| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 28, 2021, Investors Bancorp, Inc., a Delaware corporation (“Investors”) announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Citizens Financial Group, Inc., a Delaware corporation (“Citizens”). The Merger Agreement provides that, on the terms and subject to the conditions set forth therein, Investors will merge with and into Citizens (the “Merger”), with Citizens as the surviving corporation in the Merger. Promptly following the Merger, Investors Bank, a New Jersey state-chartered bank and wholly-owned subsidiary of Investors, will merge with and into Citizens Bank, National Association, a national association (“CBNA”), with CBNA as the surviving bank (the “Bank Merger”). The Merger Agreement was unanimously approved and adopted by the board of directors of each of Investors and Citizens.
Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, $0.01 par value per share, of Investors (“Investors Common Stock”) issued and outstanding immediately prior to the Effective Time, other than certain shares of Investors Common Stock held by Citizens, Investors or dissenting stockholders, will be converted into the right to receive (i) 0.297 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Citizens (“Citizens Common Stock”) (such shares, the “Stock Consideration”) and (ii) $1.46 in cash (the “Per Share Cash Consideration” and together with the Stock Consideration, the “Merger Consideration”).
Upon the terms and subject to the conditions of the Merger Agreement, at the Effective Time, (i) each option to purchase shares of Investors Common Stock under Investors’ 2015 Equity Incentive Plan and 2006 Equity Incentive Plan (the “Investors Stock Plans”) outstanding immediately prior to the Effective Time will be converted into an option to purchase a number of certain number of shares of Citizens Common Stock and (ii) each outstanding share of Investors Common Stock subject to a restricted stock award under the Investors Stock Plans will be converted into a certain number of restricted shares of Citizens Common Stock, in each case, adjusted to reflect the Merger Consideration.
The Merger Agreement contains customary representations and warranties made by each of Citizens and Investors, and each party has agreed to customary covenants, including, among others, covenants relating to (i) the conduct of its business during the interim period between the execution of the Merger Agreement and the Effective Time and (ii) use of its reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable to consummate the transactions contemplated by the Merger Agreement. The Merger Agreement also provides that Investors and its Board of Directors will, among other things, (i) call a meeting of its stockholders to adopt the Merger Agreement and, subject to certain exceptions, to recommend that its stockholders adopt the Merger Agreement and (ii) comply with certain non-solicitation obligations relating to alternative acquisition proposals.
The completion of the Merger is subject to certain conditions. The obligations of each of Citizens and Investors to effect the Merger is subject to the satisfaction or written waiver of the following conditions: (i) approval of the Merger Agreement and the Merger by the affirmative vote or requisite consent of a majority of the outstanding shares of Investors Common Stock, (ii) the absence of any governmental order or law restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Merger, (iii) effectiveness of the registration statement registering the shares of Citizens Common Stock to be issued pursuant to the Merger, (iv) receipt of certain regulatory approvals, including the approval of the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency and (v) the authorization for listing on the New York Stock Exchange of the shares of Citizens Common Stock to be issued in the Merger. Each party’s obligation to effect the Merger is also subject to certain additional customary conditions, including (a) subject to certain materiality qualifiers, the accuracy of the representations and warranties of the other party, (b) performance in all material respects by the other party of its obligations under the Merger Agreement, (c) the absence of any events or circumstances that has had or would reasonably be expected to have a material adverse effect on the other party and (d) receipt by such party of an opinion from its counsel to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Merger Agreement provides certain termination rights for both Citizens and Investors and further provides that Investors will be required to pay to Citizens a termination fee of $140,000,000 upon termination of the Merger Agreement under certain circumstances.
In connection with the consummation of the transactions contemplated by the Merger Agreement, Domenick Cama, President and Chief Operating Officer of Investors and Investors Bank, and Richard Spengler, Senior Executive Vice President and Chief Lending Officer of Investors and Investors Bank, are each entering into a new employment agreement with CBNA, to be effective as of the Effective Time. Subject to the effectiveness of, and the executive’s compliance with the terms of, the applicable employment agreement, Domenick Cama will serve as the Co-Head of Merger Integration and NYC Metro President for CBNA, and Richard Spengler will serve as Executive Vice President, Commercial Banking for CBNA.
The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (i) will not survive consummation of the Merger and (ii) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change
