Exhibit 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated January
26, 1995, is by and between Valley National Bancorp, a New Jersey
corporation and registered bank holding company ("Valley"), and
Lakeland First Financial Group, Inc. a New Jersey corporation
("Lakeland") and registered bank holding company for Lakeland
Savings Bank ("Bank").
BACKGROUND
1. Valley, Lakeland, the Bank and Valley National Bank
("VNB"), a wholly-owned subsidiary of Valley, as of the date
hereof, have executed a letter of intent (the "Letter Agreement")
pursuant to which the parties will negotiate a definitive
agreement and plan of merger (the "Merger Agreement") pursuant to
which Valley will acquire Lakeland through a merger of Lakeland
with and into Valley (the "Merger").
2. As an inducement to Valley to enter into the letter of
intent and negotiate the Merger Agreement and in consideration
for such entry and negotiation, Lakeland desires to grant to
Valley an option to purchase authorized but unissued shares of
common stock of Lakeland 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 Lakeland, intending
to be legally bound hereby, agree:
1. GRANT OF OPTION. Lakeland hereby grants to Valley the
option to purchase 1,250,000 shares of common stock, $0.10 par
value (the "Common Stock") of Lakeland at an exercise price of
$21.00 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 in accordance with the terms and conditions 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 written letter of intent or an
agreement with Lakeland pursuant to which such person or any
affiliate of such person would (i) merge or consolidate, or enter
into any similar transaction with Lakeland, (ii) acquire all or a
significant portion of the assets or liabilities of Lakeland, or
(iii) acquire beneficial ownership of securities representing, or
the right to acquire beneficial ownership or to vote securities
representing 10% 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
Lakeland or any other business combination involving Lakeland, 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 Lakeland called to vote on the Merger and
Lakeland stockholders fail to approve the Merger by the vote
required by applicable law at the meeting of stockholders called
for such purpose; or
d. makes a bona fide Proposal and thereafter, but
before such Proposal has been Publicly Withdrawn, Lakeland
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.
The term "Triggering Event" also means the taking of any
direct or indirect action by Lakeland 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
Lakeland Common Stock, a merger, consolidation, plan of
exchange, plan of acquisition or reorganization of Lakeland, or a
sale of shares of Lakeland Common Stock or any significant
portion of its assets or liabilities.
The term "significant portion" means 25% of the assets or
liabilities of Lakeland.
"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 Lakeland 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
Lakeland 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.
Lakeland 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 Lakeland shall not
be a condition to the right of Valley to exercise the Option.
Lakeland will not take any action which would have the effect of
preventing or disabling Lakeland 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 Lakeland (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 Lakeland of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by Lakeland, (b) Lakeland 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 Lakeland, 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 Lakeland
Financial Corporation, 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, Lakeland 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 Lakeland 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, Lakeland 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 Lakeland 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 Lakeland and blue
sky fees and expenses shall be paid by Valley. 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, Lakeland 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 with respect to
Lakeland or alleged untrue statement with respect to Lakeland of
any material fact with respect to Lakeland contained in any
preliminary or final registration statement or any amendment or
supplement thereto, or arise out of a material fact with respect
to Lakeland required to be stated therein or necessary to make
the statements therein with respect to Lakeland not misleading;
and Lakeland 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 Lakeland 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 Lakeland 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 Lakeland for any legal or
other expense reasonably incurred by Lakeland 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 Lakeland with another entity, or in the event any
sale of all or substantially all of the assets of Lakeland 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 Lakeland 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 Lakeland 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 LAKELAND. Lakeland
hereby represents and warrants to Valley as follows:
a. DUE AUTHORIZATION. Lakeland 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
Lakeland.
b. AUTHORIZED SHARES. Lakeland 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 Lakeland or, to
its knowledge, any agreement, instrument, judgment, decree,
statute, rule or order applicable to Lakeland.
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 Lakeland 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. 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. 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.
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 Lakeland:
Lakeland First Financial Group, Inc.
250 Route 10
Succasunna, NJ 07876
Attn.: Michael Halpin
President and Chief Executive Officer
With a copy to:
Malizia, Spidi, Sloane and Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
Attn.: John J. Spidi, 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 only to an affiliate of Valley.
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 upon
termination of the Letter Agreement unless a Triggering Event has
occurred prior to such termination date, in which case this
Agreement shall not terminate until 12 months following such
termination. 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
12 months following the date of the termination of the Merger
Agreement.
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.
LAKELAND FIRST FINANCIAL GROUP,
INC.
By: MICHAEL HALPIN
-------------------------
Michael Halpin
President and
Chief Executive Officer
VALLEY NATIONAL BANCORP
By: GERALD H. LIPKIN
-------------------------
Gerald H. Lipkin
Chairman and
Chief Executive Officer