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SECURITIES AND EXCHANGE COMMISSION
of the Securities Exchange Act of 1934
Filed by the Registrant | þ | |
Filed by a Party other than the Registrant | o |
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to § 240.14a-12 |
þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | ||
(2) | Aggregate number of securities to which transaction applies: | ||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
(4) | Proposed maximum aggregate value of transaction: | ||
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) | Amount previously paid: | ||
(2) | Form, Schedule or Registration Statement no.: | ||
(3) | Filing Party: | ||
(4) | Date Filed: |
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Independent Bank Corp. 288 Union Street Rockland, Massachusetts 02370 Attention: Edward H. Seksay, General Counsel (781) 982-6158 | Benjamin Franklin Bancorp, Inc. 58 Main Street Franklin, Massachusetts 02038 Attention: Claire S. Bean, Chief Financial Officer (617) 528-7000 |
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TO BE HELD ON FEBRUARY 11, 2009 AT 10:00 A.M. EASTERN STANDARD TIME
299 CREEK STREET
WRENTHAM, MASSACHUSETTS 02093
Anne M. King |
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Q. | Why am I receiving this document? |
A. | Independent and Benjamin Franklin have agreed to the acquisition of Benjamin Franklin by Independent under the terms of a merger agreement that is described in this document. A copy of the merger agreement is attached to this document as Annex A. In order to complete the merger, Independent’s shareholders must vote to approve the merger agreement and Benjamin Franklin’s shareholders must vote to approve the merger agreement. Both Independent and Benjamin Franklin will hold special meetings of their respective shareholders to obtain these approvals. This document contains important information about the merger, the share issuance in connection with the merger, the merger agreement, the special meetings, and other related matters, and you should read it carefully. The enclosed voting materials for the special meeting allow you to vote your shares of common stock without attending the special meeting. |
Q. | What will happen to Benjamin Franklin as a result of the merger? | |
A. | If the merger is completed, Benjamin Franklin will be acquired by Independent. | |
Q. | What will Benjamin Franklin’s shareholders receive in the merger? | |
A. | Benjamin Franklin’s shareholders will be entitled to receive in the merger 0.59 shares of Independent common stock for each share of Benjamin Franklin common stock they own. The Independent common stock is listed on the NASDAQ Global Select Market under the trading symbol “INDB.” Independent will not issue fractional shares of its common stock, but will instead cash out any fractional shares at a price determined by the average closing prices of Independent common stock on the NASDAQ Global Select Market for the twenty-five (25) trading days ending on the fifth (5th) trading day immediately preceding the completion of the merger. | |
Q. | What will Independent’s shareholders receive in the merger? | |
A. | Each share of Independent common stock outstanding held by Independent’s shareholders immediately before the merger will continue to represent one share of Independent common stock after the effective time of the merger. Accordingly, Independent’s shareholders will receive no consideration in the merger and the merger will not change the number of shares an Independent shareholder currently owns. After the merger, however, the current shareholders of Independent as a group will own approximately 77.9% of Independent, a percentage ownership of the combined organization smaller than such shareholder’s percentage ownership of Independent before the merger. | |
Q. | When will the merger be completed? |
A. | We expect the merger will be completed when all of the conditions to completion contained in the merger agreement are satisfied or waived, including obtaining required regulatory approvals, the approval of the merger agreement by Independent’s shareholders at the Independent special meeting and the approval of the merger agreement by Benjamin Franklin’s shareholders at the Benjamin Franklin special meeting. We currently expect to complete the merger during the second calendar quarter of 2009. However, because fulfillment of some of the conditions to completion of the merger, such as receiving required regulatory approvals, is not entirely within our control, we cannot predict the actual timing. |
Q. | Who is being asked to approve matters in connection with the merger? | |
A. | Independent’s shareholders and Benjamin Franklin’s shareholders are being asked to vote to approve the merger-related proposals. |
Under Massachusetts law, the merger cannot be consummated unless Independent’s shareholders vote to approve the merger agreement and the rules of The NASDAQ Stock Market, Inc. require Independent’s shareholders to approve the issuance of Independent common stock to the shareholders of Benjamin Franklin in connection with the merger. By this joint proxy statement/ prospectus, Independent’s board of directors is soliciting the proxies of Independent’s shareholders to provide these approvals at the special meeting of Independent’s shareholders discussed below. |
Under Massachusetts law, the merger cannot be consummated unless Benjamin Franklin’s |
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shareholders vote to approve the merger agreement and approve the merger. By this joint proxy statement/prospectus, Benjamin Franklin’s board of directors is soliciting proxies of Benjamin Franklin’s shareholders to provide this approval at the special meeting of Benjamin Franklin’s shareholders discussed below. |
Q. | Should Benjamin Franklin shareholders send in their stock certificates now? | |
A. | No, Benjamin Franklin shareholders should not send in any stock certificates now. If the merger is approved, Independent will send Benjamin Franklin’s shareholders written instructions on how to exchange their stock certificates for the merger consideration. | |
Q. | Will I be able to trade the shares of Independent common stock that I receive in the merger? | |
A. | You may freely trade the shares of Independent common stock issued in the merger, unless you are deemed an affiliate of Independent. Independent shares are quoted on the NASDAQ Global Select Market under the symbol “INDB.” Persons who are considered “affiliates” (generally directors, officers and 10% or greater shareholders) of Independent may resell shares of Independent common stock received in the merger only if the shares are registered for resale under the Securities Act or an exemption is available. We will notify you if we believe you are deemed an affiliate of Independent as a result of the merger. | |
Q. | What are the material U.S. federal income tax consequences of the merger to me? |
A. | We expect the merger and the immediately subsequent merger of Benjamin Franklin with and into Independent will be considered together as a single integrated transaction and will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code. If the merger qualifies as a reorganization, the exchange of your shares of Benjamin Franklin common stock for shares of Independent common stock will result in neither a gain nor loss for U.S. federal income tax purposes, except with respect to any cash received in lieu of fractional shares of Independent common stock and cash received in connection with the exercise of dissenter’s rights. |
Benjamin Franklin shareholders are urged to read the discussion in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 86 of this document and to consult their tax advisers as to the U.S. federal income tax consequences of the merger, as well as the effect of state, local, foreign and other tax laws and of any proposed changes to applicable tax laws. | ||
Q. | Are there any risks that I should consider in deciding whether to vote for approval of the merger? | |
A. | Yes. You should read and carefully consider the risk factors set forth in the section in this document titled “Risk Factors” beginning on page 8. | |
Q. | When and where will Benjamin Franklin’s shareholders meet? |
A. | Benjamin Franklin will hold a special meeting of its shareholders on February 11, 2009, at 10:00 a.m., Eastern Standard Time, at Lake Pearl Luciano’s located at 299 Creek Street, Wrentham, Massachusetts 02093. |
Q. | What matters are Benjamin Franklin’s shareholders being asked to approve at the Benjamin Franklin special meeting pursuant to this joint proxy statement/prospectus? |
A. | Benjamin Franklin’s shareholders are being asked to approve the merger agreement and approve the transactions contemplated by the merger agreement, including the merger. We refer to this proposal as the “Benjamin Franklin merger agreement proposal.” |
Benjamin Franklin’s shareholders also are being asked to approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the Benjamin Franklin merger agreement proposal, which we refer to as the “Benjamin Franklin adjournment proposal.” | ||
Q. | What does Benjamin Franklin’s board of directors recommend with respect to the two proposals? | |
A. | Benjamin Franklin’s board of directors has unanimously approved the merger agreement and determined that the merger agreement and the merger are fair to, advisable and in the best interests of Benjamin Franklin and its shareholders and unanimously recommends that Benjamin |
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Franklin’s shareholders vote “FOR” the Benjamin Franklin merger agreement proposal. | ||
Benjamin Franklin’s board of directors also unanimously recommends that Benjamin Franklin’s shareholders vote “FOR” the Benjamin Franklin adjournment proposal. | ||
Q. | Who can vote at the Benjamin Franklin special meeting? |
A. | Holders of record of Benjamin Franklin common stock at the close of business on January 7, 2009, which is the record date for the Benjamin Franklin special meeting, are entitled to vote at the special meeting. |
Q. | How many votes must be represented in person or by proxy at the Benjamin Franklin special meeting to have a quorum? | |
A. | The holders of a majority of the shares of Benjamin Franklin common stock outstanding and entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum at the special meeting. | |
Q. | What vote by Benjamin Franklin’s shareholders is required to approve the Benjamin Franklin special meeting proposals? | |
A. | Assuming a quorum is present at the Benjamin Franklin special meeting, approval of the Benjamin Franklin merger agreement proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Benjamin Franklin common stock. Abstentions and broker non-votes will have the same effect as shares voted against the merger agreement proposal. |
Assuming a quorum is present at the Benjamin Franklin special meeting, approval of the Benjamin Franklin adjournment proposal will require the affirmative vote of a majority of the voting power of the shares of Benjamin Franklin common stock present in person or represented by proxy at the special meeting and entitled to vote on the adjournment proposal. Abstentions and broker non-votes will not affect whether the Benjamin Franklin adjournment proposal is approved. |
As of the record date for the special meeting, directors and executive officers of Benjamin Franklin, together with their affiliates, had sole or shared voting power over approximately 8.8% of the Benjamin Franklin common stock outstanding and entitled to vote at the special meeting. |
Q. | Are any Benjamin Franklin shareholders already committed to vote in favor of any of the special meeting proposals? |
A. | Under voting agreements with Independent, Benjamin Franklin’s directors and executive officers have agreed to vote all of their shares of Benjamin Franklin common stock in favor of the Benjamin Franklin merger agreement proposal and have granted to Independent a proxy to vote their shares in favor of the proposal. As of the record date for the Benjamin Franklin special meeting, the Benjamin Franklin shareholders who are parties to the Benjamin Franklin voting agreements collectively owned (with sole or shared voting power) approximately 8.5% of the Benjamin Franklin common stock outstanding and entitled to vote at the special meeting. |
Q. | How may the Benjamin Franklin shareholders vote their shares for the special meeting proposals presented in this joint proxy statement/prospectus? | |
A. | Benjamin Franklin’s shareholders may submit their proxies by: | |
• signing the enclosed proxy card and mailing it in the enclosed, prepaid and addressed envelope; |
• calling toll-free 1-800-PROXIES(1-800-776-9437) and following the instructions; or |
• accessing the web page at www.voteproxy.com and following the on-screen instructions. |
Proxies submitted through the Internet or by telephone must be received by 11:59 p.m., Eastern Standard Time, on February 10, 2009. |
Q. | Will a broker or bank holding shares in “street name” for a Benjamin Franklin shareholder vote those shares for the shareholder at the Benjamin Franklin special meeting? | |
A. | A broker or bank will not be able to vote your shares with respect to the Benjamin Franklin merger agreement proposal without first receiving instructions from you on how to vote. If your shares are held in “street name,” you will receive separate voting instructions with your proxy materials. It is therefore important that |
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you provide timely instruction to your broker or bank to ensure that all shares of Benjamin Franklin common stock that you own are voted at the special meeting. | ||
Q. | Will Benjamin Franklin’s shareholders be able to vote their shares at the Benjamin Franklin special meeting? | |
A. | Yes. Submitting a proxy will not affect the right of any Benjamin Franklin shareholder to vote in person at the special meeting. Benjamin Franklin will distribute written ballots to any Benjamin Franklin shareholder who requests, and is entitled, to vote at the special meeting. If a Benjamin Franklin shareholder holds shares in “street name,” the shareholder must request a proxy from the shareholder’s broker or bank in order to vote those shares in person at the special meeting. | |
Q. | What do Benjamin Franklin’s shareholders need to do now? | |
A. | After carefully reading and considering the information contained in this joint proxy statement/prospectus, Benjamin Franklin’s shareholders are requested to complete and return their proxies as soon as possible. The proxy card will instruct the persons named on the proxy card to vote the shareholder’s Benjamin Franklin shares at the special meeting as the shareholder directs. If a shareholder signs and sends in a proxy card and does not indicate how the shareholder wishes to vote, the proxy will be voted “FOR” both of the special meeting proposals. | |
Q. | May a Benjamin Franklin shareholder change the shareholder’s vote after submitting a proxy? | |
A. | Yes. A Benjamin Franklin shareholder may change a vote at any time before the shareholder’s proxy is voted at the Benjamin Franklin special meeting. A proxy submitted through the Internet or by telephone may be revoked by executing a later-dated proxy card, by subsequently submitting a proxy through the Internet or by telephone, or by attending the special meeting and voting in person. A shareholder executing a proxy card also may revoke the proxy at any time before it is voted by giving written notice revoking the proxy to Benjamin Franklin’s secretary, by subsequently filing another proxy card bearing a later date or by attending the special meeting and voting in person. Attending the special meeting will not automatically revoke a shareholder’s prior submission of a proxy (by Internet, telephone or in writing). All written notices of revocation or other communications with respect to revocation of proxies should be addressed to: |
58 Main Street
Franklin, Massachusetts 02038
Attention: Secretary
Q. | If I am a Benjamin Franklin shareholder, who can help answer my questions? | |
A. | If you have any questions about the merger or the special meeting, or if you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should contact Benjamin Franklin’s proxy solicitor, at the following address or phone number: |
199 Water Street, 26th Floor
New York, New York10038-3560
(800) 611-7560
Q. | When and where will Independent’s shareholders meet? | |
A. | Independent will hold a special meeting of its shareholders on February 13, 2009, at 10:00 a.m., Eastern Standard Time, in the Rockland Trust Company Board Room, located on the Second Floor of 2036 Washington Street, Hanover, Massachusetts, 02339. | |
Q. | What matters are Independent’s shareholders being asked to approve at the Independent special meeting in connection with the merger pursuant to this joint proxy statement/prospectus? | |
A. | Independent’s shareholders are being asked to approve the merger agreement and approve the transactions contemplated by the merger agreement, including the merger. We refer to this proposal as the “Independent merger agreement proposal.” | |
Independent’s shareholders also are being asked to approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the Independent merger agreement proposal, which we refer to as the “Independent adjournment proposal.” |
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Q. | What does Independent’s board of directors recommend with respect to the two proposals? |
A. | Independent’s board of directors has unanimously approved the merger agreement and determined that the merger agreement and the merger are fair to, advisable and in the best interests of Independent and its shareholders and unanimously recommends that Independent’s shareholders vote “FOR” the Independent merger agreement proposal. |
Independent’s board of directors also unanimously recommends that Independent’s shareholders vote “FOR” the Independent adjournment proposal. | ||
Q. | Who can vote at the Independent special meeting? |
A. | Holders of record of Independent common stock at the close of business on January 7, 2009, which is the record date for the Independent special meeting, are entitled to vote at the special meeting. |
Q. | How many votes must be represented in person or by proxy at the Independent special meeting to have a quorum? | |
A. | The holders of a majority of the shares of Independent common stock outstanding and entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum at the special meeting. | |
Q. | What vote by Independent’s shareholders is required to approve the Independent special meeting proposals? |
A. | Assuming a quorum is present at the Independent special meeting, approval of the Independent merger agreement proposal will require the affirmative vote of the holders of two-thirds of the outstanding shares of Independent common stock. Abstentions and broker non-votes will have the same effect as shares voted against the Independent merger agreement proposal. |
Assuming a quorum is present at the Independent special meeting, approval of the Independent adjournment proposal will require the affirmative vote of a majority of the voting power of the shares of Independent common stock present in person or represented by proxy at the special meeting and entitled to vote on such proposals. Abstentions and broker non-votes will not affect whether the Independent adjournment proposal is approved. |
As of the record date for the special meeting, directors and executive officers of Independent, together with their affiliates, had sole or shared voting power over approximately 4.9% of the Independent common stock outstanding and entitled to vote at the special meeting. |
Q. | Are any of Independent’s shareholders already committed to vote in favor of any of the special meeting proposals? | |
A. | None of Independent’s shareholders are committed to vote in favor of any of the special meeting proposals. | |
Q. | How may Independent’s shareholders vote their shares for the special meeting proposals presented in this joint proxy statement/prospectus? | |
A. | Independent’s shareholders have four voting options: |
• over the internet, which we encourage if you have internet access, by accessing the web page at www.envisionreports.com/indbspec and following the on-screen instructions; |
• by telephone, by calling toll-free(800) 652-VOTE(8683) and following the instructions; |
• by mail, after completing, signing, and dating the enclosed proxy card and mailing it in the enclosed, prepaid and addressed envelope; or | ||
• by attending the special meeting and voting your shares in person. |
Proxies submitted through the Internet or by telephone must be received by 10:00 a.m., Eastern Standard Time, on February 13, 2009. |
Q. | Will a broker or bank holding shares in “street name” for an Independent shareholder vote those shares for the shareholder at the Independent special meeting? |
A. | A broker or bank will not be able to vote your shares with respect to the Independent merger agreement proposal without first receiving instructions from you on how to vote. If your shares are held in “street name,” you will receive separate voting instructions with your proxy materials. It is therefore important that |
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you provide timely instruction to your broker or bank to ensure that all shares of Independent common stock that you own are voted at the special meeting. | ||
Q. | Will Independent’s shareholders be able to vote their shares at the Independent special meeting? | |
A. | Yes. Submitting a proxy will not affect the right of any Independent shareholder to vote in person at the special meeting. Independent will distribute written ballots to any Independent shareholder who requests, and is entitled, to vote at the special meeting. If an Independent shareholder holds shares in “street name,” the shareholder must request a proxy from the shareholder’s broker or bank in order to vote those shares in person at the special meeting. | |
Q. | What do Independent’s shareholders need to do now? | |
A. | After carefully reading and considering the information contained in this joint proxy statement/prospectus, Independent’s shareholders are requested to complete and return their proxies as soon as possible. The proxy card will instruct the persons named on the proxy card to vote the shareholder’s Independent shares at the special meeting as the shareholder directs. If a shareholder signs and sends in a proxy card and does not indicate how the shareholder wishes to vote, the proxy will be voted “FOR” both of the special meeting proposals. | |
Q. | May an Independent shareholder change the shareholder’s vote after submitting a proxy? | |
A. | Yes. An Independent shareholder may change a vote at any time before the shareholder’s proxy is voted at the Independent special meeting. A proxy submitted through the Internet or by telephone may be revoked by executing a later-dated proxy card, by subsequently submitting a proxy through the Internet or by telephone, or by attending the special meeting and voting in person. A shareholder executing a proxy card also may revoke the proxy at any time before it is voted by giving written notice revoking the proxy to Independent’s clerk/secretary, by subsequently filing another proxy card bearing a later date or by attending the special meeting and voting in person. Attending the special meeting will not automatically revoke a shareholder’s prior submission of a proxy (by Internet, telephone or in writing). All written notices of revocation or other communications with respect to revocation of proxies should be addressed to: |
288 Union Street
Rockland, Massachusetts 02370
Attention: Clerk
Q. | If I am an Independent shareholder, who can help answer my questions? | |
A. | If you have any questions about the merger or the special meeting, or if you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should contact Independent’s proxy solicitor, at the following address or phone number: |
199 Water Street, 26th Floor
New York, New York10038-3560
(866) 357-4028
Q. | Where can I find more information about the companies? |
A. | You can find more information about Independent and Benjamin Franklin from the various sources described under the section of this document titled “Where You Can Find More Information” beginning on page 106. |
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288 Union Street
Rockland, Massachusetts 02370
(781) 878-6100
58 Main Street
Franklin, Massachusetts 02038
(617) 528-7000
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• | the approval of the merger agreement and transactions contemplated by the merger agreement, including the merger, by Independent’s shareholders at the Independent special meeting described in this joint proxy statement/prospectus; |
• | the approval of the merger agreement and the transactions contemplated by the merger agreement, including the merger, by Benjamin Franklin’s shareholders at the Benjamin Franklin special meeting described in this joint proxy statement/prospectus; |
• | the receipt and effectiveness of all regulatory approvals, registrations and consents (none of which shall contain a burdensome condition, as defined in the merger agreement), and the expiration of all waiting periods required to complete the merger; | |
• | the effectiveness of the registration statement with respect to the Independent common stock to be issued in the merger under the Securities Act, and the absence of any stop order or proceedings initiated or threatened by the Securities and Exchange Commission for that purpose; and | |
• | the absence of any statute, regulation, rule, decree, injunction or other order in effect by any court or other governmental entity that prohibits completion of the transactions contemplated by the merger agreement. |
• | the receipt by the party of a legal opinion from its counsel with respect to certain U.S. federal income tax consequences of the merger and the immediately subsequent merger of Benjamin Franklin with and |
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into Independent, considered together as a single integrated transaction for U.S. federal income tax purposes; and |
• | the other company’s representations and warranties in the merger agreement being true and correct, in all material respects, and the performance by the other party in all material respects of its obligations under the merger agreement. |
• | if any regulatory approval necessary for consummation of the transactions contemplated by the merger agreement is not obtained; | |
• | if the merger is not completed by April 30, 2009; | |
• | if the other party breaches the merger agreement in a way that would entitle the party seeking to terminate the merger agreement not to consummate the merger, subject to the right of the breaching party to cure the breach by the earlier of 30 days following written notice or two business days before April 30, 2009 (unless it is not possible due to the nature or timing of the breach for the breaching party to cure the breach); |
• | if Independent’s shareholders do not approve the merger agreement and the transactions contemplated thereby; or |
• | if Benjamin Franklin’s shareholders do not approve the merger agreement and the transactions contemplated thereby. |
• | Benjamin Franklin has materially breached its “non-solicitation” obligations described under “The Merger Agreement — No Solicitation of Alternative Transactions” beginning on page 76; | |
• | Benjamin Franklin’s board fails to recommend in this joint proxy statement/prospectus the approval of the merger agreement; | |
• | Benjamin Franklin’s board of directors recommends, proposes or publicly announces its intention to recommend or propose, to engage in an “Acquisition Transaction” with any party other than Independent or a subsidiary of Independent; or | |
• | Benjamin Franklin breaches its obligation to call, give notice of, convene and hold a meeting of shareholders for the purpose of approving the merger agreement and the transactions contemplated thereby. |
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• | to approve the merger agreement and the transactions contemplated thereby; |
• | to vote upon a proposal to adjourn the special meeting, if necessary, to solicit additional proxies; and | |
• | to consider and act upon any other matters as may properly come before the special meeting or any adjournment or postponement thereof. |
• | to approve the merger agreement and the transactions contemplated thereby; | |
• | to vote upon a proposal to adjourn the special meeting, if necessary, to solicit additional proxies; and | |
• | to consider and act upon any other matters as may properly come before the special meeting or any adjournment or postponement thereof. |
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Independent | Benjamin Franklin | Equivalent | ||||||||||
Date | Closing Price | Closing Price | per Share Value | |||||||||
November 7, 2008 | $ | 26.73 | $ | 13.05 | $ | 15.77 | ||||||
January 9, 2009 | $ | 25.29 | $ | 14.50 | $ | 14.92 |
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• | those risks and uncertainties Independent and Benjamin Franklin discuss or identify in their public filings with the SEC; | |
• | the risk that the businesses of Independent and Benjamin Franklin will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; | |
• | revenues following the merger may be lower than expected; | |
• | competitive pressure among financial services companies may increase significantly; | |
• | general economic or business conditions, either nationally, regionally, or in the markets in which Independent and Benjamin Franklin do business, may be less favorable than expected; | |
• | changes in the interest rate environment may reduce interest margins and impact funding sources; | |
• | changes in both companies’ businesses during the period between now and the completion of the merger may have adverse impacts on the combined company; | |
• | changes in market rates and prices may adversely impact the value of financial products and assets; | |
• | deterioration in the credit markets may adversely impact either company or its business; | |
• | legislation or regulatory environments, requirements, or changes, including changes in accounting methods, may adversely affect businesses in which either company is engaged; | |
• | litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect either company or its businesses; | |
• | deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees, may be greater than expected; and | |
• | the ability to obtain timely governmental approvals of the merger without the imposition of any conditions that would adversely affect the potential combined company. |
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Independent | Benjamin Franklin | Equivalent | ||||||||||
Date | Closing Price | Closing Price | per Share Value | |||||||||
November 7, 2008 | $ | 26.73 | $ | 13.05 | $ | 15.77 | ||||||
January 9, 2009 | $ | 25.29 | $ | 14.50 | $ | 14.92 |
Independent | Benjamin Franklin | |||||||||||||||||||||||||||
Sale Prices | Dividend | Sale Prices | Dividend | |||||||||||||||||||||||||
High | Low | per Share | High | Low | per Share | |||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||
First Quarter | $ | 36.35 | $ | 30.02 | $ | 0.17 | $ | 16.94 | $ | 14.19 | $ | 0.04 | ||||||||||||||||
Second Quarter | 33.20 | 28.46 | 0.17 | 15.68 | 13.50 | 0.06 | ||||||||||||||||||||||
Third Quarter | 32.21 | 26.11 | 0.17 | 14.34 | 12.01 | 0.06 | ||||||||||||||||||||||
Fourth Quarter | 31.46 | 26.03 | 0.17 | 14.98 | 11.50 | 0.06 | ||||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||
First Quarter | $ | 31.91 | $ | 24.00 | $ | 0.18 | $ | 14.62 | $ | 12.77 | $ | 0.06 | ||||||||||||||||
Second Quarter | 31.77 | 23.83 | 0.18 | 14.59 | 12.50 | 0.08 | ||||||||||||||||||||||
Third Quarter | 39.17 | 20.12 | 0.18 | 12.92 | 11.15 | 0.08 | ||||||||||||||||||||||
Fourth Quarter | 31.97 | 19.02 | 0.18 | 15.65 | 9.49 | 0.08 | ||||||||||||||||||||||
2009 | ||||||||||||||||||||||||||||
First Quarter (through January 9, 2009) | 26.79 | 25.09 | 0.18 | 15.09 | 14.41 |
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As of or for | As of or for | |||||||
the Year Ended | the Nine Months Ended | |||||||
December 31, 2007 | September 30, 2008 | |||||||
Book value per share: | ||||||||
Independent historical | $ | 16.04 | $ | 18.72 | ||||
Benjamin Franklin historical | 13.67 | 13.81 | ||||||
Pro forma combined | 18.65 | 21.48 | ||||||
Benjamin Franklin pro forma equivalent | 11.12 | 12.67 | ||||||
Tangible book value per share: | ||||||||
Independent historical | $ | 11.64 | $ | 10.95 | ||||
Benjamin Franklin historical | 9.06 | 9.17 | ||||||
Pro forma combined | 11.48 | 10.90 | ||||||
Benjamin Franklin pro forma equivalent | 6.77 | 6.43 | ||||||
Cash dividends declared per share: | ||||||||
Independent historical | $ | 0.68 | $ | 0.54 | ||||
Benjamin Franklin historical | 0.22 | 0.22 | ||||||
Pro forma combined | 0.68 | 0.54 | ||||||
Benjamin Franklin pro forma equivalent | 0.40 | 0.32 |
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As of or for | As of or for | |||||||
the Year Ended | the Nine Months Ended | |||||||
December 31, 2007 | September 30, 2008 | |||||||
Basic net income per share: | ||||||||
Independent historical | $ | 2.02 | $ | 1.35 | ||||
Benjamin Franklin historical | 0.48 | 0.48 | ||||||
Pro forma combined | 1.48 | 1.01 | ||||||
Benjamin Franklin pro forma equivalent | 0.87 | 0.60 | ||||||
Diluted net income per share: | ||||||||
Independent historical | $ | 2.00 | $ | 1.34 | ||||
Benjamin Franklin historical | 0.47 | 0.48 | ||||||
Pro forma combined | 1.47 | 1.01 | ||||||
Benjamin Franklin pro forma equivalent | 0.87 | 0.60 |
At September 30, | At December 31, | |||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||
FINANCIAL CONDITION DATA: | ||||||||||||||||||||||||
Securities available for sale | $ | 524,482 | $ | 460,518 | $ | 417,088 | $ | 581,516 | $ | 680,286 | $ | 527,507 | ||||||||||||
Securities held to maturity | 33,354 | 45,265 | 76,747 | 104,268 | 107,967 | 121,894 | ||||||||||||||||||
Loans | 2,585,558 | 2,042,952 | 2,024,909 | 2,040,808 | 1,916,358 | 1,581,135 | ||||||||||||||||||
Allowance for loan losses | 33,287 | 26,831 | 26,815 | 26,639 | 25,197 | 23,163 | ||||||||||||||||||
Total assets | 3,477,235 | 2,768,413 | 2,828,919 | 3,041,685 | 2,943,926 | 2,436,755 | ||||||||||||||||||
Total deposits | 2,538,031 | 2,026,610 | 2,090,344 | 2,205,494 | 2,060,235 | 1,783,338 | ||||||||||||||||||
Total borrowings(1) | 597,169 | 504,344 | 493,649 | 587,810 | 655,161 | 415,369 | ||||||||||||||||||
Corporation-obligated mandatorily redeemable Trust Preferred Securities(1) | — | — | — | — | — | 47,857 | ||||||||||||||||||
Stockholders’ equity | 304,740 | 220,465 | 229,783 | 228,152 | 210,743 | 171,847 | ||||||||||||||||||
Non-performing loans | 16,644 | 7,644 | 6,979 | 3,339 | 2,702 | 3,514 | ||||||||||||||||||
Non-performing assets | 17,883 | 8,325 | 7,169 | 3,339 | 2,702 | 3,514 |
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At or for the Nine Months | ||||||||||||||||||||||||||||
Ended September 30, | For the Year Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||||||||||
Interest income | $ | 130,904 | $ | 119,578 | $ | 159,738 | $ | 167,693 | $ | 155,661 | $ | 134,613 | $ | 128,306 | ||||||||||||||
Interest expense(1) | 43,939 | 47,886 | 63,555 | 65,038 | 49,818 | 36,797 | 32,533 | |||||||||||||||||||||
Net interest income | 86,965 | 71,692 | 96,183 | 102,655 | 105,843 | 97,816 | 95,773 | |||||||||||||||||||||
Provision for loan losses | 5,312 | 1,775 | 3,130 | 2,335 | 4,175 | 3,018 | 3,420 | |||||||||||||||||||||
Non-interest income | 24,432 | 23,552 | 32,051 | 26,644 | 27,273 | 28,355 | 27,794 | |||||||||||||||||||||
Non-interest expenses | 77,552 | 65,925 | 87,932 | 79,354 | 80,615 | 77,691 | 73,827 | |||||||||||||||||||||
Minority interest expense(1) | — | — | — | — | 1,072 | 4,353 | ||||||||||||||||||||||
Net income | 20,943 | 20,651 | 28,381 | 32,851 | 33,205 | 30,767 | 26,431 | |||||||||||||||||||||
PER SHARE DATA: | ||||||||||||||||||||||||||||
Net income — Basic | $ | 1.35 | $ | 1.46 | $ | 2.02 | $ | 2.20 | $ | 2.16 | $ | 2.06 | $ | 1.82 | ||||||||||||||
Net income — Diluted | 1.34 | 1.45 | 2.00 | 2.17 | 2.14 | 2.03 | 1.79 | |||||||||||||||||||||
Cash dividends declared | 0.54 | 0.51 | 0.68 | 0.64 | 0.60 | 0.56 | 0.52 | |||||||||||||||||||||
Book value(2) | 18.72 | 15.61 | 16.04 | 15.65 | 14.81 | 13.75 | 11.75 | |||||||||||||||||||||
Tangible book value per share(3) | 10.95 | 11.35 | 11.64 | 11.80 | 11.12 | 10.01 | 9.27 | |||||||||||||||||||||
OPERATING RATIOS: | ||||||||||||||||||||||||||||
Return on average assets | 0.87 | % | 1.02 | % | 1.05 | % | 1.12 | % | 1.11 | % | 1.13 | % | 1.11 | % | ||||||||||||||
Return on average equity | 9.74 | % | 12.55 | % | 12.93 | % | 14.60 | % | 15.10 | % | 16.27 | % | 15.89 | % | ||||||||||||||
Net interest margin ( on a fully tax equivalent basis) | 4.00 | % | 3.89 | % | 3.90 | % | 3.85 | % | 3.88 | % | 3.95 | % | 4.40 | % | ||||||||||||||
Equity to assets | 8.76 | % | 8.01 | % | 7.96 | % | 8.12 | % | 7.50 | % | 7.16 | % | 7.05 | % | ||||||||||||||
Dividend payout ratio | 40.92 | % | 32.49 | % | 33.41 | % | 29.10 | % | 27.79 | % | 27.23 | % | 28.64 | % | ||||||||||||||
ASSET QUALITY RATIOS: | ||||||||||||||||||||||||||||
Non-performing loans as a percent of gross loans | 0.64 | % | 0.32 | % | 0.37 | % | 0.34 | % | 0.16 | % | 0.14 | % | 0.22 | % | ||||||||||||||
Non-performing assets as a percent of total assets | 0.51 | % | 0.25 | % | 0.30 | % | 0.25 | % | 0.11 | % | 0.09 | % | 0.14 | % | ||||||||||||||
Allowance for loan losses as a percent of total loans | 1.29 | % | 1.32 | % | 1.31 | % | 1.32 | % | 1.31 | % | 1.31 | % | 1.46 | % | ||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 199.99 | % | 412.41 | % | 351.01 | % | 384.22 | % | 797.81 | % | 932.53 | % | 659.16 | % | ||||||||||||||
CAPITAL RATIOS: | ||||||||||||||||||||||||||||
Tier 1 leverage capital ratio | 7.69 | % | 7.98 | % | 8.02 | % | 8.05 | % | 7.71 | % | 7.06 | % | 7.60 | % | ||||||||||||||
Tier 1 risk-based capital ratio | 9.66 | % | 10.35 | % | 10.20 | % | 11.05 | % | 10.74 | % | 10.19 | % | 11.00 | % | ||||||||||||||
Total risk-based capital ratio | 12.06 | % | 11.60 | % | 11.45 | % | 12.30 | % | 11.99 | % | 11.44 | % | 12.25 | % |
(1) | Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 Revised. “Consolidation of Variable Entities — an Interpretation of Accounting Research Bulletin FIN. 51 (“FIN 46R”) required Independent to deconsolidate its two subsidiary trusts (Independent Capital Trust III and Independent Capital Trust IV) on March 31, 2004. The result of deconsolidating these subsidiary trusts is that trust preferred securities of the trusts, which were classified between liabilities and equity on the balance sheet (mezzanine section), no longer appear on the consolidated balance sheets of Independent. The related minority interest expense also is no longer included in the consolidated statement of income. Due to FIN 46R, the junior subordinated debentures of the parent company that were previously eliminated in consolidation are now included in the consolidated balance sheets within total borrowings. The interest expense on the junior |
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subordinated debentures is included in the calculation of net interest margin of the consolidated company, negatively impacting the net interest margin by approximately 0.13% for the twelve months ending December 31, 2004 on an annualized basis and 0.16% for the fiscal years to follow. There is no impact on net income as the amount of interest previously recognized as minority interest is equal to the amount of interest expense. | ||
(2) | Calculated by dividing total stockholders’ equity by the net outstanding shares as of the end of each period. | |
(3) | Calculated by dividing stockholders’ equity less goodwill and core deposit intangible by the net outstanding shares as of the end of each period. |
At September 30, | At December 31, | |||||||||||||||||||||||
2008 | 2007 | 2006 | 2005(1) | 2004 | 2003 | |||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||
FINANCIAL CONDITION DATA: | ||||||||||||||||||||||||
Securities available for sale(2) | $ | 194,362 | $ | 168,352 | $ | 137,933 | $ | 132,391 | $ | 93,045 | $ | 109,868 | ||||||||||||
Securities held to maturity | — | — | 31 | 109 | 217 | 386 | ||||||||||||||||||
Loans(3) | 678,908 | 612,735 | 645,550 | 610,802 | 386,545 | 291,385 | ||||||||||||||||||
Allowance for loan losses | 6,853 | 5,789 | 5,337 | 5,212 | 2,874 | 2,395 | ||||||||||||||||||
Total assets | 980,737 | 903,278 | 914,122 | 867,515 | 517,691 | 458,972 | ||||||||||||||||||
Total deposits | 660,745 | 617,368 | 633,179 | 611,673 | 396,499 | 380,257 | ||||||||||||||||||
Total borrowings | 197,109 | 165,284 | 158,969 | 140,339 | 85,250 | 45,000 | ||||||||||||||||||
Stockholders’ equity | 106,514 | 107,444 | 109,405 | 108,112 | 31,328 | 29,301 | ||||||||||||||||||
Non-performing loans | 8,808 | 1,598 | 1,548 | 467 | 337 | 463 | ||||||||||||||||||
Non-performing assets | 8,808 | 1,598 | 1,548 | 467 | 337 | 463 |
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At or for the Nine Months | ||||||||||||||||||||||||||||
Ended September 30, | For the Year Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005(1) | 2004 | 2003 | ||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||||||||||
Interest income | $ | 36,762 | $ | 35,972 | $ | 48,173 | $ | 44,259 | $ | 35,135 | $ | 20,795 | $ | 19,532 | ||||||||||||||
Interest expense | 17,036 | 18,328 | 24,488 | 20,863 | 13,117 | 7,032 | 6,752 | |||||||||||||||||||||
Net interest income | 19,726 | 17,644 | 23,685 | 23,396 | 22,018 | 13,763 | 12,780 | |||||||||||||||||||||
Provision for loan losses | 1,128 | 469 | 634 | 201 | 525 | 451 | 497 | |||||||||||||||||||||
Non-interest income | 4,268 | 5,845 | 7,810 | 3,524 | 3,487 | 2,124 | 3,076 | |||||||||||||||||||||
Non-interest expenses | 17,691 | 19,461 | 25,687 | 22,337 | 23,437 | 12,855 | 12,852 | |||||||||||||||||||||
Net income | 3,505 | 2,492 | 3,642 | 4,740 | 431 | 1,689 | 1,688 | |||||||||||||||||||||
PER SHARE DATA: | ||||||||||||||||||||||||||||
Net income — Basic | $ | 0.48 | $ | 0.32 | $ | 0.48 | $ | 0.60 | $ | n/a | $ | n/a | $ | n/a | ||||||||||||||
Net income — Diluted | 0.48 | 0.32 | 0.47 | 0.60 | n/a | n/a | n/a | |||||||||||||||||||||
Cash dividends declared | 0.22 | 0.16 | 0.22 | 0.13 | 0.06 | n/a | n/a | |||||||||||||||||||||
Book value(4) | 13.81 | 13.43 | 13.67 | 13.26 | 12.74 | n/a | n/a | |||||||||||||||||||||
Tangible book value per share(5) | 9.17 | 8.86 | 9.06 | 8.80 | 8.27 | n/a | n/a | |||||||||||||||||||||
OPERATING RATIOS: | ||||||||||||||||||||||||||||
Return on average assets | 0.49 | % | 0.37 | % | 0.40 | % | 0.53 | % | 0.06 | % | 0.34 | % | 0.36 | % | ||||||||||||||
Return on average equity | 4.37 | % | 3.06 | % | 3.36 | % | 4.35 | % | 0.49 | % | 5.59 | % | 5.65 | % | ||||||||||||||
Net interest margin (on a fully tax equivalent basis) | 3.06 | % | 2.99 | % | 3.00 | % | 3.01 | % | 3.21 | % | 3.00 | % | 2.98 | % | ||||||||||||||
Equity to assets | 10.86 | % | 11.80 | % | 11.89 | % | 11.97 | % | 12.46 | % | 6.05 | % | 6.38 | % | ||||||||||||||
Dividend payout ratio | 50.33 | % | 54.29 | % | 46.81 | % | 21.67 | % | n/a | n/a | n/a | |||||||||||||||||
ASSET QUALITY RATIOS: | ||||||||||||||||||||||||||||
Non-performing loans as a percent of gross loans | 1.30 | % | 0.54 | % | 0.26 | % | 0.24 | % | 0.08 | % | 0.09 | % | 0.16 | % | ||||||||||||||
Non-performing assets as a percent of total assets | 0.90 | % | 0.38 | % | 0.18 | % | 0.17 | % | 0.05 | % | 0.07 | % | 0.10 | % | ||||||||||||||
Allowance for loan losses as a percent of total loans | 1.01 | % | 0.94 | % | 0.94 | % | 0.92 | % | 0.85 | % | 0.74 | % | 0.82 | % | ||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 77.80 | % | 172.87 | % | 362.27 | % | 344.77 | % | 1115.85 | % | 852.82 | % | 517.28 | % | ||||||||||||||
CAPITAL RATIOS: | ||||||||||||||||||||||||||||
Tier 1 leverage capital ratio | 7.76 | % | 9.38 | % | 8.32 | % | 9.62 | % | 9.82 | % | 7.35 | % | 7.77 | % | ||||||||||||||
Tier 1 risk-based capital ratio | 10.71 | % | 12.96 | % | 11.38 | % | 13.49 | % | 14.30 | % | 11.51 | % | 13.24 | % | ||||||||||||||
Total risk-based capital ratio | 11.74 | % | 13.88 | % | 12.32 | % | 14.42 | % | 15.29 | % | 12.48 | % | 14.17 | % |
(1) | Benjamin Franklin’s mutual-to-stock conversion was completed on April 4, 2005. Because shares were not issued and outstanding for the entire period, earnings per share have not been reported for the year ended December 31, 2005. Earnings per share (both basic and diluted) were $.16 in each of the third and fourth quarters of 2005. Cash dividends paid per share were $.03 in each of the third and fourth quarters of 2005. | |
(2) | Includes restricted equity securities. | |
(3) | Includes loans held for sale of $63,730 at December 31, 2006. | |
(4) | Calculated by dividing total stockholders’ equity by the net outstanding shares as of the end of each period. | |
(5) | Calculated by dividing stockholders’ equity less goodwill and core deposit intangible by the net outstanding shares as of the end of each period. |
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Benjamin | Unaudited | |||||||||||||||
Independent | Franklin | Adjustments | Pro Forma | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Cash and Short Term Investments | $ | 92,852 | $ | 51,052 | $ | 5,173 | (1) | $ | 149,077 | |||||||
Securities | 560,884 | 194,362 | — | 755,246 | ||||||||||||
Loans, net | 2,552,271 | 672,055 | 36 | (2) | 3,224,362 | |||||||||||
Bank Premises and Equipment | 35,246 | 5,049 | 413 | (3) | 40,708 | |||||||||||
Goodwill | 116,622 | 33,763 | 49,058 | (4) | 199,443 | |||||||||||
Identifiable Intangible Assets | 9,790 | 2,057 | 9,746 | (5) | 21,593 | |||||||||||
Other Assets | 109,570 | 22,399 | (4,570 | )(6) | 127,399 | |||||||||||
Total Assets | $ | 3,477,235 | $ | 980,737 | $ | 59,856 | $ | 4,517,828 | ||||||||
Deposits | 2,538,031 | 660,745 | (664 | )(7) | 3,198,112 | |||||||||||
Borrowings | 597,169 | 197,109 | 22,817 | (8) | 817,095 | |||||||||||
Other Liabilities | 37,295 | 16,369 | — | 53,664 | ||||||||||||
Stockholders’ Equity | 304,740 | 106,514 | 37,703 | (9) | 448,957 | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | 3,477,235 | $ | 980,737 | $ | 59,856 | $ | 4,517,828 | ||||||||
Common shares | 16,278,392 | 7,842,015 | (10) | (3,215,226 | ) | 20,905,181 |
* | The pro forma financial statements outlined above do not reflect the issuance of 78,158 shares of Independent’s Series C Preferred Stock and a10-year warrant to purchase up to 481,664 shares of Independent’s common stock at an exercise price of $24.34 per share to the Treasury on January 9, 2009, for aggregate proceeds of $78,158,000 in connection with the Treasury’s TARP Capital Purchase Program. |
(1) | Includes cash received from termination of Benjamin Franklin employee stock ownership plan. | |
(2) | Calculated to reflect fair value adjustments on loans of ($6,817), net of eliminated Benjamin Franklin allowance for loan losses of $6,853. | |
(3) | Calculated to reflect thestep-up in bank premises values to fair value. |
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(4) | Calculated to reflect the amount of goodwill estimated to be recorded in the acquisition of Benjamin Franklin, less amounts allocated to the fair value of tangible assets acquired. The purchase price, purchase price allocation, and financing of the transaction are as follows: |
Purchase Price for Benjamin Franklin paid as: | ||||
Conversion of 100% of Benjamin Franklin’s outstanding shares of common stock into 0.59 shares of Independent stock (based upon the average closing Independent stock value of $31.17 based upon the closing stock price at September 30, 2008) plus the value of the portion of options of Benjamin Franklin to be converted to Independent options | $ | 145,895 | ||
Cashing out a portion of the options as specified in the merger agreement | 688 | |||
146,583 | ||||
Allocated to: | ||||
Historical net book value of Benjamin Franklin assets and liabilities | (106,514 | ) | ||
Adjustment to Benjamin Franklin equity resulting from transaction related expenses paid by Benjamin Franklin | 19,550 | |||
Adjustments tostep-up assets and liabilities to fair value: | ||||
Loans, net | (36 | ) | ||
Bank premises and equipment | (413 | ) | ||
Capital benefit from cash out of ESOP plan, net of tax adjustment of $879 | (4,294 | ) | ||
Other assets | 3,691 | |||
Deposits & borrowings | 1,644 | |||
Core deposit intangible | (11,153 | ) | ||
Excess purchase price over allocation to identifiable assets and liabilities (goodwill) | $ | 49,058 | ||
(5) | Calculated to reflect the recognition of the estimated fair value of core deposit intangibles (CDI) of $11,153, expected to be acquired in the Benjamin Franklin acquisition, less the elimination of Benjamin Franklin’s prior identifiable intangible balance of $2,057. The estimated CDI represents the estimated future economic benefit resulting for the acquired customer balances and relationships. This value was derived from similar transactions. The final value will be determined based upon an independent appraisal at the date of acquisition. This amount also includes the non-compete agreements totaling $650. | |
(6) | Calculated to reflect estimated deferred tax liabilities of $4,600 arising from the core deposit intangible less estimated net deferred income tax assets of $971 arising from the purchase and fair value adjustments of assets and liabilities, which includes a 1.00% adjustment, reflective of Independent’s higher statutory federal tax rate of 35%, and taxes payable of $879 from the elimination of Benjamin Franklin’s ESOP plan. | |
(7) | Calculated to reflect fair value adjustments on deposits at current market rates. | |
(8) | Calculated to reflect the fair value adjustment of borrowings at current market rates ($2,308) and to adjust for additional borrowings needed to fund the transaction ($20,509). | |
(9) | Calculated to reflect the elimination of Benjamin Franklin stockholders’ equity as a part of the purchase accounting adjustments and represents the conversion of 100% of Benjamin Franklin shares into Independent shares at an exchange ratio of 0.59 of Independent shares (assuming a stock price of $31.17). | |
(10) | Amount represents common shares issued, which includes 131,383 restricted stock awards that would vest immediately upon acquisition. |
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Benjamin | Unaudited | |||||||||||||||
Independent | Franklin | Adjustments | Pro Forma | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||
Interest on Loans | $ | 135,391 | $ | 39,182 | $ | (85 | )(1) | $ | 174,488 | |||||||
Interest and Dividends on Securities | 22,879 | 8,139 | — | 31,018 | ||||||||||||
Interest on Fed Funds Sold and Short Term Investments | 1,468 | 852 | — | 2,320 | ||||||||||||
Total Interest Income | 159,738 | 48,173 | (85 | ) | 207,826 | |||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest on Deposits | 43,639 | 16,985 | 332 | (2) | 60,956 | |||||||||||
Interest on Borrowed Funds | 19,916 | 7,503 | (546 | )(3) | 26,873 | |||||||||||
Total Interest Expense | 63,555 | 24,488 | (214 | ) | 87,829 | |||||||||||
Net Interest Income | 96,183 | 23,685 | 129 | 119,997 | ||||||||||||
Less — Provision for Loan Losses | 3,130 | 634 | — | 3,764 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 93,053 | 23,051 | 129 | 116,233 | ||||||||||||
NON-INTEREST INCOME | ||||||||||||||||
Service Charges on Deposit Accounts | 14,414 | 1,487 | — | 15,901 | ||||||||||||
Wealth Management | 8,110 | — | — | 8,110 | ||||||||||||
Mortgage Banking Income | 3,166 | 680 | — | 3,846 | ||||||||||||
BOLI Income | 2,004 | 402 | — | 2,406 | ||||||||||||
ATM Servicing Fees | — | 2,534 | — | 2,534 | ||||||||||||
Other Non-Interest Income | 4,357 | 2,707 | — | 7,064 | ||||||||||||
Total Non-Interest Income | 32,051 | 7,810 | — | 39,861 | ||||||||||||
NON-INTEREST EXPENSE | ||||||||||||||||
Salaries and Employee Benefits | 52,520 | 14,687 | 67,207 | |||||||||||||
Occupancy and Equipment Expenses | 9,932 | 3,456 | 10 | (4) | 13,398 | |||||||||||
Data Processing and Facilities Management | 4,584 | 2,411 | — | 6,995 | ||||||||||||
Other Non-Interest Expense | 20,896 | 5,133 | 6,893 | (5) | 32,922 | |||||||||||
Total Non-Interest Expense | 87,932 | 25,687 | 6,903 | 120,522 | ||||||||||||
INCOME BEFORE INCOME TAXES | 37,172 | 5,174 | (6,774 | ) | 35,572 | |||||||||||
PROVISION FOR INCOME TAXES | 8,791 | 1,532 | (2,413 | )(6) | 7,910 | |||||||||||
NET INCOME | $ | 28,381 | $ | 3,642 | $ | (4,361 | ) | $ | 27,662 | |||||||
BASIC EARNINGS PER SHARE | $ | 2.02 | $ | 0.48 | $ | 1.48 | ||||||||||
DILUTED EARNINGS PER SHARE | $ | 2.00 | $ | 0.47 | $ | 1.47 | ||||||||||
BASIC AVERAGE SHARES(7) | 14,033,257 | 7,644,470 | (3,017,681 | ) | 18,660,046 | |||||||||||
DILUTED AVERAGE SHARES(8) | 14,160,598 | 7,686,543 | (3,026,872 | ) | 18,820,269 |
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* | The pro forma financial statements outlined above do not reflect the issuance of 78,158 shares of Independent’s Series C Preferred Stock and a10-year warrant to purchase up to 481,664 shares of Independent’s common stock at an exercise price of $24.34 per share to the Treasury on January 9, 2009, for aggregate proceeds of $78,158,000 in connection with the Treasury’s TARP Capital Purchase Program. |
(2) | Amount represents amortization of deposit fair value adjustment over 2 years, which is based on the estimated weighted average life of deposits. | |
(3) | Amount represents amortization of fair value adjustment on borrowings ($577), net of interest expense of $31 associated with incremental borrowings used to finance the transaction. | |
(4) | Amount represents amortization of fair value adjustment on fixed assets over estimated life of 39.5 years. | |
(5) | Amount represents CDI Amortization of $1,673 over an estimated life of 10 years using an accelerated method based on anticipated life of deposits, amortization of non-compete agreements over one year for top executive officers of $650, additional acquisition expenses of $1,640 ($1,000 of which is not tax deductible), $1,988 for elimination of vendor contracts, and severance payments of $942. The final severance estimate may change at the date of acquisition. | |
(6) | Amount represents a change in taxes from adjustments at an assumed tax rate of 41.8%. | |
(7) | Represents the number of shares issued from the transaction (4,626,789) less shares outstanding at the end of the period. | |
(8) | Represents the number of shares issued from the transaction (4,626,789) plus dilutive shares (32,882) from the transaction, less shares outstanding at the end of the period. |
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Benjamin | Unaudited | |||||||||||||||
Independent | Franklin | Adjustments | Pro Forma | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||
Interest on Loans | $ | 113,025 | $ | 30,152 | $ | (64 | )(1) | $ | 143,113 | |||||||
Interest and Dividends on Securities | 17,783 | 6,213 | — | 23,996 | ||||||||||||
Interest on Fed Funds Sold and Short Term Investments | 96 | 397 | — | 493 | ||||||||||||
Total Interest Income | 130,904 | 36,762 | (64 | ) | 167,602 | |||||||||||
INTEREST EXPENSE | ||||||||||||||||
Interest on Deposits | 28,933 | 10,462 | 249 | (2) | 39,644 | |||||||||||
Interest on Borrowed Funds | 15,006 | 6,574 | (410 | )(3) | 21,170 | |||||||||||
Total Interest Expense | 43,939 | 17,036 | (161 | ) | 60,814 | |||||||||||
Net Interest Income | 86,965 | 19,726 | 97 | 106,788 | ||||||||||||
Less — Provision for Loan Losses | 5,312 | 1,128 | — | 6,440 | ||||||||||||
Net Interest Income after Provision for Loan Losses | 81,653 | 18,598 | 97 | 100,348 | ||||||||||||
NON-INTEREST INCOME | ||||||||||||||||
Service Charges on Deposit Accounts | 11,681 | 1,305 | — | 12,986 | ||||||||||||
Wealth Management | 8,554 | — | — | 8,554 | ||||||||||||
Mortgage Banking Income | 2,574 | 216 | — | 2,790 | ||||||||||||
BOLI Income | 1,816 | 295 | — | 2,111 | ||||||||||||
ATM Servicing Fees | — | 937 | — | 937 | ||||||||||||
Net Loss on Sale of Securities | (609 | ) | — | — | (609 | ) | ||||||||||
Other-Than-Temporary-Impairment on Certain Pooled Trust Preferred Securities Rated (BBB) | (2,570 | ) | — | — | (2,570 | ) | ||||||||||
Other Non-Interest Income | 2,986 | 1,515 | — | 4,501 | ||||||||||||
Total Non-Interest Income | 24,432 | 4,268 | — | 28,700 | ||||||||||||
NON-INTEREST EXPENSE | ||||||||||||||||
Salaries and Employee Benefits | 43,806 | 9,963 | — | 53,769 | ||||||||||||
Occupancy and Equipment Expenses | 9,338 | 2,657 | 8 | (4) | 12,003 | |||||||||||
Data Processing and Facilities Management | 4,170 | 1,728 | — | 5,898 | ||||||||||||
Other Non-Interest Expense | 20,238 | 3,343 | 6,313 | (5) | 29,894 | |||||||||||
Total Non-Interest Expense | 77,552 | 17,691 | 6,321 | 101,564 | ||||||||||||
INCOME BEFORE INCOME TAXES | 28,533 | 5,175 | (6,224 | ) | 27,484 | |||||||||||
PROVISION FOR INCOME TAXES | 7,590 | 1,670 | (2,184 | )(6) | 7,076 | |||||||||||
NET INCOME | $ | 20,943 | $ | 3,505 | $ | (4,040 | ) | $ | 20,408 | |||||||
BASIC EARNINGS PER SHARE | $ | 1.35 | $ | 0.48 | $ | 1.01 | ||||||||||
DILUTED EARNINGS PER SHARE | $ | 1.34 | $ | 0.48 | $ | 1.01 | ||||||||||
BASIC AVERAGE SHARES(7) | 15,518,540 | 7,300,101 | (2,673,221 | ) | 20,145,420 | |||||||||||
DILUTED AVERAGE SHARES(8) | 15,591,167 | 7,369,376 | (2,687,208 | ) | 20,273,335 |
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* | The pro forma financial statements outlined above do not reflect the issuance of 78,158 shares of Independent’s Series C Preferred Stock and a10-year warrant to purchase up to 481,664 shares of Independent’s common stock at an exercise price of $24.34 per share to the Treasury on January 9, 2009, for aggregate proceeds of $78,158,000 in connection with the Treasury’s TARP Capital Purchase Program. |
(1) | Amount represents accretion of loan discount of approximately $320, over estimated life of 5 years. The $320 is the portion of the fair value adjustment on loans which is due to changes in the interest rate environment and not the portion that reflects the credit quality fair value adjustment on the loans. | |
(2) | Amount represents amortization of deposit fair value adjustment over 2 years, which is based on the estimated weighted average life of deposits. | |
(3) | Amount represents amortization of fair value adjustment on borrowings ($433), net of interest expense of $23 associated with incremental borrowings used to finance the transaction. | |
(4) | Amount represents amortization of fair value adjustment on fixed assets over estimated life of 39.5 years. | |
(5) | Amount represents CDI Amortization of $1,255 over an estimated life of 10 years, plus non-compete agreements for executive officers of $488, plus additional acquisition expenses of $1,640 ($1,000 of which is not tax deductible), $1,988 for elimination of vendor contracts, and severance payments of $942. The final severance estimate may change at the date of acquisition. | |
(6) | Amount represents a change in taxes from adjustments at an assumed tax rate of 41.8%. | |
(7) | Represents the number of shares issued from the transaction (4,626,789) less shares outstanding at the end of the period. | |
(8) | Represents the number of shares issued from the transaction (4,626,789) plus dilutive shares (55,379) from the transaction, less shares outstanding at the end of the period. |
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• | delivering a written notice bearing a date later than the date of your proxy card to the clerk/secretary of Benjamin Franklin, stating that you revoke your proxy; | |
• | signing and delivering to the clerk/secretary of Benjamin Franklin a new proxy card relating to the same shares and bearing a later date; | |
• | properly casting a new vote through the Internet or by telephone at any time before the closure of the Internet voting facilities and the telephone voting facilities; or | |
• | attending the Benjamin Franklin special meeting and voting in person, but you also must file a written revocation with the clerk/secretary of the special meeting prior to the voting. |
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• | deliver written notice of your intent to demand payment for your shares of Benjamin Franklin common stock to Anne M. King, Secretary, Benjamin Franklin Bancorp, Inc., 58 Main Street, Franklin, MA 02038 before the vote on the approval of the merger agreement is taken; | |
• | NOT vote for the approval of the merger agreement; and | |
• | comply with other procedures as are required by Part 13 of the Massachusetts Business Corporation Act. |
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• | each shareholder that has properly perfected his appraisal rights will be entitled to a cash payment of the estimated fair value of the shares, plus interest but subject to any applicable withholding taxes, within 30 days of the written appraisal notice and forms due date; | |
• | a shareholder that fails to execute and return the forms, and comply with the terms stated therein, will not be entitled to such a payment; and | |
• | if dissatisfied with the payment or offer, shareholders may demand further payment. |
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• | delivering a written notice bearing a date later than the date of your proxy card to the clerk/secretary of Independent, stating that you revoke your proxy; | |
• | signing and delivering to the clerk/secretary of Independent a new proxy card relating to the same shares and bearing a later date; | |
• | properly casting a new vote through the Internet or by telephone at any time before the closure of the Internet voting facilities and the telephone voting facilities; or | |
• | attending the Independent special meeting and voting in person, but you also must file a written revocation with the clerk/secretary of the special meeting prior to the voting. |
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• | The value of the merger consideration being offered as compared to the book value, earnings per share and historical trading prices of Benjamin Franklin’s common stock. | |
• | The fact that Benjamin Franklin’s shareholders will experience an increase in the liquidity for their shares as Independent’s common stock is traded on the NASDAQ Global Select Market and, historically, has a much larger volume of shares traded on a daily basis than trades in Benjamin Franklin common stock. | |
• | Benjamin Franklin’s positive perception about Independent due to its understanding of, and review of information concerning, the management, business, results of operations, financial condition, competitive position, growth potential and future prospects of Independent, including the results of its due diligence review of Independent. | |
• | The fact that Benjamin Franklin’s shareholders may receive dividend income from such investment in the future, which dividend income on an exchange basis is currently $0.42 per Benjamin Franklin share on an annual basis. | |
• | Benjamin Franklin’s board of directors’ belief that, given the current prospective environment in which Benjamin Franklin operates, including the economic, competitive and regulatory conditions facing financial institutions generally and the trend toward consolidation in the banking and financial services industries, pursuing the merger with Independent would be more beneficial to shareholders than continuing to operate as an independent financial institution. | |
• | The types of business that Independent conducts in the region, and the expanded service Independent can provide to Benjamin Franklin’s customers and the communities it serves. | |
• | The compatibility of the respective business philosophies and cultures of Benjamin Franklin and Independent. | |
• | The perceived ability of Independent to receive the requisite regulatory approvals in a timely manner. |
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• | Independent’s agreement that Benjamin Franklin representatives, including its President and Chief Executive Officer, would be elected to Independent’s board of directors. | |
• | The terms and conditions of the merger agreement, including the parties’ respective representations and warranties, the conditions to closing and termination provisions which the board believed provided adequate assurances about the current operations of Independent and its ability to consummate the merger in a timely manner without any extraordinary conditions. | |
• | The fact that the transaction eliminates the necessity and business risks associated with Benjamin Franklin undertaking the additional capital investment necessary to expand Benjamin Franklin’s product offerings as well as the expansion of its branch and technology infrastructure in order to continue to grow the business franchise and shareholder value. | |
• | The alternatives of Benjamin Franklin continuing as an independent community-focused banking company or combining with other potential merger partners, as compared to the effect of Benjamin Franklin combining with Independent pursuant to the merger agreement, and the determination that the transaction with Independent presented the best opportunity for maximizing shareholder value and achieving Benjamin Franklin’s other strategic goals. | |
• | The written opinion of KBW that the consideration to be received by the Benjamin Franklin shareholders pursuant to the merger agreement was fair to them from a financial point of view. |
• | The fact that the merger agreement provides for Benjamin Franklin’s payment of a $4.5 million termination fee to Independent if the merger agreement is terminated under certain limited circumstances, although this factor was mitigated somewhat by the fact that such circumstances would generally involve the receipt of an acquisition proposal from a third party. | |
• | The fact that the merger agreement limits Benjamin Franklin’s ability to solicit or discuss alternative transactions during the pendency of the merger, although this was mitigated by the fact that Benjamin Franklin’s board is permitted, in certain circumstances in the exercise of its fiduciary duties, to engage in discussions with parties who submit an unsolicited proposal. | |
• | The fact that the Benjamin Franklin shareholders will receive a fixed ratio of 0.59 shares of Independent common stock for each share of Benjamin Franklin common stock regardless of any decline in the market value of Benjamin Franklin common stock or Independent common stock before the completion of the merger, and the lack of any “walk-away” provision that would enable Benjamin Franklin to terminate the agreement based on a decline in the market price of Independent’s common stock, including a decline relative to the market prices of the common stock of peer institutions. | |
• | The potential job loss among Benjamin Franklin employees. |
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Transaction Metric | Multiple | |||
Price/LTM Diluted EPS | 25.0 | x | ||
Price/BVPS | 114.2 | % | ||
Price/TBVPS | 172.0 | % | ||
Core Deposit Premium | 9.7 | % |
• Berkshire Hills Bancorp, Inc. | • Legacy Bancorp, Inc. | |
• Brookline Bancorp, Inc. | • LSB Corporation | |
• Chicopee Bancorp, Inc. | • New England Bancshares, Inc. | |
• Danvers Bancorp, Inc. | • New Hampshire Thrift Bancshares, Inc. | |
• Hampden Bancorp, Inc. | • United Financial Bancorp, Inc. | |
• Hingham Institution for Savings | • Westfield Financial, Inc. |
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Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Peer | Peer | Peer | Peer | |||||||||||||||||
Benjamin | Group | Group | Group | Group | ||||||||||||||||
Financial Performance Measures(1): | Franklin | Median | Mean | Maximum | Minimum | |||||||||||||||
Return on Average Equity | 4.34 | % | 1.69 | % | 1.97 | % | 10.38 | % | (8.98 | )% | ||||||||||
Return on Average Assets | 0.49 | % | 0.32 | % | 0.29 | % | 0.81 | % | (0.79 | )% | ||||||||||
Net Interest Margin | 3.06 | % | 3.17 | % | 3.11 | % | 3.43 | % | 2.56 | % | ||||||||||
Efficiency Ratio | 73.80 | % | 69.25 | % | 75.84 | % | 112.09 | % | 51.82 | % |
(1) | Calculated for the LTM period ended September 30, 2008. |
Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Peer | Peer | Peer | Peer | |||||||||||||||||
Benjamin | Group | Group | Group | Group | ||||||||||||||||
Financial Condition Measures(1): | Franklin | Median | Mean | Maximum | Minimum | |||||||||||||||
Total Risk-Based Capital Ratio | 11.74 | % | 16.55 | % | 19.93 | % | 45.79 | % | 10.18 | % | ||||||||||
Tangible Equity to Tangible Assets | 7.48 | % | 13.35 | % | 13.20 | % | 25.46 | % | 5.48 | % | ||||||||||
Non-Performing Assets to Assets | 0.90 | % | 0.50 | % | 0.55 | % | 1.14 | % | 0.26 | % | ||||||||||
Reserves to Loans | 1.01 | % | 1.05 | % | 1.05 | % | 1.38 | % | 0.67 | % |
(1) | Calculated at September 30, 2008 or June 30, 2008. |
Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Peer | Peer | Peer | Peer | |||||||||||||||||
Benjamin | Group | Group | Group | Group | ||||||||||||||||
Market Performance Measures: | Franklin | Median | Mean | Maximum | Minimum | |||||||||||||||
Price to LTM Diluted EPS(1)(2) | 20.7 | x | 13.7 | x | 19.7 | x | 34.3 | x | 10.1 | x | ||||||||||
Price to BVPS(3) | 94.5 | % | 90.7 | % | 95.0 | % | 135.0 | % | 67.6 | % | ||||||||||
Price to TBVPS(3) | 142.3 | % | 106.9 | % | 111.6 | % | 181.9 | % | 78.3 | % |
(1) | Calculated based upon the closing stock price as of November 7, 2008 and earnings for the LTM period ended September 30, 2008. | |
(2) | Benjamin Franklin Peer Group Median, Maximum and Minimum exclude multiples greater than 50.0x. | |
(3) | Calculated based upon the closing stock price as of November 7, 2008 and at September 30, 2008. |
Implied Transaction | Selected Company Multiples | |||||||||||||||||||
September 30, 2008 | Multiples per Share | Median | Mean | Maximum | Minimum | |||||||||||||||
LTM Diluted EPS | 25.0 | x | 13.7 | x | 19.7 | x | 34.3 | x | 10.1 | x | ||||||||||
BVPS | 114.2 | % | 90.7 | % | 95.0 | % | 135.0 | % | 67.6 | % | ||||||||||
TBVPS | 172.0 | % | 106.9 | % | 111.6 | % | 181.9 | % | 78.3 | % |
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Benjamin Franklin | Implied Exchange Ratio(1) | |||||||||||||||||||
September 30, 2008 | per Share | Median | Mean | Maximum | Minimum | |||||||||||||||
LTM Diluted EPS | $ | 0.63 | 0.32 | 0.46 | 0.81 | 0.24 | ||||||||||||||
BVPS | $ | 13.81 | 0.47 | 0.49 | 0.70 | 0.35 | ||||||||||||||
TBVPS | $ | 9.17 | 0.37 | 0.38 | 0.62 | 0.27 |
(1) | Based on Independent’s stock price of $26.73 per share as of November 7, 2008. |
Acquiror | Target | |
• Eastern Bank Corporation | • MASSBANK Corp. | |
• Assabet Valley Bancorp | • Westborough Financial Services, Inc. | |
• Webster Financial Corporation | • NewMil Bancorp, Inc. | |
• Berkshire Hills Bancorp Inc. | • Woronoco Bancorp, Inc. | |
• Benjamin Franklin Bancorp, MHC | • Chart Bank, A Co-op Bank | |
• Brookline Bancorp, Inc. | • Mystic Financial, Inc. | |
• Banknorth Group, Inc. | • BostonFed Bancorp, Inc. | |
• Sovereign Bancorp, Inc. | • Seacoast Financial Services Corporation | |
• Independent Bank Corp. | • Falmouth Bancorp, Inc. | |
• Banknorth Group, Inc. | • Foxborough Savings Bank |
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Implied Transaction | Selected Acquisition Multiples | |||||||||||||||||||
Multiples per Share | Median | Mean | Maximum | Minimum | ||||||||||||||||
LTM Diluted EPS | 25.0 | x | 29.4 | x | 30.4 | x | 58.7 | x | 19.2 | x | ||||||||||
BVPS | 114.2 | % | 208.2 | % | 222.9 | % | 319.3 | % | 155.7 | % | ||||||||||
TBVPS | 172.0 | % | 225.4 | % | 251.6 | % | 396.0 | % | 157.3 | % | ||||||||||
Core Deposit Premium | 9.7 | % | 14.5 | % | 19.0 | % | 35.1 | % | 11.4 | % |
Implied | ||||||||||||||||||||||||
Time Prior to | Benjamin Franklin | Transaction | Selected Acquisition Multiples | |||||||||||||||||||||
Announcement | Stock Price | Premium(1) | Median | Mean | Maximum | Minimum | ||||||||||||||||||
1-Trading Day | $ | 13.05 | 20.8 | % | 13.9 | % | 15.3 | % | 41.8 | % | (1.6 | )% | ||||||||||||
6-Trading Days | $ | 12.99 | 21.4 | % | 18.1 | % | 17.8 | % | 48.1 | % | (1.7 | )% | ||||||||||||
1-Month | $ | 11.25 | 40.2 | % | 28.7 | % | 25.2 | % | 36.6 | % | 2.8 | % | ||||||||||||
3-Months | $ | 11.52 | 36.9 | % | 25.2 | % | 22.9 | % | 51.3 | % | (6.1 | )% | ||||||||||||
1-Year | $ | 14.45 | 9.1 | % | 47.3 | % | 47.4 | % | 85.7 | % | 8.9 | % |
(1) | Based on the implied per share purchase price of $15.77 as of November 7, 2008 by the exchange ratio in the merger. |
Benjamin Franklin | Implied Exchange Ratio(1) | |||||||||||||||||||
per Share | Median | Mean | Maximum | Minimum | ||||||||||||||||
LTM EPS(2) | $ | 0.63 | 0.69 | 0.72 | 1.38 | 0.45 | ||||||||||||||
BVPS(2) | $ | 13.81 | 1.08 | 1.15 | 1.65 | 0.80 | ||||||||||||||
TBVPS(2) | $ | 9.17 | 0.77 | 0.86 | 1.36 | 0.54 | ||||||||||||||
Core Deposit Premium | N/A | 0.73 | 0.85 | 1.28 | 0.63 |
(1) | Based on Independent’s stock price of $26.73 per share as of November 7, 2008. | |
(2) | Benjamin Franklin per share data as of September 30, 2008. |
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Category | Independent | Benjamin Franklin | ||||||
Assets(1) | 78.0 | % | 22.0 | % | ||||
Gross Loans(1) | 79.2 | % | 20.8 | % | ||||
Deposits(1) | 79.3 | % | 20.7 | % | ||||
Tangible Equity(1) | 71.6 | % | 28.4 | % | ||||
2009 Estimated Earnings (GAAP)(2) | 85.7 | % | 14.3 | % | ||||
Estimated Pro Forma Ownership | 77.8 | % | 22.2 | % |
(1) | As of September 30, 2008. | |
(2) | Based on standalone estimates provided by the managements of Independent and Benjamin Franklin. |
Note: | Except for estimated pro forma ownership, contribution percentages do not include purchase accounting adjustments. |
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• | reviewed, among other things, |
• | the merger agreement, | |
• | Annual Reports to shareholders and Annual Reports onForm 10-K for the three years ended December 31, 2007 of Independent, | |
• | Quarterly Reports onForm 10-Q of Independent, | |
• | Annual Reports to shareholders and Annual Reports onForm 10-K for the three years ended December 31, 2007 of Benjamin Franklin, and | |
• | Quarterly Reports onForm 10-Q of Benjamin Franklin; |
• | held discussions with members of senior management of Benjamin Franklin and Independent regarding |
• | past and current business operations, | |
• | regulatory relations, | |
• | financial condition and | |
• | future prospects of their respective companies; |
• | reviewed the market prices, valuation multiples, publicly reported financial condition and results of operations for Benjamin Franklin and Independent and compared them with those of certain publicly traded companies that KBW deemed to be relevant; | |
• | compared the proposed financial terms of the merger with the financial terms of certain other transactions that KBW deemed to be relevant; and | |
• | performed other studies and analyses that it considered appropriate. |
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• | the merger will be completed substantially in accordance with the terms set forth in the merger agreement; | |
• | the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement are true and correct; | |
• | each party to the merger agreement and all related documents will perform all of the covenants and agreements required to be performed by such party under such documents; | |
• | all conditions to the completion of the merger will be satisfied without any waivers; and | |
• | in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, will be imposed that will have a material adverse effect on the future results of operations or financial condition of the combined entity or the contemplated benefits of the merger, including the cost savings and related expenses expected to result from the merger. |
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Banks: | Thrifts: | |
Independent Bank Corp. | Berkshire Hills Bancorp, Inc. | |
Century Bancorp, Inc. | Brookline Bancorp, Inc. | |
Enterprise Bancorp, Inc. | Westfield Financial, Inc. | |
Wainwright Bank & Trust Company | Legacy Bancorp, Inc. | |
Cambridge Bancorp | Hingham Institution for Savings | |
LSB Corporation | ||
Hampden Bancorp, Inc. | ||
Central Bancorp, Inc. |
Signature Bank | Lakeland Bancorp, Inc. | |
Harleysville National Corporation | Camden National Corporation | |
Community Bank System, Inc. | Intervest Bancshares Corporation | |
NBT Bancorp Inc. | Sterling Bancorp | |
Sun Bancorp, Inc. | Univest Corporation of Pennsylvania | |
Washington Trust Bancorp, Inc. |
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Independent | Independent | |||||||||||
Peer Group | Peer Group | |||||||||||
Independent | Median | Average | ||||||||||
Core Return on Average Assets | 1.04 | % | 0.91 | % | 0.82 | % | ||||||
Core Return on Average Equity | 11.60 | % | 9.70 | % | 10.40 | % | ||||||
Net Interest Margin | 4.09 | % | 3.28 | % | 3.37 | % | ||||||
Fee Income/Revenue | 22.90 | % | 27.10 | % | 24.20 | % | ||||||
Efficiency Ratio | 62.60 | % | 60.90 | % | 59.40 | % |
Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Bank | Bank | Thrift | Thrift | |||||||||||||||||
Benjamin | Peer Group | Peer Group | Peer Group | Peer Group | ||||||||||||||||
Franklin | Median | Average | Median | Average | ||||||||||||||||
Core Return on Average Assets | 0.50 | % | 0.58 | % | 0.76 | % | 0.55 | % | 0.52 | % | ||||||||||
Core Return on Average Equity | 4.60 | % | 8.30 | % | 9.70 | % | 3.30 | % | 4.60 | % | ||||||||||
Net Interest Margin | 3.13 | % | 4.09 | % | 3.72 | % | 3.16 | % | 3.11 | % | ||||||||||
Fee Income/Revenue | 15.00 | % | 22.70 | % | 16.50 | % | 10.70 | % | 12.40 | % | ||||||||||
Efficiency Ratio | 71.30 | % | 70.80 | % | 75.10 | % | 63.00 | % | 65.90 | % |
Independent | Independent | |||||||||||
Peer Group | Peer Group | |||||||||||
Independent | Median | Average | ||||||||||
Equity/Assets | 8.76 | % | 8.51 | % | 8.45 | % | ||||||
Tangible Equity/Tangible Assets | 5.32 | % | 6.05 | % | 6.16 | % | ||||||
Loans/Deposits | 101.70 | % | 93.10 | % | 91.40 | % | ||||||
Core Deposits/Total Deposits | 88.20 | % | 86.60 | % | 85.60 | % | ||||||
Loan Loss Reserve/Loans | 1.29 | % | 1.25 | % | 1.24 | % | ||||||
Nonperforming Assets/Loans + OREO | 0.69 | % | 0.72 | % | 1.36 | % | ||||||
Last Twelve Months Net Charge-Offs/Average Loans | 0.22 | % | 0.32 | % | 0.37 | % |
Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Bank | Bank | Thrift | Thrift | |||||||||||||||||
Benjamin | Peer Group | Peer Group | Peer Group | Peer Group | ||||||||||||||||
Franklin | Median | Average | Median | Average | ||||||||||||||||
Equity/Assets | 10.86 | % | 7.80 | % | 7.63 | % | 13.84 | % | 13.70 | % | ||||||||||
Tangible Equity/Tangible Assets | 7.48 | % | 6.79 | % | 6.75 | % | 10.07 | % | 12.52 | % | ||||||||||
Loans/Deposits | 102.80 | % | 96.20 | % | 88.40 | % | 113.30 | % | 117.50 | % | ||||||||||
Core Deposits/Total Deposits | 84.20 | % | 88.20 | % | 86.80 | % | 80.40 | % | 79.20 | % | ||||||||||
Loan Loss Reserve/Loans | 1.01 | % | 1.29 | % | 1.38 | % | 1.08 | % | 1.07 | % | ||||||||||
Nonperforming Assets/Loans + OREO | 1.30 | % | 0.56 | % | 0.50 | % | 0.82 | % | 0.98 | % | ||||||||||
Last Twelve Months Net Charge-Offs/Average Loans | 0.04 | % | 0.10 | % | 0.16 | % | 0.06 | % | 0.11 | % |
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Independent | Independent | |||||||||||
Peer Group | Peer Group | |||||||||||
Independent | Median | Average | ||||||||||
Stock Price/Book Value per Share | 1.43 | x | 1.38 | x | 1.38 | x | ||||||
Stock Price/Tangible Book Value per Share | 2.44 | x | 1.95 | x | 2.02 | x | ||||||
Stock Price/2008 Estimated GAAP EPS | 13.40 | x | 14.70 | x | 15.20 | x | ||||||
Stock Price/2009 Estimated GAAP EPS | 13.00 | x | 14.10 | x | 14.10 | x | ||||||
Dividend Yield | 2.70 | % | 3.70 | % | 3.40 | % | ||||||
2009 Dividend Payout Ratio | 35.10 | % | 44.40 | % | 39.20 | % |
Benjamin | Benjamin | Benjamin | Benjamin | |||||||||||||||||
Franklin | Franklin | Franklin | Franklin | |||||||||||||||||
Bank | Bank | Thrift | Thrift | |||||||||||||||||
Benjamin | Peer Group | Peer Group | Peer Group | Peer Group | ||||||||||||||||
Franklin | Median | Average | Median | Average | ||||||||||||||||
Stock Price/Book Value per Share | 0.94 | x | 0.99 | x | 1.11 | x | 0.95 | x | 0.93 | x | ||||||||||
Stock Price/Tangible Book Value per Share | 1.42 | x | 1.03 | x | 1.34 | x | 1.03 | x | 1.06 | x | ||||||||||
Stock Price/2008 Estimated GAAP EPS | 18.90 | x | 13.40 | x | 13.40 | x | 34.10 | x | 33.10 | x | ||||||||||
Stock Price/2009 Estimated GAAP EPS | 17.20 | x | 13.00 | x | 13.00 | x | 27.50 | x | 25.40 | x | ||||||||||
Dividend Yield | 2.50 | % | 3.40 | % | 3.60 | % | 2.70 | % | 3.60 | % | ||||||||||
2009 Dividend Payout Ratio | 42.10 | % | 35.10 | % | 35.10 | % | 53.70 | % | 59.00 | % |
Acquiror | Bank Acquiree | |
Valley National Bancorp | Greater Community Bancorp | |
F.N.B. Corporation | Iron & Glass Bancorp, Inc. | |
S&T Bancorp, Inc. | IBT Bancorp, Inc. | |
Eagle Bancorp, Inc. | Fidelity & Trust Financial Corporation | |
Tompkins Financial Corporation | Sleepy Hollow Bancorp, Inc. | |
F.N.B. Corporation | Omega Financial Corporation | |
Independent Bank Corp. | Slade’s Ferry Bancorp. | |
Camden National Corporation | Union Bankshares Company | |
Community Bancorp. | LyndonBank | |
Cape Bancorp, Inc. | Boardwalk Bancorp, Inc. |
Acquiror | Thrift Acquiree | |
Harleysville National Corporation | Willow Financial Bancorp, Inc. | |
Eastern Bank Corporation | MASSBANK Corp. | |
First Niagara Financial Group, Inc. | Great Lakes Bancorp, Inc. | |
National Penn Bancshares, Inc. | KNBT Bancorp, Inc. |
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• | the earnings per share of the acquired company for the latest 12 months of results publicly available prior to the time the transaction was announced; | |
• | book value per share of the acquired company based on the latest publicly available financial statements of the company available prior to the announcement of the acquisition. | |
• | tangible book value per share of the acquired company based on the latest publicly available financial statements of the company available prior to the announcement of the acquisition. | |
• | tangible equity premium to core deposits (total deposits less time deposits greater than $100,000) based on the latest publicly available financial statements of the company available prior to the announcement of the acquisition. | |
• | market premium based on the latest closing price1-day prior to the announcement of the acquisition. |
Comparable | Comparable | |||||||||||
Independent/ | Bank | Thrift | ||||||||||
Benjamin | Transactions | Transactions | ||||||||||
Transaction Price to: | Franklin Merger | Median | Median | |||||||||
Last Twelve Months Earnings per Share | 25.0 | x | 23.1 | x | 22.8 | x | ||||||
Book Value | 114.0 | % | 199.0 | % | 120.0 | % | ||||||
Tangible Book Value | 172.0 | % | 218.0 | % | 167.0 | % | ||||||
Core Deposit Premium | 8.8 | % | 15.7 | % | 9.4 | % | ||||||
Market Premium(1) | 20.8 | % | 31.5 | % | 18.0 | % |
(1) | Based on Benjamin Franklin closing price of $13.05 on November 7, 2008. |
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Category | Independent | Benjamin Franklin | ||||||
2008 Estimated Net Income | 86.7 | % | 13.3 | % | ||||
2008 Estimated Cash Net Income | 85.2 | % | 14.8 | % | ||||
2009 Estimated Net Income | 85.8 | % | 14.2 | % | ||||
2009 Estimated Net Income with Cost Savings | 74.2 | % | 25.8 | % | ||||
2009 Estimated Cash Net Income | 84.4 | % | 15.6 | % | ||||
2009 Estimated Cash Net Income with Cost Savings | 73.4 | % | 26.6 | % | ||||
Total Assets | 78.0 | % | 22.0 | % | ||||
Gross Loans | 79.2 | % | 20.8 | % | ||||
Total Deposits | 79.3 | % | 20.7 | % | ||||
Common Equity | 74.1 | % | 25.9 | % | ||||
Tangible Common Equity | 71.6 | % | 28.4 | % | ||||
Market Capitalization | 81.0 | % | 19.0 | % | ||||
Ownership at 100% Stock | 78.5 | % | 21.5 | % |
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• | the approval of the Board of Bank Incorporation of the Commonwealth of Massachusetts to merge Merger Sub with and into Benjamin Franklin, with Benjamin Franklin becoming a wholly owned subsidiary of Independent; |
• | confirmation from the Massachusetts Housing Partnership Fund (the “Housing Partnership Fund”) that Independent has made arrangements satisfactory to the Housing Partnership Fund; and | |
• | the approval or waiver of the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956. |
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Payment at | ||||||||||||||||
Completion of | Number of | Value at Completion of | ||||||||||||||
Merger if Options | Currently | Merger of Currently | ||||||||||||||
are Cancelled | Unvested | Unvested Shares of | ||||||||||||||
(Before Deduction of | Shares of | Restricted Stock | ||||||||||||||
Number of | Withholding | Restricted | (Before Deduction of | |||||||||||||
Name | Options | Taxes)(1) | Stock | Withholding Taxes)(2) | ||||||||||||
Thomas R. Venables | 113,500 | $ | 221,170 | 33,848 | $ | 533,783 | ||||||||||
Claire S. Bean | 67,500 | 134,530 | 25,244 | 398,098 | ||||||||||||
Rose M. Buckley | 32,100 | 61,488 | 4,934 | 77,809 | ||||||||||||
Mariane E. Broadhurst | 26,900 | 51,732 | 4,934 | 77,809 | ||||||||||||
Michael J. Piemonte | 7,400 | 15,512 | 4,540 | 71,596 | ||||||||||||
Executive Officers as a Group | 247,400 | 484,432 | 73,500 | 1,159,095 | ||||||||||||
Non-Employee Directors as a Group (13 Persons) | 120,471 | 266,707 | 32,227 | 508,220 | ||||||||||||
TOTAL | 367,871 | $ | 751,139 | 105,727 | $ | 1,667,315 | ||||||||||
(1) | Calculated by multiplying the number of options by the amount of the excess of the implied per share purchase price of $15.77 as of November 7, 2008 over the exercise price of the options. | |
(2) | Calculated by multiplying the number of unvested shares of restricted stock by the implied per share purchase price of $15.77 as of November 7, 2008. |
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• | an Independent stock certificate representing the number of whole shares of Independent common stock that they are entitled to receive under the merger agreement; and | |
• | a check representing the amount of cash that they are entitled to receive in lieu of fractional shares, if any. |
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• | have been qualified by information set forth in confidential disclosure schedules exchanged by the parties in connection with signing the merger agreement — the information contained in these schedules modifies, qualifies and creates exceptions to the representations and warranties in the merger agreement; | |
• | will not survive consummation of the merger and cannot be the basis for any claims under the merger agreement by the other party after termination of the merger agreement; | |
• | may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the merger agreement if those statements turn out to be inaccurate; | |
• | are subject to the materiality standard described in the merger agreement which may differ from what may be viewed as material by you; and | |
• | were made only as of the date of the merger agreement or such other date as is specified in the merger agreement. |
• | capital stock; | |
• | corporate matters, including due organization and qualification; | |
• | authority relative to execution and delivery of the merger agreement and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger; | |
• | the filing of securities and regulatory reports, and the absence of investigations by regulatory agencies; | |
• | governmental filings and consents necessary to complete the merger; | |
• | absence of certain changes or events; | |
• | compliance with applicable laws; | |
• | regulatory capitalization; | |
• | loan, non-performing and classified assets; | |
• | trust business and fiduciary accounts; | |
• | the Community Reinvestment Act and anti-money laundering requirements; | |
• | accuracy of this joint proxy statement/prospectus; | |
• | legal proceedings; | |
• | broker’s fees payable in connection with the merger; | |
• | employee benefit matters; | |
• | labor matters; | |
• | environmental matters; | |
• | tax matters, including tax treatment of the merger; and | |
• | the accuracy of information supplied for inclusion in this document and other similar documents. |
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• | organization and ownership of subsidiaries; | |
• | matters relating to certain contracts; | |
• | investment securities; | |
• | derivative transactions; | |
• | investment management; | |
• | repurchase agreements; | |
• | deposit insurance; | |
• | transactions with affiliates and insiders; | |
• | tangible properties and assets; | |
• | intellectual property; | |
• | insurance; | |
• | the inapplicability of state anti-takeover laws; | |
• | the receipt of a fairness opinion; and | |
• | transaction costs. |
• | issue, or enter into an agreement to issue, shares of common stock except pursuant to the exercise of Benjamin Franklin stock options outstanding as of the date of the merger agreement, accelerate the vesting of any rights to acquire shares of common stock, or change the number of, or provide for the exchange of, shares of Benjamin Franklin stock, any securities convertible into or exchangeable for any additional shares of stock, any rights issued and outstanding prior to the effective date of the merger as a result of a stock split, stock dividend, recapitalization, reclassification, or similar transaction with respect to its outstanding stock or any other such securities; | |
• | declare, set aside or pay any dividends or other distributions on any shares of its capital stock, other than (1) dividends paid by any of the wholly owned subsidiaries of Benjamin Franklin to Benjamin Franklin or to any of its wholly owned subsidiaries, and (2) regular quarterly cash dividends at a rate not to exceed $0.08 per share; | |
• | enter into or amend or renew any employment, consulting, severance or similar agreements or arrangements with any director, officer, employee of Benjamin Franklin or any of its subsidiaries, or grant any salary or wage increase or increase any employee benefit plan or pay any incentive or bonus payments, subject to certain exceptions primarily intended to permit increases in compensation and the payment of bonuses in the ordinary course of business; |
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• | hire any person except for at-will employees at an annual rate of salary not to exceed $75,000 to fill vacancies that may arise from time to time in the ordinary course of business, or promote any employee, except to satisfy contractual obligations existing as of the date of the merger agreement; | |
• | with certain exceptions, enter into, establish, adopt, amend, modify or terminate any benefit plan or other pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement related thereto, in respect of any current or former director, officer or employee; | |
• | except pursuant to agreements in effect as of the date of the merger agreement, pay, loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement with, any of its officers or directors or any of their immediate family members or any affiliates or associates of any of its officers or directors other than compensation or business expense reimbursement in the ordinary course of business consistent with past practice; | |
• | sell, transfer, mortgage, pledge, encumber or otherwise dispose or discontinue any of its assets, deposits, business or properties other than in the ordinary course of business consistent with past practice; | |
• | acquire, other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, all or any portion of the assets, business, deposits or properties of any other entity other than in the ordinary course of business consistent with past practice; | |
• | with certain exceptions, make any capital expenditures other than in the ordinary course of business consistent with past practice in amounts not exceeding $50,000 individually or $100,000 in the aggregate unless consented to in writing by Independent (which consent will not be unreasonably delayed or withheld); | |
• | amend its articles of organization or bylaws or any equivalent documents of any Benjamin Franklin subsidiary; | |
• | implement or adopt any change in its accounting principles, practices or methods, other than as may be required by applicable laws or regulations or generally accepted accounting principles in the United States of America; | |
• | with certain exceptions, enter into, amend, modify or terminate any material contract, lease, or insurance policy; | |
• | enter into any settlement of any action, suit, proceeding, order or investigation to which Benjamin Franklin or any of its subsidiaries becomes party after the date of the merger agreement, which settlement involves payment of an amount exceeding $25,000 individually or $50,000 in the aggregateand/or would impose any material restriction on the business of Benjamin Franklin or its subsidiaries; | |
• | enter into any new material line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operative policies, except as required by applicable law, regulation or policies imposed by any governmental authority, or file any application or make any contract with respect to branching or site location or relocation; | |
• | enter into any derivatives transactions; | |
• | incur indebtedness or in any way assume the indebtedness of another person, except in the ordinary course of business; | |
• | with certain exceptions, acquire, sell or otherwise dispose of any debt security or equity investment unless consented to in writing by Independent (which consent will not be unreasonably delayed or withheld); | |
• | make or renew any loan, loan commitment, letter of credit or other extension of credit in excess of $2.5 million or in connection with collateral located outside of the Commonwealth of Massachusetts or |
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in violation of Benjamin Franklin’s credit policies or procedures other than in the ordinary course of business consistent with recent past practice unless consented to in writing by Independent (which consent will not be unreasonably delayed or withheld); |
• | make any investment or commitment to invest in real estate or in any real estate development project other than by way of foreclosure or deed in lieu thereof; | |
• | make or change any material tax election, file any material amended tax return, enter into any material closing agreement, settle or compromise any material liability with respect to taxes, agree to any material adjustment of any tax attribute, file any claim for a material refund of taxes, or consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment; | |
• | commit any act or omission which constitutes a material breach or default of an agreement with any governmental authority or any other material agreement or license; | |
• | foreclose on or take a deed or title to any commercial real estate without first conducting a Phase I environmental assessment of the property or foreclose on any commercial real estate if such environmental assessment indicates the presence of a condition or mater with respect to which liability will exceed $25,000 individually or $50,000 in the aggregate; | |
• | except as may be required by applicable law or regulation, take or fail to take any action which would result in (1) any of Benjamin Franklin’s representations and warranties in the merger agreement becoming untrue in any material respect, (2) any of the conditions to the merger not being satisfied, or (3) a material violation of any provision of the merger agreement; | |
• | repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock; or | |
• | enter into any contract with respect to, or otherwise agree to do any of the actions prohibited by the preceding bullet points. |
• | except as may be required by applicable law or regulation, take any action or fail to take any action that is intended or reasonably likely to result in: a delay in the consummation of the merger or the transactions contemplated by the merger agreement; any impediment to its ability to consummate the merger or the transactions contemplated by the merger agreement; any of its representations and warranties contained in the merger agreement becoming untrue in any material respect at or prior to the effective time; any of the conditions contained in the merger agreement not being satisfied; or a material violation of any provision of the merger agreement; or | |
• | enter into any contract with respect to, or otherwise agree to do any of the actions prohibited by the preceding bullet point. |
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• | solicit, initiate or knowingly encourage any inquiry with respect to, or the making of, any proposal that constitutes or could reasonably be expected to lead to an Acquisition Proposal (as defined below); | |
• | participate in any negotiations regarding an Acquisition Proposal with, or furnish any nonpublic information relating to a Acquisition Proposal to, any party that has made or, to the knowledge of Benjamin Franklin, is considering making an Acquisition Proposal; or | |
• | engage in discussions regarding an Acquisition Proposal with any party that has made, or, to Benjamin Franklin’s knowledge, is considering making, an Acquisition Proposal. |
• | furnish nonpublic information to the party making such Acquisition Proposal, but only if (1) prior to so furnishing such information, Benjamin Franklin has entered into a customary confidentiality agreement |
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with such party, and (2) all such information has previously been provided to Independent or is provided to Independent prior to or contemporaneously with the time it is provided to the party making such Acquisition Proposal; and |
• | engage or participate in any discussions or negotiations with such party with respect to the Acquisition Proposal. |
• | any proposal that constitutes or could reasonably be expected to lead to an Acquisition Proposal and the material terms of the proposal; and | |
• | any request for non-public information relating to Benjamin Franklin or any of its subsidiaries other than requests for information not reasonably expected to be related to an Acquisition Proposal. |
• | withhold, withdraw or modify (or publicly propose to withhold, withdraw or modify), in a manner adverse to Independent, its recommendation that Benjamin Franklin shareholders approve the merger agreement and the transactions contemplated thereby; or | |
• | approve or recommend (or publicly propose to approve or recommend) any Acquisition Proposal. |
• | the Acquisition Proposal constitutes a Superior Proposal (as defined below); | |
• | prior to terminating the merger agreement, Benjamin Franklin provides written notice to Independent at least three business days in advance of its intention to take such action (which notice must specify all material terms and conditions of the Superior Proposal, including documentation related thereto and the identity of the party making the Superior Proposal); | |
• | during thethree-day notice period, Benjamin Franklin negotiates with Independent in good faith if Independent proposes to make adjustments in the terms and conditions of this merger agreement so that the Acquisition Proposal ceases to constitute a Superior Proposal; and | |
• | the Acquisition Proposal continues to constitute a Superior Proposal after taking into account any amendments that Independent agrees to make to the merger agreement. |
• | any merger, consolidation, share exchange, business combination or other similar transaction; | |
• | any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assetsand/or liabilities that constitute a substantial portion of the net revenues, net income or assets of Benjamin Franklin in a single transaction or series of transactions; |
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• | any tender offer or exchange offer for 20% or more of the outstanding shares of Benjamin Franklin’s capital stock or the filing of a registration statement under the Securities Act, in connection therewith; or | |
• | any public announcement by any party of a proposal, plan or intention to do any of the foregoing or any agreement to engage in any of the foregoing. |
• | that is on terms which Benjamin Franklin’s board of directors determines in good faith, after consultation with its financial adviser, to be more favorable from a financial point of view to Benjamin Franklin’s shareholders than the transactions contemplated by the merger agreement; | |
• | that constitutes a transaction that, in the good faith judgment of Benjamin Franklin’s board of directors, is reasonably likely to be consummated on the terms set forth, taking into account all legal, financial, regulatory and other aspects of such proposal; and | |
• | for which financing, to the extent required, is then committed pursuant to a written commitment letter. |
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• | receipt of approval of our shareholders; | |
• | the effectiveness of the registration statement of which this document is a part, with respect to the Independent common stock to be issued in the merger under the Securities Act, and the absence of any stop order or proceedings initiated or threatened by the Securities and Exchange Commission for that purpose; |
• | the receipt by each party of a legal opinion from its counsel with respect to certain U.S. federal income tax consequences of the merger and the immediately subsequent merger of Benjamin Franklin with and into Independent, considered together as a single integrated transaction for U.S. federal income tax purposes; |
• | the receipt and effectiveness of all regulatory approvals, registrations and consents, and the expiration of all waiting periods required to complete the merger; and | |
• | the absence of any statute, regulation, rule, decree, injunction or other order in effect by any court or other governmental entity that prohibits completion of the transactions contemplated by the merger agreement. |
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• | a governmental entity which must grant a regulatory approval as a condition to the merger denies approval of the merger or any governmental entity has issued an order prohibiting the merger and such action has become final and non-appealable; | |
• | the requisite shareholder approval is not obtained from either Independent’s shareholders or Benjamin Franklin’s shareholders; | |
• | the merger is not completed by April 30, 2009 (other than because of a material breach of the Agreement caused by the party seeking termination); or | |
• | the other party breaches the merger agreement in a way that would entitle the party seeking to terminate the agreement not to consummate the merger, subject to the right of the breaching party to cure the breach by the earlier of: 30 days following written notice or 2 business days before April 30, 2009 (unless it is not possible due to the nature or timing of the breach for the breaching party to cure the breach). |
• | both Independent and Benjamin Franklin will remain liable for any willful breach of the merger agreement; and | |
• | designated provisions of the merger agreement, including those relating to the termination fee, the payment of fees and expenses, non-survival of the representations and warranties, and confidential treatment of information will survive the termination. |
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• | if Benjamin Franklin terminates the merger agreement because Benjamin Franklin’s board of directors has approved, and Benjamin Franklin enters into, a definitive agreement with respect to a Superior Proposal (as defined above under “— No Solicitation of Alternative Transactions”); or | |
• | if Independent terminates the merger agreement because: |
• | Benjamin Franklin materially breaches its non-solicitation obligations; | |
• | Benjamin Franklin’s board of directors fails to recommend that Benjamin Franklin shareholders approve the merger agreement and the transactions contemplated thereby, or the board withdraws the recommendation or modifies it in a manner adverse to Independent; | |
• | Benjamin Franklin’s board of directors recommends, proposes or publicly announces its intention to recommend or propose, to engage in an Acquisition Transaction (as defined below) with any party other than Independent or a subsidiary or affiliate of Independent; or | |
• | Benjamin Franklin materially breaches its obligations to call, give notice of, convene and hold a meeting of Benjamin Franklin shareholders in order to approve the merger agreement and the transactions contemplated thereby. |
• | (1) an Acquisition Proposal, whether or not conditional, has been publicly announced (or any person has publicly announced an intention, whether or not conditional, to make an Acquisition Proposal) or (2) Benjamin Franklin’s board of directors has withheld, withdrawn or modified (or publicly proposed to withhold, withdraw or modify) its recommendation for the merger, prior to or on the date of the special meeting or at any adjournment or postponement thereof at which the vote on the merger agreement is held; and | |
• | the merger agreement is terminated: |
• | by Independent or Benjamin Franklin because shareholder approval is not obtained by both Independent’s shareholders and Benjamin Franklin’s shareholders; | |
• | by Independent or Benjamin Franklin because the merger is not completed on or before April 30, 2009; or | |
• | by Independent because Benjamin Franklin willfully breaches the merger agreement in a way that would entitle Independent not to consummate the merger, subject to the right of Benjamin Franklin to cure the breach; and |
• | within 12 months following the date of termination, Benjamin Franklin enters into a definitive agreement with respect to any Acquisition Transaction, or Benjamin Franklin consummates any Acquisition Transaction, |
• | any merger, consolidation, share exchange, business combination or other similar transaction; |
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• | any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assetsand/or liabilities that constitute a substantial portion of the net revenues, net income or assets of Benjamin Franklin in a single transaction or series of transactions; or | |
• | any tender offer or exchange offer for 20% or more of the outstanding shares of Benjamin Franklin’s capital stock or the filing of a registration statement under the Securities Act, in connection therewith. |
• | Benjamin Franklin willfully breaches the merger agreement in a way that would entitle Independent not to consummate the merger, subject to the right of Benjamin Franklin to cure the breach; | |
• | shareholder approval is not obtained by both Independent’s shareholders and Benjamin Franklin’s shareholders; or | |
• | the merger is not completed on or before April 30, 2009; |
• | an Acquisition Proposal, whether or not conditional, has been publicly announced (or any person has publicly announced an intention, whether or not conditional, to make an Acquisition Proposal); or | |
• | Benjamin Franklin’s board of directors has withheld, withdrawn or modified (or publicly proposed to withhold, withdraw or modify), its recommendation for the merger, prior to or on the date of the special meeting or at any adjournment or postponement thereof at which the vote on the merger agreement is held |
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• | the further registration under the Securities Act of the Independent common stock to be transferred; or | |
• | the availability of another exemption from registration. |
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• | restrict their ability to transfer or dispose of their shares of Benjamin Franklin common stock; | |
• | appear at the special meeting or otherwise cause their shares of Benjamin Franklin common stock to be counted as present thereat for purposes of calculating a quorum; | |
• | vote their shares of Benjamin Franklin common stock in favor of adoption and approval of the merger agreement and the transactions contemplated thereby; | |
• | vote their shares of Benjamin Franklin common stock against any action or agreement that would result in a breach of any covenant, representation or warranty, or other obligation or agreement, of Benjamin Franklin contained in the merger agreement; and | |
• | vote their shares of Benjamin Franklin common stock against any proposal to acquire Benjamin Franklin by any person other than Independent or against any action, agreement or transaction intended to, or could reasonably be expected to, materially impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect the consummation of the transactions contemplated by the merger agreement. |
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• | Prior to the adoption of SFAS 141R, equity consideration was measured using the price a few days before and after the measurement date, or the date when the terms and conditions of the acquisition have been agreed and the acquisition is publicly announced. As a result of SFAS 141R, common stock issued by Independent as consideration for the merger is measured at fair value as of the acquisition date on the relevant unaudited pro forma financial statements. | |
• | Prior to the adoption of SFAS 141R, direct acquisition-related costs would be included in the purchase price. As a result of SFAS 141R, direct acquisition-related costs totaling $1,640,000 are being shown as expenses. | |
• | As a result of SFAS 141R, all loans are transferred at fair value, including adjustments for credit. An allowance for loan losses is not carried over. The estimated fair value adjustment on loans is $(6,817,000), and Benjamin Franklin’s Allowance for Loan Loss at September 30, 2008 was $6,853,000. |
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• | financial institutions; | |
• | insurance companies; | |
• | individual retirement and other tax-deferred accounts; | |
• | persons subject to the alternative minimum tax provisions of the Internal Revenue Code; | |
• | persons eligible for tax treaty benefits; | |
• | entities treated as partnerships or other flow-through entities for U.S. federal income tax purposes; | |
• | foreign corporations, foreign partnerships and other foreign entities; | |
• | tax-exempt organizations; | |
• | dealers in securities; | |
• | persons whose functional currency is not the U.S. dollar; | |
• | traders in securities that elect to use a mark to market method of accounting; | |
• | persons who are not citizens or residents of the United States; | |
• | persons that hold Benjamin Franklin common stock as part of a straddle, hedge, constructive sale or conversion transaction; and | |
• | Persons who acquired their shares of Benjamin Franklin common stock through the exercise of an employee stock option or otherwise as compensation. |
• | a U.S. citizen or resident, as determined for U.S. federal income tax purposes; | |
• | a corporation, or entity taxable as a corporation, created or organized in or under the laws of the United States; or | |
• | otherwise subject to U.S. federal income tax on a net income basis. |
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• | Independent, Merger Sub, Benjamin Franklin and Independent shareholders will not recognize any gain or loss as a result of the merger; | |
• | Benjamin Franklin shareholders will not recognize any gain or loss upon receipt of solely Independent common stock in exchange for their Benjamin Franklin common stock pursuant to the merger, except with respect to any cash received in lieu of a fractional share of Independent common stock; | |
• | the aggregate tax basis of the shares of Independent common stock received by a Benjamin Franklin shareholder in the merger (including any fractional share deemed received and redeemed, as described below) will equal the aggregate tax basis of its Benjamin Franklin common stock surrendered in the merger; | |
• | the holding period of the shares of Independent common stock received by a Benjamin Franklin shareholder in the merger (including any fractional share deemed received and redeemed, as described below) will include the holding period of the shares of Benjamin Franklin common stock exchanged therefor; | |
• | generally, cash payments received by Benjamin Franklin shareholders in lieu of fractional shares of Independent common stock will be treated as if such fractional shares were issued in the merger and then redeemed by Independent for cash. In general, this deemed redemption will be treated as a sale or exchange, provided the redemption is not essentially equivalent to a dividend. The determination of whether a redemption is essentially equivalent to a dividend depends upon whether and to what extent the redemption reduces the Benjamin Franklin shareholder’s deemed percentage stock ownership of Independent. While this determination is based on each Benjamin Franklin shareholder’s particular facts and circumstances, the Internal Revenue Service has ruled that a redemption is not essentially equivalent to a dividend and will therefore result in sale or exchange treatment in the case of a shareholder of a publicly held company whose relative stock interest is minimal and who exercises no control over corporate affairs if the redemption results in any actual reduction in the stock interest of the shareholder. As a result, the redemption of a fractional share of Independent common stock will |
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generally be treated as a sale or exchange and not as a dividend, and a Benjamin Franklin shareholder generally will recognize gain or loss equal to the difference between the amount of cash received and the basis in its fractional share of Independent common stock as set forth above. This gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for the shares is greater than one year. The deductibility of capital losses is subject to limitations; and |
• | A Benjamin Franklin shareholder who perfects dissenter’s rights and who, as a result, receives cash in respect of the holder’s Benjamin Franklin stock generally will recognize capital gain or loss equal to the difference between the amount of cash received and the adjusted tax basis of the holder’s Benjamin Franklin stock surrendered. This gain or loss generally will be long-term capital gain or loss if the shares of Benjamin Franklin stock have been owned by the holder for more than one year as of the effective date of the merger. The deductibility of capital losses is subject to limitations. If the cash received has the effect of the distribution of a dividend with respect to a holder, part or all of the cash received may be treated as a dividend and as ordinary income to the holder. |
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Independent | Benjamin Franklin | |||||||||||||||||||||||
Dividend | Dividend | |||||||||||||||||||||||
Paid per | Paid per | |||||||||||||||||||||||
Year Ending December 31, 2008 | High | Low | Share | High | Low | Share | ||||||||||||||||||
Quarter Ended: | ||||||||||||||||||||||||
December 31, 2008 | $ | 31.97 | $ | 19.02 | $ | 0.18 | $ | 15.65 | $ | 9.49 | $ | 0.08 | ||||||||||||
September 30, 2008 | 39.17 | 20.12 | 0.18 | 12.92 | 11.15 | 0.08 | ||||||||||||||||||
June 30, 2008 | 31.77 | 23.83 | 0.18 | 14.59 | 12.50 | 0.08 | ||||||||||||||||||
March 31, 2008 | 31.91 | 24.00 | 0.18 | 14.62 | 12.77 | 0.06 |
Dividend | Dividend | |||||||||||||||||||||||
Paid per | Paid per | |||||||||||||||||||||||
Year Ending December 31, 2007 | High | Low | Share | High | Low | Share | ||||||||||||||||||
Quarter Ended: | ||||||||||||||||||||||||
December 31, 2007 | $ | 31.46 | $ | 26.03 | $ | 0.17 | $ | 14.98 | $ | 11.50 | $ | 0.06 | ||||||||||||
September 30, 2007 | 32.21 | 26.11 | 0.17 | 14.34 | 12.01 | 0.06 | ||||||||||||||||||
June 30, 2007 | 33.20 | 28.46 | 0.17 | 15.68 | 13.50 | 0.06 | ||||||||||||||||||
March 31, 2007 | 36.35 | 30.02 | 0.17 | 16.94 | 14.19 | 0.04 |
Dividend | Dividend | |||||||||||||||||||||||
Paid per | Paid per | |||||||||||||||||||||||
Year Ending December 31, 2006 | High | Low | Share | High | Low | Share | ||||||||||||||||||
Quarter Ended: | ||||||||||||||||||||||||
December 31, 2006 | $ | 37.12 | $ | 31.50 | $ | 0.16 | $ | 16.36 | $ | 13.81 | $ | 0.04 | ||||||||||||
September 30, 2006 | 34.93 | 30.93 | 0.16 | 14.20 | 13.76 | 0.03 | ||||||||||||||||||
June 30, 2006 | 33.00 | 29.70 | 0.16 | 14.19 | 13.58 | 0.03 | ||||||||||||||||||
March 31, 2006 | 32.33 | 28.17 | 0.16 | 14.23 | 13.00 | 0.03 |
Dividend | Dividend | |||||||||||||||||||||||
Paid per | Paid per | |||||||||||||||||||||||
Year Ending December 31, 2005 | High | Low | Share | High | Low | Share | ||||||||||||||||||
Quarter Ended: | ||||||||||||||||||||||||
December 31, 2005 | $ | 30.70 | $ | 26.50 | $ | 0.15 | $ | 14.80 | $ | 13.20 | $ | 0.03 | ||||||||||||
September 30, 2005 | 31.72 | 27.77 | 0.15 | 14.40 | 11.11 | 0.03 | ||||||||||||||||||
June 30, 2005 | 29.74 | 25.05 | 0.15 | 11.59 | 9.91 | — | ||||||||||||||||||
March 31, 2005 | 34.15 | 28.15 | 0.15 | — | — | — |
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• | classifying the Independent board of directors into three classes to serve for three years, with one class being elected annually; | |
• | authorizing the Independent board of directors to fix the size of the Independent board of directors; | |
• | limiting for removal of directors by a majority of shareholders to removal for cause; and | |
• | increasing the amount of stock required to be held by shareholders seeking to call a special meeting of shareholders above the minimum established by statute. |
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BENJAMIN FRANKLIN AND INDEPENDENT
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• | by the president; | |
• | by a majority of the board of directors; and | |
• | at the direction of holder(s) of at least 80% of the voting capital stock of Benjamin Franklin at the time issued and outstanding (or such lesser percentage, if any, (but not less than 40%) as determined to be the maximum percentage permitted by applicable law to establish for the call of such a meeting). |
• | by the chairman of the board, if any; | |
• | by the president; | |
• | by a majority of the directors; and | |
• | by the clerk or other officer at the written direction of the holders of at least two-thirds of the capital stock of the Independent entitled to vote at the meeting. |
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• | Annual Report onForm 10-K for the year ended December 31, 2007, filed with the Securities and Exchange Commission on March 14, 2008; | |
• | Quarterly Report onForm 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008, filed with the Securities and Exchange Commission on May 9, 2008, August 7, 2008 and November 7, 2008, respectively; and |
• | Current Reports onForm 8-K filed with the Securities and Exchange Commission on January 17, 2008, January 22, 2008, February 21, 2008, February 27, 2008, March 3, 2008, March 20, 2008, April 25, 2008, May 6, 2008, May 7, 2008, May 9, 2008, June 19, 2008, July 21, 2008, July 25, 2008, |
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• | Annual Report onForm 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on March 13, 2008, and as amended on June 30, 2008; | |
• | Quarterly Report onForm 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008, as filed with the Securities and Exchange Commission on May 8, 2008, August 11, 2008 and November 7, 2008, respectively; and |
• | Current Report onForm 8-K as filed with the Securities and Exchange Commission on January 28, 2008, February 28, 2008, March 25, 2008, July 24, 2008, October 24, 2008 and November 13, 2008. |
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ARTICLE I THE MERGER | A-6 | |||||
Section 1.01 | The Merger | A-6 | ||||
Section1.02 | Articles of Organization and Bylaws | A-6 | ||||
Section1.03 | Directors and Officers of Merger Sub Surviving Entity | A-6 | ||||
Section1.04 | Effective Time; Closing | A-6 | ||||
Section1.05 | The Final Merger | A-6 | ||||
Section1.06 | Tax Consequences | A-7 | ||||
ARTICLE II MERGER CONSIDERATION; EXCHANGE PROCEDURES | A-7 | |||||
Section2.01 | Merger Consideration | A-7 | ||||
Section 2.02 | Rights as Shareholders; Stock Transfers | A-7 | ||||
Section2.03 | Fractional Shares | A-7 | ||||
Section2.04 | Exchange Procedures | A-8 | ||||
Section2.05 | Anti-Dilution Provisions | A-9 | ||||
Section2.06 | Options and Restricted Stock | A-9 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY | A-11 | |||||
Section3.01 | Company Disclosure Schedule and Making of Representations and Warranties | A-11 | ||||
Section3.02 | Organization, Standing and Authority | A-11 | ||||
Section3.03 | Capital Stock | A-11 | ||||
Section3.04 | Subsidiaries | A-12 | ||||
Section3.05 | Corporate Power; Minute Books | A-12 | ||||
Section3.06 | Corporate Authority | A-13 | ||||
Section3.07 | Regulatory Approvals; No Defaults | A-13 | ||||
Section3.08 | SEC Documents; Financial Reports; and Regulatory Reports | A-13 | ||||
Section3.09 | Absence of Certain Changes or Events | A-14 | ||||
Section3.10 | Legal Proceedings | A-15 | ||||
Section3.11 | Compliance With Laws | A-15 | ||||
Section3.12 | Material Contracts; Defaults | A-16 | ||||
Section3.13 | Brokers | A-16 | ||||
Section3.14 | Employee Benefit Plans | A-16 | ||||
Section3.15 | Labor Matters | A-18 | ||||
Section3.16 | Environmental Matters | A-18 | ||||
Section3.17 | Tax Matters | A-19 | ||||
Section3.18 | Investment Securities | A-21 | ||||
Section3.19 | Derivative Transactions | A-21 | ||||
Section3.20 | Regulatory Capitalization | A-21 | ||||
Section3.21 | Loans; Nonperforming and Classified Assets | A-21 | ||||
Section3.22 | Trust Business; Administration of Fiduciary Accounts | A-22 | ||||
Section3.23 | Investment Management and Related Activities | A-22 | ||||
Section3.24 | Repurchase Agreements | A-22 | ||||
Section3.25 | Deposit Insurance | A-22 | ||||
Section3.26 | CRA, Anti-money Laundering and Customer Information Security | A-23 | ||||
Section3.27 | Transactions with Affiliates | A-23 | ||||
Section3.28 | Tangible Properties and Assets | A-23 | ||||
Section3.29 | Intellectual Property | A-24 | ||||
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Section3.30 | Insurance | A-24 | ||||
Section3.31 | Antitakeover Provisions | A-24 | ||||
Section3.32 | Fairness Opinion | A-24 | ||||
Section3.33 | Proxy Statement-Prospectus | A-24 | ||||
Section3.34 | Transaction Costs | A-25 | ||||
Section3.35 | Participation in U.S. Treasury and FDIC Economic Stability Programs | A-25 | ||||
Section3.36 | Disclosure | A-25 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER | A-25 | |||||
Section4.01 | Buyer Disclosure Schedule and Making of Representations and Warranties | A-25 | ||||
Section4.02 | Organization, Standing and Authority | A-25 | ||||
Section4.03 | Corporate Power; Minute Books | A-26 | ||||
Section4.04 | Corporate Authority | A-26 | ||||
Section4.05 | SEC Documents; Financial Reports; and Regulatory Reports | A-26 | ||||
Section4.06 | Regulatory Approvals; No Defaults | A-27 | ||||
Section4.07 | Absence of Certain Changes or Events | A-28 | ||||
Section4.08 | Compliance with Laws | A-28 | ||||
Section4.09 | Proxy Statement-Prospectus Information; Registration Statement | A-28 | ||||
Section4.10 | Legal Proceedings | A-28 | ||||
Section4.11 | Brokers | A-29 | ||||
Section4.12 | Employee Benefit Plans | A-29 | ||||
Section4.13 | Labor Matters | A-29 | ||||
Section4.14 | Tax Matters | A-29 | ||||
Section4.15 | Loans: Nonperforming and Classified Assets | A-30 | ||||
Section4.16 | Buyer Capital Stock | A-30 | ||||
Section4.17 | CRA and Anti-money Laundering | A-30 | ||||
Section4.18 | Environmental Matters | A-31 | ||||
Section4.19 | Regulatory Capitalization | A-31 | ||||
Section4.20 | Administration of Trust and Fiduciary Accounts | A-31 | ||||
Section4.21 | Disclosure | A-31 | ||||
ARTICLE V COVENANTS | A-31 | |||||
Section5.01 | Covenants of Company | A-31 | ||||
Section5.02 | Covenants of Buyer | A-34 | ||||
Section5.03 | Commercially Reasonable Efforts | A-35 | ||||
Section5.04 | Shareholder Approvals | A-35 | ||||
Section5.05 | Registration Statement; Proxy Statement-Prospectus; Nasdaq Listing | A-36 | ||||
Section5.06 | Regulatory Filings; Consents | A-37 | ||||
Section5.07 | Publicity | A-38 | ||||
Section5.08 | Access; Information | A-38 | ||||
Section5.09 | No Solicitation by Company | A-38 | ||||
Section5.10 | Indemnification | A-40 | ||||
Section5.11 | Employees; Benefit Plans | A-41 | ||||
Section5.12 | Notification of Certain Changes | A-43 | ||||
Section5.13 | Current Information | A-43 | ||||
Section5.14 | Board Packages | A-43 | ||||
Section5.15 | Transition; Informational Systems Conversion | A-43 | ||||
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Section5.16 | Access to Customers and Suppliers | A-43 | ||||
Section5.17 | Environmental Assessments | A-44 | ||||
Section5.18 | Certain Litigation | A-44 | ||||
Section5.19 | Stock Exchange De-listing | A-44 | ||||
Section5.20 | Director Resignations | A-44 | ||||
Section5.21 | Coordination of Dividends | A-44 | ||||
Section5.22 | Representation on Buyer Board | A-44 | ||||
Section5.23 | Coordination | A-45 | ||||
Section5.24 | Bank Merger | A-45 | ||||
Section5.25 | Transactional Expenses | A-46 | ||||
Section5.26 | ATM Cash Business Termination | A-46 | ||||
Section5.27 | Section 16 | A-46 | ||||
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER | A-46 | |||||
Section6.01 | Conditions to Obligations of the Parties to Effect the Merger | A-46 | ||||
Section6.02 | Conditions to Obligations of Company | A-47 | ||||
Section6.03 | Conditions to Obligations of Buyer | A-47 | ||||
Section6.04 | Frustration of Closing Conditions | A-47 | ||||
ARTICLE VII TERMINATION | A-48 | |||||
Section7.01 | Termination | A-48 | ||||
Section7.02 | Termination Fee; Reimbursement | A-49 | ||||
Section7.03 | Effect of Termination | A-50 | ||||
ARTICLE VIII DEFINITIONS | A-50 | |||||
Section8.01 | Definitions | A-50 | ||||
ARTICLE IX MISCELLANEOUS | A-56 | |||||
Section9.01 | Survival | A-56 | ||||
Section9.02 | Waiver; Amendment | A-56 | ||||
Section9.03 | Governing Law | A-56 | ||||
Section9.04 | Expenses | A-56 | ||||
Section9.05 | Notices | A-56 | ||||
Section9.06 | Entire Understanding; No Third Party Beneficiaries | A-57 | ||||
Section9.07 | Severability | A-57 | ||||
Section9.08 | Enforcement of the Agreement | A-58 | ||||
Section9.09 | Interpretation | A-58 | ||||
Section9.10 | Assignment | A-58 | ||||
Section9.11 | Alternative Structure | A-58 | ||||
Section9.12 | Counterparts | A-58 |
Exhibit A | Form of Voting Agreement | A-60 | ||
Exhibit B | Form of Settlement Agreement | A-65 | ||
Exhibit C | Form of Settlement Agreement | A-70 |
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288 Union Street
Rockland, Massachusetts 02370
Attention: Edward H. Seksay, General Counsel
Fax:(781) 982-6130
555 Thirteenth Street, NW
Washington, DC 20004
Attention: Richard A. Schaberg, Esq.
Fax:(202) 637-5910
58 Main Street
P.O. Box 309
Franklin, Massachusetts 02038
Attention: Thomas R. Venables, President and Chief Executive Officer
Fax:(508) 520-8364
Seaport World Trade Center West
155 Seaport Boulevard
Boston, MA 02210
Attention: Carol Hempfling Pratt
Fax:(617) 832-7000
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By: | /s/ Christopher Oddleifson |
Title: | President and Chief Executive Officer |
By: | /s/ Christopher Oddleifson |
Title: | President and Chief Executive Officer |
By: | /s/ Christopher Oddleifson |
Title: | President and Chief Executive Officer |
By: | /s/ Thomas R. Venables |
Title: | President and Chief Executive Officer |
By: | /s/ Thomas R. Venables |
Title: | President and Chief Executive Officer |
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By: | /s/ Christopher Oddleifson |
Title: | President |
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Shareholder | Shares | Options | ||||||
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WITNESS: | EXECUTIVE: | |
Name: | Name: | |
ATTEST: | INDEPENDENT BANK CORP. | |
By: | ||
Name: | Name:Title: | |
ATTEST: | ROCKLAND TRUST COMPANY | |
By: | ||
Name: | Name: Title: | |
ATTEST: | BENJAMIN FRANKLIN BANCORP, INC. | |
By: | ||
Name: | Name: Title: | |
ATTEST: | BENJAMIN FRANKLIN BANK | |
By: | ||
Name: | Name: Title: |
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WITNESS: | EXECUTIVE: | |
Name: | Name: | |
ATTEST: | INDEPENDENT BANK CORP. | |
By: | ||
Name: | Name: Title: | |
ATTEST: | ROCKLAND TRUST COMPANY | |
By: | ||
Name: | Name: Title: | |
ATTEST: | BENJAMIN FRANKLIN BANCORP, INC. | |
By: | ||
Name: | Name: Title: | |
ATTEST: | BENJAMIN FRANKLIN BANK | |
By: | ||
Name: | Name: Title: |
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Pinnacle Tower North, Suite 1100
1751 Pinnacle Drive
McLean, Virginia 22102
Main 703.821.5750
Fax 703.821.5789
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your proxy card in the
envelope provided as soon
as possible.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREý | ||||||||||||||||||||
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||||
1. | To approve the Second Amended and Restated Agreement and Plan of Merger, dated as of January 12, 2009 by and among Independent Bank Corp., Independent Acquisition Subsidiary, Inc., Rockland Trust Company, Benjamin Franklin Bancorp, Inc. and Benjamin Franklin Bank, and thereby to approve the transactions contemplated by the merger agreement, including the merger of Independent Acquisition Subsidiary, Inc. with and into Benjamin Franklin Bancorp; | o | o | o | 2. | To approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the merger. | o | o | o | |||||||||||
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of Special Meeting of Shareholders and Proxy Statement for the Special Meeting of Shareholders and hereby revokes any proxy or proxies heretofore given. This proxy may be revoked at any time before it is voted on any matter (without, however, affecting any vote taken prior to such revocation) pursuant to the revocation methods specified in the Proxy Statement. | ||||||||||||||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o |
Signature of Stockholder | Date: | Signature of Stockholder | Date: |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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| n |
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON FEBRUARY 11, 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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PROXY VOTING INSTRUCTIONS |
(1-800-776-9437) from anytouch-tonetelephone and follow the instructions. Have your proxy card available when you call.
COMPANY NUMBER | |||||
ACCOUNT NUMBER | |||||
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREý | |||||||||||||||||||||
To approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the merger. | FOR o | AGAINST o | ABSTAIN o | ||||||||||||||||||
1. | To approve the Second Amended and Restated Agreement and Plan of Merger, dated as of January 12, 2009 by and among Independent Bank Corp., Independent Acquisition Subsidiary, Inc., Rockland Trust Company, Benjamin Franklin Bancorp, Inc. and Benjamin Franklin Bank, and thereby to approve the transactions contemplated by the merger agreement, including the merger of Independent Acquisition Subsidiary, Inc. with and into Benjamin Franklin Bancorp; | FOR o | AGAINST o | ABSTAIN o | 2. | ||||||||||||||||
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of Special Meeting of Shareholders and Proxy Statement for the Special Meeting of Shareholders and hereby revokes any proxy or proxies heretofore given. This proxy may be revoked at any time before it is voted on any matter (without, however, affecting any vote taken prior to such revocation) pursuant to the revocation methods specified in the Proxy Statement. | |||||||||||||||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o |
Signature of Stockholder | Date: | Signature of Stockholder | Date: |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |