Exhibit 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated
October 14, 1994, is by and between Valley National Bancorp, a New
Jersey corporation and registered bank holding company ("Valley"),
and American Union Bank, a New Jersey banking corporation
("American").
BACKGROUND
1. Valley, American and Valley National Bank (the
"Bank"), a wholly-owned subsidiary of Valley, as of the date
hereof, have executed a letter of intent pursuant to which the
parties will negotiate a definitive agreement and plan of merger
(the "Merger Agreement") pursuant to which Valley will acquire
American through a merger of American with and into the Bank (the
"Merger").
2. As an inducement to Valley and the Bank to enter
into the letter of intent and negotiate the Merger Agreement and in
consideration for such entry and negotiation, American desires to
grant to Valley an option to purchase authorized but unissued
shares of common stock of American in an amount and on the terms
and conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein and in letter of intent
and in any definitive Merger Agreement, Valley and American,
intending to be legally bound hereby, agree:
1. Grant of Option. American hereby grants to Valley
the option to purchase 180,000 shares of common stock, $5.00 par
value (the "Common Stock") of American at a price of $10.00 per
share (the "Option Price"), on the terms and conditions set forth
herein (the "Option").
2. Exercise of Option. This Option shall not be
exercisable until the occurrence of a Triggering Event (as such
term is hereinafter defined). Upon or after the occurrence of a
Triggering Event (as such term is hereinafter defined), Valley may
exercise the Option, in whole or in part, at any time or from time
to time, subject to and in accordance with the terms hereof.
The term "Triggering Event" means the occurrence of any
of the following events:
A person or group (as such terms are defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder) other than Valley or an
affiliate of Valley:
a. acquires beneficial ownership (as such term is
defined in Rule 13d-3 as promulgated under the Exchange Act) of at
least 20% of the then outstanding shares of Common Stock;
b. enters into a letter of intent or an agreement,
whether oral or written, with American pursuant to which such
person or any affiliate of such person would (i) merge or
consolidate, or enter into any similar transaction with American,
(ii) acquire all or a significant portion of the assets or
liabilities of American, or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial
ownership or to vote securities representing 20% or more of the
then outstanding shares of Common Stock;
c. makes a filing with any bank or thrift
regulatory authorities or publicly announces a bona fide proposal
(a "Proposal") for (i) any merger, consolidation or acquisition of
all or a significant portion of all the assets or liabilities of
American or any other business combination involving American, or
(ii) a transaction involving the transfer of beneficial ownership
of securities representing, or the right to acquire beneficial
ownership or to vote securities representing, 20% or more of the
outstanding shares of Common Stock, and thereafter, if such
Proposal has not been Publicly Withdrawn (as such term is
hereinafter defined) at least 15 days prior to the meeting of
stockholders of American called to vote on the Merger and American'
stockholders fail to approve the Merger by the vote required by
applicable law at the meeting of stockholders called for such
purpose;
d. makes a bona fide Proposal and thereafter, but
before such Proposal has been Publicly Withdrawn, American
willfully takes any action in any manner which would materially
interfere with its desire or ability to enter into a definitive
Merger Agreement or its ability to consummate the Merger or
materially reduce the value of the transaction to Valley; or
e. which is the holder of more than 5% of the
Common Stock solicits proxies in opposition to approval of the
Merger.
The term "Triggering Event" also means the taking of any
direct or indirect action by American or any of its directors,
officers or agents to invite, encourage or solicit any proposal
which has as its purpose a tender offer for the shares of American'
Common Stock, a merger, consolidation, plan of exchange, plan of
acquisition or reorganization of American, or a sale of shares of
American' Common Stock or any significant portion of its assets or
liabilities.
The term "significant portion" means 25% of the assets or
liabilities of American.
"Publicly Withdrawn", for purposes of clauses (c) and (d)
above, shall mean an unconditional bona fide withdrawal of the
Proposal coupled with a public announcement of no further interest
in pursuing such Proposal or in acquiring any controlling influence
over American or in soliciting or inducing any other person (other
than Valley or any affiliate) to do so.
Notwithstanding the foregoing, the Option may not be
exercised at any time (i) in the absence of any required
governmental or regulatory approval or consent necessary for
American to issue the Option Shares or Valley to exercise the
Option or prior to the expiration or termination of any waiting
period required by law, or (ii) so long as any injunction or other
order, decree or ruling issued by any federal or state court of
competent jurisdiction is in effect which prohibits the sale or
delivery of the Option Shares.
American shall notify Valley promptly in writing of the
occurrence of any Triggering Event known to it, it being understood
that the giving of such notice by American shall not be a condition
to the right of Valley to exercise the Option. American will not
take any action which would have the effect of preventing or
disabling American from delivering the Option Shares to Valley upon
exercise of the Option or otherwise performing its obligations
under this Agreement.
In the event Valley wishes to exercise the Option, Valley
shall send a written notice to American (the date of which is
hereinafter referred to as the "Notice Date") specifying the total
number of Option Shares it wishes to purchase and a place and date
for the closing of such a purchase (a "Closing"); provided,
however, that a Closing shall not occur prior to two days after the
later of receipt of any necessary regulatory approvals and the
expiration of any legally required notice or waiting period, if
any.
3. Payment and Delivery of Certificates. At any
Closing hereunder (a) Valley will make payment to American of the
aggregate price for the Option Shares so purchased by wire transfer
of immediately available funds to an account designated by
American, (b) American will deliver to Valley a stock certificate
or certificates representing the number of Option Shares so
purchased, free and clear of all liens, claims, charges and
encumbrances of any kind or nature whatsoever created by or through
American, registered in the name of Valley or its designee, in such
denominations as were specified by Valley in its notice of exercise
and bearing a legend as set forth below and (c) Valley shall pay
any transfer or other taxes required by reason of the issuance of
the Option Shares so purchased.
Unless a registration statement is filed and declared
effective under Section 4 hereof, a legend will be placed on each
stock certificate evidencing Option Shares issued pursuant to this
Agreement, which legend will read substantially as follows:
The shares of stock evidenced by this certificate
have not been registered for sale under the Securities
Act of 1933 (the "1933 Act"). These shares may not be
sold, transferred or otherwise disposed of unless a
registration statement with respect to the sale of such
shares has been filed under the 1933 Act and declared
effective or, in the opinion of counsel reasonably
acceptable to American Union Bank, said transfer would be
exempt from registration under the provisions of the 1933
Act and the regulations promulgated thereunder.
4. Registration Rights. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
Valley, American shall prepare and file a registration statement
with the Securities and Exchange Commission, covering the Option
and such number of Option Shares as Valley shall specify in its
request, and American shall use its best efforts to cause such
registration statement to be declared effective in order to permit
the sale or other disposition of the Option and the Option Shares,
provided that Valley shall in no event have the right to have more
than one such registration statement become effective.
In connection with such filing, American shall use its
best efforts to cause to be delivered to Valley such certificates,
opinions, accountant's letters and other documents as Valley shall
reasonably request and as are customarily provided in connection
with registrations of securities under the Securities Act of 1933,
as amended. All expenses incurred by American in complying with
the provisions of this Section 4, including without limitation, all
registration and filing fees, printing expenses, fees and
disbursements of counsel for American and blue sky fees and
expenses shall be paid by American. Underwriting discounts and
commissions to brokers and dealers relating to the Option Shares,
fees and disbursements of counsel to Valley and any other expenses
incurred by Valley in connection with such registration shall be
borne by Valley. In connection with such filing, American shall
indemnify and hold harmless Valley against any losses, claims,
damages or liabilities, joint or several, to which Valley may
become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in any preliminary or final registration
statement or any amendment or supplement thereto, or arise out of
a material fact required to be stated therein or necessary to make
the statements therein not misleading; and American will reimburse
Valley for any legal or other expense reasonably incurred by Valley
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that American will
not be liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement of omission or alleged
omission made in such preliminary or final registration statement
or such amendment or supplement thereto in reliance upon and in
conformity with written information furnished by or on behalf of
Valley specifically for use in the preparation thereof. Valley
will indemnify and hold harmless American to the same extent as set
forth in the immediately preceding sentence but only with reference
to written information specifically furnished by or on behalf of
Valley for use in the preparation of such preliminary or final
registration statement or such amendment or supplement thereto; and
Valley will reimburse American for any legal or other expense
reasonably incurred by American in connection with investigating or
defending any such loss, claim, damage, liability or action.
5. Adjustment Upon Changes in Capitalization. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, exchanges of shares or the like, then the number and
kind of Option Shares and the Option Price shall be appropriately
adjusted.
In the event any capital reorganization or
reclassification of the Common Stock, or any consolidation, merger
or similar transaction of American with another entity, or in the
event any sale of all or substantially all of the assets of
American shall be effected in such a way that the holders of Common
Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of
such reorganization, reclassification, consolidation, merger or
sale, lawful and adequate provisions (in form reasonably
satisfactory to the holder hereof) shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive upon
the basis and upon the terms and conditions specified herein and in
lieu of the Common Stock immediately theretofore purchasable and
receivable upon exercise of the rights represented by this Option,
such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore purchasable and receivable
upon exercise of the rights represented by this Option had such
reorganization, reclassification, consolidation, merger or sale not
taken place; provided, however, that if such transaction results in
the holders of Common Stock receiving only cash, the holder hereof
shall be paid the difference between the Option Price and such cash
consideration without the need to exercise the Option.
6. Filings and Consents. Each of Valley and American
will use its best efforts to make all filings with, and to obtain
consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by
this Agreement.
Exercise of the Option herein provided shall be subject
to compliance with all applicable laws including, in the event
Valley is the holder hereof, approval of the Board of Governors of
the Federal Reserve System and American agrees to cooperate with
and furnish to the holder hereof such information and documents as
may be reasonably required to secure such approvals.
7. Representations and Warranties of American.
American hereby represents and warrants to Valley as follows:
a. Due Authorization. American has full corporate
power and authority to execute, deliver and perform this Agreement
and all corporate action necessary for execution, delivery and
performance of this Agreement has been duly taken by American.
b. Authorized Shares. American has taken and, as
long as the Option is outstanding, will take all necessary
corporate action to authorize and reserve for issuance all shares
of Common Stock that may be issued pursuant to any exercise of the
Option.
c. No Conflicts. Neither the execution and
delivery of this Agreement nor consummation of the transactions
contemplated hereby (assuming all appropriate regulatory approvals)
will violate or result in any violation or default of or be in
conflict with or constitute a default under any term of the
certificate of incorporation or by-laws of American or any
agreement, instrument, judgment, decree, statute, rule or order
applicable to American.
8. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a breach
of this Agreement and that the obligations of the parties hereto
shall be specifically enforceable. Notwithstanding the foregoing,
Valley shall have the right to seek money damages against American
for a breach of this Agreement.
9. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of
them with respect to the subject matter hereof.
10. Assignment or Transfer. Valley may not sell, assign
or otherwise transfer its rights and obligations hereunder, in
whole or in part, to any person or group of persons other than to
an affiliate of Valley, except upon or after the occurrence of a
Triggering Event. Valley represents that it is acquiring the
Option for Valley's own account and not with a view to or for sale
in connection with any distribution of the Option or the Option
Shares. Valley is aware that presently neither the Option nor the
Option Shares are being offered by a registration statement filed
with, and declared effective by, the Securities and Exchange
Commission, but instead are being offered in reliance upon the
exemption from the registration requirements pursuant to Section
4(2) of the Securities Act of 1933, as amended. Valley shall have
the right to assign this Agreement to any party it selects after
the occurrence of a Triggering Event.
11. Amendment of Agreement. By mutual consent of the
parties hereto, this Agreement may be amended in writing at any
time, for the purpose of facilitating performance hereunder or to
comply with any applicable regulation of any governmental authority
or any applicable order of any court or for any other purpose.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
13. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given when delivered
personally, by express service, cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
If to Valley:
Valley National Bancorp
1445 Valley Road
Wayne, New Jersey 07470
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
With a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
Florham Park, New Jersey 07932-0950
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Ronald H. Janis, Esq.
If to American:
American Union Bank
2784 Morris Avenue
Union, New Jersey 07083
Attn.: Alan Turtletaub,
Chairman
With a copy to:
Sills, Cummis, Zuckerman, Radin,
Tischman, Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102
Attn.: Steven Radin, Esq.
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in the
manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
14. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
Jersey.
15. Captions. The captions in the Agreement are
inserted for convenience and reference purposes, and shall not
limit or otherwise affect any of the terms or provisions hereof.
16. Waivers and Extensions. The parties hereto may, by
mutual consent, extend the time for performance of any of the
obligations or acts of either party hereto. Each party may waive
(i) compliance with any of the covenants of the other party
contained in this Agreement and/or (ii) the other party's
performance of any of its obligations set forth in this Agreement.
17. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto,
and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement, except as provided
in Section 10 permitting Valley to assign its rights and
obligations hereunder.
18. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
agreement.
19. Termination. In the event no definitive Merger
Agreement is entered into, then this Agreement shall expire three
months from the date hereof unless a Triggering Event has occurred
prior to such expiration date, in which case this Agreement shall
not terminate until the later of 12 months or the consummation of
any proposed transactions which constitute the Triggering Event.
In the event a definitive Merger Agreement is entered into by the
parties hereto, this Agreement shall terminate upon either the
termination of the Merger Agreement as provided therein or the
consummation of the transactions contemplated by the Merger
Agreement; provided, however, that if termination of the Merger
Agreement occurs after the occurrence of a Triggering Event, this
Agreement shall not terminate until the later of 12 months
following the date of the termination of the Merger Agreement or
the consummation of any proposed transactions which constitute the
Triggering Event.
IN WITNESS WHEREOF, each of the parties hereto, pursuant
to resolutions adopted by its Board of Directors, has caused this
Agreement to be executed by its duly authorized officer, all as of
the day and year first above written.
ATTEST: AMERICAN UNION BANK
________________________ By:___________________________
, Secretary Alan Turtletaub,
Chairman
ATTEST: VALLEY NATIONAL BANCORP
________________________ By:___________________________
, Secretary Gerald H. Lipkin,
Chairman & Chief
Executive Officer