similar as possible to, and in no event less advantageous to
the Holder than, the terms of the Option. The issuer of the
Substitute Option also shall enter into an agreement with the
then Holder or Holders of the Substitute Option in substantially
the same form as this Agreement (after giving effect for such
purpose to the provisions of Section 9), which agreement shall
be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for
such number of shares of Substitute Common Stock as is equal to
the Assigned Value multiplied by the number of shares of Common
Stock for which the Option was exercisable immediately prior to
the event described in the first sentence of Section 8(a),
divided by the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall
then be equal to the Option Price multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock
for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the
denominator of which shall be the number of shares of Substitute
Common Stock for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more
than 19.9% of the shares of Substitute Common Stock outstanding
prior to exercise of the Substitute Option. In the event that
the Substitute Option would be exercisable for more than 19.9%
of the shares of Substitute Common Stock outstanding prior to
exercise but for this paragraph (e), the issuer of the
Substitute Option (the "Substitute Option Issuer") shall make a
cash payment to Holder equal to the excess of (i) the value of
the Substitute Option without giving effect to the limitation in
this paragraph (e) over (ii) the value of the Substitute Option
after giving effect to the limitation in this paragraph (e).
This difference in value shall be determined by a nationally-
recognized investment banking firm selected by a majority in
interest of the Holders and reasonably acceptable to the
Acquiring Corporation.
(f) Issuer shall not enter into any transaction
described in paragraph (a) of this Section 8 unless the
Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer
hereunder.
9. (a) At the request of the holder of the Substitute
Option (the "Substitute Option Holder"), the issuer of the
Substitute Option Issuer shall repurchase the Substitute Option
from the Substitute Option Holder at a price (the "Substitute
Option Repurchase Price") equal to the amount by which (i) the
Highest Closing Price (as hereinafter defined) exceeds (ii) the
exercise price of the Substitute Option, multiplied by the
number of shares of Substitute Common Stock for which the
Substitute Option may then be exercised, and at the request of
each owner (the "Substitute Share Owner") of shares of
Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares
at a price (the
-10-
"Substitute Share Repurchase Price") equal to the greater of (A)
the Highest Closing Price and (B) the average exercise price per
share paid by the Substitute Share Owner for the Substitute
Shares so designated, multiplied by the number of Substitute
Shares so designated. The term "Highest Closing Price" shall
mean the highest closing price for shares of Substitute Common
Stock within the six-month period immediately preceding the date
the Substitute Option Holder gives notice of the required
repurchase of the Substitute Option or the Substitute Share
Owner gives notice of the required repurchase of the Substitute
Shares, as applicable.
(b) Each Substitute Option Holder and Substitute
Share Owner, as the case may be, may exercise its respective
right to require the Substitute Option Issuer to repurchase the
Substitute Option and the Substitute Shares pursuant to this
Section 9 by surrendering for such purpose to the Substitute
Option Issuer, at its principal office, the agreement for such
Substitute Option (or, in the absence of such an agreement, a
copy of this Agreement) and/or certificates for Substitute
Shares accompanied by a written notice or notices stating that
the Substitute Option Holder or the Substitute Share Owner, as
the case may be, elects to require the Substitute Option Issuer
to repurchase the Substitute Option and/or the Substitute Shares
in accordance with the provisions of this Section 9. As promptly
as practicable, and in any event within five business days after
the surrender of the Substitute Option and/or certificates
representing Substitute Shares and the receipt of such notice or
notices relating thereto, the Substitute Option Issuer shall
deliver or cause to be delivered to the Substitute Option Holder
the Substitute Option Repurchase Price and/or to the Substitute
Share Owner the Substitute Share Repurchase Price therefor, or
the portion(s) thereof which the Substitute Option Issuer is not
then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that the Substitute Option
Issuer is prohibited under applicable law or regulation, or as a
consequence of administrative policy, or as a result of a
written agreement or other binding obligation with a
governmental or regulatory body or agency, from repurchasing the
Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer following a request for
repurchase pursuant to this Section 9 shall immediately so
notify the Substitute Option Holder and/or the Substitute Share
Owner and thereafter deliver or cause to be delivered, from time
to time, to the Substitute Option Holder and/or the Substitute
Share Owner, as appropriate, the portion of the Substitute
Option Repurchase Price and/or the Substitute Share Repurchase
Price, respectively, which it is no longer prohibited from
delivering, within five business days after the date on which
the Substitute Option Issuer is no longer so prohibited;
provided, however, that if the Substitute Option Issuer is at
any time after delivery of a notice of repurchase pursuant to
subsection (b) of this Section 9 prohibited under applicable law
or regulation, or as a consequence of administrative policy, or
as a result of a written agreement or other binding obligation
with a governmental or regulatory body or agency, from
delivering to the Substitute Option Holder and/or the Substitute
Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively,
in full (and the Substitute Option Issuer shall use all
reasonable efforts to obtain all required regulatory and legal
approvals as promptly as practicable in order to accomplish such
repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the
Substitute Option or the Substitute Shares either in whole or to
the extent of the prohibition, whereupon, in the latter case,
the Substitute Option Issuer shall promptly (i) deliver to the
Substitute Option Holder or
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Substitute Share Owner, as appropriate, that portion of the
Substitute Option Repurchase Price or the Substitute Share
Repurchase Price that the Substitute Option Issuer is not
prohibited from delivering; and (ii) deliver, as appropriate,
either (A) to the Substitute Option Holder, a new Substitute
Option evidencing the right of the Substitute Option Holder to
purchase that number of shares of the Substitute Common Stock
obtained by multiplying the number of shares of the Substitute
Common Stock for which the surrendered Substitute Option was
exercisable at the time of delivery of the notice of repurchase
by a fraction, the numerator of which is the Substitute Option
Repurchase Price less the portion thereof theretofore delivered
to the Substitute Option Holder and the denominator of which is
the Substitute Option Repurchase Price, and/or (B) to the
Substitute Share Owner, a certificate for the Substitute Option
Shares it is then so prohibited from repurchasing.
10. The periods for exercise of certain rights under
Sections 2, 6, 7 and 12 shall be extended: (i) to the extent
necessary to obtain all regulatory approvals for the exercise of
such rights (for so long as the Holder, Owner, Substitute Option
Holder or Substitute Share Owner, as the case may be, is using
its reasonable best efforts to obtain such regulatory
approvals), and for the expiration of all statutory waiting
periods; (ii) during the pendency of any temporary restraining
order, injunction or other legal bar to exercise of such rights;
and (iii) to the extent necessary to avoid liability under
Section 16(b) of the 1934 Act by reason of such exercise.
11. (a) Issuer hereby represents and warrants to
Grantee as follows:
(i) Issuer has full corporate power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by the Issuer Board and no other corporate
proceedings on the part of Issuer are necessary to authorize
this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
(ii) Issuer has taken all necessary corporate
action to authorize and reserve and to permit it to issue, and
at all times from the date hereof through the termination of
this Agreement in accordance with its terms will have reserved
for issuance upon the exercise of the Option, that number of
shares of Common Stock equal to the maximum number of shares of
Common Stock at any time and from time to time issuable
hereunder, and all such shares, upon issuance pursuant thereto,
will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not
subject to any preemptive rights.
(b) Grantee hereby represents and warrants to
Issuer that:
(i) Grantee has full corporate power and
authority to execute and deliver this Agreement and, subject to
any approvals or consents referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee.
-12-
(ii) The Option is not being, and any shares
of Common Stock or other securities acquired by Grantee upon
exercise of the Option will not be, acquired with a view to the
public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
12. Neither of the parties hereto may assign any of its
rights or obligations under this Agreement or the Option created
hereunder to any other person, without the express written
consent of the other party, except that in the event a
Subsequent Triggering Event shall have occurred prior to an
Exercise Termination Event, Grantee, subject to the express
provisions hereof, may assign in whole or in part its rights and
obligations hereunder within four months following such
Subsequent Triggering Event; provided, however, that until the
date 15 days following the date on which the FRB approves an
application by Grantee under the Bank Holding Company Act or the
OTS approves an application by Grantee under the HOLA to acquire
the shares of Common Stock subject to the Option, Grantee may
not assign its rights under the Option except in (i) a widely
dispersed public distribution, (ii) a private placement in which
no one party acquires the right to purchase in excess of 2% of
the voting shares of Issuer, (iii) an assignment to a single
party (e.g., a broker or investment banker) for the sole purpose
of conducting a widely dispersed public distribution on
Grantee's behalf or (iv) any other manner approved by the FRB or
the OTS.
13. Each of Grantee and Issuer will use all reasonable
efforts to make all filings with, and to obtain consents of, all
third parties and governmental authorities necessary to the
consummation of the transactions contemplated by this Agreement,
including, without limitation, applying to the FRB under the
Bank Holding Company Act or the OTS under the HOLA for approval
to acquire the shares issuable hereunder and applying for
listing or quotation of such shares on any exchange or quotation
system on which the Common Stock is then listed or quoted.
14. The parties hereto acknowledge that damages would be
an inadequate remedy for a breach of this Agreement by either
party hereto and that the obligations of the parties hereto
shall be enforceable by either party hereto through injunctive
or other equitable relief.
15. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or
state regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions
and covenants and restrictions contained in this Agreement shall
remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court
or regulatory agency determines that the Holder is not permitted
to acquire, or Issuer or Substitute Option Issuer, as the case
may be, is not permitted to repurchase pursuant to Section 7 or
Section 9, as the case may be, the full number of shares of
Common Stock provided in Section l(a) hereof (as adjusted
pursuant to Section l(b) or Section 5 hereof), it is the express
intention of Issuer (which shall be binding on the Substitute
Option Issuer) to allow the Holder to acquire or to require
Issuer or Substitute Option Issuer, as the case may be, to
repurchase such lesser number of shares as may be permissible,
without any amendment or modification hereof.
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16. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given
when delivered in person, by fax, telecopy or by registered or
certified mail (postage prepaid, return receipt requested) at
the respective addresses of the parties set forth in the Merger
Agreement.
17. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without regard
to the conflict of law principles thereof.
18. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
19. Except as otherwise expressly provided herein, each
of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses
of its own financial consultants, investment bankers,
accountants and counsel.
20. Except as otherwise expressly provided herein or in
the Merger Agreement, this Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors and
permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as
expressly provided herein.
21. The transactions provided for in this Agreement are
in addition to and supplemental of the provisions of the Merger
Agreement.
22. Capitalized terms used in this Agreement and not
defined herein shall have the meanings assigned thereto in the
Merger Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
WESTWOOD HOMESTEAD FINANCIAL
CORPORATION
Attest:
________________________ By: _____________________________
Name: Xxxx Xxx Xxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Secretary Title: President
and Chief Executive Officer
CAMCO FINANCIAL CORPORATION
Attest:
________________________ By: _____________________________
Name: Xxxxxxx X. Xxxx Name: Xxxxx X. Xxxxxxxx
Title: Secretary Title: President,
Chief Executive Officer and
Chairman of the Board
