Exhibit 99.2
VALLEY NATIONAL BANCORP
1445 VALLEY ROAD
WAYNE, NEW JERSEY 07474
January 26, 1995
Lakeland First Financial Group, Inc.
250 Route 10
Succasunna, NJ 07876
Gentlemen:
Valley National Bancorp ("Valley") proposes to acquire all
of the outstanding shares of common stock of Lakeland First
Financial Group, Inc. ("Lakeland") in accordance with the
following terms and conditions:
1. Each holder of Lakeland common stock, $0.10 par value
("Lakeland Common Stock"), will receive for each share of
Lakeland Common Stock held 1.225 shares (the "Exchange Ratio") of
Valley common stock, no par value ("Valley Stock"). No
fractional shares of Valley Stock will be issued, and cash will
be paid in lieu of fractional interests, based upon the average
closing price for Valley Stock. The average closing price shall
mean the average price of Valley Stock calculated based upon the
closing price during the first 10 of the 15 consecutive trading
days immediately preceding the closing of the Merger. Lakeland
represents that there are 3,881,398 shares of Lakeland Common
Stock outstanding and options granted to directors, officers and
employees to purchase 140,199 shares.
2. Each holder of options to purchase shares of Lakeland
Common Stock granted under Lakeland's Stock Option Plan to
directors, officers and certain other employees shall have the
right to elect either (i) to convert the option to an option to
purchase Valley Stock wherein each share of Lakeland Common Stock
covered by the option shall be converted into the right to
purchase that number of shares of Valley Stock multiplied by the
Exchange Ratio for the same aggregate exercise price; or, (ii) if
the option is fully vested at the closing of the Merger, to
convert the option into the right to receive immediately after
the closing a number of whole shares of Valley Stock equal to (x)
the excess of the sum determined by multiplying (A) the number of
shares of Lakeland Common Stock covered by the option, times (B)
the Exchange Ratio, times (C) the average closing price, less (y)
the aggregate exercise price for the option (z) divided by the
average closing price. No fractional shares of Valley Stock
shall be issued, and in lieu thereof, each optionee who would
otherwise be entitled to a fractional interest will receive an
amount in cash determined by multiplying such fractional interest
by the average closing price.
3. The acquisition will take the form of a tax-free merger
of Lakeland into Valley with Valley as the survivor (the
"Merger") and a simultaneous merger of Lakeland Savings Bank,
into Valley National Bank with Valley National Bank as the
survivor.
4. No employment contract nor any contract between
Lakeland or its subsidiaries and any other person shall cause
Lakeland or Valley or their subsidiaries to make an excess
parachute payment as defined in Section 280G of the Code in
connection with or after the Merger.
5. All of the directors of Lakeland shall agree to vote in
favor of and recommend the Merger, subject to the execution of a
mutually satisfactory definitive merger agreement. The directors
of Lakeland will agree to sign a standard affiliates letter for a
pooling-of-interests transaction and Lakeland shall use
reasonable efforts to cause all other affiliates of Lakeland to
agree to sign a standard affiliates letter for a pooling-of-
interests transaction.
6. Upon acceptance of this proposal, Lakeland and Valley
shall proceed promptly to negotiate in good faith a definitive
merger agreement embodying the terms hereof and containing, among
other provisions, representations, warranties and covenants
mutually satisfactory to the parties and customary conditions to
the obligations of each party to consummate the transaction.
7. Among other conditions of the definitive agreement, it
shall be a condition to Valley's obligation to close under the
definitive merger that the Merger be treated as a pooling-of-
interests for accounting purposes. In addition, Valley has
agreed that, at the closing of the Merger, it shall elect two of
Lakeland's directors to Valley's Board of Directors. The
directors to be elected shall include William McNear and one
other to be selected by Valley's nominating committee from two
nominees submitted by Lakeland's Board of Directors. Also,
Valley shall elect John Grabovetz as a Director Emeritus of
Valley.
8. Valley agrees that it will have Michael Halpin,
Lakeland's Chief Executive Officer, join Valley as a member of
its senior management team with the title of First Senior Vice
President and Valley will assume Mr. Halpin's employment
contract. Valley agrees that working with the current management
of Lakeland Savings Bank, Valley intends to continue the
employment of all officers and employees of Lakeland Savings Bank
and, to the extent practical, at the same location, with the same
or equivalent salary and benefits. Valley intends to have all
Lakeland employees participate in the benefits and opportunities
available to all Valley employees.
9. Valley and Lakeland shall have the right to commence
due diligence following the execution of this letter agreement.
The parties acknowledge that they have not commenced their due
diligence as of the date hereof. The parties may continue their
due diligence after execution of the definitive merger agreement
for the purpose of assuring themselves that representations and
warranties in the definitive agreement were correct and that
covenants and conditions set forth in the agreement have been
complied with.
10. The consummation of the Merger shall be targeted for
and the parties shall use all reasonable efforts to have the
Merger consummated no later than July 31, 1995 and it must occur
not later than October 31, 1995, unless extended by mutual
agreement of the parties.
11. In the event of the termination of this letter of
intent each party will be responsible for its own fees and costs
and neither party will be liable to the other party or its
shareholders in connection with the transaction or its
termination.
12. Simultaneously with the acceptance of this proposal,
Lakeland agrees to grant to Valley an option to purchase
1,250,000 shares of the authorized and unissued Lakeland Common
Stock at an exercise price of $21.00 per share and on the other
terms and conditions set forth in the form of option agreement
annexed hereto.
13. Valley and Lakeland will negotiate a definitive merger
agreement to be entered into as soon as possible. This letter
agreement will terminate upon execution by Valley and Lakeland of
the definitive merger agreement or, if the parties have not
entered into the definitive merger agreeement by such date, the
close of business on February 27, 1995.
14. Valley and Lakeland and their respective officers,
directors, employees and agents will cooperate with each other in
good faith, consistent with their respective legal obligations,
in the preparation and distribution of any and all press
releases, announcements and other public disclosures concerning
this letter agreement, the status of negotiations leading to the
execution of a definitive merger agreement and the execution of a
definitive merger agreement. Neither party will make a public
announcement concerning this letter agreement without the prior
consent of the other party.
If the foregoing is acceptable to you, will you kindly
so indicate by signing, dating and returning the enclosed
counterpart of this letter.
Very truly yours,
VALLEY NATIONAL BANCORP
By: GERALD H. LIPKIN
-------------------------
Gerald H. Lipkin
Chairman and
Chief Executive Officer
AGREED AND ACCEPTED:
LAKELAND FIRST FINANCIAL GROUP, INC.
By: MICHAEL HALPIN
-------------------------
Michael Halpin
Chief Executive Officer
Dated: January 26, 1995