As filed with the Securities and Exchange Commission on April 26, 1995
Registration No. 033-58497
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-4/A
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
--------------------
New Jersey
(State or other Jurisdiction of Incorporation of Organization)
--------------------
6711
(Primary Standard Industrial Classification Code Number)
--------------------
22-2477875
(I.R.S. Employer Identification No.)
1445 Valley Road
Wayne, New Jersey 07470
201-305-8800
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Gerald H. Lipkin, Chairman & CEO
Valley National Bancorp
1445 Valley Road
Wayne, New Jersey 07470
201-305-8800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Please send copies of all communications to:
RONALD H. JANIS, ESQ. JOHN J. SPIDI, ESQ.
MICHAEL W. ZELENTY, ESQ. Malizia, Spidi, Sloane
Pitney, Hardin, Kipp & Szuch & Fisch, P.C.
P.O. Box 1945 1301 K St., N.W., Suite 700
East Morristown, New Jersey 07962 Washington, D.C. 20005
(201) 966-6300 (202) 434-4670
Approximate date of commencement of proposed sale to the
public: At the Effective Date of the Merger, as defined in the Amended and
Restated Agreement and Plan of Merger dated as of April 21, 1995 (the
"Merger Agreement"), between the Registrant, Valley National Bank,
Lakeland First Financial Group, Inc. and Lakeland Savings Bank, attached
as Annex A to the Proxy Statement/Prospectus.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
====================================================================
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registration
of registered offering aggregate fee
securities price per offering
to be unit(1) price(1)
registered
--------------------------------------------------------------------
Common 5,159,338 $23.91 $123,366,752 $42,540
Stock, No Shares(2)
Par Value
====================================================================
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) and (f)(1) under the Securities
Act of 1993 based on the average of the high and low prices for Lakeland
First Financial Group, Inc. Common Stock as of April 5, 1995.
(2) The Registrant also registers hereby such additional shares
of its Common Stock as may be issuable in the Merger pursuant to the
anti-dilution provisions of the Merger Agreement.
____________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
==================================================================
VALLEY NATIONAL BANCORP
PART I
INFORMATION REQUIRED IN PROSPECTUS
CROSS REFERENCE SHEET
Item 1. Cross Reference Sheet.
Pursuant to Item 501 of Regulation S-K, this cross-reference
sheet shows the location in the Proxy Statement/Prospectus of responses to
Items 1 through 19 of Part I of Form S-4
Item Caption Location or Heading
No. ------- in Proxy Statement/
---- Prospectus
------------------
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus . . . . . . . . . . . . Forepart of
Registration
Statement; Cross
Reference Sheet,
Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus . . . . . . . . Inside Front Cover
3. Risk Factors, Ratio of Earnings to
Fixed Charges and Other Information
Introduction (S-K-503) . . . . . . SUMMARY
(a) . . . . . . . . . . . . . . . . SUMMARY - Valley
National Bancorp and
Valley National Bank;
- Lakeland First
Financial Group, Inc.
and Lakeland Savings
Bank
(b) . . . . . . . . . . . . . . . . SUMMARY - Valley
National Bancorp and
Valley National Bank;
- Lakeland First
Financial Group, Inc.
and Lakeland Savings
Bank
(c) . . . . . . . . . . . . . . . . SUMMARY - The Mergers
(d) . . . . . . . . . . . . . . . . SELECTED CONSOLIDATED
FINANCIAL AND OTHER
DATA
(e) . . . . . . . . . . . . . . . . UNAUDITED PRO FORMA
FINANCIAL INFORMATION
(f) . . . . . . . . . . . . . . . . SELECTED CONSOLIDATED
FINANCIAL INFORMATION
AND OTHER DATA -
Comparative Per Share
Data
(g) . . . . . . . . . . . . . . . . SELECTED CONSOLIDATED
FINANCIAL AND OTHER
DATA - Comparative
Per Share Data
(h) . . . . . . . . . . . . . . . . SUMMARY - Vote
Required
(i) . . . . . . . . . . . . . . . . SUMMARY - Regulatory
Approvals
(j) . . . . . . . . . . . . . . . . SUMMARY - Dissenters'
Rights
(k) . . . . . . . . . . . . . . . . SUMMARY - Certain
Federal Income Tax
Consequences
4. Terms of the Transaction
(a) . . . . . . . . . . . . . . . . THE MERGERS; THE
MERGER AGREEMENT;
DESCRIPTION OF VALLEY
CAPITAL STOCK;
COMPARISON OF RIGHTS
OF VALLEY AND
LAKELAND STOCKHOLDERS
(b) . . . . . . . . . . . . . . . . THE MERGERS - Opinion
of Financial Advisor
(c) . . . . . . . . . . . . . . . . THE MERGERS - General
5. Pro Forma Financial Information UNAUDITED PRO FORMA
FINANCIAL INFORMATION
6. Material Contacts with the Company
Being Acquired . . . . . . . . . . THE MERGERS -
Background and
Reasons
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters . . . . . NOT APPLICABLE
8. Interests of Named Experts and
Counsel . . . . . . . . . . . . . . LEGAL OPINIONS
9. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities . . . . . . . . . . NOT APPLICABLE
10. Information with Respect to S-3
Registrants . . . . . . . . . . . . NOT APPLICABLE
11. Incorporation of Certain
Information by Reference . . . . . INCORPORATION OF
CERTAIN DOCUMENTS BY
REFERENCE
12. Information with Respect to S-2 or
S-3 Registrants . . . . . . . . . . NOT APPLICABLE
13. Incorporation of Certain
Information by Reference . . . . . NOT APPLICABLE
14. Information with Respect to
Registrants other than S-3 or S-2
Registrants . . . . . . . . . . . . NOT APPLICABLE
15. Information with Respect to S-3
Companies . . . . . . . . . . . . . INCORPORATION OF
CERTAIN DOCUMENTS BY
REFERENCE
16. Information with Respect to S-2 or
S-3 Companies . . . . . . . . . . . NOT APPLICABLE
17. Information with Respect to
Companies Other than S-2 or S-3
Companies . . . . . . . . . . . . . NOT APPLICABLE
18. Information if Proxies, Consents or
Authorizations are to be Solicited
THE SPECIAL MEETING;
THE MERGERS; THE
MERGER AGREEMENT
19. Information if Proxies, Consents or
Authorization Are Not to be
Solicited or in an Exchange Offer . NOT APPLICABLE
LAKELAND FIRST FINANCIAL GROUP, INC.
250 ROUTE 10
SUCCASUNNA, NEW JERSEY 07876
(201) 584-6666
May 3, 1995
Dear Stockholder:
On behalf of the Board of Directors, I want to extend to you a cordial
invitation to attend a Special Meeting of Stockholders of Lakeland First
Financial Group, Inc. ("Lakeland"). The meeting will be held at 10:00
a.m., Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46,
Ledgewood, New Jersey.
The purpose of the meeting is to vote on a proposal to approve the
Amended and Restated Agreement and Plan of Merger, dated as of April 21,
1995 (the "Merger Agreement"), among Lakeland, Lakeland Savings Bank (the
"Bank"), Valley National Bancorp ("Valley") and Valley National Bank
("VNB"), pursuant to which Lakeland would merge with and into Valley (the
"Merger"), and the Bank would merge with and into VNB (the "Bank Merger"
and together with the Merger, the "Mergers").
Upon consummation of the Merger, each outstanding share of Lakeland
common stock will be converted into and represent the right to receive
1.286 shares (the "Exchange Ratio") of Valley's common stock, no par value
("Valley Common Stock"), subject to certain adjustments. The closing
price of Valley Common Stock on May 1, 1995, the latest practicable
trading day before the printing of the enclosed Proxy Statement/Prospectus
was $____ per share. Consummation of the Mergers is subject to certain
conditions, including approval of the Merger Agreement by Lakeland
stockholders and approval of the Mergers by various regulatory agencies.
Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast by the holders of Lakeland common stock
represented at a meeting at which a quorum is present.
The accompanying Notice of Special Meeting and Proxy
Statement/Prospectus contain information about the Mergers as well as other
information relating to Lakeland and Valley. We urge you to review
carefully such information and the information in Lakeland's 1994 Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q for the periods ended
September 30, 1994 and December 31, 1994, and the 1995 Annual Meeting Proxy
Statement, copies of which are available as indicated in the accompanying
Proxy Statement/Prospectus under "AVAILABLE INFORMATION."
The Board of Directors of Lakeland has unanimously adopted the Merger
Agreement and recommends that the stockholders of Lakeland vote FOR
approval of the Merger Agreement. Even if you plan to attend the meeting
in person, please complete the enclosed proxy, sign and date it and mail it
promptly in the enclosed postage-paid, return addressed envelope. You may
revoke your proxy by attending the special meeting and voting in person.
Yours very truly,
Michael Halpin
President and Chief Executive Officer
Please do not send your common stock certificates at this time. If
the Merger is consummated, you will be sent instructions regarding the
surrender of your stock certificates.
LAKELAND FIRST FINANCIAL GROUP, INC.
250 ROUTE 10
SUCCASUNNA, NEW JERSEY 07876
(201) 584-6666
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 6, 1995
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of
Lakeland First Financial Group, Inc. ("Lakeland") will be held at 10:00
a.m., Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46,
Ledgewood, New Jersey for the following purposes:
1. To consider and vote upon a proposal to approve the Amended
and Restated Agreement and Plan of Merger, dated as of April 21,
1995 (the "Merger Agreement"), among Lakeland, Lakeland Savings
Bank (the "Bank"), Valley National Bancorp ("Valley") and Valley
National Bank ("VNB"), pursuant to which: (i) Lakeland will
merge with and into Valley (the "Merger"), and the Bank will
merge with and into VNB (the "Bank Merger" and together with the
Merger, the "Mergers"); (ii) each outstanding share of Lakeland
common stock will be converted into and represent the right to
receive 1.286 shares (the "Exchange Ratio") of Valley's common
stock, no par value ("Valley Common Stock"), subject to certain
adjustments.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
A copy of the Merger Agreement is set forth as ANNEX A to the
accompanying Proxy Statement/Prospectus.
The Board of Directors of Lakeland has fixed April 26, 1995, as
the record date for the determination of stockholders entitled to notice of
and to vote at the Special Meeting, and accordingly, only holders of record
of Lakeland common stock at the close of business on that date will be
entitled to notice of and to vote at the Special Meeting. In the event
there are not sufficient shares represented for a quorum or votes to
approve the Merger Agreement at the Special Meeting, the Special Meeting
may be adjourned to permit further solicitation.
Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast by the holders of Lakeland common stock
represented at a meeting at which a quorum is present.
The Board of Directors of Lakeland unanimously recommends that
stockholders vote "For" approval of the Merger Agreement.
By Order of the Board of Directors of
LAKELAND FIRST FINANCIAL GROUP, INC.
WILLIAM H. McNEAR
CHAIRMAN OF THE BOARD
Stockholders are urged to complete, date, sign and return promptly the
enclosed Proxy in the accompanying envelope, which requires no postage if
mailed in the United States. If a Stockholder receives more than one Proxy
for any reason, each Proxy should be completed and returned. Your
cooperation will be appreciated. Your Proxy will be voted with respect to
the matters identified thereon in accordance with any specifications on the
Proxy.
PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS FOR
LAKELAND FIRST FINANCIAL GROUP, INC.
TO BE HELD ON JUNE 6, 1995
DAYS INN, ROUTE 46
LEDGEWOOD, NEW JERSEY 07876
PROSPECTUS OF
VALLEY NATIONAL BANCORP
FOR COMMON STOCK OF VALLEY NATIONAL BANCORP
TO BE ISSUED IN CONNECTION WITH
THE MERGER OF LAKELAND FIRST FINANCIAL GROUP, INC.
WITH AND INTO VALLEY NATIONAL BANCORP
This Proxy Statement/Prospectus is being furnished by Lakeland First
Financial Group, Inc., a New Jersey corporation ("Lakeland"), to the
holders of Lakeland common stock, par value $0.10 per share ("Lakeland
Common Stock"), as a Proxy Statement/Prospectus in connection with the
solicitation of proxies by Lakeland's Board of Directors for use at a
special meeting of stockholders of Lakeland to be held at 10:00 a.m.,
Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46,
Ledgewood, New Jersey (the "Special Meeting"), and at any adjournment or
adjournments thereof. In the event there are not sufficient shares
represented for a quorum or votes to approve the Merger Agreement at the
Special Meeting, the Special Meeting may be adjourned to permit further
solicitation.
This Proxy Statement/Prospectus, the accompanying Notice of Special
Meeting and form of Proxy are first being mailed to the stockholders of
record of Lakeland on or about May 3, 1995.
The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Amended and Restated Agreement and Plan of Merger,
dated as of April 21, 1995 (the "Merger Agreement"), among Lakeland,
Lakeland Savings Bank ("the Bank"), Valley National Bancorp ("Valley"),
and Valley National Bank ("VNB"), pursuant to which Lakeland will merge
with and into Valley (the "Merger") and the Bank will merge with and into
VNB (the "Bank Merger" and together with the Merger, the "Mergers"), all
on and subject to the terms and conditions contained therein. See
"SUMMARY," "THE MERGER AGREEMENT," and a copy of the Merger Agreement
which is attached as ANNEX A to this Proxy Statement/Prospectus.
Upon consummation of the Merger each outstanding share of Lakeland
Common Stock will be converted into and represent the right to receive
1.286 shares (the "Exchange Ratio") of Valley's common stock, no par value
("Valley Common Stock"), subject to certain adjustments. The Exchange
Ratio of 1.286 shares, and all share and per share data (including reported
stock prices) for Valley and for Valley and Lakeland on a pro forma basis
included in this Proxy Statement/Prospectus, have been adjusted for the 5%
stock dividend declared March 23, 1995 and payable May 2, 1995 to Valley
stockholders of record on April 14, 1995. The Merger Agreement, a copy of
which is attached as ANNEX A to this Proxy Statement/Prospectus, has been
amended and restated to reflect the adjusted Exchange Ratio. Valley's
Annual Report on Form 10-K, which is incorporated by reference into this
Proxy Statement/Prospectus, has not been amended or restated to
retroactively reflect the stock dividend. Pursuant to the terms of the
Merger Agreement, cash will be paid in lieu of fractional shares of Valley
Common Stock. For a more complete description of the Merger Agreement and
the terms of the Merger, see "THE MERGERS" and "THE MERGER AGREEMENT."
Valley Common Stock is traded on the New York Stock Exchange under the
symbol "VLY." On January 25, 1995, the last business day prior to public
announcement of the execution of the letter of intent with respect to the
Mergers (the "Letter of Intent"), the closing price of Valley Common Stock
was $25.48 per share. On May 1, 1995, the latest practicable date before
the printing of this Proxy Statement/Prospectus, such price was $________.
Lakeland's Common Stock is listed on the NASDAQ National Market System
under the symbol "LLSL." On January 25, 1995, the last business day prior
to public announcement of the execution of the Letter of Intent, the last
reported sale price per share of Lakeland Common Stock on the NASDAQ
National Market System was $21.50. On May 1, 1995, such price was $_____.
See "SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA -- Comparative Per
Share Data." Lakeland stockholders are urged to obtain current market
quotations for the Valley and Lakeland Common Stock. Because the Exchange
Ratio is fixed, Lakeland stockholders are not assured of receiving any
specific market value of Valley Common Stock. The price of Valley Common
Stock at the Effective Time may be higher or lower than the market price
at the time of entering into the Letter of Intent, at the time of mailing
this Proxy Statement/Prospectus or at the time of the Special Meeting.
Valley has filed a Registration Statement pursuant to the Securities
Act of 1933, as amended (the "Act"), covering the shares of Valley Common
Stock which will be issued in connection with the Merger. In addition to
constituting the Lakeland Proxy Statement for the Special Meeting, this
document constitutes a Prospectus of Valley with respect to the Valley
Common Stock to be issued if the Merger is consummated.
THESE SECURITIES ARE NOT A SAVINGS OR DEPOSIT ACCOUNT AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS MAY 3, 1995
AVAILABLE INFORMATION
Lakeland and Valley are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), and, in accordance therewith,
file reports, proxy statements and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements, and
other information filed by Lakeland and Valley can be inspected and copied
at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's Regional
Offices in New York (7 World Trade Center, 13th Floor, New York, New York
10048) and Chicago (Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661) and copies of such materials can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Lakeland's Common Stock is
listed on the NASDAQ National Market System and reports, proxy statements,
and other information relating to Lakeland can also be inspected at the
offices of the NASDAQ Stock Market Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006. The outstanding shares of Valley Common Stock are
traded on the New York Stock Exchange ("NYSE") and reports, proxy
statements, and other information relating to Valley may be inspected at
the offices of the NYSE, 20 Broad Street, New York, New York 10005.
Valley has filed with the SEC a Registration Statement on Form S-4
(together with any amendments thereto, the "Registration Statement") under
the Act, with respect to the shares of Valley Common Stock to be issued
upon consummation of the Merger. This Proxy Statement/Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits thereto, certain portions of which have been omitted as permitted
by the rules and regulations of the SEC. Copies of the Registration
Statement are available for inspection and copying as set forth above.
Statements contained in this Proxy Statement/Prospectus or in any document
incorporated by reference in this Proxy Statement/Prospectus relating to
the contents of any contract or other document referred to herein or
therein are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to
the Registration Statement or such other document, each such statement
being qualified in all respects by such reference.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. A COPY OF DOCUMENTS
RELATING TO LAKELAND IS AVAILABLE WITHOUT CHARGE (OTHER THAN CERTAIN
EXHIBITS TO SUCH DOCUMENTS) TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER,
TO WHOM A PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST TO: LAKELAND FIRST FINANCIAL GROUP, INC., ATTENTION: FRANCES A.
STACEY, CORPORATE SECRETARY, 250 ROUTE 10, SUCCASUNNA, NEW JERSEY 07876;
TELEPHONE NUMBER (201) 584-6666. THOSE DOCUMENTS PERTAINING TO VALLEY ARE
AVAILABLE UPON WRITTEN OR ORAL REQUEST FROM ALAN ESKOW, CORPORATE
SECRETARY, VALLEY NATIONAL BANCORP, 1445 VALLEY ROAD, WAYNE, NEW JERSEY
07470; TELEPHONE NUMBER (201) 305-8800. IN ORDER TO ENSURE TIMELY DELIVERY
OF SUCH DOCUMENTS, ANY SUCH REQUEST SHOULD BE MADE BY MAY 26, 1995.
All information contained or incorporated by reference in this Proxy
Statement/Prospectus with respect to Valley was supplied by Valley, and all
information contained or incorporated by reference in this Proxy
Statement/Prospectus with respect to Lakeland was supplied by Lakeland.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY VALLEY
OR LAKELAND. NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS AT
ANY TIME, NOR ANY DISTRIBUTION OF SHARES OF VALLEY COMMON STOCK SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF VALLEY OR LAKELAND SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR AN OFFER TO
SELL OR SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT LAWFUL.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Lakeland with the Commission (Company
File No. 0-17992) under Section 13(a) or 15(d) of the Exchange Act are
hereby incorporated by reference in this Proxy Statement/Prospectus:
1. Annual Report on Form 10-K for the year ended June 30, 1994;
2. Quarterly Reports on Form 10-Q for the periods ended September
30, 1994 and December 31, 1994;
3. Current Reports on Form 8-K, dated January 26, 1995, February
27, 1995 and April 25, 1995;
4. The description of Lakeland Common Stock set forth in Lakeland's
Registration Statement filed on Form 8-A filed pursuant to
Section 12 of the Exchange Act, and any amendment or report filed
for the purpose of updating such description; and
5. The portions of Lakeland's Proxy Statement for the Annual Meeting
of Stockholders held on October 18, 1994, that have been
incorporated by reference in the 1994 Lakeland Form 10-K.
The following documents filed by Valley with the Commission (Company
File No. 0-11179) are incorporated herein by reference.
1. Annual Report on Form 10-K for the year ended December 31, 1994,
as amended by Form 10-K/A filed April 4, 1995;
2. Current Reports on Form 8-K filed February 2, 1995, March 2,
March 30, April 25, 1995 and April 26, 1995;
3. The description of Valley Common Stock set forth in Valley's
Registration Statement on Form 8-A filed by Valley pursuant to
Section 12 of the Exchange Act, and any amendment or report filed
for the purpose of updating such description; and
4. The portions of Valley's Proxy Statement for the Annual Meeting
of Stockholders held on March 23, 1995 that have been
incorporated by reference in the 1994 Valley Form 10-K.
All documents filed by Lakeland or Valley pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the earlier of the Effective Time or the termination of the Merger
Agreement are hereby incorporated by reference into this Proxy
Statement/Prospectus and shall be deemed a part hereof from the date of
filing of such documents.
Any statement contained herein, in any supplement hereto or in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein, in
any supplement hereto or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement/Prospectus or any supplement hereto.
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . .
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RECENT DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . .
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA . . . . . . . . . . .
Lakeland First Financial Group, Inc. . . . . . . . . . . . . . . .
Valley National Bancorp . . . . . . . . . . . . . . . . . . . . .
Comparative Per Share Data . . . . . . . . . . . . . . . . . . . .
UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . .
CERTAIN INFORMATION REGARDING VALLEY . . . . . . . . . . . . . . . .
CERTAIN INFORMATION REGARDING LAKELAND . . . . . . . . . . . . . . .
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record Date: Vote Required . . . . . . . . . . . . . . . . . . . .
THE MERGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Background and Reasons . . . . . . . . . . . . . . . . . . . . . .
Valley's Reasons for the Merger. . . . . . . . . . . . . . . . . .
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences . . . . . . . . . . . . .
THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . .
The Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of Lakeland Certificates . . . . . . . . . . . . . . . .
Conversion of Stock Options . . . . . . . . . . . . . . . . . . .
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . .
Interests of Certain Persons in the Merger . . . . . . . . . . . .
Employment Matters . . . . . . . . . . . . . . . . . . . . . . . .
Business Pending Consummation . . . . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . .
Conditions to Consummation; Termination . . . . . . . . . . . . .
Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . .
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resale of Valley Common Stock by Affiliates. . . . . . . . . . . .
THE STOCK OPTION AGREEMENT . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF VALLEY CAPITAL STOCK . . . . . . . . . . . . . . . . .
COMPARISON OF RIGHTS OF VALLEY AND LAKELAND STOCKHOLDERS . . . . . .
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING . . . . . . . . . . . .
LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUBSEQUENT FILINGS INCORPORATED BY REFERENCE. . . . . . . . . . . . .
ANNEXES:
ANNEX A - AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER . . . A-1
ANNEX B - OPINION OF HOPPER SOLIDAY & CO., INC . . . . . . . . . . B-1
ANNEX C - STOCK OPTION AGREEMENT . . . . . . . . . . . . . . . . . C-1
ANNEX D - LETTER REGARDING EMPLOYEE AND
DIRECTOR BENEFITS . . . . . . . . . . . . . . . . . . . D-1
SUMMARY
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION RELATING TO
THE MERGERS CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS. THIS
SUMMARY IS NOT INTENDED TO BE A SUMMARY OF ALL MATERIAL INFORMATION
RELATING TO THE MERGERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
MORE DETAILED INFORMATION CONTAINED ELSEWHERE IN THIS PROXY
STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES HERETO AND IN THE DOCUMENTS
INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS. A COPY OF
THE MERGER AGREEMENT IS SET FORTH IN ANNEX A TO THIS PROXY
STATEMENT/PROSPECTUS. STOCKHOLDERS ARE URGED TO READ CAREFULLY THE ENTIRE
PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES.
Valley National Bancorp and Valley National Bank
Valley National Bancorp ("Valley") is the parent corporation and bank
holding company of Valley National Bank ("VNB"), a national banking
association that provides a wide range of commercial and retail banking
services and trust services in New Jersey. As of December 31, 1994, and
for the year then ended, Valley reported assets of $3.7 billion, net loans
of $2.2 billion, deposits of $3.3 billion, stockholder's equity of $300.2
million and net income of $59.0 million, and as of such date Valley
operated through 62 branches in New Jersey. The principal executive offices
of Valley and VNB are located at 1445 Valley Road, Wayne, New Jersey 07470,
and their telephone number is (201) 305-8800.
Lakeland First Financial Group, Inc. and Lakeland Savings Bank
Lakeland First Financial Group, Inc. ("Lakeland") is a bank holding
company registered under the Bank Holding Company Act of 1956, as amended
("BHCA"). Lakeland's principal asset is the stock of Lakeland Savings Bank
(the "Bank") which is a community-oriented institution offering a variety
of financial services in New Jersey. As of December 31, 1994, Lakeland
reported total assets of $673.9 million, net loans of $393.0 million,
deposits of $531.1 million and stockholders' equity of $53.1 million. As
of December 31, 1994 Lakeland operated its business through its main office
and 16 branch offices located in Morris, Warren, and Sussex Counties, New
Jersey. For the fiscal year ended June 30, 1994 and for the six months
ended December 31, 1994, Lakeland reported net income of $8.5 million and
$4.8 million, respectively. The principal executive offices of Lakeland
and the Bank are located at 250 Route 10, Succasunna, New Jersey 07876, and
their telephone number is (201) 584-6666.
The Mergers
Under the terms of the Amended and Restated Agreement and Plan of
Merger dated as of April 21, 1995 (the "Merger Agreement"), Lakeland will
merge with and into Valley (the "Merger"). Upon consummation of the
Merger, each outstanding share of Lakeland common stock, $0.10 par value
("Lakeland Common Stock") will be converted into and represent the right
to receive 1.286 shares (the "Exchange Ratio") of Valley common stock, no
par value ("Valley Common Stock"), subject to certain adjustments.
Pursuant to the terms of the Merger Agreement, cash will be paid in lieu
of fractional shares of Valley Common Stock. For a more complete
description of the Merger Agreement and the terms of the Merger, see "THE
MERGERS."
Pursuant to a separate merger agreement between VNB and the Bank
("Bank Merger Agreement"), the Bank will be merged with and into VNB
(the"Bank Merger" and collectively, the "Mergers"). Immediately following
consummation of the Merger (the "Effective Time") or as soon thereafter as
VNB may deem appropriate, the Bank Merger will be consummated.
Background and Reasons for the Mergers
For a discussion of the background and factors considered by Lakeland
and Valley in reaching their respective decisions to approve the Merger
Agreement, see "THE MERGERS -- Background and Reasons."
The Board of Directors of Lakeland has adopted the Merger Agreement by
unanimous vote, believes it is in the best interests of Lakeland and its
stockholders and recommends its approval by Lakeland stockholders.
Special Meeting; Record Date
The Special Meeting will be held on Wednesday, May 24, 1995, at 10:00
a.m., Eastern time, at Days Inn, Route 46, Ledgewood, New Jersey, for the
purpose of considering and voting upon a proposal to approve the Merger
Agreement.
The Board of Directors of Lakeland has fixed April 26, 1995, as the
record date for determining stockholders entitled to notice of and to vote
at the Special Meeting (the "Record Date"). As of such date, there were
_______________ shares of Lakeland Common Stock outstanding and entitled to
be voted at the Special Meeting. See "THE SPECIAL MEETING."
Vote Required; Board Recommendation
Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast at the Special Meeting at which a quorum is
present by the holders of Lakeland Common Stock. The directors and
executive officers of Lakeland (including certain of their related
interests) beneficially owned, as of the Record Date, and are entitled to
vote at the Special Meeting, ________ shares of Lakeland Common Stock,
which represents ____ percent of the shares outstanding. The executive
officers and directors of Lakeland have indicated that they intend to vote
all of their shares in favor of approval of the Merger Agreement. The
Board of Directors of Lakeland has unanimously approved the Merger
Agreement and recommends that Lakeland stockholders vote "FOR" approval
of the Merger Agreement. See "THE SPECIAL MEETING -- Record Date; Vote
Required."
Opinion of Financial Advisor
Hopper Soliday & Co., Inc. ("Hopper Soliday") has advised Lakeland's
Board of Directors that, in its opinion, the consideration to be received
for each share of Lakeland Common Stock set forth in the Merger Agreement
is fair, from a financial point of view, to Lakeland and its stockholders.
The full text of the Hopper Soliday opinion, dated as of May _, 1995,
which describes the procedures followed, assumptions made, limitations on
the review undertaken and other matters in connection with rendering such
opinion, is set forth in ANNEX B to this Proxy Statement/Prospectus and
should be read in its entirety by Lakeland stockholders. For further
information regarding the opinion of Hopper Soliday, see "THE MERGERS
- -- Opinion of Financial Advisor."
Consideration
At the Effective Time of the Merger, each share of Lakeland Common
Stock outstanding will automatically be converted into 1.286 shares of
Valley Common Stock (adjusted for the 5% stock dividend declared March
23, 1995 and payable May 2, 1995 to Valley stockholders of record of April
14, 1995), subject to certain adjustments.
The Exchange Ratio is subject to adjustment to take into account any
stock split, stock dividend, stock combination, reclassification, or
similar transaction by Valley with respect to the Valley Common Stock. No
adjustments to the Exchange Ratio will be made as of the Effective Time to
compensate Lakeland stockholders for any change in the market value of
Valley Common Stock between January 26, 1995 (the date of the Letter of
Intent) and the Effective Time.
No holder of Lakeland Common Stock will be entitled to receive
fractional shares of Valley Common Stock, but instead will be entitled to
receive a cash payment in the amount of the value of such fractional share
interest, determined by multiplying such stockholders' fractional interest
by the Average Closing Price (as defined below) of Valley Common Stock.
All shares of Valley Common Stock that individual Lakeland stockholders are
entitled to receive in exchange for each share of Lakeland Common Stock
held will be aggregated to constitute as many whole shares of Valley Common
Stock as possible before determining the amount of a cash payment for
fractional shares.
The "Average Closing Price" is defined in the Merger Agreement as the
average of the closing prices of Valley Common Stock as reported on the New
York Stock Exchange and published in the WALL STREET JOURNAL during the
first ten of the fifteen consecutive trading days immediately preceding the
Effective Time. The Average Closing Price is subject to adjustment to take
into account any stock split, stock dividend, stock combination,
reclassification, or similar transaction by Valley with respect to the
Valley Common Stock. See "THE MERGER AGREEMENT -- The Mergers."
Conversion of Stock Options
At the Effective Time, each outstanding option to purchase Lakeland
Common Stock (a "Lakeland Option") granted under the 1986 Stock Option and
Incentive Plan of Lakeland (the "Lakeland Option Plan") will be converted
into either Valley Common Stock or an option to purchase Valley Common
Stock, at the election of the holder of such Lakeland Option (an
"Optionee"), subject to certain conditions. See "THE MERGER AGREEMENT --
Conversion of Stock Options."
From and after the Effective Time, each Lakeland Option which is
converted into an option to purchase Valley Common Stock will be
administered, operated, and interpreted by a committee comprised of members
of the Board of Directors of Valley appointed by such board. Valley has
agreed to reserve for issuance the number of shares of Valley Common Stock
necessary to satisfy Valley's obligations under such options, and to
register such shares, if they are not previously registered under the
Securities Act and the optionee becomes an employee or director of Valley
or VNB.
Holders of Lakeland Options will receive an option preference form
after the mailing of this Proxy Statement/Prospectus but prior to the
Effective Time and may exercise the election by submitting the option
preference form as specified in such form.
Certain Federal Income Tax Consequences
Stockholders are urged to consult their own tax advisors as to the
specific consequences to them of the Mergers under applicable tax laws.
Consummation of the Mergers is conditioned upon the receipt of an
opinion of counsel to Valley to the effect that the Merger will constitute
a tax-free reorganization as defined in Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). Assuming the applicability
of Section 368(a)(1) of the Code, the receipt of Valley stock in exchange
for Lakeland stock will be a nontaxable event to Valley, Lakeland, and the
Lakeland stockholders. The receipt of cash by a stockholder of Lakeland in
lieu of fractional shares of Valley Common Stock pursuant to the Merger
will be a taxable transaction to such stockholder for federal income tax
purposes. In general, a stockholder will recognize gain or loss upon the
surrender of the stockholder's Lakeland Common Stock equal to the
difference, if any, between (i) the amount of the cash payment expected to
be received from Valley in lieu of fractional shares of Valley Common Stock
and (ii) the stockholder's tax basis in such Common Stock. See "THE
MERGERS -- Certain Federal Income Tax Consequences."
Dissenters' Rights
Consistent with the provisions of the New Jersey Business Corporation
Act, no stockholder of Lakeland will have the right to dissent from the
Merger. See "THE MERGER AGREEMENT -- Dissenters' Rights."
Business Pending Consummation
Lakeland has agreed in the Merger Agreement not to take certain
actions relating to the operation of Lakeland pending consummation of the
Mergers, without the prior written consent of Valley or VNB, except as
otherwise permitted by the Merger Agreement. These actions include, among
other things: (i) changing any provision of its Certificate of
Incorporation or Bylaws or similar governing document; (ii) paying any
dividends (other than regular quarterly dividends of $0.15 per share and
one special dividend which may be declared in an amount such that between
January 26, 1995 and the Effective Time, Lakeland's stockholders will
receive dividends equal to those they would have received had the Merger
been consummated on January 26, 1995) or redeeming or otherwise acquiring
any shares of its capital stock, or issuing any additional shares of its
capital stock (other than upon exercise of an outstanding Lakeland Option)
or giving any person the right to acquire any such shares; (iii) granting
any severance or termination pay other than the settlement of the retainer
agreement of Mr. William H. McNear, Chairman of the Board of Lakeland, or
pursuant to policies of Lakeland in effect as of the date of the Merger
Agreement (see "THE MERGER AGREEMENT -- Interests of Certain Persons") or
entering into or amending any employment agreement with any directors,
officers, or employees except as authorized in the Merger Agreement, or
adopting any new employee benefit plan or arrangement or amending any
existing benefit plan; (iv) awarding any increase in compensation or
benefits to its directors, officers, or employees except in the ordinary
course of business and consistent with past practices and policies;
(v) selling or disposing of any substantial amount of assets or incurring
any significant liability other than in the ordinary course of business; or
(vi) taking any other action not in the ordinary course of business
consistent with prudent banking practices.
Regulatory Approvals
Consummation of the Merger requires the approval of the Office of the
Comptroller of the Currency (the "OCC"). OCC approval does not constitute
an endorsement of the Merger or a determination by the OCC that the terms of
the Merger are fair to the shareholders of Lakeland. An application for
such approval was filed on March 22, 1995. On March 22, 1995, Valley
submitted a draft application to the Federal Reserve Board seeking a waiver
of the requirement for approval of the Merger under Regulation Y
promulgated under the BHCA. There can be no assurance that the necessary
regulatory approvals will be obtained or as to the timing or conditions of
such approvals. See "THE MERGER AGREEMENT -- Regulatory Approvals."
Management and Operations After the Mergers
At the Effective Time, as a result of the Merger, Lakeland will be
merged into Valley, which will be the surviving entity in the Merger. In
addition, the Bank will be merged into VNB, with VNB as the surviving
entity in the Bank Merger. VNB will continue to operate as a subsidiary of
Valley. Valley has agreed to appoint Michael Halpin, President of Lakeland
and the Bank, as a First Senior Vice President of VNB following the
Mergers. See "The Merger Agreement -- Employment Matters."
The location of the principal office of Valley will remain unchanged
- -- 1445 Valley Road, Wayne, New Jersey. Initially, the branch offices of
the Bank will serve as branch offices of VNB; however, there is no
assurance that one or more of these branch offices will not be closed in
the future.
Effect of the Merger on Rights of Stockholders
At the Effective Time, the holders of Lakeland Common Stock will
become holders of Valley Common Stock. Valley and Lakeland are both New
Jersey general business corporations governed by the New Jersey Business
Corporation Act and registered bank holding companies under the BHCA.
Therefore, there are no material differences in the legal rights of holders
of shares of Lakeland Common Stock and Valley Common Stock under the New
Jersey Business Corporation Act. For a description of Valley Common Stock,
see "DESCRIPTION OF VALLEY COMMON STOCK". For a comparison of the
Certificates of Incorporation and the Bylaws of Valley and Lakeland, see
"COMPARISON OF RIGHTS OF VALLEY AND LAKELAND STOCKHOLDERS."
Exchange of Certificates
At the Effective Time, holders of certificates formerly representing
shares of Lakeland Common Stock will cease to have any rights as Lakeland
stockholders and their certificates automatically will represent the shares
of Valley Common Stock into which their shares of Lakeland Common Stock
will have been converted by the Merger. As soon as practicable after the
Effective Time, Valley will send written notice to each holder of Lakeland
Common Stock indicating the number of shares of Valley Common Stock for
which such holder's shares of Lakeland Common Stock have been exchanged.
Holders of outstanding certificates for Lakeland Common Stock, upon
proper surrender of such certificates to Valley, will receive, promptly
after the Effective Time, a certificate representing the full number of
shares of Valley Common Stock into which the shares of Lakeland Common
Stock previously represented by the surrendered certificates have been
converted. At the time of issuance of the new stock certificate each
stockholder so entitled will receive a check for the amount of the
fractional share interest, if any, to which he may be entitled.
Each share of Valley Common Stock for which shares of Lakeland Common
Stock are exchanged will be deemed to have been issued at the Effective
Time. Accordingly, Lakeland stockholders who receive Valley Common Stock
in the Merger will be entitled to receive any dividend or other
distribution which may be payable to holders of record of Valley Common
Stock as of dates on or after the Effective Time. However, no dividend or
other distribution will actually be paid with respect to any shares of
Valley Common Stock until the certificate or certificates formerly
representing shares of Lakeland Common Stock have been surrendered, at
which time any accrued dividends and other distributions on such shares of
Valley Common Stock will be paid without interest. See "THE MERGER
AGREEMENT -- Exchange of Lakeland Certificates."
Lakeland stock certificates should not be returned to Lakeland with
the enclosed proxy and should not be forwarded until after receipt of a
letter of transmittal which will be provided to Lakeland stockholders upon
consummation of the Merger.
Effective Time; Conditions to Consummation; Amendments; Termination
A closing under the Merger Agreement (the "Closing") will occur on the
first business day of the month following receipt of all necessary
regulatory approvals and the satisfaction or waiver of all conditions
precedent to the Merger, or at such other time as is agreed to by Valley
and Lakeland. A Certificate of Merger will be filed with the New Jersey
Secretary of State immediately following the Closing. The time of such
filing will be the "Effective Time." The actual Effective Time is
dependent upon satisfaction of all conditions precedent, some of which are
not under the control of Valley and/or Lakeland, and may be changed by
agreement of the parties.
Consummation of the Mergers is contingent upon a number of conditions,
including receiving all necessary regulatory approvals; the approval of the
Merger by the requisite vote of the Lakeland stockholders; an opinion of
Pitney, Hardin, Kipp & Szuch, counsel to Valley, to the effect that the
Merger will result in a tax free reorganization; and an opinion of Hopper
Soliday & Co., Inc. ("Hopper Soliday"), advisors to Lakeland, that the
Merger is fair to the stockholders of Lakeland from a financial point of
view. Hopper Soliday's opinion is included as ANNEX B. See "THE MERGERS -
- - Opinion of Financial Advisor; and THE MERGER AGREEMENT -- Conditions to
Consummation; Termination."
Consummation of the Merger requires the approval of the Office of the
Comptroller of the Currency (the "OCC"). OCC approval does not constitute
an endorsement of the Merger or a determination by the OCC that the terms of
the Merger are fair to the shareholders of Lakeland. An application for
such approval was filed on March 22, 1995. On March 22, 1995, Valley
submitted a draft application to the Federal Reserve Board seeking a waiver
of the requirement for approval of the Merger under Regulation Y
promulgated under the BHCA. While Valley and Lakeland anticipate receiving
such approvals, there can be no assurance that they will be granted, or
that they will be granted on a timely basis without conditions unacceptable
to Valley or Lakeland. See "THE MERGER AGREEMENT -- Regulatory Approvals".
The Merger Agreement may be amended, modified or supplemented with
respect to any of its terms by the written consent of Valley and Lakeland
at any time prior to the Effective Time.
The Merger Agreement may be terminated by either Lakeland or Valley if
the Effective Time has not occurred by October 31, 1995. The Merger
Agreement may be terminated by Valley if Lakeland's net operating income
(subject to certain adjustments) for any full fiscal quarter after December
31, 1994 is materially less than Lakeland's net income for each of the last
two fiscal quarters of calendar year 1994. The Merger Agreement may be
terminated by Lakeland if Valley's net operating income (subject to certain
adjustments) for any full fiscal quarter after December 31, 1994 is
materially less than Valley's net income for each of the last two fiscal
quarters of calendar year 1994, or if the fiduciary responsibilities of the
Board of Directors of Lakeland require Lakeland to participate or authorize
participation in a merger with a third party or some other form of
Acquisition Transaction (as such term is defined in the Merger Agreement).
For a more complete description of the foregoing termination rights, and
for a description of other termination rights available to Lakeland and
Valley, see "THE MERGER AGREEMENT -- Conditions to Consummation;
Termination".
Upon a termination of the Agreement, the transactions contemplated
thereby will be abandoned without further action by any party and each
party will bear its own expenses, except printing and mailing costs will
be borne equally by the parties. In the event of a termination, each
party will retain all rights and remedies it may have at law or equity
under the Merger Agreement.
Accounting Treatment of the Merger
The Merger is expected to be accounted for by Valley under the
pooling-of-interests method of accounting in accordance with generally
accepted accounting principles. Under the pooling-of-interests method of
accounting, Lakeland's historical basis of assets, liabilities and
shareholders' equity will be retained by Valley as the surviving entity.
For a discussion of the effects of pooling-of-interests accounting, see
"SUPPLEMENTAL HISTORICAL AND PRO FORMA COMBINED FINANCIAL INFORMATION."
Stock Option for Shares of Lakeland Common Stock
On January 26, 1995, Valley and Lakeland entered into a stock option
agreement (the "Stock Option Agreement"), in connection with the execution
of the Letter of Intent. Pursuant to the terms of the Stock Option
Agreement, Lakeland has granted to Valley an option (the "Option") to
purchase up to 1,250,000 authorized but unissued shares of Lakeland Common
Stock, representing approximately 24.9% of the outstanding shares of
Lakeland Common Stock, assuming full exercise of the Option, at a price of
$21.00 per share. Valley does not have any voting rights with respect to
shares of Lakeland Common Stock subject to the Option prior to exercise of
the Option. The Stock Option Agreement is set forth as Annex C hereto.
See "THE STOCK OPTION AGREEMENT."
In the event that certain specifically enumerated "Triggering Events"
occur and the Mergers are not consummated, Valley would recognize a gain on
the sale of the shares of Lakeland Common Stock received pursuant to the
exercise of the Option if such shares of Lakeland Common Stock were sold at
prices exceeding $21.00 per share. The ability of Valley to exercise the
Option and to cause up to an additional 1,250,000 shares of Lakeland Common
Stock to be issued may be considered a deterrent to other potential
acquisitions of control of Lakeland, as it is likely to increase the cost
of an acquisition of all of the share of Lakeland Common Stock which would
then be outstanding. The exercise of the Option by Valley may also make
"pooling-of-interests" accounting treatment unavailable to a subsequent
acquiror.
Interests of Certain Persons
The Merger Agreement provides that for the six-year period following
the Effective Time, Valley will indemnify the directors, officers, and
employees of Lakeland holding such positions on or prior to the date of the
Merger Agreement, against certain liabilities to the extent such persons
were indemnified under Lakeland's Certificate of Incorporation and Bylaws
as in effect on the date of the Merger Agreement. See "THE MERGER
AGREEMENT -- Interests of Certain Persons."
As of the Effective Time, Valley will cause its Board of Directors to
take action to appoint as a member of its Board Mr. William H. McNear, who
is Chairman of Lakeland's Board of Directors, and one other Lakeland
director to be selected by Valley from two nominees submitted by the Board
of Directors of Lakeland. In addition, John Grabovetz will be designated
as a Director Emeritus of Valley at the Effective Time. As of the
Effective Time, Valley will appoint Michael Halpin as a First Senior Vice
President of VNB, and Valley will assume Mr. Halpin's employment contract.
It is anticipated that Mr. McNear will receive a lump sum payment of
$150,000 from Lakeland upon the Effective Time as settlement of his
retainer agreement with Lakeland. In a letter to Lakeland dated February
27, 1995, Valley expressed its intention to provide Lakeland directors and
employees with certain benefits. See "THE MERGER AGREEMENT -- Interests of
Certain Persons" and "-- Employment Matters" and ANNEX D.
Employment Matters
Valley intends to continue the employment of as many officers and
employees of the Bank as possible, 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. See "THE MERGER AGREEMENT
- -- Employment Matters."
Resale of Valley Common Stock by Affiliates
For a discussion on the ability of affiliates of Lakeland and Valley
to resell Valley Common Stock, see "Resale of Valley Common Stock by
Affiliates." This Proxy Statement/Prospectus cannot be used for resales of
Valley Common Stock received by any person who may be deemed an affiliate
of Valley or Lakeland.
RECENT DEVELOPMENTS
On February 28, 1995, American Union Bank was merged with and into
VNB, resulting in the issuance of 288,734 shares of Valley Common Stock.
The historical per share data for Valley contained in this Proxy
Statement/Prospectus and incorporated by reference herein does not include
the combined results of American Union Bank, as the combined results would
not be materially different from those presented.
On March 23, 1995, Valley announced that its Board of Directors had
approved a 5% stock dividend payable May 2, 1995 to record holders of
Valley Common Stock as of April 14, 1995. Valley also announced its intention
to maintain its $.25 per share regular quarterly dividend following the
stock dividend. The Exchange Ratio of 1.286 shares, and all share and
per share data (including reported stock prices) for Valley and for Valley
and Lakeland on a pro forma basis included in this Proxy Statement/Prospectus,
have been adjusted for this 5% stock dividend. The Merger Agreement, a copy
of which is attached as ANNEX A to this Proxy Statement/Prospectus, has been
amended and restated to reflect the adjusted Exchange Ratio. Valley's
Annual Report on Form 10-K, which is incorporated by reference into this
Proxy Statement/Prospectus, has not been amended or restated to
retroactively reflect the stock dividend.
On April 13, 1995, Valley and VNB announced that VNB had filed an
application with the Federal Reserve Bank of New York to establish an Edge
Corporation to undertake certain international activities. The purpose of
the application is to establish a finance company in Toronto, Canada. The
proposed Canadian finance company will make consumer loans, primarily auto
and mortgage loans in Canada, utilizing Valleys's expertise in the area and
extending to Canada the existing referral program Valley has with a major
insurance company. An application has also been filed with the Office of
Supervision of Financial Institutions, the Canadian banking and financial
institution regulator, to establish the finance company in Canada, with
capitalization of Canadian $10.0 million. While Valley anticipates the
applications will be approved, there can be no assurance concerning
regulatory approval or the timing of such approvals.
On April 11, 1995, Lakeland announced that its Board of Directors had
declared its regular cash dividend of 15 cents per share of Lakeland Common
Stock, payable on or about May 19, 1995 to shareholders of record as May 5,
1995.
On April 12, 1995, Lakeland announced that its net income for the
quarter ended March 31, 1995 was $2.6 million, or $.66 per share, a 23.7%
increase over net income of $2.1 million, or $.54 per share, for the same
quarter last year. Net income for the nine months ending March 31, 1995
totalled $7.4 million, or $1.87 per share, compared to $6.3 million, or
$1.61 per share, for the same period last year. At March 31, 1995 there
were 3,913,315 shares outstanding, compared to 3,506,358 on March 31,
1994. The book value of Lakeland Common Stock at March 31, 1995
was $14.14 per share.
As of March 31, 1995, Lakeland's assets totalled $676.7 million,
compared to $641.5 million at March 31, 1994, and stockholders' equity
totalled $55.3 million, or 8.18% of assets, compared to $49.0 million,
or 7.64% of assets last year. Lakeland's provision for losses on loans
totalled $307,000 for the quarter ended March 31, 1995, and $1,652,000
for the nine months ended March 31, 1995, compared to $300,000 and
$900,000 for the same periods last year. Lakeland's allowance for loan
losses totalled $5.7 million on March 31, 1995, as compared to
$4.4 million at March 31, 1994. Non-performing loans, ninety days or
more in arrears, totalled $4.5 million, or 0.66% of Lakeland's total
assets at March 31, 1995, compared to $5.4 million, or 0.84% of total
assets a year earlier. Lakeland's other non-performing assets, which
include foreclosed properties, in-substance foreclosures, and
investments in real estate, totalled $1.2 million at March 31, 1995,
compared to $3.5 million at March 31, 1994.
On April 19, 1995, Valley reported net income before securities
gains of $14.4 million for the first quarter of 1995 as compared to
$14.0 million for the first quarter of 1994, a 2.4% increase. After
securities gains, net income was $14.7 million for the quarter ended
March 31, 1995, compared with net income of $16.0 million recorded for
the first quarter of 1994 and $14.3 million for the fourth quarter of
1994. Per share earnings were $0.48 for the first quarter of 1995,
compared with per share earnings of $0.53 and $0.47 for the first
quarter and fourth of 1994, respectively. The first quarter of 1994
was positively impacted by securities gains of $3.3 million, compared
to only $537 thousand of securities gains in the first quarter of 1995.
Valley had a return on average assets of 1.55%, a return on average
equity of 19.04%, and an efficiency ratio of 44.9% for the first
quarter of 1995.
On March 31, 1995, Valley's assets totalled $3.82 billion,
representing a 2.1% increase over the $3.74 billion in assets at
December 31, 1994. Additionally, loans net of unearned income
increased 2.8% to $2.25 billion, compared to December 31, 1994.
Total deposits increased 2.7% to $3.42 billion at March 31, 1995,
compared with deposits of $3.33 billion on December 31, 1994.
Valley's shareholders' equity was $322.1 million at March 31, 1995,
an 11.3% increase over Valley's capital position at March 31, 1994.
Valley had a book value per share of $10.52, a tier one leverage ratio
of 8.52% and a risk based capital ratio of 15.16% at March 31, 1995.
Valley's net interest income before the provision for possible
loan losses was $37.98 million for the first quarter of 1995,
representing a 1.7% increase above the $37.1 million recorded in the
same period in 1994. Interest on loans was up 22.7% during the quarter
and reached $46.6 million, compared with $37.9 million recorded during
the first quarter of 1994. This helped to limit the decline in
Valley's net interest margin to 4.48% at the end of the first quarter
of 1995 from 4.63% and 4.56% at March 31, 1994 and December 31, 1994,
respectively.
Valley's non-interest income for the first quarter of 1995 was
$4.5 million, compared with $7.5 million reported in the same period
a year ago. Gains on the sale of securities for the first quarter
decreased from $3.3 million to $537 thousand. Total non-interest
expense, including costs connected with recent acquisitions, increased
slightly during the quarter to $19.7 million, compared with
$19.4 million recorded for the first quarter of 1994.
Valley's non-performing assets, including non-accrual loans, and
other real estate owned ("OREO"), were $24.2 million, or 1.07% of loans
and OREO at March 31, 1995, versus $25.7 million, or 1.17% of loans and
OREO at December 31, 1994. This compares with $23.4 million, or 1.20%
of loans and OREO at March 31, 1994. Loans past due in excess of 90
days and still accruing interest, were $5.7 million at March 31, 1995,
as compared with $15.2 million at March 31, 1994 and $5.4 million at
December 31, 1994.
On April 25, 1995, Valley announced that it has authorized the
purchase of up to 500,000 shares of outstanding Valley Common Stock.
Purchases may be made from time to time through 1995 in the open market
or in privately negotiated transactions, at prices not exceeding prevailing
market prices. The acquired shares are to be held in treasury to be used
for the exercise of employee stock options and the exercise of outstanding
warrants that expire December 31, 1995.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
Lakeland First Financial Group, Inc.
The following selected consolidated financial and other data are
presented on a December 31 year end basis, in order to make such data
comparable to the Valley data contained elsewhere herein and incorporated
herein by reference. However, Lakeland has historically used a June 30
fiscal year end. Thus, the data set forth below are derived from the
unaudited consolidated quarterly financial data of Lakeland necessary to
present December 31 fiscal year data for Lakeland. The data below should
be read in conjunction with the audited consolidated financial statements,
related notes and other financial information incorporated by reference
herein. See "AVAILABLE INFORMATION" and "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
At or For the Year Ended December 31,
1994 1993 1992 1991 1990
-------- ------- ------- -------- -------
(In thousands, except for per share data)
INCOME STATEMENT DATA:
Interest income . . . . . . . $ 46,543 $ 41,123 $ 33,358 $ 31,478 $30,007
Interest expense . . . . . . 21,424 19,952 18,584 20,648 21,052
------- ------- ------- ------- -------
Net interest income . . . . . 25,119 21,171 14,774 10,830 8,955
------- ------- ------- ------- -------
Provision for possible loan
losses . . . . . . . . . . . 2,350 2,209 1,656 769 1,301
------- ------- ------- ------- -------
Net interest income after
provision for possible loan
losses . . . . . . . . . . . 22,769 18,962 13,118 10,061 7,654
Non-interest income . . . . . 1,243 1,214 1,764 558 61
Non-interest expense . . . . 9,770 9,278 7,953 6,430 5,631
------- ------- ------- ------- -------
Income before income taxes
and cumulative effect of
accounting change . . . . . 14,242 10,898 6,929 4,189 2,084
Income taxes . . . . . . . . 5,095 3,488 3,196 1,740 1,189
------- ------- ------- ------- -------
Income before cumulative
effect of accounting change. 9,147 7,410 3,733 2,449 895
Cumulative effect of
accounting change. . . . . . -- -- 473 -- --
------- ------- ------- ------- -------
Net income . . . . . . . . . $ 9,147 $ 7,410 $ 4,206 $ 2,449 $ 895
======= ======= ====== ======= =======
PER COMMON SHARE DATA<F1>:
Income before cumulative
effect of accounting change. $ 2.31 $ 1.89 $ 0.98 $ 0.65 $ 0.24
Cumulative effect of
accounting change . . . . . -- -- 0.12 -- --
Net income . . . . . . . . . 2.31 1.89 1.10 0.65 0.24
Book Value . . . . . . . . . 13.65 13.54 12.86 12.95 13.57
Dividends . . . . . . . . . . 0.92 0.74 0.50 0.48 0.75
RATIOS:
Return on Average Assets . . 1.42% 1.32% 0.94% 0.70% 0.28%
Return on Average Equity . . 18.23% 16.63% 10.32% 6.23% 2.25%
FINANCIAL CONDITION DATA:
Total assets . . . . . . . . $ 673,877 $ 613,171 $ 508,625 $ 381,561 $ 320,708
Investment securities held to
maturity . . . . . . . . . . 250,059 236,766 191,366 97,060 46,137
Investment securities
available for sale . . . . . 640 2,777 3,891 -- --
Loans (net of unearned
income). . . . . . . . . . . 398,345 355,669 294,526 266,328 249,679
Allowance for possible loan
losses . . . . . . . . . . . 5,351 5,426 3,430 1,819 1,665
Deposits . . . . . . . . . . 531,057 501,029 373,231 323,626 279,018
Shareholders' equity . . . . 53,070 47,298 41,833 39,665 38,953
- -----------------------
<FN>
<F1> The per share data has been restated to give retroactive effect to stock splits and dividends.
</FN>
Valley National Bancorp
The following selected consolidated financial and other data for the last
five fiscal years are derived in part from audited consolidated financial
statements of Valley. The data should be read in conjunction with the audited
consolidated financial statements, related notes and other financial
information incorporated by reference herein. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
At or For the Year Ended December 31,
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(In thousands, except per share data)
INCOME STATEMENT DATA:
Interest income . . . . . . . . $ 242,945 $ 237,461 $ 236,600 $ 212,894 $ 188,620
Interest expense . . . . . . . 93,839 93,426 114,947 115,695 104,336
------- ------- ------- -------- --------
Net interest income . . . . . . 149,106 144,035 121,653 97,199 84,284
Provision for possible loan
losses . . . . . . . . . . . . 3,545 6,360 16,320 12,268 12,795
Net interest income after ------- ------- -------- -------- --------
provision for possible loan
losses . . . . . . . . . . . . 145,561 137,675 105,333 84,931 71,489
Non-interest income . . . . . . 22,479 26,514 30,967 14,717 11,289
Non-interest expense . . . . . 79,018 76,640 70,826 54,381 43,362
------- ------- ------- ------- -------
Income before income taxes and
cumulative effect of accounting
change . . . . . . . . . . . . 89,022 87,549 65,474 45,267 39,416
Income taxes . . . . . . . . . 29,978 30,703 22,095 13,547 10,784
------- ------- ------- ------- -------
Income before cumulative effect
of accounting change . . . . . 59,044 56,846 43,379 31,720 28,632
Cumulative effect of accounting
change . . . . . . . . . . . . -- (402) -- -- --
------- ------- ------- ------- -------
Net income . . . . . . . . . . $ 59,044 $ 56,444 $ 43,379 $ 31,720 $ 28,632
========= ========= ========= ========= =========
PER COMMON SHARE DATA<F2>:
Income before cumulative effect
of accounting change . . . . . $ 1.96 $ 1.91 $ 1.49 $ 1.09 $ 0.98
Cumulative effect of accounting
change . . . . . . . . . . . . -- (0.01) -- -- --
Net income . . . . . . . . . . 1.96 1.90 1.49 1.09 0.98
Book Value . . . . . . . . . . 9.91 9.41 8.03 7.22 6.69
Dividends . . . . . . . . . . . 0.93 0.74 0.67 0.63 0.63
RATIOS:
Return on Average Assets . . . 1.60% 1.62% 1.36% 1.29% 1.44%
Return on Average Equity . . . 20.03% 21.42% 19.17% 15.40% 14.54%
FINANCIAL CONDITION DATA:
Total assets . . . . . . . . . $3,743,943 $3,604,868 $3,357,405 $3,055,062 $2,149,062
Investment securities held to
maturity . . . . . . . . . . . 846,151 991,573 1,160,019 1,272,487 408,173
Investment securities available
for sale . . . . . . . . . . . 458,223 461,080 331,916 9,239 --
Loans (net of unearned income) 2,187,808 1,898,941 1,614,064 1,556,555 1,557,344
Allowance for possible loan
losses . . . . . . . . . . . . 36,434 36,568 29,990 23,366 17,262
Deposits . . . . . . . . . . . 3,334,021 3,250,656 3,052,256 2,726,669 1,875,926
Shareholders' equity . . . . . 300,191 282,451 235,550 211,398 196,184
- --------------------
<FN>
<F2> The per share data has been restated to give retroactive effect to stock splits and dividends,
including the 5% stock dividend declared March 23, 1995 to shareholders of record April 14,
1995, payable May 2, 1995.
</FN>
Comparative Per Share Data
The following table shows comparative per share data for Valley Common
Stock and Lakeland Common Stock on an historical basis, for Valley Common
Stock on a pro forma basis after giving effect to the Mergers and for
Lakeland on a pro forma equivalent basis. The Mergers are expected to be
accounted for under the pooling of interests method of accounting. The
amount of future dividends payable by Valley, if any, is subject to the
discretion of Valley's Board of Directors. The Directors normally consider
Valley's and VNB's cash needs, general business conditions, dividends from
subsidiaries and applicable governmental regulations and policies. Pro
forma amounts assume that Valley would have declared cash dividends per
share of Valley Common Stock equal to its historical cash dividends per
share of Valley Common Stock declared. The pro forma combined amounts
below have been calculated on a basis consistent with the assumptions
utilized in the preparation of the unaudited pro forma combined financial
information appearing elsewhere in this Proxy Statement/Prospectus.
Pro Forma
Equivalent Per
Historical Historical Pro Forma Lakeland
Valley Lakeland Combined Share<F3>
---------- ---------- --------- --------------
Year Ended December 31, 1994
Net Income Per Share $1.96 $2.31 $1.93 $2.48
Book Value Per Share 9.91 13.65 10.02 12.89
Cash Dividends Per Share 0.93 0.92 0.93 1.20
Year Ended December 31, 1993
Net Income Per Share $1.90 $1.89 $1.84 $2.37
Book Value Per Share 9.41 13.54 9.46 12.17
Cash Dividends Per Share 0.74 0.74 0.74 0.95
Year Ended December 31, 1992
Net Income Per Share $1.49 $1.10 $1.39 $1.79
Book Value Per Share 8.03 12.37 8.12 10.44
Cash Dividends Per Share 0.67 0.50 0.67 0.86
- ----------------------
<FN>
<F3> Lakeland pro forma equivalent per share data is computed by
multiplying the pro forma combined per share data (giving effect to
the Merger) by the Exchange Ratio of 1.286 (which is adjusted for the
5% stock dividend declared by Valley on March 23, 1995, payable on May
2, 1995 to stockholders of record on April 14, 1995).
</FN>
The following table presents information concerning the market price
of Valley Common Stock and Lakeland Common Stock for the dates indicated:
January 25, 1995, the last business day prior to public announcement of the
execution of the Letter of Intent, and May 1, 1995, the latest
practicable date before the printing of this Proxy Statement/Prospectus.
The table also presents the equivalent value of Valley Common Stock per
Lakeland share which has been calculated by multiplying the market price of
Valley Common Stock on the dates indicated by the Exchange Ratio of 1.286.
Lakeland Common Stock is listed on the Nasdaq National Market under the
symbol "LLSL." Valley Common Stock is traded on the New York Stock Exchange
under the symbol "VLY." Lakeland stockholders are urged to obtain current
market quotations for the Valley Common Stock. Because the Exchange Ratio
is fixed, Lakeland stockholders are not assured of receiving any specific
market value of Valley Common Stock. The price of Valley Common Stock at
the Effective Time may be higher or lower than the market price at the time
of entering into the Letter of Intent, the time of mailing this Proxy
Statement/Prospectus or the time of the Meeting.
Equivalent
Value
of Valley
Stock Per
Market Price Share of
Per Share Lakeland
---------------------------------- ----------
Valley
Closing Lakeland
------- --------
January 25, 1995 $25.48 $21.50 $32.77
May 1, 1995 $_____ $_____ $_____
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information
presents the Pro Forma Combined Condensed Statement of Condition of Valley
and Lakeland at December 31, 1994 giving effect to the Mergers as if they
had been consummated at such date. Also presented are the Pro Forma
Combined Condensed Statements of Income for the years ended December 31,
1994, 1993, and 1992 giving effect to the Mergers as if they were
consummated on January 1 of each year. The unaudited pro forma information
is based on the historical financial statements of Valley and Lakeland
after giving effect to the Mergers under the pooling-of-interests method of
accounting and based upon the assumptions and adjustments contained in the
accompanying notes to the Unaudited Pro Forma Combined Condensed Financial
Statements.
The unaudited pro forma combined financial information has been
prepared by Valley's management based upon the historical financial
statements and related notes thereto of Valley and Lakeland incorporated
herein by reference. The unaudited pro forma information should be read in
conjunction with such historical financial statements and notes. The
historical data for Valley include the combined results of Rock Financial
Corporation, which was merged into Valley at the close of business on
November 30, 1994. The Rock acquisition was accounted for using the
pooling-of-interests method of accounting. The historical data for Valley
do not include the results of American Union Bank, which was merged into
VNB at the close of business on February 28, 1995, as the combined results
would not be materially different from those presented. The Unaudited Pro
Forma Combined Statements of Operations are not necessarily indicative of
operating results which would have been achieved had the Mergers been
consummated as of the beginning of the periods for which such data are
presented and should not be construed as being representative of future
periods.
The historical per share data for Valley and Lakeland have been
restated to give retroactive effect to stock dividends and stock splits,
including Valley's 5% stock dividend declared March 23, 1995, payable on
May 2, 1995 to Valley shareholders of record on April 14, 1995.
PRO FORMA COMBINED CONDENSED STATEMENT OF CONDITION
December 31, 1994
(Unaudited)
PRO FORMA<F4> PRO FORMA
VALLEY LAKELAND ADJUSTMENTS COMBINED
------ -------- ----------- --------
(In Thousands)
ASSETS:
Cash and due from banks . . $ 154,647 $ 14,957 $ --- $ 169,604
Investment securities held
to maturity . . . . . . . 846,151 250,059 --- 1,096,210
Investment securities
available for sale . . . . 458,223 640 --- 458,863
Loans . . . . . . . . . . . 2,187,808 398,345 --- 2,586,153
Allowance for possible loan
losses . . . . . . . . . . (36,434) (5,351) --- (41,785)
Other assets . . . . . . . 133,548 15,227 --- 148,775
--------- --------- --------- ---------
Total assets . . . . . . . $3,743,943 $ 673,877 $ --- $4,417,820
========= ========= ========= ==========
LIABILITIES:
Deposits . . . . . . . . . $3,334,021 $ 531,057 --- $3,865,078
Borrowings . . . . . . . . 81,684 83,321 --- 165,005
Other liabilities . . . . . 28,047 6,429 --- 34,476
--------- --------- -------- ---------
Total liabilities . . . . . 3,443,752 620,807 --- 4,064,559
--------- --------- -------- ---------
SHAREHOLDERS' EQUITY
Common Stock . . . . . . . 16,276 389 2,277 18,942
Surplus . . . . . . . . . . 133,190 40,628 (2,277) 171,541
Retained earnings, net . . 152,889 12,053 -- 164,942
Treasury stock . . . . . . (2,164) --- --- (2,164)
--------- ----------- --------- ---------
Total shareholders' equity 300,191 53,070 --- 353,261
--------- --------- --------- ---------
Total liabilities and
shareholders' equity . . . $3,743,943 $ 673,877 $ 0 $4,417,820
========== ========= ========= =========
- --------------------
<FN>
<F4> To record the exchange of 3,886,845 shares of Lakeland Common Stock outstanding at December
31, 1994 into 4,998,483 shares of Valley Common Stock.
</FN>
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
(Unaudited)
For the year ended December 31,
1994 1993 1992
------------ ------------ ------------
(In thousands, except per share data)
Interest income . . . . . . $ 289,488 $ 278,584 $ 269,958
Interest expense . . . . . 115,263 113,378 133,531
---------- ---------- ----------
Net interest income . . . . 174,225 165,206 136,427
Provision for possible loan
losses . . . . . . . . . . 5,895 8,569 17,976
---------- ---------- -----------
Net interest income after
provision for possible
loan losses . . . . . . . 168,330 156,637 118,451
Non-interest income . . . . 23,722 27,728 32,731
Non-interest expense . . . 88,788 85,918 78,779
---------- ---------- ----------
Income before income taxes
and cumulative effect of
accounting change . . . . 103,264 98,447 72,403
Income taxes<F5> . . . . . 35,073 34,191 25,291
---------- ---------- ----------
Net income before
cumulative effect of
accounting change . . . . 68,191 64,256 47,112
Cumulative effect of
accounting change . . . . -- (402) 473
---------- ---------- ----------
Net income . . . . . . . . $ 68,191 $ 63,854 $ 47,585
============ ============ ============
Net income per share before
cumulative effect of
accounting change . . . . $ 1.93 $ 1.85 $ 1.38
============= ============ ============
Net income per share . . . $ 1.93 $ 1.84 $ 1.39
============ ============ ============
Weighted average number of
shares outstanding . . . . 35,254,099 34,703,608 34,196,309
========== ========== ==========
- --------------------
<FN>
<F5> Income Taxes shown do not reflect a one-time adjustment of approximately
$3.2 million which will be required in connection with the Mergers
to recapture tax bad debt deductions previously taken by Lakeland in
the aggregate amount of $8.6 million. Tax bad debt deductions taken
by a savings bank must be reversed if the savings bank is merged into
a commercial bank, as will be the case in the Bank Merger. The
required adjustment has no effect on the pro forma combined statements
of income shown above, but Valley will record income tax expense of
approximately $3.2 million, which will reduce its net income for the
year ended December 31, 1995 by the same amount.
</FN>
COMBINED PRO FORMA
SELECTED FINANCIAL DATA
(Unaudited)
At or for the Year Ended December 31,
1994 1993 1992 1991 1990
------------ ----------- ----------- ---------- ----------
INCOME STATEMENT DATA (In thousands, except for per share data)
Interest income . . $ 289,488 $ 278,584 $ 269,958 $ 244,372 $ 218,627
Interest expense . 115,263 113,378 133,531 136,343 125,388
------- ------- ------- ------- -------
Net interest income 174,225 165,206 136,427 108,029 93,239
Provision for
possible loan
losses . . . . . . 5,895 8,569 17,976 13,037 14,096
Net interest income ------- ------- ------- ------- -------
after provision
for possible loan
losses . . . . . . 168,330 156,637 118,451 94,992 79,143
Non-interest income 23,722 27,728 32,731 15,275 11,350
Non-interest
expense. . . . . . 88,788 85,918 78,779 60,811 48,993
Income before ------- ------- ------- ------- -------
income taxes and
cumulative effect
of accounting
change . . . . . . 103,264 98,447 72,403 49,456 41,500
Income taxes . . . 35,073 34,191 25,291 15,287 11,973
------- ------- ------- ------- -------
Income before
cumulative effect
of accounting change 68,191 64,256 47,112 34,169 29,527
Cumulative effect
of accounting change -- (402) 473 -- --
------- ------- ------- ------- -------
Net income . . . . $ 68,191 $ 63,854 $ 47,585 $ 34,169 $ 29,527
========= ========= ========= ========= ========
PER COMMON SHARE DATA:
Income before
cumulative effect
of accounting change $ 1.93 $ 1.85 $ 1.38 $ 0.99 $ 0.87
Cumulative effect
of accounting change -- (0.01) 0.01 -- --
Net income . . . . 1.93 1.84 1.39 0.99 0.87
Book value . . . . 10.02 9.46 8.12 7.37 7.14
Dividends . . . . . 0.93 0.74 0.67 0.63 0.63
RATIOS:
Return on Average Assets 1.57% 1.58% 1.31% 1.22% 1.28%
Return on Average Equity 19.77% 20.73% 17.82% 14.10% 12.47%
FINANCIAL CONDITION DATA:
Total Assets . . . $4,417,820 $4,218,039 $3,866,030 $3,436,623 $2,469,770
Investment
securities held to
maturity . . . . . 1,096,210 1,228,339 1,351,385 1,369,547 454,310
Investment
securities
available for sale 458,863 463,857 335,807 9,239 --
Loans (net of
unearned income) . 2,586,153 2,254,610 1,908,590 1,822,883 1,807,023
Allowance for
possible loan
losses . . . . . . 41,785 41,994 33,420 25,185 18,927
Deposits . . . . . 3,865,078 3,751,685 3,425,487 3,050,295 2,154,944
Shareholders'
equity . . . . . . 353,261 329,749 277,383 251,063 235,137
CERTAIN INFORMATION REGARDING VALLEY
Valley National Bancorp
Valley is a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Board of Governors") under
the BHCA. Valley was organized under the laws of New Jersey in 1983 by VNB
for the purpose of creating a bank holding company for VNB. In addition to
VNB, Valley indirectly owns additional subsidiaries through VNB, including
two investment subsidiaries and a mortgage servicing subsidiary. The
corporate headquarters of Valley is located in Wayne, New Jersey.
As of December 31, 1994, Valley had consolidated assets of
approximately $3.7 billion, deposits of $3.3 billion and stockholders'
equity of $300.2 million.
Valley National Bank
VNB, a wholly owned subsidiary of Valley, is a commercial bank
established in 1927 under the laws of the United States of America. It
maintains its main office in Passaic, New Jersey and operates 64 branches
in northern New Jersey.
VNB provides a full range of commercial and retail bank services,
including the acceptance of demand, savings and time deposits. Retail
lending, primarily residential mortgages and automobile loans constitutes a
substantial part of VNB's business. VNB also provides commercial loans and
mortgages to a variety of businesses and offers full personal, corporate
and pension trust and other fiduciary services.
Additional information about Valley and VNB is included above under
the caption "Recent Developments" and in documents incorporated by
reference in this Proxy Statement/Prospectus. See "RECENT DEVELOPMENTS"
and "INFORMATION INCORPORATED BY REFERENCE."
CERTAIN INFORMATION REGARDING LAKELAND
Lakeland is a bank holding company registered under the BHCA and
subject to examination by the Board of Governors. Lakeland is
headquartered in Succasunna, New Jersey. Lakeland was incorporated in
1988 for the purpose of acting as a holding company for the bank which
is Lakeland's sole operating subsidiary.
The Bank, a wholly owned subsidiary of Lakeland, was chartered by the
State of New Jersey in 1887. The Bank received the necessary approvals
from the Office of Thrift Supervision and the New Jersey Department of
Banking to convert its charter to a New Jersey chartered capital stock
savings bank effective June 1, 1992 and to change the name of the Bank from
Lakeland Savings Bank, SLA to Lakeland Savings Bank. The Bank has been a
member of the Federal Home Loan Bank ("FHLB") System since 1954. Its
savings deposits are insured by the Savings Association Insurance Fund
("SAIF") which is administered by the Federal Deposit Insurance Corporation
("FDIC").
Additional information about Lakeland and the Bank is included above
under the caption "Recent Developments" and in documents incorporated by
reference in this Proxy Statement/Prospectus. See "RECENT DEVELOPMENTS"
and "INFORMATION INCORPORATED BY REFERENCE."
THE SPECIAL MEETING
General
This Proxy Statement/Prospectus is being furnished by Lakeland to its
stockholders in connection with the solicitation of proxies by the Board of
Directors of Lakeland for use at the Special Meeting to be held on May 24,
1995, and any adjournment or adjournments thereof, to consider and vote
upon: (i) a proposal to approve the Merger Agreement and the transactions
contemplated thereby; and (ii) such other business as may properly came
before the Special Meeting or any adjournment thereof.
After having been submitted, the enclosed Proxy may be revoked by the
person giving it, at any time before it is exercised, by: (i) submitting
written notice of revocation of such Proxy to the Secretary of Lakeland;
(ii) submitting a Proxy having a later date; or (iii) such person appearing
at the Special Meeting and requesting a return of the Proxy. All shares
represented by valid proxies will be exercised in the manner specified
thereon. If no specification is made, such shares will be voted in favor
of approval of the Merger Agreement.
Directors, officers, and employees of Lakeland may solicit proxies
from Lakeland stockholders, either personally or by telephone, telegraph or
other form of communication. Such persons will receive no additional
compensation for such services. All expenses associated with the
solicitation of proxies will be paid by Lakeland, except that Lakeland and
VNB will share printing and mailing expenses of the Proxy materials.
THE BOARD OF DIRECTORS OF LAKELAND HAS UNANIMOUSLY ADOPTED THE MERGER
AGREEMENT, BELIEVES IT IS IN THE BEST INTERESTS OF LAKELAND AND ITS
STOCKHOLDERS AND RECOMMENDS ITS APPROVAL BY LAKELAND STOCKHOLDERS. SEE
"THE MERGERS -- BACKGROUND AND REASONS."
Record Date; Vote Required
The Board of Directors of Lakeland has fixed April 26, 1995, as the
Record Date for determining stockholders entitled to notice of and to vote
at the Special Meeting, and accordingly, only holders of Lakeland Common
Stock of record at the close of business on that day will be entitled to
notice of and to vote at the Special Meeting. The number of shares of
Lakeland Common Stock outstanding on the Record Date was _________, each
share being entitled to one vote.
Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast by the holders of Lakeland Common Stock
represented at a meeting at which a quorum is present. By checking the
appropriate box, a stockholder may: (i) vote "FOR" approval of the Merger
Agreement, (ii) vote "AGAINST" approval of the Merger Agreement, or (iii)
"ABSTAIN." The Merger Agreement must be approved by a vote of a majority
of the shares of the Common Stock votes cast, without regard to (a) Broker
Non-votes, or (b) proxies marked "ABSTAIN" as to that matter.
The directors and executive officers of Lakeland (including certain of
their related interests) beneficially owned, as of the Record Date, and are
entitled to vote at the Special Meeting _______ shares of Lakeland Common
Stock, which represent ____ percent of the shares of Lakeland Common Stock
outstanding. The executive officers and directors of Lakeland have
indicated that they intend to vote all of their shares in favor of approval
of the Merger Agreement. The Board of Directors of Lakeland has
unanimously approved the Merger Agreement and recommends that Lakeland
stockholders vote "FOR" approval of the Merger Agreement.
THE MERGERS
THE FOLLOWING INFORMATION RELATING TO THE MERGERS IS NOT INTENDED TO
BE A COMPLETE DESCRIPTION OF ALL MATERIAL INFORMATION RELATING TO THE
MERGERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO MORE DETAILED
INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS,
INCLUDING THE ANNEXES HERETO AND THE DOCUMENTS INCORPORATED HEREIN BY
REFERENCE. A COPY OF THE MERGER AGREEMENT IS SET FORTH IN ANNEX A TO THIS
PROXY STATEMENT/PROSPECTUS AND REFERENCE IS MADE THERETO FOR A COMPLETE
DESCRIPTION OF THE TERMS OF THE MERGERS AND IS INCORPORATED HEREIN BY
REFERENCE. STOCKHOLDERS OF LAKELAND ARE URGED TO READ THE MERGER AGREEMENT
CAREFULLY.
General
Under the terms of the Merger Agreement, Lakeland will merge with and
into Valley and the Bank will subsequently merge with and into VNB. Upon
consummation of the Merger, each outstanding share of Lakeland Common Stock
will be converted, by virtue of the Merger, automatically and without any
action on the part of the holder thereof, into the right to receive 1.286
shares of Valley Common Stock, subject to certain adjustments. See "THE
MERGER AGREEMENT -- The Merger."
Pursuant to a separate merger agreement between VNB and the Bank (the
"Bank Merger Agreement"), the Bank will be merged with and into VNB (the
"Bank Merger"). Immediately following consummation of the Merger at the
Effective Time or as soon thereafter as VNB may deem appropriate, the Bank
Merger will be consummated.
Background and Reasons
BACKGROUND OF THE MERGER. In late 1994, in recognition of the trend
towards consolidation and increasing competition in the financial
institution industry, Lakeland began to evaluate its strategic alternatives
given these circumstances and inquiries by third parties as to possible
affiliations or other business combinations. After holding discussions
with Valley, Lakeland hired Hopper Soliday in January 1995 to assist it in
evaluating a possible business combination with Valley. Thereafter, Valley
orally conveyed a non-binding preliminary indication of interest. Following
a review of the non-binding preliminary indication of interest and extensive
discussion, the Board voted to authorize management to execute a letter of
intent and a stock option agreement and to negotiate the terms of a
proposed definitive merger agreement with Valley for its consideration.
The Letter of Intent and the Stock Option Agreement were executed by
Lakeland and Valley on January 26, 1995.
During the following weeks, the management of Lakeland and Valley,
along with their financial and legal advisors, negotiated the terms and
conditions of a transaction as contained in the Merger Agreement.
On February 24 and 26, 1995, the Lakeland Board met to consider the
proposed Merger Agreement with Valley. At those meetings, Hopper Soliday
provided the Board with a preliminary indication that the value of the
consideration to be received by the Lakeland stockholders was fair from a
financial point of view. After extensive discussions, the Lakeland Board
voted to approve and adopt the Merger Agreement as of February 27, 1995.
LAKELAND'S REASONS FOR THE MERGER. Lakeland believes that the Merger
is fair to, and in the best interests of Lakeland and its stockholders.
Accordingly, the Lakeland Board of Directors has unanimously approved and
adopted the Merger Agreement. The Board therefore unanimously recommends
that Lakeland's stockholders vote FOR the approval and adoption of the
Merger Agreement.
In reaching its determination that the Merger is fair to, and in the
best interests of Lakeland and its stockholders, the Lakeland Board
considered a number of factors both from a short-term and long-term
perspective, including, without limitation, the following:
(i) Lakeland Board's familiarity with and review of Lakeland's
business, operations, financial conditions, earnings and prospects;
(ii) the current and prospective economic environment and competitive
and regulatory constraints facing financial institutions and
particularly Lakeland;
(iii) the Lakeland Board's review, based in part on presentations
by Hopper Soliday and the due diligence reviews by Lakeland's
financial and legal advisers and management, of the business,
operations, financial condition, earnings and prospects of Valley;
(iv) the advice of Hopper Soliday that the acquisition proposal by
Valley was fair to Lakeland stockholders from a financial point of
view;
(v) the Lakeland Board's review of the alternative of continuing to
remain independent. In this regard, the Lakeland Board considered an
analysis of Hopper Soliday regarding the range of possible values to
Lakeland stockholders that could potentially be obtained in a sale of
Lakeland to other potential acquirors;
(vi) the Lakeland Board's evaluation of the risks to consummation of
the Mergers, including, among others, the risks associated with
obtaining all necessary regulatory approvals without the imposition of
any condition which differs from conditions customarily imposed in
approving acquisitions of the type contemplated by the Merger
Agreement and compliance with which would materially adversely affect
the reasonably anticipated benefits of the transactions to Valley;
(vii) the expectation that the Merger will be a tax-free transaction
to Lakeland and its stockholders and that the Merger will be accounted
for as a pooling of interests; and
(viii) the terms of the Merger Agreement and the other documents
executed in connection with the Mergers.
In view of the variety of factors considered in connection with its
evaluation of the Mergers, the Lakeland Board did not find it practicable
to, and did not, quantify or otherwise attempt to assign relative weights
to the specific factors considered in reaching its determination.
LAKELAND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT LAKELAND
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.
Valley's Reasons for the Merger
Valley entered into the Merger Agreement with Lakeland as part of
Valley's ongoing strategy of growth through acquisitions.
Opinion of Financial Advisor
Lakeland has retained Hopper Soliday to act as Lakeland's financial
advisor and render a fairness opinion in connection with the Merger.
Hopper Soliday has provided and continues to provide, certain and other
financial advisory services to Lakeland. Hopper Soliday was selected to
act as Lakeland's financial advisor on a transaction specific basis based
upon its qualifications, expertise and reputation.
In such capacity, Hopper Soliday participated in the negotiations with
respect to the pricing and other terms and conditions of the Merger, but
the decision as to whether to accept the price offered was ultimately made
by the Board of Directors of Lakeland. Hopper Soliday rendered a
preliminary indication of fairness to the Lakeland Board of Directors on
January 26, 1995 and rendered its written opinion on May __, 1995 that, in
its opinion, as of such date the financial terms of Valley's offer were
"fair" to Lakeland and to its stockholders from a financial point of view.
No limitations were imposed by Lakeland's Board of Directors upon Hopper
Soliday with respect to its investigations or procedures followed by it in
arriving at its opinion.
The full text of the written opinion of Hopper Soliday dated
May __, 1995, which sets forth the assumptions made and the matters
considered, is attached as ANNEX B to this Proxy Statement/Prospectus.
Lakeland stockholders are urged to read this opinion in its entirety.
Hopper Soliday's opinion is directed only to the consideration to be
received by Lakeland stockholders in the Merger and does not constitute a
recommendation to any Lakeland stockholder as to how such stockholder
should vote at the Special Meeting. The summary of Hopper Soliday's
opinion set forth in this Proxy Statement/Prospectus is qualified in its
entirety by reference to the full text of the opinion. Hopper Soliday's
preliminary indication of fairness as of January 26, 1995 was to the same
effect as its opinion attached hereto.
In arriving at its written opinion, Hopper Soliday reviewed and
analyzed among other things: (i) the Merger Agreement; (ii) the Agreement
and Plan of Merger by and between American Union Bank ("American Union")
and Valley; (iii) the American Union Proxy Statement/Prospectus; (iv)
Valley Annual Reports for the years ended December 31, 1992 through
December 31, 1994 and Annual Reports on Form 10-K for the years ended
December 31, 1992 and 1993; (v) Lakeland Annual Reports for the years ended
June 30, 1992 through June 30, 1994, Annual Reports on Form 10-K for the
same period and Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1994 and December 31, 1994; (vi) financial forecasts of
Valley reviewed with the management of Valley; (vii) financial forecasts of
Lakeland reviewed with the management of Lakeland; (viii) the views of
senior management of Lakeland and Valley of their respective past and
current business operations, results thereof, financial condition and
future prospects; (ix) historical and currently publicly available market
information concerning the trading of and the trading markets for Lakeland
Common Stock and Valley Common Stock; (x) the financial terms of recent
mergers and acquisitions in the savings industry; (xi) the current banking
environment; and (xii) such other information, financial studies, analyses
and investigations and financial, economic and market criteria as Hopper
Soliday considered relevant.
In connection with its review, Hopper Soliday relied upon and assumed
without independent verification the accuracy and completeness of the
financial and other information regarding Valley and Lakeland provided to
Hopper Soliday by the companies and their representatives. Hopper Soliday
was not retained to nor did it conduct a physical inspection of any of the
properties or facilities of Valley or Lakeland, nor did Hopper Soliday make
any independent evaluation or appraisal of Valley's or Lakeland's assets or
liabilities, nor was it furnished with any such appraisal. Hopper Soliday
also assumed that the Mergers in all respects are, and will be, undertaken
and consummated in compliance with all laws and regulations that are
applicable to Valley and Lakeland.
In rendering its opinion, Hopper Soliday assumed that in the course of
obtaining the necessary approvals for the Merger and in the preparation of
this Proxy Statement/Prospectus, no conditions will be imposed that will
have a material adverse effect on the amount or form of the consideration
or on the results of operations, or the financial condition or prospects of
Lakeland or, on a pro forma basis, Valley.
In arriving at its opinion, Hopper Soliday performed a variety of
financial analyses. The preparation of a fairness opinion, however,
involves various determinations as to the most appropriate and relevant
methods of financial analysis and the application of those methods to the
particular circumstances and therefore, such opinion is not readily
susceptible to summary description. Accordingly, Hopper Soliday believes
that its analyses must be considered as a whole and that considering any
portions of such analysis and the factors considered, without considering
all the analyses and factors could create a misleading view of the process
underlying Hopper Soliday's opinion. No one analysis was assigned a
greater significance than any other. As a result of its consideration of
the aggregate of all factors present and analyses performed, Hopper Soliday
has reached the conclusion, and opines, that the terms of the Merger, as
set forth in the Agreement and Plan of Merger, are fair from a financial
point of view to Lakeland and its stockholders.
In its analyses, Hopper Soliday made numerous assumptions with respect
to industry performance, business and economic conditions, and other
matters, many of which are beyond the control of Valley or Lakeland. Any
estimates contained in Hopper Soliday's analyses are not necessarily
indicative of future results or values, which may be significantly more or
less favorable than suggested by such analyses. Estimates of values of
companies do not purport to be appraisals or necessarily reflect the prices
at which companies or their securities may actually be sold.
The following is a brief summary of the analyses and procedures
performed by Hopper Soliday in the course of arriving at its written
opinion dated May __, 1995 and presented to the Lakeland Board of
Directors. See ANNEX B.
Impact Analysis - Hopper Soliday analyzed the changes in the amount of
earnings, book value and indicated dividends represented by the issuance of
1.286 shares of Valley Common Stock and the number of outstanding shares of
Lakeland Common Stock. The analysis evaluated, among other things,
possible dilution in earnings and book value per share for Valley and the
dividends to be received by Lakeland stockholders. This analysis was based
upon December 31, 1993 data for Valley and Lakeland.
At the time performed, this analysis indicated that the Merger would
be approximately 1.03% dilutive to Valley's earnings per share (after giving
pro forma effect to the American Union Merger), assuming no merger economies,
other expense reductions or revenue enhancements. Hopper Soliday's analysis
also evaluated, among other things, the Merger's accretive effect on Valley's
tangible book value per share of approximately 0.31%, the percentage of
reserves to non-performing loans and the capitalization of Valley after the
Merger. In addition, Hopper Soliday's analysis considered dividends paid
by Lakeland to date and future dividend prospects for fiscal 1995 and
Valley's annualized dividend of $1.00 per share. This impact analysis was
based upon the data available at the time performed and should not be
construed as indicative of the actual impact of the Merger when
consummated.
Impact per Share Analysis. Hopper Soliday also analyzed the impact of
the Merger on certain Valley values (giving pro forma effect to the
American Union Merger) per Lakeland share based on the exchange ratio of
1.286 shares of Valley Common Stock for one share of Lakeland Common Stock.
That analysis, which was based on certain assumptions made by Hopper
Soliday found that, based on the Exchange Ratio, Valley's equivalent
earnings per share would be $2.48, or 7.36% greater than existing Lakeland
earnings per share; that Valley's equivalent tangible book value would be
$12.36, or 6.51% less than the existing Lakeland tangible book value; and
that Valley's equivalent dividend income would be $1.286, or 28.60% greater
than Lakeland's current dividend income per share, including the special
dividend paid in August 1994.
Stock Performance Analysis. Hopper Soliday reviewed the trading
prices of Lakeland and Valley over the period from December 31, 1990 to
January 31, 1995, relative to each other, the Standard & Poor's 500 Stock
Index and SNL Securities' All Bank and All Thrift indices. Over the
various periods analyzed, the performance of Lakeland Common Stock and
Valley Common Stock exceeded the performance of the Standard & Poor's 500
Stock Index and SNL Securities' All Bank and All Thrift indices.
Comparable Companies Analysis. Hopper Soliday performed an analysis
of Lakeland's operating performance (including return on average assets,
return on average common equity, total and tangible equity/assets and
certain asset quality measures) and stock price to book and tangible book
value and earnings multiples relative to the following three subsets: (i)
fifteen thrift institutions located in New Jersey (Bankers Corp., Central
Jersey Financial Corporation, Covenant Bank for Savings, Collective
Bancorp, Inc., FMS Financial Corp., First State Financial Services, Inc.,
First Savings Bank, SLA, MHC, First Savings Bank of NJ, MHC, First Home
Savings Bank, FSB, IBS Financial Corp., Lakeview Financial Corp., Pamrapo
Bancorp, Inc., PennFed Financial Services, Inc., Pulse Bancorp, Inc. and
Raritan Bancorp, Inc.); (ii) sixteen institutions located in the Mid-
Atlantic states with total assets of $500 million to $1.5 billion and an
equity/assets ratio greater than 7.00% (Bay Ridge Bancorp, Inc., BSB
Bancorp, Inc., Commonwealth Savings Bank, MHC, First Savings Bank, MHC,
Harris Savings Bank, MHC, IBS Financial Corp., Maryland Federal Bancorp,
Inc., MLF Bancorp, Inc., PennFed Financial Services, Inc., Prime Bancorp,
Inc., Progressive Bank, Inc., PennFirst Bancorp, Inc., Queens County
Bancorp, Inc., Reliance Bancorp, Inc., Sunrise Bancorp, Inc. and York
Financial Corp.) and (iii) twenty-four institutions nationwide with total
assets of $500 million to $1.5 billion, an equity to assets ratio greater
than 7.00%, non-performing assets to total assets ratio of 2.00% or less
and a year to date return on average assets ratio of 1.00% or greater
(Advantage Bancorp, Inc., Anchor BanCorp Wisconsin, Inc., American Federal
Bank, FSB, AMFED Financial, Inc., Bankers First Corporation, BSB Bancorp,
Inc., Calumet Bancorp, Inc., Eagle Financial Services Corp., FFY Financial
Corp., First Savings Bank, MHC, Harbor Federal Savings Bank, MHC, Home
Financial Corp., Home Federal Bancorp, IBS Financial Corp., Indiana Federal
Corporation, InterWest Savings Bank, Maryland Federal Bancorp, Inc., N.S.
Bancorp, Inc., Prime Bancorp, Inc., Progressive Bank, Inc., Queens County
Bancorp, Inc., Reliance Bancorp, Inc., and Sunrise Bancorp, Inc.).
Hopper Soliday calculated the high, low, mean and median values for
price to book value, price to tangible book value, price to latest twelve
months earnings, non-performing assets to total assets, latest twelve
months return on average assets (before extraordinary items) and latest
twelve months return on average equity (before extraordinary items) for
each of the respective groups of comparable companies. At December 31,
1995, Lakeland's price to book value of 142.86%, price to tangible book
value of 147.50%, price to latest twelve months earnings of 8.4x, non-
performing assets to total assets of 1.06%, latest twelve months return on
average assets of 1.41% and latest twelve months return on average equity
of 18.19% was compared to the medians of each of the respective groups of
comparable companies. The medians for the New Jersey peer group were
98.98%, 105.12%, 8.6x, 1.67%, 1.08% and 11.98%, respectively. The medians
for the Mid-Atlantic peer group were 91.35%, 92.75%, 9.2x, 0.73%, 1.06%,
and 10.13%, respectively. The medians for the nationwide peer group were
98.88%, 110.15%, 8.9x, 0.69%, 1.15% and 11.63%, respectively.
Comparable Transactions Analysis. Hopper Soliday compared the
multiples of book value, tangible book value, the latest twelve months'
earnings and the premium paid in excess of tangible book value as a
percentage of core deposits with the multiples paid in recent acquisitions
of savings institutions that Hopper Soliday deemed comparable. The
transactions deemed comparable by Hopper Soliday included both intrastate
and interstate acquisitions announced since January 1, 1993 with total
assets between $375.0 million and $1.6 billion and an announced transaction
value in excess of $50.0 million. The transactions compared included
(buyer/seller): NBD Bancorp, Inc./DeerBank Corp; BayBanks, Inc./NFS
Financial Corporation; First Bancorporation of Ohio/CIVISTA Corporation;
First Interstate Bancorp/University Savings Bank; New York Bancorp,
Inc./Hamilton Bancorp, Inc.; Sovereign Bancorp/Charter FSB Bancorp, Inc.;
NBD Bancorp, Inc./AmeriFed Financial Corporation; Core States Financial
Corp/Germantown Savings Bank; Fifth Third Bancorp/Cumberland Federal
Bancorporation; UJB Financial Corp/VSB Bancorp, Inc.; Citizens Financial
Group/Neworld Bancorp; Roosevelt Financial Group/Home Federal Bancorp of
Missouri; SunTrust Banks, Inc./Regional Investment Corporation; Shawmut
National Corporation/Peoples Bancorp of Worcester; Mercantile
Bancorporation, Inc./Untied Postal Bancorp; Fifth Third Bancorp/TriState
Bancorp; CB Bancshares, Inc./International Holding Capital Corp.; and
Huntington Bancshares, Inc./Railroadmen's FS&LA of Indianapolis.
No company or transaction used in this analysis is identical to
Lakeland, Valley or the Merger and Hopper Soliday did not assign greater
weight to any specific company or transaction. Accordingly, the results
of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning the differences in financial and
operating characteristics of the companies involved and other factors that
could affect the public trading values of the securities of the company or
companies to which they are being compared.
Discounted Cash Flow Analysis. Hopper Soliday estimated the future
earnings, tangible book value and a dividend stream that Lakeland could
produce over a four and a half year period (ending June 30, 1999), assuming
annual growth rates of 10%, 15% and 20% in earnings. Hopper Soliday also
estimated the terminal value of the Lakeland Common Stock at the end of
such period by: (i) a range of 10 to 15 times Lakeland's terminal year
earnings and (ii) a range of 125% to 225% of Lakeland's tangible book value
at the end of the period analyzed. Using a discounted cash flow analysis,
the dividend streams and terminal values were then discounted to present
values using discount rates ranging from 10% to 20%, which reflects
different assumptions regarding the required rates of return of holders and
prospective buyers of Lakeland Common Stock. The range of present values
per fully diluted share of Lakeland Common Stock resulting from these
assumptions was from $13.87 to $52.25, using a terminal value based on
earnings, and from $15.07 to $39.87 using a terminal value based on tangible
book value. The low end of the range utilizing earnings as a terminal value
was based upon a 10% earnings growth rate, a terminal earnings multiple of
10 and a 20% discount rate, while the high end of this range was based upon
a 20% earnings growth rate, a terminal earnings multiple of 15 and a 10%
discount rate. The low end of the range utilizing tangible book value
as a terminal value was based upon a 10% earnings growth rate, a tangible
book value multiple of 125% and a 20% discount rate, while the high end of
this range was based upon a 20% earnings growth rate, a tangible book value
multiple of 225% and a 10% discount rate.
Hopper Soliday's written opinion dated May __, 1995 is based
solely upon the information available to it and the economic, market and
other circumstances as they existed as of the date of such opinion,
including the market price of Valley Common Stock. Events occurring after
that date, including a material change in the market price of Valley Common
Stock, could materially affect the assumptions and conclusions contained in
this opinion. Hopper Soliday has not undertaken to reaffirm or revise its
opinion or otherwise comment upon any events occurring after the date
thereof.
Compensation of Hopper Soliday. Pursuant to an engagement letter
dated January 10, 1995 between Lakeland and Hopper Soliday, Lakeland agreed
to pay Hopper Soliday an initial non-refundable retainer of $35,000. In
addition, upon the execution of a definitive merger agreement with Valley,
Lakeland became obligated to pay Hopper Soliday a contingent advisory fee
("Advisory Fee") equal to one half of one percent (0.50%) of the total
merger consideration and such Advisory Fee would not exceed $650,000. The
Advisory Fee is due and payable in cash upon the Effective Time of the
Merger and the non-refundable retainer will be credited toward the Advisory
Fee.
As part of its investment banking business, Hopper Soliday is
regularly engaged in the valuation of securities and companies, and in
particular the valuation of bank holding companies, banks, savings and loan
companies and savings institutions and their securities, in connection with
mergers, acquisitions, private placements, secondary distributions of listed
and unlisted securities and other corporate transactions. The Board of
Directors of Lakeland decided to retain Hopper Soliday based on its
experience as a financial advisor in mergers and acquisitions, particularly
financial institutions in the Mid-Atlantic region of the United States,
and its knowledge of financial institutions and Lakeland in particular.
Certain Federal Income Tax Consequences
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR
GENERAL INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO CERTAIN CLASSES OF
TAXPAYERS, INCLUDING INSURANCE COMPANIES, SECURITIES DEALERS, FINANCIAL
INSTITUTIONS, FOREIGN PERSONS AND PERSONS WHO ACQUIRED SHARES OF LAKELAND
COMMON STOCK PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR RIGHTS
OR OTHERWISE AS COMPENSATION. LAKELAND SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE
MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND
OTHER TAX LAWS.
General. It is intended that the Merger will be treated as a tax-free
reorganization as defined in Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that, accordingly, no gain or
loss will be recognized by Valley, Lakeland, VNB, the Bank or to the
shareholders of Lakeland upon the exchange of their shares of Lakeland
Common Stock solely for shares of Valley Common Stock pursuant to the
Merger. Counsel to Valley is required, as a condition of closing, to
provide an opinion to Valley and to Lakeland, with respect to the matter
covered by the foregoing sentence. With respect to this Proxy Statement,
counsel has provided an opinion that, based upon the circumstances as they
presently exist, it expects to be able to render the required opinion.
Consequences of Receipt of Cash in Lieu of Fractional Shares. In
general, cash paid in lieu of fractional share interests in corporate
reorganizations is treated as having been received in part or full payment
in exchange for the fractional share interest (and therefore subject to
capital gains treatment if the related shares are held as capital assets)
if the cash distribution is undertaken solely for purposes of saving the
corporation the expense and inconvenience of issuing and transferring
fractional shares and is not separately bargained for consideration.
Basis of Valley Common Stock. The basis of Valley Common Stock
received by a Lakeland shareholder who receives solely Valley Common Stock
will be the same immediately after the exchange, as the basis of such
shareholder's Lakeland Common Stock exchanged therefor. Where a Lakeland
shareholder receives both Valley Common Stock and cash, the basis of the
Valley Common Stock received will equal (a) the basis of the Lakeland
Common Stock exchanged therefor, (b) decreased by the amount of cash
received and (c) increased by the amount of gain recognized, if any, on the
exchange.
Holding Period. The holding period of Valley Common Stock received by
a Lakeland shareholder will include the holding period for the Lakeland
Common Stock exchanged therefor.
Consequences to Holders of Unexercised Lakeland Options. Holders of
options to purchase Lakeland Common Stock which have been issued
pursuant to the stock option plan maintained by Lakeland may elect to
convert their unexercised options to purchase shares of Lakeland Common
Stock ("Lakeland Options") either into (i) an option to purchase Valley
Common Stock on the same terms and conditions existing for the current
stock option, except that the number of shares of Valley Common Stock
purchasable under the option and the option price will both be adjusted to
reflect the Exchange Ratio, or (ii) for holders of vested Lakeland Options,
the right to receive a number of whole shares of Valley Common Stock with a
value equal to the difference between the exercise price of the option and
the value of the shares of Valley Common Stock received in exchange for
each share of Lakeland Common Stock.
In the case of holders of the Lakeland Options which qualify as
"incentive stock options" pursuant to Section 422 of the Code, no gain or
loss will be recognized on a substitution of Valley Common Stock options
for Lakeland Options, provided the excess of the aggregate fair market
value of the Valley Common Stock subject to the options over the aggregate
option price for such shares is not greater than the excess of the
aggregate fair market value of the Lakeland Common Stock subject to the
aggregate options over the option price for such shares immediately prior
to the substitution, and further provided that no additional benefits are
conferred upon the holders of the new options. The substituted Valley
Common Stock options also should qualify as incentive stock options under
Section 422 of the Code, provided the terms of the new options are in full
compliance with such statutory provision. Those holders of incentive stock
options who receive cash or Valley Common Stock in cancellation of their
Lakeland Options will be treated as having received compensation taxable as
ordinary income equal to the amount by which the amount of cash or the
value of the Valley Common Stock received exceeds their adjusted basis in
their incentive stock options, if any.
No ruling has been or will be requested from the IRS as to any of the
tax effects of any of the transactions discussed in this Proxy
Statement/Prospectus to stockholders of Lakeland, and no opinion of counsel
has been or will be rendered to Lakeland's stockholders with respect to any
of the tax effects of the Mergers to Lakeland's stockholders. There is no
assurance that applicable tax laws will not change prior to the Effective
Date.
THE MERGER AGREEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN PROVISIONS OF THE MERGER
AGREEMENT. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
FULL TEXT OF THE MERGER AGREEMENT WHICH IS ATTACHED AS ANNEX A TO THIS
PROXY STATEMENT/PROSPECTUS.
The Mergers
Under the terms of the Merger Agreement, Lakeland will merge with and
into Valley in accordance with the New Jersey Business Corporation Act and
Valley will be the Surviving Corporation. Immediately following the
effective time, the Bank will be merged with and into VNB. Upon
consummation of the Merger, each outstanding share of Lakeland Common Stock
will be converted, by virtue of the Merger, automatically and without any
action on the part of the holder thereof, into and represent the right to
receive 1.286 shares of Valley Common Stock. The Exchange Ratio of 1.286
shares, and all share and per share data (including reported stock prices)
for Valley and for Valley and Lakeland on a pro forma basis included in
this Proxy Statement/Prospectus, have been adjusted for the 5% stock
dividend declared March 23, 1995 and payable May 2, 1995 to Valley
stockholders of record of April 14, 1995. The Merger Agreement, a copy of
which is attached as ANNEX A to this Proxy Statement/Prospectus, has been
amended and restated to reflect the adjusted Exchange Ratio. Valley's
Annual Report on Form 10-K, which is incorporated by reference into this
Proxy Statement/Prospectus, has not been amended or restated to
retroactively reflect the stock dividend.
The Exchange Ratio is subject to adjustment to take into account any
stock split, stock dividend, stock combination, reclassification or similar
transaction by Valley with respect to the Valley Common Stock. No
adjustments to the Exchange Ratio will be made as of the Effective Time to
compensate Lakeland stockholders for any change in the market value of
Valley Common Stock between January 26, 1995 (the date of the Letter of
Intent) and the Effective Time.
No holder of Lakeland Common Stock will be entitled to receive any
fractional share of Valley Common Stock, but instead will be entitled to
receive (without interest) a cash payment in the amount of the value of
such fractional share interest, determined by multiplying such holder's
fractional interest by the Average Closing Price ( as defined below) of
Valley Common Stock. All shares of Valley Common Stock that individual
Lakeland stockholders are entitled to receive in exchange for each share of
Lakeland Common Stock held will be aggregated to constitute as many whole
share of Valley Common Stock as possible before determining the amount of a
cash payment for fractional shares.
The "Average Closing Price" is defined in the Merger Agreement as the
average of the closing prices of Valley Common Stock as reported on the New
York Stock Exchange and published in the WALL STREET JOURNAL during the
first 10 of the 15 consecutive trading days immediately preceding the
Closing. The Average Closing Price is subject to adjustment to take into
account any stock split, stock dividend, stock combination,
reclassification, or similar transaction by Valley with respect to the
Valley Common Stock. The closing price of Valley Common Stock on May 1,
1995, the latest practicable trading day before the printing of this Proxy
Statement/Prospectus was $____. For a more complete description of the
Merger Agreement and the terms of the Merger, see "ANNEX A."
Effective Time
The Effective Time of the Merger will be the time and date on which a
Certificate of Merger is filed with the Secretary of State of the State of
New Jersey. A closing (the "Closing") will occur on the first day of the
month next following receipt of all necessary regulatory approvals and the
satisfaction and waiver of all conditions precedent to the Merger, or at
such other time agreed to by Valley and Lakeland. Immediately following
the Closing, the Certificate of Merger will be filed with the Secretary of
State of the State of New Jersey. At the Closing, documents required to
satisfy the conditions to the Merger of the respective parties will be
exchanged. The actual Effective Time is dependent upon satisfaction of all
conditions precedent, some of which are not under control of Valley and/or
Lakeland, and may be changed by agreement of the parties. The Board of
Directors of either Valley or Lakeland may terminate the Merger Agreement
if the Effective Date does not occur on or before October 31, 1995. See
"-- Exchange of Lakeland Certificates" and "-- Conditions to Consummation;
Termination."
Exchange of Lakeland Certificates
As promptly as practicable after the Effective Date, Valley will send
or cause to be sent to each stockholder of record of Lakeland Common Stock,
transmittal materials for use in exchanging all of such stockholder's
certificates or certificates representing shares of Lakeland Common Stock
for certificates representing Valley Common Stock, as appropriate. The
transmittal materials will contain information and instructions with
respect to the surrender and exchange of such certificates.
LAKELAND STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
Holders of outstanding certificates for Lakeland Common Stock, upon
proper surrender of such certificates to Valley, will receive, promptly
after the Effective Time, a certificate representing the full number of
shares of Valley Common Stock into which the shares of Lakeland Common
Stock previously represented by the surrendered certificates have been
converted. At the time of issuance of the new stock certificate each
shareholder so entitled will receive a check for the amount of the
fractional share interest, if any, to which he may be entitled.
Each share of Valley Common Stock for which shares of Lakeland Common
Stock are exchanged will be deemed to have been issued at the Effective
Time. Accordingly, Lakeland shareholders who receive Valley Common Stock
in the Merger will be entitled to receive any dividend or other
distribution which may be payable to holders of record of Valley Common
Stock as of the dates on or after the Effective Time. However, no dividend
or other distribution will actually be paid with respect to any shares of
Valley Common Stock until the certificate or certificates formerly
representing shares of Lakeland Common Stock have been surrendered, at
which time any accrued dividends and other distributions on such shares of
Valley Common stock will be paid without interest.
After the Effective Date, the stock transfer books of Lakeland will be
closed and there will be no transfers on the transfer books of Lakeland of
the shares of Lakeland Common Stock that were outstanding immediately prior
to the Effective Time.
Conversion of Stock Options
The Merger Agreement provides that each outstanding option to purchase
Lakeland Common Stock (a "Lakeland Option") granted under Lakeland's
existing stock option plan (the "Lakeland Option Plan") will be converted
at the Effective Time into either an option to purchase Valley Common Stock
or the right to receive shares of Valley Common Stock, as more fully
described below. At the Effective Time, each outstanding Lakeland Option
will be converted, at the election of the holder of the Lakeland Option
(the "Optionee"), into either (i) an option to purchase Valley Common
Stock on the same terms and conditions existing for the current Lakeland
Option, except that the number of shares of Valley Common Stock
purchasable under the new option and the new option exercise price will
both be adjusted to reflect the Exchange Ratio, or (ii) if the Lakeland
Option is fully vested at the Closing, into the right to receive a number
of whole shares of Valley Common Stock equal to (x) the excess of the sum
determined by multiplying (A) the number of shares of Lakeland Common
Stock covered by the Lakeland Option, times (B) the Exchange Ratio, times
(C) the Average Closing Price, less (y) the aggregate exercise price for
the Lakeland Option (z) divided by the Average Closing Price; provided,
that only an Optionee who is an employee or director of Lakeland or the
Bank at the Effective Time and who will become an employee or director of
Valley or VNB immediately after the Effective Time will be entitled to
select alternative (i). Any Optionee whose options are fully vested and
who either chooses alternative (ii) or is limited to alternative (ii)
because the Optionee will not be an employee or director of Valley or VNB
immediately after the Effective Time will receive an aggregate whole
number of shares of Valley Common Stock for all Lakeland Options so
converted and if applicable, an amount in cash equal to the fractional
interest in Valley Common Stock such Optionee would otherwise be entitled
to receive, multiplied by the Average Closing Price of Valley Common
Stock. Any Optionee choosing or limited to alternative (ii) should
carefully consider the possibility of exercising his or her Lakeland
Options prior to the Effective Time, rather than having such Lakeland
Options converted into Valley Common Stock at the Effective Time, which
would cause an immediate recognition of taxable income to the Optionee.
See "THE MERGERS -- Certain Federal Income Tax Consequences" for a
discussion of the federal income tax consequences of these alternatives.
From and after the Effective Time, each Lakeland Option which is
converted into an option to purchase Valley Common Stock will be
administered, operated, and interpreted by a committee comprised of members
of the Board of Directors of Valley appointed by such board. Valley has
agreed to reserve for issuance the number of shares of Valley Common Stock
necessary to satisfy Valley's obligations under such options, and to
register such shares, if they are not previously registered to the
Securities Act.
Holders of Lakeland Options will receive an Option Preference Form
after the mailing of this Proxy Statement/Prospectus but prior to the
Effective Time and may exercise the election by submitting the Option
Preference Form as specified in such form. As of March 31, 1995, there
were _____ Lakeland Options outstanding.
Dissenters' Rights
Consistent with the provisions of the New Jersey Business Corporation
Act, no stockholder of Lakeland will have the right to dissent from the
Merger.
Interests of Certain Persons in the Merger
The Merger Agreement provides that for the six-year period following
the Effective Time, Valley will indemnify the directors, officers, and
employees of Lakeland holding such positions on or prior to the date of the
Merger Agreement, against certain liabilities to the extent such persons
were indemnified under Lakeland's Certificate of Incorporation and Bylaws
as in effect on the date of the Merger Agreement.
As of the Effective Time, Valley will cause its Board of Directors to
take action to appoint to the Board of Directors of Valley Mr. William H.
McNear and one other director to be selected by Valley from two nominees
submitted by the Board of Directors of Lakeland. In addition, John
Grabovetz will be designated as a Director Emeritus of Valley at the
Effective Time. As of the Effective Time, Valley will appoint Michael
Halpin as a First Senior Vice President of VNB, and Valley will assume in
writing Mr. Halpin's employment contract. Mr. McNear will receive a lump
sum payment of $150,000 from Lakeland upon the Effective Time in settlement
of his Retainer Agreement with Lakeland. In a letter dated February 27,
1995, from VNB to Lakeland, VNB has agreed to provide Lakeland employees
and Directors with certain benefits. See "-- Employment Matters" and ANNEX
D -- Letter Regarding Employee and Director Benefits.
Employment Matters
In a letter to Lakeland dated February 27, 1995, Valley expressed its
intention to provide certain benefits to Lakeland and Bank employees who
become employees of Valley or VNB. See Annex D -- Letter Regarding
Employee and Director Benefits. Valley and VNB intend to provide eligible,
actively employed Lakeland and Bank employees who join Valley or VNB with
the same Valley or VNB benefits plans coverage under which Valley and VNB
employees participate under the terms and conditions as required by Valley
and VNB plan contracts. VNB benefit plans include but are not limited to,
medical, dental and disability plans, pension and 401(k) plans, vacation
and paid personal days and sick days. It is anticipated that employees of
the Bank will retain their date of employment with the Bank for purposes of
calculating VNB employee seniority and eligibility for VNB benefit plans.
It is Valley's intention that employees will be eligible to
participate in the VNB 401(k) and Retirement plans as soon as feasible
after the date of the Merger assuming all legal and financial requirements
of the VNB and Lakeland retirement plans are satisfactory and complete,
and that employees of the Bank will receive full eligible credit, sick
leave accrual and vesting for prior pension services under the Lakeland
Retirement Plan when merged into the VNB Retirement Plan. VNB maintains
the sole right to determine the terms and conditions of VNB benefit plans
for service after the Effective Time of the Merger, but it is Valley's
intent that such benefits, in the aggregate, will not be less than those
applicable to Lakeland or the Bank prior to the Merger.
If any Lakeland or Bank employee is relocated as a result of
departmental consolidations following the Effective Time to a location,
other than that of an acquired Lakeland office or facility, Valley intends
to give such employee, on a priority basis, the opportunity to accept a job
posting to relocate to a Lakeland office or facility at the salary and
position so posted. VNB intends to offer the severance arrangements to
employees of the Bank consistent with prior Valley mergers.
Consistent with Lakeland's past practice, Valley intends to provide
Directors of Lakeland who continue as or become retired Directors of
Lakeland, with supplemental medical insurance which supplements their
coverage under Medicare, and to provide any Director or retired Director
who is not 65 years of age with a supplementary medical insurance policy or
a primary medical insurance policy until such person reaches age 65 at
which time the supplementary policy will apply. Valley also intends to
continue the Lakeland Directors Post-Retirement Plan.
Business Pending Consummation
Lakeland has agreed in the Merger Agreement not to take certain
actions relating to the operation of Lakeland pending consummation of the
Mergers, without the prior written consent of Valley or VNB, except as
otherwise permitted by the Merger Agreement. These actions include, among
other things: (i) changing any provision of its Certificate of
Incorporation or Bylaws or similar governing document; (ii) paying any
dividends (other than regular quarterly dividends of $0.15 per share and
one special dividend which may be declared in an amount such that between
January 26, 1995 and the Effective Time, Lakeland's stockholders will
receive dividends equal to those they would have received had the Merger
been consummated on January 26, 1995) or redeeming or otherwise acquiring
any shares of its capital stock, or issuing any additional shares of its
capital stock (other than upon exercise of an outstanding Lakeland Option)
or giving any person the right to acquire any such shares; (iii) granting
any severance or termination pay other than the settlement of the retainer
agreement of Mr. William H. McNear, Chairman of the Board of Lakeland, or
pursuant to policies of Lakeland in effect as of the date of the Merger
Agreement (see "-- Interests of Certain Persons") or entering into or
amending any employment agreement with any directors, officers, or
employees except as authorized in the Merger Agreement, or adopting any new
employee benefit plan or arrangement or amending any existing benefit plan;
(iv) awarding any increase in compensation or benefits to its directors,
officers, or employees except in the ordinary course of business and
consistent with past practices and policies; (v) selling or disposing of
any substantial amount of assets or incurring any significant liability
other than in the ordinary course of business; or (vi) taking any other
action not in the ordinary course of business consistent with prudent
banking practices.
Regulatory Approvals
Consummation of the Merger requires the approval of the OCC. OCC
approval does not constitute an endorsement of the Merger or a
determination by the OCC that the terms of the Merger are fair to the
shareholders of Lakeland. An application for such approval was filed on
March 22, 1995. On March 22, 1995, Valley submitted a draft application
to the Federal Reserve Board seeking a waiver of the requirement for
approval of the Merger under Regulation Y promulgated under the BHCA. The
Merger and the Bank Merger cannot proceed in the absence of the requisite
regulatory approvals. While Valley and Lakeland anticipate receiving such
approvals, there can be no assurance that they will be granted, or that
they will be granted on a timely basis. There can also be no assurance
that any such approvals will not contain a condition or requirement which
causes such approvals to fail to satisfy the conditions set forth in the
Merger Agreement and described below under "-- Conditions to
Consummation; Termination". There can likewise be no assurance that the
U.S. Department of Justice or a state Attorney General will not challenge
the Merger or the Bank Merger or, if such a challenge is made, as to the
result thereof.
Conditions to Consummation; Termination
Consummation of the Mergers is subject, among other things, to:
(i) approval of the Merger Agreement by the requisite vote of the
stockholders of Lakeland; (ii) the receipt of all consents, approvals and
authorizations of all necessary federal government authorities and
expiration of all required waiting periods, necessary for the consummation
of the Merger (see "--Regulatory Approvals"); (iii) the effectiveness of
the registration statement covering the shares of Valley Common Stock to be
issued to Lakeland stockholders; (iv) qualification of the Merger to be
treated by Valley as a pooling-of-interests for accounting purposes; and
(v) receipt by the parties of an opinion of Pitney, Hardin, Kipp & Szuch to
the effect that the exchange of Lakeland Common Stock for Valley Common
Stock is a tax-free reorganization with the meaning of Section 368(a)(1)(A)
of the Code. See "--Federal Income Tax Consequences". Consummation of the
Merger is also conditioned on, among other things, (i) the continued
accuracy in all material respects of the representations and warranties of
Lakeland and Valley, respectively, contained in the Merger Agreement; (ii)
the performance by Lakeland or Valley, as the case may be, in all material
respects, of all obligations under the Merger Agreement; (iii) the absence
of any litigation that would restrain or prohibit the consummation of the
Merger; and (iv) receipt by the Board of Directors of Lakeland of a
fairness opinion by Hopper Soliday (see "-- Opinion of Financial Advisor").
Consummation of the Mergers is also subject to the satisfaction or
waiver of various other conditions specified in the Merger Agreement,
including, among others: (i) the delivery by Lakeland and Valley, each of
the other, of (a) opinions of their respective counsel, and (b)
certificates executed by certain of their respective executive officers as
to compliance with the Merger Agreement; and (ii) the accuracy of the
representations and warranties, and compliance in all material respects
with the agreements and covenants, of the parties to the Merger Agreement.
The Merger Agreement provides that, whether before or after the
Special Meeting and notwithstanding the approval of the Merger Agreement by
the stockholders of Lakeland, the Merger Agreement may be terminated and
the Mergers abandoned at any time prior to the Effective Date: (i) by
mutual consent of Valley and Lakeland; or (ii) by either Valley or
Lakeland, (a) if the stockholders of Lakeland fail to approve the Merger
Agreement, (b) if the Merger is not consummated on or before October 31,
1995, or (c) if any necessary regulatory approval has been denied or
withdrawn at the request or recommendation of the applicable regulatory
agency or governmental authority or by Valley upon written notice to
Lakeland if any such application is approved with conditions which
materially impair the value of Lakeland and the Bank, taken as a whole, to
Valley.
The Merger Agreement also provides that the Merger Agreement may be
terminated: (a) by Valley if (i) there shall have occurred a material
adverse change in the business, operations, assets, or financial condition
of Lakeland or the Bank, taken as a whole, from that disclosed by Lakeland
on February 27, 1995; or (ii) if the net operating income excluding
security gains and losses (after tax but excluding expenses related to the
Mergers) of Lakeland for any full fiscal quarter after December 31, 1994,
is materially less than the net income of Lakeland for each of the last two
fiscal quarters of calendar year 1994; or (iii) there was a material breach
in any representation, warranty, covenant, agreement or obligation of
Lakeland; (b) by Lakeland, if (i) there shall have occurred a material
adverse change in the business, operations, assets or financial condition
of Valley or VNB from that disclosed by Valley on February 27, 1995; or
(ii) if the net operating income excluding security gains and losses (after
tax but excluding expenses related to the Mergers) of Valley for any full
fiscal quarter after December 31, 1994, is materially less than the net
income of Valley for each of the last two fiscal quarters of calendar year
1994; or (iii) there was a material breach in any representation, warranty,
covenant, agreement or obligation of Valley; (c) by Valley or Lakeland if
any condition to Closing specified in the Merger Agreement applicable to
such party cannot reasonably be met after giving the other party a
reasonable opportunity to cure any such condition; or (d) by Lakeland in
the event that the fiduciary responsibilities of the Board of Directors of
Lakeland established under applicable law require Lakeland to participate
or authorize participation in any "Acquisition Transaction," as defined in
the Merger Agreement. See ANNEX A.
Upon termination of the Merger Agreement, the transactions
contemplated thereby will be abandoned without further action by any party
and each party will bear its own expenses, except that the cost of printing
and mailing this Proxy Statement/Prospectus will be borne equally by Valley
and Lakeland. In the event of a termination, each party will retain all
rights and remedies it may have at law or equity under the Agreement.
Amendment
The Merger Agreement may be amended by mutual action taken by Valley
and Lakeland at any time before or after the adoption of the Merger
Agreement by the stockholders of Lakeland but, after any such adoption, no
amendment can be made which reduces or changes the amount or form of the
consideration to be delivered to the stockholders of Lakeland without the
approval of such stockholders. The Merger Agreement may not be amended,
except by an instrument in writing signed on behalf of Valley, VNB,
Lakeland, and the Bank.
Extension; Waiver
Lakeland, the Bank, Valley, or VNB may, at any time prior to the
Effective Time of the Merger, (i) extend the time for the performance of
any of the obligations or other acts of the other; (ii) waive any
inaccuracies in the representations and warranties contained in the Merger
Agreement or in any document delivered pursuant to the Merger Agreement; or
(iii) waive compliance with any of the agreements or conditions contained
in the Merger Agreement. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party against which the waiver is
sought to be enforced.
Accounting Treatment
The Merger is expected to be accounted for by Valley under the
pooling-of-interests method of accounting. As required by generally
accepted accounting principles, under a pooling of interest, the assets and
liabilities of Lakeland as of the Effective Time will be recorded at their
respective historical cost net of depreciation and added to those of
Valley. Financial statements of Valley issued after consummation of the
Merger would reflect such values. Financial statements of Valley issued
before consummation of the Merger will be restated retroactively to
reflect Lakeland's historical financial position or results of operations.
See "UNAUDITED PRO FORMA FINANCIAL INFORMATION."
Expenses
All expenses incurred by or on behalf of the parties in connection
with the Merger Agreement and the transactions contemplated thereby shall
be borne by the party incurring the same, except that printing and mailing
expenses will be shared equally by Valley and Lakeland if the Merger
Agreement is terminated.
Resale of Valley Common Stock by Affiliates
The shares of Valley Common Stock that will be issued if the Merger is
consummated have been registered under the Securities Act of 1933 (the
"Securities Act") and will be freely transferable, except for shares
received by persons, including directors and executive officers of
Lakeland, who may be deemed to be "affiliates" of Lakeland under Rule 145
promulgated under the Securities Act. An "affiliate" of an issuer is
defined generally as a person who "controls" the issuer. Directors,
executive officers and 10% stockholders are presumed by the Securities and
Exchange Commission to control the issuer. Affiliates may not sell their
shares of Valley Common Stock acquired pursuant to the Merger, except
pursuant to an effective registration statement under the Securities Act
covering the Valley Common Stock or in compliance with Rule 145
requirements of the Securities Act.
Persons who may be deemed to be "affiliates" of Lakeland have
delivered letters to Valley in which they have agreed to certain
restrictions on their ability to sell, transfer or otherwise dispose of
("transfer") any Lakeland Common Stock owned by them and any Valley Common
Stock acquired by them in the Merger. Pursuant to the accounting rules
governing a pooling-of-interest, the affiliates of Lakeland have agreed not
to transfer the shares during a period commencing with the period beginning
30 days prior to the Effective Time and ending on the date on which
financial results covering at least 30 days of post-merger combined
operations of Valley and Lakeland have been published by Valley or filed by
Valley on a Form 8-K, 10-Q or 10-K. Also, in connection with the pooling-
of-interests rules, the affiliates have agreed not to transfer their
Lakeland Common Stock in the period prior to 30 days before the Effective
Time without giving Valley advance notice and an opportunity to object if
the transfer would interfere with pooling-of-interests accounting for the
Merger. Pursuant to Rule 145, the affiliates have also agreed to refrain
from transferring Valley Common Stock acquired by them in the Merger,
except in compliance with certain restrictions imposed by Rule 145.
Certificates representing the shares of Valley Common Stock acquired by
each such person pursuant to the Merger will bear a legend reflecting that
the shares are restricted in accordance with the letter signed by such
person and may not be transferred except in compliance with such
restrictions.
Persons who may be deemed "affiliates" of Valley have also delivered
letters in which they have agreed not to transfer Valley Common Stock
beneficially owned by them in violation of the pooling-of -interests
restrictions set forth above with respect to Lakeland.
THE STOCK OPTION AGREEMENT
Valley and Lakeland entered into the Stock Option Agreement, in
connection with the execution of the Letter of Intent. Pursuant to the
terms of the Stock Option Agreement, Lakeland has granted to Valley an
Option to purchase up to 1,250,000 authorized but unissued shares of
Lakeland Common Stock, or approximately 24.9% of the outstanding shares of
Lakeland Common Stock. The exercise price under the Stock Option Agreement
is $21.00 per share. Valley does not have any voting rights with respect
to shares of Lakeland Common Stock subject to the Option prior to exercise
of the Option. The Stock Option Agreement is set forth as Annex C hereto.
In the event that certain specifically enumerated "Triggering Events"
occur, as defined below, including but not limited to the acquisition of
beneficial ownership of at least 20% of the outstanding shares of Lakeland
Common Stock by a person or group other than Valley or an affiliate of
Valley, Valley may exercise the Option in whole or in part. The ability of
Valley to exercise the Option and to cause up to an additional 1,250,000
shares of Lakeland Common Stock to be issued may be considered a deterrent
to other potential acquisitions of control of Lakeland because it is likely
to increase the cost of an acquisition of all of the shares of Lakeland
Common Stock that would be outstanding. In the event that a Triggering
Event occurs and the Merger is not consummated, Valley would recognize a
gain on the sale of the shares of Lakeland Common Stock received pursuant
to the exercise of the Option if such shares of Lakeland Common Stock were
sold at prices exceeding $21.00 per share.
Upon or after the occurrence of certain "Triggering Events" (as
hereinafter defined), and only while Valley is not in material breach of
the Agreement, the Option may be exercised by Valley in whole or in part.
The term "Triggering Event" is defined to mean the occurrence of any of the
following events: a person or group, as such terms are defined in 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 promulgated under the Exchange Act) of at least 20%
of the then outstanding shares of Lakeland Common Stock; (b) enters into a
written letter of intent or an agreement with Lakeland pursuant to which
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 the
beneficial ownership or to vote securities representing, 10% or more of the
then outstanding shares of Lakeland Common Stock; or (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 Lakeland Common Stock, and thereafter, if such
Proposal has not been publicly withdrawn (as defined in the Stock Option
Agreement) at least fifteen (15) days prior to the Lakeland Special Meeting
called to vote on the Merger and Lakeland's stockholders fail to approve
the Merger by the vote required by applicable law at the Lakeland Special
Meeting; 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 that 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" is further defined as 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. Under the Stock Option Agreement, a significant
portion means 25% of the assets or liabilities of Lakeland. "Publicly
withdrawn" for purposes of the Stock Option Agreement means an
unconditional bona fide withdrawal of the Proposal coupled with a public
announcement of no further interest in pursuing such Proposal or acquiring
any controlling influence over Lakeland or in soliciting or inducing any
other person (other than Valley or any affiliate) to do so.
Valley may not sell, assign or otherwise transfer its rights and
obligations under the Stock Option Agreement in whole or in part to any
person or any group of persons other than to an affiliate of Valley. The
Option may not be exercised at any time that Valley is in material breach
of the Agreement without a prior material breach of Lakeland having
occurred. Lakeland is not obligated to issue shares of Lakeland Common
Stock upon exercise of the Option (i) in the absence of any required
governmental or regulatory approval or consent necessary for Lakeland to
issue the Lakeland Common Stock subject to such Option 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
Lakeland Common Stock subject to the Option.
The Stock Option Agreement further provides that 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
Commission, covering the Option and such number of shares subject thereto
as Valley shall specify in order to permit the sale or other disposition of
the Option and the shares subject thereto; provided, however, that in no
event will Valley have the right to have more than one such registration
statement become effective, and provided further, that Lakeland shall not
be required to prepare and file any such registration statement in
connection with any proposed sale to which Lakeland's counsel delivers to
Lakeland and to Valley an opinion to the effect that no filing is required
under applicable laws and regulations.
The exercise of the Option by Valley may also make "pooling-of-
interests" accounting treatment unavailable to a subsequent acquiror.
DESCRIPTION OF VALLEY CAPITAL STOCK
The authorized capital stock of Valley consists of 39,414,375 shares
of Common Stock. As of December 31, 1994, 30,269,824 shares of Common
Stock were issued and outstanding, excluding treasury shares.
DIVIDEND RIGHTS. Holders of Valley Common Stock are entitled to dividends
when and if declared by the Board of Directors of Valley out of funds
legally available for the payment of dividends. The only statutory
limitation is that such dividends may not be paid when Valley is insolvent.
Because funds for the payment of dividends by Valley must come primarily
from the earnings of Valley's bank subsidiary, as a practical matter, any
restrictions on the ability of VNB to pay dividends will act as
restrictions on the amount of funds available for payment of dividends by
Valley.
As a national banking association, VNB is subject to limitation on the
amount of dividends it may pay to Valley, VNB's only shareholder. Prior
approval by the OCC is required to the extent the total of all dividends to
be declared by VNB in any calendar year exceeds net profits, as defined,
for that year combined with VNB's retained net profits from the preceding
two calendar years, less any transfers to capital surplus. Under this
limitation, VNB could declare dividends in 1995 without prior approval of
the OCC of up to $65 million plus an amount equal to VNB's net profits for
1995 to the date of such dividend declaration.
Valley is also subject to the certain Federal Reserve Board policies
which may, in certain circumstances, limit its ability to pay dividends.
These policies require, among other things, that a bank holding company
maintain a minimum capital base. The Federal Reserve Board would most
likely seek to prohibit any dividend payment which would reduce a holding
company's capital below these minimum amounts.
VOTING RIGHTS. At meetings of stockholders, holders of Valley Common
Stock are entitled to one vote per share. The quorum for stockholders'
meeting is a majority of the outstanding shares. Generally, actions and
authorizations to be taken or given by stockholders require the approval of
a majority of the votes cast by holders of Valley Common Stock at a meeting
at which a quorum is present.
LIQUIDATION RIGHTS. In the event of liquidation, dissolution or winding
up of Valley, holders of Valley Common Stock are entitled to share
equally and ratably in assets available for distribution after payment of
debts and liabilities.
ASSESSMENT AND REDEMPTION. All outstanding shares of Valley Common Stock
are fully paid and nonassessable. The Common Stock is not redeemable at
the option of the issuer or the holders thereof.
OTHER MATTERS. The transfer agent and registrar for Valley Common Stock
is presently American Stock Transfer and Trust Company. Valley Common
Stock is traded on the New York Stock Exchange, and is registered with
the Commission under Section 12(b) of the Exchange Act. Valley also has
outstanding stock purchase warrants issued in connection with a prior
acquisition. As of December 31, 1994, warrants to purchase 593,318 shares
of Common Stock were outstanding.
COMPARISON OF RIGHTS OF VALLEY AND LAKELAND STOCKHOLDERS
GENERAL. Valley and Lakeland are both New Jersey general business
corporations governed by the New Jersey Business Corporation Act and
registered bank holding companies under the BHCA. Therefore, there are no
material differences in the legal rights of holders of shares of Lakeland
Common Stock and Valley Common Stock under the New Jersey Business
Corporation Act. The following description of the Valley Common Stock sets
forth certain general terms of the Valley Common Stock.
The following is a comparison of certain provisions of the respective
certificates of incorporation and bylaws of each of Lakeland and Valley.
This summary does not purport to be complete and is qualified in its
entirety by reference to the certificates of incorporation and bylaws of
each of Lakeland and Valley, which may be changed from time to time.
VOTING REQUIREMENTS. Under the New Jersey Business Corporation Act, a
greater vote is specified in the certificate of incorporation, any
amendment to a New Jersey corporation's certificate of incorporation, the
voluntary dissolution of the corporation, or the sale or other disposition
of all or substantially all of its assets otherwise than in the ordinary
course of business or the merger or consolidation of the corporation with
another corporation, requires in each case the affirmative vote of a
majority of the votes cast by shareholders of the corporation entitled to
vote thereon. Lakeland's Certificate of Incorporation contains certain
restrictions on "Business Combinations" with "Related Persons" which may be
avoided by means of a super-majority vote of shareholders other than
Related Persons. No "Business Combination" (as defined in the Certificate
of Incorporation) between Lakeland and a "Related Person" (defined in the
Certificate of Incorporation to include persons who, together with their
affiliates, own 10% or more of the voting power of Lakeland's capital
stock) is valid or can be consummated unless (i) the proposed Business
Combination is first approved by a majority of "Continuing Directors"
(defined in the Certificate of Incorporation as directors (unaffiliated
with the Related Person) who became directors prior to the time the Related
Person became a Related Person, or who were subsequently nominated for
director by a majority of other Continuing Directors) or (ii) the proposed
Business Combination is first approved by the affirmative vote of 80% of
the outstanding shares entitled to vote thereon and at least a majority of
the outstanding shares not beneficially owned by the Related Person.
Valley's Certificate of Incorporation does not contain greater vote
provisions than those required by the New Jersey Business Corporation Act.
CLASSIFIED BOARD OF DIRECTORS. The New Jersey Business Corporation Act
permits a New Jersey corporation to provide for a classified board in
its certificate of incorporation. The Certificate of Incorporation of
Lakeland currently provides for a classified Board of Directors; the Board
is divided into three classes, with one class of directors generally
elected for three-year terms at each annual meeting. Valley's Certificate
of Incorporation does not presently contain any provision for a classified
Board of Directors.
PREFERRED STOCK. The authorized capital stock of Lakeland consists of
15,000,000 shares of Lakeland Common Stock and 5,000,000 shares of serial
preferred stock. As of May 1, 1995, no preferred stock was issued
or outstanding. Under the terms of Lakeland's Certificate of
Incorporation, the Board of Directors of Lakeland (provided two-thirds of a
quorum approves) has authority at any time to divide any or all of the
authorized but unissued shares of preferred stock into series, determine
the designations, number of shares, relative rights, preferences, and
limitations of any such series and authorize the issuance of such series.
Valley's Certificate of Incorporation does not presently contain any
provision for authorization of preferred stock.
SHAREHOLDER CONSENT TO CORPORATE ACTION. Except as otherwise provided by
the certificate of incorporation, the New Jersey Business Corporation
Act permits any action required or permitted to be taken at any meeting of
a corporation's shareholders, other than the annual election of directors,
to be taken without a meeting upon the written consent of shareholders who
would have been entitled to cast the minimum number of votes necessary to
authorize such action at a meeting of shareholders at which all
shareholders entitled to vote were present and voting. The annual election
of directors, if not conducted at a shareholders' meeting, may only be
effected by unanimous written consent. Under the New Jersey Business
Corporation Act, a shareholder vote on a plan of merger or consolidation,
if not conducted at a shareholders' meeting, may only be effected by
either: (i) unanimous written consent of all shareholders entitled to vote
on the issue with advance notice to any other shareholders or (ii) written
consent of shareholders who would have been entitled to cast the minimum
number of votes necessary to authorize such action at a meeting, together
with advance notice to all other shareholders. Lakeland's Certificate of
Incorporation specifically prohibits the taking of any stockholder action
by written consent without a meeting, while Valley's Certificate of
Incorporation presently is silent on this issue, thus permitting
stockholder action by written consent to the fullest extent allowed under
the New Jersey Business Corporation Act.
LIQUIDATION RIGHTS. In the event of liquidation, dissolution, or winding
up of Valley, holders of Valley Common Stock are entitled to share
equally and ratably in assets available for distribution after payment of
debts and liabilities. In the event of liquidation, dissolution, or
winding up of Lakeland, holders of Lakeland Common Stock are entitled to
share equally and ratably in assets available for distribution after
payment of debts and liabilities, except that if shares of preferred stock
of Lakeland are outstanding at the time of liquidation, such shares of
preferred stock may have prior rights upon liquidation.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
If the Merger is not completed, the next annual meeting of
stockholders of Lakeland is expected to be held in October 1995. Any
proposal that a stockholder wishes to have included in Lakeland's Proxy
Statement/Prospectus for the 1995 Annual Meeting must be received by the
Secretary of Lakeland at Lakeland's executive offices, 250 Route 10,
Succasunna, New Jersey 07876, not later than May 23, 1995. If such
proposal is in compliance with the requirements of Rule 14a-8 under the
Exchange Act and Article XI of Lakeland's by-laws, the proposal will be
included in the Proxy Statement/Prospectus and set forth on the form of
proxy issued for the 1995 Annual Meeting. It is urged that any such
proposals be sent by certified mail, return receipt requested.
LEGAL OPINIONS
Certain legal matters associated with the Mergers will be passed for
Lakeland upon by Malizia, Spidi, Sloane & Fisch, P.C., Washington, D.C.,
special counsel for Lakeland. Certain legal matters relating to the
issuance of the shares of Valley Common Stock offered hereby will be passed
upon by Pitney, Hardin, Kipp & Szuch, counsel to Valley. Attorneys in the
law firm of Pitney, Hardin, Kipp & Szuch, beneficially own ______ shares of
Valley Common Stock as of April __, 1995.
EXPERTS
The consolidated balance sheets of Lakeland as of June 30, 1994 and
1993, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the years in the three-year period ended
June 30, 1994, included in Lakeland's 1994 Annual Report to Stockholders
which is incorporated by reference in Lakeland's Annual Report on Form 10-K
for the fiscal year ended June 30, 1994, have been incorporated herein in
reliance on the report of Stephen P. Radics & Co., independent certified
public accountants, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Valley as of December 31,
1994 and 1993 and for each of the years in the three-year period ended
December 31, 1994 have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference
herein upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31,
1994 consolidated financial statements refers to a change in accounting
for certain investments in debt and equity securities in 1994 and accounting
for income taxes in 1993.
Representatives of Stephen P. Radics & Co., will be present at the
Special Meeting, will be given an opportunity to make a statement, if they
so desire, and will be available to respond to any appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement/Prospectus, the Board of
Directors of Lakeland knows of no matters which will be presented for
consideration at the Special Meeting other than as set forth in the Notice
of Special Meeting accompanying this Proxy Statement/Prospectus. However,
if any other matters shall come before the meeting or any adjournments
thereof and be voted upon, the enclosed Proxy shall be deemed to confer
discretionary authority to the individuals named as proxies therein to vote
the shares represented by such Proxy as to any such matters.
SUBSEQUENT FILINGS INCORPORATED
BY REFERENCE
All documents filed by Lakeland or Valley pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the earlier of the Effective Time or the termination of the Merger
Agreement are hereby incorporated by reference into this Proxy
Statement/Prospectus and shall be deemed a part hereof from the date of
filing of such documents.
ANNEX A
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,
dated as of April 21, 1995 ("Agreement"), is among Valley National
Bancorp, a New Jersey corporation and registered bank holding
company ("Valley"), Valley National Bank, a national banking
association ("VNB"), Lakeland First Financial Group, Inc., a New
Jersey corporation and registered bank holding company
("Lakeland") and Lakeland Savings Bank, a savings bank chartered
under the laws of New Jersey (the "Bank").
Valley desires to acquire Lakeland and Lakeland's Board
of Directors has determined, based upon the terms and conditions
hereinafter set forth, that the acquisition is in the best
interests of Lakeland and its stockholders. The acquisition will
be accomplished by merging Lakeland into Valley with Valley as the
surviving corporation and, at the same time, merging the Bank into
VNB with VNB as the surviving bank, and Lakeland shareholders
receiving the consideration hereinafter set forth. The Boards of
Directors of Lakeland, Valley, the Bank and VNB have duly adopted
and approved this Agreement and the Board of Directors of Lakeland
has directed that it be submitted to its shareholders for approval.
Lakeland and Valley entered into a letter of intent,
dated January 26, 1995 (the "Letter of Intent"), and a Stock Option
Agreement, dated January 26, 1995 (the "Valley Stock Option"), in
contemplation of entering into this Agreement.
This Agreement was originally entered into on February 27,
1995, and the parties desire to amend and restate this Agreement to
take into account the 5% common stock dividend declared by Valley's
Board of Directors and payable on May 2, 1995 to shareholders of
record on April 14, 1995 (the "Second Quarter Stock Dividend") and
the exchange ratio adjustment necessitated thereby, and also to
reflect their mutual understanding that Valley stock options will
be issued in exchange for Lakeland stock options in the Merger only
to employees and directors of Lakeland who will become employees or
directors of Valley at the Effective Time of the Merger.
Accordingly, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. THE MERGER. Subject to the terms and conditions of
this Agreement, at the Effective Time (as hereafter defined),
Lakeland shall be merged with and into Valley (the "Merger") in
accordance with the New Jersey Business Corporation Act and Valley
shall be the surviving corporation (the "Surviving Corporation").
Immediately following the Effective Time, the Bank shall be merged
with and into VNB as provided in Section 1.7 hereof.
1.2. EFFECT OF THE MERGER. At the Effective Time (as
hereafter defined), the Surviving Corporation shall be considered
the same business and corporate entity as each of Lakeland and
Valley and thereupon and thereafter, all the property, rights,
powers and franchises of each of Lakeland and Valley shall vest in
the Surviving Corporation and the Surviving Corporation shall be
subject to and be deemed to have assumed all of the debts,
liabilities, obligations and duties of each of Lakeland and Valley
and shall have succeeded to all of each of their relationships,
fiduciary or otherwise, as fully and to the same extent as if such
property rights, privileges, powers, franchises, debts,
obligations, duties and relationships had been originally acquired,
incurred or entered into by the Surviving Corporation.
1.3. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Valley as it exists immediately prior to the
Effective Time shall not be amended by the Merger, but shall
continue as the certificate of incorporation of the Surviving
Corporation until otherwise amended as provided by law.
1.4. BYLAWS. The bylaws of Valley as they exist
immediately prior to the Effective Date shall continue as the by-
laws of the Surviving Corporation until otherwise amended as
provided by law.
1.5. DIRECTORS AND OFFICERS. The directors and officers
of Valley as of the Effective Time shall continue as the directors
and officers of the Surviving Corporation with the additions
provided for in Section 5.15 hereof.
1.6. EFFECTIVE TIME AND CLOSING. The Merger shall
become effective (and be consummated) upon the filing of the
certificate of merger (the "Certificate of Merger") with the New
Jersey Secretary of State. The term "Effective Time" shall mean
the date and time when the Certificate of Merger is so filed. A
closing (the "Closing") shall take place prior to the Effective
Time at 10:00 a.m., on the first day of the month next following
the receipt of all necessary regulatory and governmental approvals
and consents and the expiration of all statutory waiting periods in
respect thereof and the satisfaction or waiver of the conditions to
the consummation of the Merger specified in Article VI hereof
(other than the delivery of certificates, opinions and other
instruments and documents to be delivered at the Closing), at
Valley's main office or at such other place, time or date as Valley
and Lakeland may mutually agree upon. When all necessary
regulatory and governmental approvals and consents have been
received and all statutory waiting periods in respect thereto are
scheduled to expire on a date certain (or have already expired) and
all other conditions to the consummation of the Merger specified in
Article VI hereof (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at the
Closing) have been met, then the parties shall schedule a date for
the Closing (the "Scheduled Closing Date"). Immediately following
the Closing, the Certificate of Merger shall be filed with the New
Jersey Secretary of State.
1.7. THE BANK MERGER. Immediately following the
Effective Time, the Bank shall be merged with and into VNB (the
"Bank Merger") in accordance with the provisions of the National
Bank Act and the New Jersey Banking Act of 1948, as amended, and
VNB shall be the surviving bank (the "Surviving Bank"). Upon the
consummation of the Bank Merger, the separate existence of the Bank
shall cease and the Surviving Bank shall be considered the same
business and corporate entity as each of the Bank and VNB and all
of the property, rights, powers and franchises of each of the Bank
and VNB shall vest in the Surviving Bank and the Surviving Bank
shall be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Bank and VNB and shall have
succeeded to all of each of their relationships, fiduciary or
otherwise, as fully and to the same extent as if such property
rights, privileges, powers, franchises, debts, obligations, duties
and relationships had been originally acquired, incurred or entered
into by the Surviving Bank. Upon the consummation of the Bank
Merger, the articles of association and bylaws of VNB shall become
the articles of association and bylaws of the Surviving Bank and
the officers, employees and directors of VNB and the officers and
employees of the Bank shall be the officers, employees and
directors of the Surviving Bank with such additions from the
directors of Lakeland as specified herein. In connection with the
execution of this Agreement, the Bank and VNB shall execute and
deliver a separate merger agreement (the "Bank Merger Agreement")
in the form of Appendix A, annexed hereto, for delivery to the OCC
(as hereafter defined) and the Commissioner (as hereafter defined)
for approval of the Bank Merger.
ARTICLE II
CONVERSION OF LAKELAND SHARES
2.1. CONVERSION OF LAKELAND SHARES AND OPTIONS. Each
share of common stock, $0.10 par value, of Lakeland ("Lakeland
Common Stock"), issued and outstanding immediately prior to the
Effective Time, and each validly outstanding option to purchase
Lakeland Common Stock, shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted, paid or
cancelled as follows:
(a) LAKELAND COMMON STOCK. Each share of Lakeland
Common Stock shall be converted into and represent the right to
receive 1.286 (the "Exchange Ratio") shares of Valley's common
stock, no par value ("Valley Common Stock"), subject to adjustments
as set forth in this subsection 2.1(a).
(i) This Agreement has been amended and restated to
reflect adjustment of the Exchange Ratio to account for the
Second Quarter Stock Dividend. The Exchange Ratio and the
Average Closing Price (as hereafter defined) shall be
appropriately adjusted for any stock split, stock dividend,
stock combination, reclassification or similar transaction
("Capital Change") effected by Valley with respect to Valley
Common Stock between April 21, 1995 and the Effective Date.
The parties shall mutually agree upon such adjustment in
writing or, if unable to agree, shall arbitrate the dispute,
using a mutually agreed upon arbitrator whose decision shall
be final and non-appealable.
(ii) No fractional shares of Valley Common Stock
will be issued, and in lieu thereof, each holder of Lakeland
Common Stock 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 (as hereafter defined).
(iii) The "Average Closing Price" shall mean the
average price of Valley Common Stock calculated based upon the
closing price during the first 10 of the 15 consecutive
trading days immediately preceding the Closing. The Average
Closing Price shall be determined by (x) first, recording the
closing price (the "Daily Price") of Valley Common Stock
reported on the New York Stock Exchange and published in THE
WALL STREET JOURNAL during the first 10 of the 15 consecutive
trading days immediately preceding the Closing; and
(y) second, computing the average of the Daily Prices in the
10 day period.
(b) LAKELAND STOCK OPTIONS. At the Effective Time, each
outstanding option to purchase Lakeland Common Stock (a "Lakeland
Option") granted under the Stock Option Plans of Lakeland (the
"Lakeland Option Plans") shall be converted, at the election of the
holder of such Lakeland Option (an "optionee"), provided that only
an optionee who is an employee or director of Lakeland or the Bank
at the Effective Time and who will become an employee or director
of Valley or VNB immediately after the Effective Time shall be
entitled to receive an option to purchase Valley Common Stock as
set forth in paragraph (i) below:
(i) into an option to purchase Valley Common Stock,
wherein (x) the right to purchase shares of Lakeland Common
Stock pursuant to the Lakeland Option shall be converted into
the right to purchase that same number of shares of Valley
Common Stock multiplied by the Exchange Ratio, (y) the option
exercise price per share of Valley Common Stock shall be the
previous option exercise price per share of the Lakeland
Common Stock divided by the Exchange Ratio and (z) in all
other material respects the option shall be subject to the
same terms and conditions as governed the Lakeland Option on
which it was based, including the length of time within which
the option may be exercised and for any options which are
"incentive stock options" (as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
adjustments shall be and are intended to be effected in a
manner which is consistent with Section 424(a) of the Code; or
(ii) if the Lakeland Option is fully vested at the
Closing, into the right to receive immediately after the
Effective Time a number of whole shares of Valley Common Stock
equal to (x) the excess of the sum determined by multiplying
(A) the number of shares of Lakeland Common Stock covered by
the Lakeland Option, times (B) the Exchange Ratio, times (C)
the Average Closing Price, less (y) the aggregate exercise
price for the Lakeland Option (z) divided by the Average
Closing Price. No fractional shares of Valley Common Stock
shall be issued pursuant to this Section 2.1(b)(ii), 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.
2.2. EXCHANGE OF SHARES.
(a) Lakeland and Valley hereby appoint Valley National
Bank, Trust Department (the "Exchange Agent") as the Exchange Agent
for purposes of effecting the conversion of Lakeland Common Stock
and Lakeland Options. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record (a
"Record Holder") of a certificate or certificates which,
immediately prior to the Effective Time represented outstanding
shares of Lakeland Common Stock (the "Certificates"), a mutually
agreed upon letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent), and instructions for use in effecting the
surrender of the Certificates in exchange for Valley Common Stock
(and cash in lieu of fractional shares) as provided in Section 2.1.
Upon surrender of a Certificate for exchange and cancellation to
the Exchange Agent, together with such letter of transmittal, duly
executed, the Record Holder shall be entitled to promptly receive
in exchange for such Certificate the consideration as provided in
Section 2.1 hereof and the Certificates so surrendered shall be
cancelled. The Exchange Agent shall not be obligated to deliver or
cause to be delivered to any Record Holder the consideration to
which such Record Holder would otherwise be entitled until such
Record Holder surrenders the Certificate for exchange or, in
default thereof, an appropriate Affidavit of Loss and Indemnity
Agreement and/or a bond as may be reasonably required in each case
by Valley. Notwithstanding the time of surrender of the
Certificates, Record Holders shall be deemed shareholders of Valley
for all purposes from the Effective Time, except that Valley shall
withhold the payment of dividends from any Record Holder until such
Record Holder effects the exchange of Certificates for Valley
Common Stock. (Such Record Holder shall receive such withheld
dividends, without interest, upon effecting the share exchange.)
With respect to each outstanding Lakeland Option the Exchange Agent
shall, 10 days prior to Closing, distribute option election forms
to each optionee and, upon receipt from the optionee of a properly
completed option election, shall after the Effective Time
distribute to the optionee Valley Common Stock or an amendment to
the option grant evidencing the conversion of the grant to an
option to purchase Valley Common Stock in accordance with Section
2.1 hereof.
(b) After the Effective Time, there shall be no
transfers on the stock transfer books of Lakeland of the shares of
Lakeland Common Stock which were outstanding immediately prior to
the Effective Time and, if any Certificates representing such
shares are presented for transfer, they shall be cancelled and
exchanged for the consideration as provided in Section 2.1 hereof.
(c) If payment of the consideration pursuant to Section
2.1 hereof is to be made in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it
shall be a condition of such payment that the Certificate so
surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form
for transfer, and that the person requesting such payment shall pay
to the Exchange Agent in advance any transfer or other taxes
required by reason of the payment to a person other than that of
the registered holder of the Certificate surrendered, or required
for any other reason, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
2.3. NO DISSENTERS' RIGHTS. Consistent with the
provisions of the New Jersey Business Corporation Act, no
shareholder of Lakeland shall have the right to dissent.
2.4. VALLEY SHARES. The shares of Valley Common Stock
outstanding at the Effective Time shall not be affected by the
Merger, but along with the additional shares of Valley Common Stock
to be issued as provided in Section 2.1 hereof, shall become the
outstanding common stock of the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LAKELAND
References herein to "Lakeland Disclosure Schedule" shall
mean all of the disclosure schedules required by this Article III,
dated as of the date hereof and referenced to the specific sections
and subsections of Article III of this Agreement, which have been
delivered on the date hereof by Lakeland to Valley. Lakeland
hereby represents and warrants to Valley as follows:
3.1. CORPORATE ORGANIZATION.
(a) Lakeland is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey. Lakeland has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business
as it is now being conducted and is duly licensed or qualified to
do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the
business, operations, assets or financial condition of Lakeland on
a consolidated basis. Lakeland is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended
("BHCA").
(b) Each of the Subsidiaries of Lakeland are listed in
the Lakeland Disclosure Schedule. The term "Subsidiary", when used
in this Agreement with respect to Lakeland, means any corporation,
joint venture, association, partnership, trust or other entity in
which Lakeland has, directly or indirectly at least a 50% interest
or acts as a general partner. Each Subsidiary of Lakeland is duly
organized, validly existing and in good standing under the laws of
its state of incorporation. The Bank is a New Jersey savings bank
whose deposits are insured by the Savings Association Insurance
Fund of the Federal Deposit Insurance Corporation ("FDIC") to the
fullest extent permitted by law. Each Subsidiary of Lakeland has
the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not
have a material adverse effect on the business, operations, assets
or financial condition of Lakeland and its Subsidiaries. The
Lakeland Disclosure Schedule sets forth true and complete copies of
the Certificate of Incorporation and Bylaws of Lakeland and each
Lakeland Subsidiary as in effect on the date hereof. Except as set
forth in the Lakeland Disclosure Schedule, Lakeland does not own or
control, directly or indirectly, any equity interest in any
corporation, company, association, partnership, joint venture or
other entity and owns no real estate, except (i) residential real
estate acquired through foreclosure or deed in lieu of foreclosure
in each individual instance with a fair market value less than
$500,000 and (ii) real estate used for its banking premises.
3.2. CAPITALIZATION. The authorized capital stock of
Lakeland consists of 15,000,000 shares of Lakeland Common Stock and
5,000,000 shares of preferred stock ("Lakeland Preferred Stock").
As of February 3, 1995, there were 3,901,770 shares of Lakeland
Common Stock issued and outstanding and no shares issued and held
in the treasury. There are no shares of Lakeland Preferred Stock
issued or outstanding. As of February 3, 1995, there were 110,157
shares of Lakeland Common Stock issuable upon exercise of
outstanding Lakeland Options granted to directors, officers and
employees of the Bank pursuant to the Lakeland Option Plan. The
Lakeland Disclosure Schedule sets forth true and complete copies of
the Lakeland Option Plans and of each outstanding Lakeland Option.
All issued and outstanding shares of Lakeland Common Stock, and all
issued and outstanding shares of capital stock of each Lakeland
Subsidiary, have been duly authorized and validly issued, are fully
paid, and nonassessable. The authorized capital stock of the Bank
consists of 10,000,000 shares of common stock, $2.00 par value.
All of the outstanding shares of capital stock of each Lakeland
Subsidiary are owned by Lakeland and are free and clear of any
liens, encumbrances, charges, restrictions or rights of third
parties. Except for the Lakeland Options and the Valley Stock
Option, neither Lakeland nor any Lakeland Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of
Lakeland or any Lakeland Subsidiary or any securities representing
the right to purchase or otherwise receive any shares of such
capital stock or any securities convertible into or representing
the right to purchase or subscribe for any such shares, and there
are no agreements or understandings with respect to voting of any
such shares.
3.3. AUTHORITY; NO VIOLATION.
(a) Subject to the approval of this Agreement and the
transactions contemplated hereby by the shareholders of Lakeland,
and subject to the parties obtaining all necessary regulatory
approvals, Lakeland and the Bank have full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly approved by the Board of Directors of each of Lakeland
and the Bank. The execution and delivery of the Bank Merger
Agreement has been duly and validly approved by the Board of
Directors of the Bank. Except for the approvals described in
paragraph (b) below, no other corporate proceedings on the part of
Lakeland or the Bank are necessary to consummate the transactions
contemplated hereby (except for the approval by Lakeland of the
Bank Merger Agreement). This Agreement has been duly and validly
executed and delivered by Lakeland and the Bank, and constitutes
valid and binding obligations of Lakeland and the Bank, enforceable
against Lakeland and the Bank in accordance with its terms.
(b) Neither the execution and delivery of this Agreement
by Lakeland and the Bank, nor the consummation by Lakeland and the
Bank of the transactions contemplated hereby in accordance with the
terms hereof, or compliance by Lakeland and the Bank with any of
the terms or provisions hereof, will (i) violate any provision of
Lakeland's or the Bank's Certificate of Incorporation or other
governing instrument or Bylaws, (ii) assuming that the consents and
approvals set forth below are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Lakeland or the Bank or any of their
respective properties or assets, or (iii) except as set forth in
the Lakeland Disclosure Schedule, violate, conflict with, result in
a breach of any provisions of, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the
respective properties or assets of Lakeland or the Bank under, any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Lakeland or the Bank is a party,
or by which either or both of them or any of their respective
properties or assets may be bound or affected except, with respect
to (ii) and (iii) above, such as individually and in the aggregate
will not have a material adverse effect on the business,
operations, assets or financial condition of Lakeland and its
Subsidiaries on a consolidated basis, and which will not prevent or
delay the consummation of the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations
with or notices to the Comptroller of the Currency ("OCC"), the
Commissioner of Banking of the State of New Jersey (the
"Commissioner"), the Board of Governors of the Federal Reserve
System ("FRB"), the Securities and Exchange Commission ("SEC"), the
New Jersey Secretary of State, and the shareholders of Lakeland, no
consents or approvals of or filings or registrations with or
notices to any third party or any public body or authority are
necessary on behalf of Lakeland or the Bank in connection with (x)
the execution and delivery by Lakeland and the Bank of this
Agreement and (y) the consummation by Lakeland and the Bank of
transactions contemplated hereby and (z) the execution and delivery
by the Bank of the Bank Merger Agreement and the consummation by
the Bank of the transactions contemplated thereby.
3.4. FINANCIAL STATEMENTS.
(a) The Lakeland Disclosure Schedule sets forth copies
of the consolidated statements of condition of Lakeland as of June
30, 1992, 1993 and 1994, and the related consolidated statements of
income, stockholders' equity and cash flows for the periods ended
June 30 in each of the three years 1992 through 1994, in each case
accompanied by the audit report of Stephen P. Radics, independent
public accountants with respect to Lakeland, and the unaudited
consolidated statements of condition and related consolidated
statements of income, stockholders' equity and cash flows of
Lakeland for the periods ended September 30, 1994 and December 31,
1994, as filed with the SEC on Form 10-Q under the Securities
Exchange Act of 1934, as amended (the "1934 Act") (collectively,
the "Lakeland Financial Statements"). The Lakeland Financial
Statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, and fairly
present the consolidated financial condition of Lakeland as of the
respective dates set forth therein, and the related consolidated
statements of income, stockholders' equity and cash flows fairly
present the results of the consolidated operations, stockholders'
equity and cash flows of Lakeland for the respective periods set
forth therein.
(b) The books and records of Lakeland and its
Subsidiaries have been and are being maintained in material
compliance with applicable legal and accounting requirements, and
reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed or
reserved against in the Lakeland Financial Statements (including
the notes thereto), as of December 31, 1994 neither Lakeland nor
any of its Subsidiaries had any material liabilities, whether
absolute, accrued, contingent or otherwise material to the
business, operations, assets or financial condition of Lakeland or
any of its Subsidiaries. Since December 31, 1994 and to the date
hereof, neither Lakeland nor any of its Subsidiaries have incurred
any material liabilities except in the ordinary course of business
and consistent with prudent banking practice, except as
specifically contemplated by this Agreement.
3.5. BROKERAGE FEES. Neither Lakeland nor any of its
Subsidiaries nor any of their respective directors or officers has
employed any broker or finder or incurred any liability for any
broker's or finder's fees or commissions in connection with any of
the transactions contemplated by this Agreement, except for Hopper
Soliday & Co., Inc. ("Hopper Soliday"). Copies of the agreements
with Hopper Soliday are set forth in the Lakeland Disclosure
Schedule.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) There has not been any material adverse change in
the business, operations, assets or financial condition of Lakeland
and its Subsidiaries on a consolidated basis since December 31,
1994 and to Lakeland's knowledge, no facts or conditions exist
which Lakeland believes will cause or is likely to cause such a
material adverse change in the future.
(b) Except as set forth in the Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries has taken or
permitted any of the actions set forth in Section 5.2 hereof
between December 31, 1994 and the date hereof and Lakeland and the
Lakeland Subsidiaries have conducted their business only in the
ordinary course, consistent with past practice.
3.7. LEGAL PROCEEDINGS. Except as disclosed in the
Lakeland Disclosure Schedule, neither Lakeland nor any of its
Subsidiaries is a party to any, and there are no pending or, to
Lakeland's knowledge, threatened, legal, administrative, arbitral
or other proceedings, claims, actions or governmental
investigations of any nature against Lakeland or any of its
Subsidiaries. Except as disclosed in the Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries is a party
to any order, judgment or decree entered against Lakeland or any
Lakeland Subsidiary in any lawsuit or proceeding.
3.8. TAXES AND TAX RETURNS.
(a) To its knowledge, Lakeland and each Lakeland
Subsidiary have duly filed (and until the Effective Time will so
file) all returns, declarations, reports, information returns and
statements ("Returns") required to be filed by them in respect of
any federal, state and local taxes (including withholding taxes,
penalties or other payments required) and each has duly paid (and
until the Effective Time will so pay) all such taxes due and
payable, other than taxes or other charges which are being
contested in good faith (and disclosed to Valley in writing).
Lakeland and each Lakeland Subsidiary have established (and until
the Effective Time will establish) on their books and records
reserves for the payment of all federal, state and local taxes not
yet due and payable, but incurred in respect of Lakeland or any
Lakeland Subsidiary through such date, which reserves are, to the
knowledge of Lakeland, adequate for such purposes. Except as set
forth in the Lakeland Disclosure Schedule, the federal income tax
returns of Lakeland and its Subsidiaries have been examined by the
Internal Revenue Service (the "IRS") (or are closed to examination
due to the expiration of the applicable statute of limitations) and
no deficiencies were asserted as a result of such examinations
which have not been resolved and paid in full. Except as set forth
in the Lakeland Disclosure Schedule, the applicable state income
tax returns of Lakeland and its Subsidiaries have been examined by
the applicable authorities (or are closed to examination due to the
expiration of the statute of limitations) and no deficiencies were
asserted as a result of such examinations which have not been
resolved and paid in full. To the knowledge of Lakeland, there are
no audits or other administrative or court proceedings presently
pending nor any other disputes pending, or claims asserted for,
taxes or assessments upon Lakeland or any of its Subsidiaries, nor
has Lakeland or any of its Subsidiaries given any currently
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any taxes
or tax Returns.
(b) Except as set forth in the Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries (i) has
requested any extension of time within which to file any tax Return
which Return has not since been filed, (ii) is a party to any
agreement providing for the allocation or sharing of taxes, (iii)
is required to include in income any adjustment pursuant to Section
481(a) of the Code, by reason of a voluntary change in accounting
method initiated by Lakeland or any Lakeland Subsidiary (nor does
Lakeland have any knowledge that the IRS has proposed any such
adjustment or change of accounting method) or (iv) has filed a
consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply.
3.9. EMPLOYEE BENEFIT PLANS. Except as disclosed in the
Lakeland Disclosure Schedule:
(a) Neither Lakeland nor any of its Subsidiaries
maintains or contributes to any "employee pension benefit plan",
within the meaning of Section 3(2)(A) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (the "Lakeland
Pension Plans"), "employee welfare benefit plan", within the
meaning of Section 3(1) of ERISA (the "Lakeland Welfare Plans"),
stock option plan, stock purchase plan, deferred compensation plan,
severance plan, bonus plan, employment agreement or other similar
plan, program or arrangement. Neither Lakeland nor any of its
Subsidiaries has, since September 2, 1974, contributed to any
"Multiemployer Plan", within the meaning of Sections 3(37) and
4001(a)(3) of ERISA.
(b) Lakeland has delivered to Valley a complete and
accurate copy of each of the following with respect to each of the
Lakeland Pension Plans and Lakeland Welfare Plans: (i) plan
document, summary plan description, and summary of material
modifications (if not available, a detailed description of the
foregoing); (ii) trust agreement or insurance contract, if any;
(iii) most recent IRS determination letter, if any; (iv) most
recent actuarial report, if any; and (v) most recent annual report
on Form 5500.
(c) The present value of all accrued benefits under each
of the Lakeland Pension Plans subject to Title IV of ERISA, based
upon the actuarial assumptions used for purposes of the most recent
actuarial valuation prepared by such Pension Plan's actuary, did
not exceed the then current value of the assets of such plans
allocable to such accrued benefits.
(d) During the last five years, the Pension Benefit
Guaranty Corporation (the "PBGC") has not asserted any claim for
liability against Lakeland or any of its Subsidiaries which has not
been paid in full.
(e) All premiums (and interest charges and penalties for
late payment, if applicable) due to the PBGC with respect to each
Lakeland Pension Plan have been paid. All contributions required
to be made to each Lakeland Pension Plan under the terms thereof,
ERISA or other applicable law have been timely made, and all
amounts properly accrued to date as liabilities of Lakeland and its
Subsidiaries which have not been paid have been properly recorded
on the books of Lakeland and its Subsidiaries.
(f) To the knowledge of Lakeland, each of the Lakeland
Pension Plans, the Lakeland Welfare Plans and each other plan and
arrangement identified on the Lakeland Disclosure Schedule has been
operated in compliance in all material respects with the provisions
of ERISA, the Code, all regulations, rulings and announcements
promulgated or issued thereunder, and all other applicable
governmental laws and regulations. Furthermore, the IRS has issued
a favorable determination letter with respect to each of the
Lakeland Pension Plans and Lakeland is not aware of any fact or
circumstance which would disqualify either plan, that could not be
retroactively corrected (in accordance with the procedures of the
IRS).
(g) To the knowledge of Lakeland, within the past two
plan years no non-exempt prohibited transaction, within the meaning
of Section 4975 of the Code or Section 406 of ERISA, has occurred
with respect to any of the Lakeland Welfare Plans or Lakeland
Pension Plans.
(h) No Lakeland Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable
events", within the meaning of Section 4034(b) of ERISA, with
respect to any of the Lakeland Pension Plans.
(i) To the knowledge of Lakeland, no "accumulated
funding deficiency", within the meaning of Section 412 of the Code,
has been incurred with respect to any of the Lakeland Pension
Plans.
(j) There are no pending, or, to the knowledge of
Lakeland, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the
Lakeland Pension Plans or the Lakeland Welfare Plans, any trusts
related thereto or any other plan or arrangement identified in the
Lakeland Disclosure Schedule.
(k) No Lakeland Pension or Welfare Plan provides medical
or death benefits (whether or not insured) beyond an employee's
retirement or other termination of service, other than (i) coverage
mandated by law, or (ii) death benefits under any Lakeland Pension
Plan.
(l) Except with respect to customary health, life and
disability benefits or as disclosed in the Lakeland Disclosure
Schedule, there are no unfunded benefits obligations which are not
accounted for by reserves shown on the financial statements and
established under GAAP, or otherwise noted on such financial
statements.
(m) With respect to each Lakeland Pension and Welfare
Plan that is funded wholly or partially through an insurance
policy, there will be no liability of Lakeland or any Lakeland
Subsidiary as of the Effective Time under any such insurance policy
or ancillary agreement with respect to such insurance policy in the
nature of a retroactive rate adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except as hereafter agreed to by Valley in writing,
the consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former employee of Lakeland or
any Lakeland Subsidiary to severance pay or any similar payment, or
(ii) accelerate the time of payment, vesting, or increase the
amount, of any compensation due to any current employee or former
employee under any Lakeland Pension or Welfare Plan.
3.10. REPORTS.
(a) Each communication mailed by Lakeland to its
stockholders since January 1, 1992, and each annual, quarterly or
special report, proxy statement or communication, as of its date,
complied in all material respects with all applicable statutes,
rules and regulations enforced or promulgated by the applicable
regulatory agency and did not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading; provided that disclosures as of a later date shall
be deemed to modify disclosures as of an earlier date.
(b) Lakeland and the Bank have, since January 1, 1992,
duly filed with the FDIC and the FRB in correct form in all
material respects the monthly, quarterly and annual reports
required to be filed under applicable laws and regulations, and
Lakeland promptly will deliver or make available to Valley accurate
and complete copies of such reports. The Lakeland Disclosure
Schedule lists all examinations of Lakeland or the Bank conducted
by either the New Jersey Department of Banking, FDIC or the FRB
since January 1, 1992 and the dates of any responses thereto
submitted by Lakeland or the Bank.
3.11. LAKELAND AND BANK INFORMATION. The information
relating to Lakeland and the Bank to be contained in the Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof) to be
delivered to stockholders of Lakeland in connection with the
solicitation of their approval of this Agreement and the
transactions contemplated hereby, as of the date the Proxy
Statement/Prospectus is mailed to stockholders of Lakeland, and up
to and including the date of the meeting of stockholders to which
such Proxy Statement/Prospectus relates, will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.12. COMPLIANCE WITH APPLICABLE LAW.
(a) GENERAL. Except as set forth in the Lakeland
Disclosure Schedule, each of Lakeland and the Lakeland Subsidiaries
hold all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of its business under and pursuant
to each, and has complied with and is not in default in any respect
under any, applicable law, statute, order, rule, regulation, policy
and/or guideline of any federal, state or local governmental
authority relating to Lakeland or the Bank (other than where such
defaults or non-compliances will not, alone or in the aggregate,
result in a material adverse effect on the business, operations,
assets or financial condition of Lakeland and its Subsidiaries on
a consolidated basis) and Lakeland has not received notice of
violation of, and does not know of any violations of, any of the
above.
(b) CRA. Without limiting the foregoing, to its
knowledge the Bank has complied in all material respects with the
Community Reinvestment Act ("CRA") and Lakeland has no reason to
believe that any person or group would object to the consummation
of this Merger due to the CRA performance of or rating of the Bank.
Except as listed on the Lakeland Disclosure Schedule, no person or
group has adversely commented upon the Bank's CRA performance.
3.13. CERTAIN CONTRACTS.
(a) Except as disclosed in the Lakeland Disclosure
Schedule under this Section or Section 3.5, (i) neither Lakeland
nor any Lakeland Subsidiary is a party to or bound by any contract
or understanding (whether written or oral) with respect to the
employment or termination of any present or former officers,
employees, directors or consultants. The Lakeland Disclosure
Schedule sets forth true and correct copies of all employment
agreements or termination agreements with officers, employees,
directors, or consultants to which Lakeland or any Lakeland
Subsidiary is a party.
(b) Except as disclosed in the Lakeland Disclosure
Schedule, (i) as of the date of this Agreement, neither Lakeland
nor any Lakeland Subsidiary is a party to or bound by any
commitment, agreement or other instrument which contemplates the
payment by Lakeland or any Lakeland Subsidiary of amounts in excess
of $100,000, or which has a term extending beyond December 31, 1995
and cannot be terminated by Lakeland or its subsidiary without
consent of the other party thereto, (ii) no commitment, agreement
or other instrument to which Lakeland or any Lakeland Subsidiary is
a party or by which any of them is bound limits the freedom of
Lakeland or any Lakeland Subsidiary to compete in any line of
business or with any person, and (iii) neither Lakeland nor any
Lakeland Subsidiary is a party to any collective bargaining
agreement.
(c) Except as disclosed in the Lakeland Disclosure
Schedule, neither Lakeland nor any Lakeland Subsidiary nor, to the
knowledge of Lakeland, any other party thereto, is in default in
any material respect under any material lease, contract, mortgage,
promissory note, deed of trust, loan or other commitment or
arrangement.
3.14. PROPERTIES AND INSURANCE.
(a) Lakeland and its Subsidiaries have good and, as to
owned real property, marketable title to all material assets and
properties, whether real or personal, tangible or intangible,
reflected in Lakeland's consolidated balance sheet as of December
31, 1994, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for
fair value in the ordinary course of business since December 31,
1994), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure
liabilities that are reflected in such balance sheet or the notes
thereto or incurred in the ordinary course of business after the
date of such balance sheet, (ii) statutory liens for amounts not
yet delinquent or which are being contested in good faith, (iii)
such encumbrances, liens, mortgages, security interests, pledges
and title imperfections that are not in the aggregate material to
the business, operations, assets, and financial condition of
Lakeland and its Subsidiaries taken as a whole and (iv) with
respect to owned real property, title imperfections noted in title
reports delivered to Valley prior to the date hereof. Lakeland and
its Subsidiaries as lessees have the right under valid and
subsisting leases to occupy, use, possess and control all property
leased by them in all material respects as presently occupied,
used, possessed and controlled by them.
(b) The Lakeland Disclosure Schedule lists all policies
of insurance covering business operations and all insurable
properties and assets of Lakeland and its Subsidiaries showing all
risks insured against, in each case under valid, binding and
enforceable policies or bonds, with such amounts and such
deductibles as are specified. As of the date hereof, neither
Lakeland nor any of its Subsidiaries has received any notice of
cancellation or notice of a material amendment of any such
insurance policy or bond or is in default under such policy or
bond, no coverage thereunder is being disputed and all material
claims thereunder have been filed in a timely fashion.
3.15. MINUTE BOOKS. The minute books of Lakeland and
its Subsidiaries contain records that are accurate in all material
respects of all meetings and other corporate action held of their
respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
3.16. ENVIRONMENTAL MATTERS. Except as disclosed in the
Lakeland Disclosure Schedule, neither Lakeland nor any of its
Subsidiaries has received any written notice, citation, claim,
assessment, proposed assessment or demand for abatement alleging
that Lakeland or any of its Subsidiaries (either directly or as a
successor-in-interest in connection with the enforcement of
remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or
clean-up of any condition material to the business, operations,
assets or financial condition of Lakeland or its Subsidiaries.
Except as disclosed in the Lakeland Disclosure Schedule, Lakeland
has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on
any property owned or leased by Lakeland or any of its Subsidiaries
in any manner that violates or, after the lapse of time may
violate, any presently existing federal, state or local law or
regulation governing or pertaining to such substances and
materials.
3.17. RESERVES. As of the date hereof, the reserve for
loan and lease losses in the Lakeland Financial Statements is , to
Lakeland's knowledge, adequate based upon past loan loss
experiences and potential losses in the current portfolio to cover
all known or anticipated loan losses.
3.18. NO PARACHUTE PAYMENTS. No officer, director,
employee or agent (or former officer, director, employee or agent)
of Lakeland or any Lakeland Subsidiary is entitled now, or will or
may be entitled to as a consequence of this Agreement or the
Merger, to any payment or benefit from Lakeland, a Lakeland
Subsidiary, Valley or VNB which if paid or provided would
constitute an "excess parachute payment", as defined in Section
280G of the Code or regulations promulgated thereunder.
3.19 DISCLOSURE. There are no material facts concerning
the business, operations, assets or financial condition of Lakeland
or its Subsidiaries which could have a material adverse effect on
the business, operations or financial condition of Lakeland or its
Subsidiaries on a consolidated basis which have not been disclosed
to Valley directly or indirectly by access to any filing by
Lakeland under the 1934 Act. The representations and warranties
contained in Article III of this Agreement are accurate in all
material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF VALLEY
References herein to the "Valley Disclosure Schedule"
shall mean all of the disclosure schedules required by this Article
IV, dated as of the date hereof and referenced to the specific
sections and subsections of Article IV of this Agreement, which
have been delivered on the date hereof by Valley to Lakeland.
Valley hereby represents and warrants to Lakeland as follows:
4.1. CORPORATE ORGANIZATION.
(a) Valley is a corporation duly organized and validly
existing and in good standing under the laws of the State of New
Jersey. Valley has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business
as it is now being conducted, and is duly licensed or qualified to
do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the
business, operations, assets or financial condition of Valley or
its Subsidiaries (defined below). Valley is registered as a bank
holding company under the BHCA.
(b) Each of the Subsidiaries of Valley are listed in the
Valley Disclosure Schedule. The term "Subsidiary" when used in
this Agreement with reference to Valley, means any corporation,
joint venture, association, partnership, trust or other entity in
which Valley has, directly or indirectly, at least a 50% interest
or acts as a general partner. Each Subsidiary of Valley is duly
organized and validly existing and in good standing under the laws
of the jurisdiction of its incorporation. VNB is a national bank
whose deposits are insured by the Bank Insurance Fund of the FDIC
to the fullest extent permitted by law. Each Subsidiary of Valley
has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not
have a material adverse effect on the business, operations, assets
or financial condition of Valley and its Subsidiaries.
4.2. CAPITALIZATION. All figures in this Section 4.2
are adjusted to take into account the Second Quarter Stock
Dividend as though it had occurred prior to the date as to
which the figures relate. The authorized capital stock of
Valley consists solely of 39,414,375 shares of Valley Common Stock.
As of December 31, 1994, there were 30,269,824 shares of Valley
Common Stock issued and outstanding net of treasury stock, and
121,696 treasury shares. Since such date, and from time to time
hereafter, Valley may repurchase shares of its Common Stock. Since
December 31, 1994, to and including the date of this Agreement, no
additional shares of Valley Common Stock have been issued except in
connection with exercises of options granted under the Long-Term
Stock Incentive Plan of Valley (the "Valley Option Plan") or grants
of restricted stock under the Valley Option Plan or upon exercise
of outstanding Warrants (as hereafter defined). As of December 31,
1994, except for: (a) 509,905 shares of Valley Common Stock
issuable upon exercise of outstanding stock options and stock
appreciation rights granted pursuant to the Valley Option Plan, (b)
up to 593,318 shares issuable upon exercise of the outstanding
warrants issued by Valley in connection with the acquisition of
Mayflower Financial Corporation (the "Warrants"), and (c) 10,827
shares of Valley Common Stock issuable upon exercise of outstanding
stock options granted to a consultant for Valley, there were no
shares of Valley Common Stock issuable upon the exercise of
outstanding stock options or otherwise. All issued and outstanding
shares of Valley Common Stock, and all issued and outstanding
shares of capital stock of Valley's Subsidiaries, have been duly
authorized and validly issued, are fully paid, nonassessable and
free of preemptive rights, and are free and clear of all liens,
encumbrances, charges, restrictions or rights of third parties.
All of the outstanding shares of capital stock of Valley's
Subsidiaries are owned by Valley free and clear of any liens,
encumbrances, charges, restrictions or rights of third parties.
Except for the options and stock appreciation rights referred to
above under the Valley Option Plan and the Warrants, and 288,734
shares of Valley Common Stock to be issued in connection with the
Agreement and Plan of Merger, dated as of November 9, 1994, among
Valley, VNB, American Union Bank (the "American Union Agreement"),
neither Valley nor any of Valley's Subsidiaries has or is bound by
any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of
Valley or Valley's Subsidiaries or any securities representing the
right to otherwise receive any shares of such capital stock or any
securities convertible into or representing the right to purchase
or subscribe for any such shares, and there are no agreements or
understandings with respect to voting of any such shares.
4.3. AUTHORITY; NO VIOLATION.
(a) Valley and VNB have full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby in accordance with the terms
hereof. Valley has a sufficient number of authorized but unissued
shares of Valley Common Stock to pay the consideration for the
Merger set forth in Section 2.1 of this Agreement. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of each of Valley and VNB. No
other corporate proceedings on the part of Valley and VNB are
necessary to consummate the transactions contemplated hereby
(except for the approval by Valley of the Bank Merger Agreement).
This Agreement has been duly and validly executed and delivered by
Valley and VNB and constitutes a valid and binding obligation of
Valley and VNB, enforceable against Valley and VNB in accordance
with its terms.
(b) Neither the execution or delivery of this Agreement
nor the consummation by Valley and VNB of the transactions
contemplated hereby in accordance with the terms hereof, will (i)
violate any provision of the Certificate of Incorporation or Bylaws
of Valley or the Articles of Association or Bylaws of VNB, (ii)
assuming that the consents and approvals set forth below are duly
obtained, violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Valley or
VNB or any of their respective properties or assets, or (iii)
violate, conflict with, result in a breach of any provision of,
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
termination of, accelerate the performance required by, or result
in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Valley or VNB
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which Valley or VNB is a
party, or by which Valley or VNB or any of their properties or
assets may be bound or affected, except, with respect to (ii) and
(iii) above, such as in the aggregate will not have a material
adverse effect on the business, operations, assets or financial
condition of Valley and Valley's Subsidiaries on a consolidated
basis, or the ability of Valley and VNB to consummate the
transactions contemplated hereby. Except for consents and
approvals of or filings or registrations with or notices to the
OCC, the Commissioner, the FRB, the New Jersey Secretary of State,
the SEC, or applicable state securities bureaus or commissions, no
consents or approvals of or filings or registrations with or
notices to any third party or any public body or authority are
necessary on behalf of Valley or VNB in connection with (a) the
execution and delivery by Valley or VNB of this Agreement, (b) the
consummation by Valley of the Merger and the other transactions
contemplated hereby and (c) the execution and delivery by VNB of
the Bank Merger Agreement and the consummation by VNB of the Bank
Merger and other transactions contemplated thereby. To Valley's
knowledge, no fact or condition exists which Valley has reason to
believe will prevent it or VNB from obtaining the aforementioned
consents and approvals.
4.4. FINANCIAL STATEMENTS.
(a) Valley has previously delivered to Lakeland copies
of the consolidated statements of financial condition of Valley as
of December 31, 1991, 1992 and 1993, the related consolidated
statements of income, changes in stockholders' equity and of cash
flows for the periods ended December 31 in each of the three fiscal
years 1991 through 1993, in each case accompanied by the audit
report of KPMG Peat Marwick LLP, independent public accountants
with respect to Valley, and the unaudited consolidated statements
of condition of Valley as of March 30, 1994, June 30, 1994 and
September 30, 1994, and the related unaudited consolidated
statements of income, changes in stockholders' equity and cash
flows for the three months then ended as reported in Valley's
Quarterly Reports on Form 10-Q, filed with the SEC under the 1934
Act (collectively, the "Valley Financial Statements"). The Valley
Financial Statements (including the related notes), have been
prepared in accordance with generally accepted accounting
principles consistently applied during the periods involved, and
fairly present the consolidated financial position of Valley as of
the respective dates set forth therein, and the related
consolidated statements of income, changes in stockholders' equity
and of cash flows (including the related notes, where applicable)
fairly present the results of the consolidated operations and
changes in stockholders' equity and of cash flows of Valley for the
respective fiscal periods set forth therein.
(b) The books and records of Valley and its subsidiaries
have been and are being maintained in material compliance with
applicable legal and accounting requirements, and reflect only
actual transactions.
(c) Except as and to the extent reflected, disclosed or
reserved against in the Valley Financial Statements (including the
notes thereto), as of September 30, 1994 neither Valley nor any of
its Subsidiaries had or has, as the case may be, any material
obligation or liability, whether absolute, accrued, contingent or
otherwise, material to the business, operations, assets or
financial condition of Valley or any of its Subsidiaries. Since
September 30, 1994, neither Valley nor any of its Subsidiaries have
incurred any material liabilities, except in the ordinary course of
business and consistent with prudent banking practice.
4.5. BROKERAGE FEES. Except for fees to be paid to MG
Advisors, Inc., neither Valley nor VNB nor any of their respective
directors or officers has employed any broker or finder or incurred
any liability for any broker's or finder's fees or commissions in
connection with any of the transactions contemplated by this
Agreement.
4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. There has
not been any material adverse change in the business, operations,
assets or financial condition of Valley and Valley's Subsidiaries
on a consolidated basis since September 30, 1994 and to Valley's
knowledge, no fact or condition exists which Valley believes will
cause or is likely to cause such a material adverse change in the
future.
4.7. VALLEY INFORMATION. The information relating to
Valley and its subsidiaries, this Agreement and the transactions
contemplated hereby in the Registration Statement and Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof), as of
the date of the mailing of the Proxy Statement/Prospectus, and up
to and including the date of the meeting of stockholders of
Lakeland to which such Proxy Statement/Prospectus relates, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.8. CAPITAL ADEQUACY. At the Effective Time, after
taking into effect the Merger and the transactions contemplated
hereunder, Valley will have sufficient capital to satisfy all
applicable regulatory capital requirements.
4.9. VALLEY COMMON STOCK. At the Effective Time, the
Valley Common Stock to be issued pursuant to the terms of Section
2.1, when so issued, shall be duly authorized, validly issued,
fully paid, and non-assessable, free of preemptive rights and free
and clear of all liens, encumbrances or restrictions created by or
through Valley, with no personal liability attaching to the
ownership thereof.
4.10. LEGAL PROCEEDINGS. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor its Subsidiaries is
a party to any, and there are no pending or, to Valley's knowledge,
threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature
against Valley or any of its Subsidiaries which, if decided
adversely to Valley, or any of its Subsidiaries, would have a
material adverse effect on the business, operations, assets or
financial condition of Valley and its Subsidiaries on a
consolidated basis. Except as disclosed in the Valley Disclosure
Schedule, neither Valley nor any of Valley's Subsidiaries is a
party to any order, judgment or decree entered against Valley or
any such Subsidiary in any lawsuit or proceeding which would have
a material adverse effect on the business, operations, assets or
financial condition of Valley and its Subsidiaries on a
consolidated basis.
4.11. TAXES AND TAX RETURNS. To the knowledge of
Valley, Valley and its Subsidiaries have duly filed (and until the
Effective Time will so file) all Returns required to be filed by
them in respect of any federal, state and local taxes (including
withholding taxes, penalties or other payments required) and have
duly paid (and until the Effective Time will so pay) all such taxes
due and payable, other than taxes or other charges which are being
contested in good faith. Valley and its Subsidiaries have
established (and until the Effective Time will establish) on their
books and records reserves for the payment of all federal, state
and local taxes not yet due and payable, but incurred in respect of
Valley and its Subsidiaries through such date, which reserves are,
to the knowledge of Valley, adequate for such purposes. No
deficiencies exist or have been asserted based upon the federal
income tax returns of Valley and VNB.
4.12. EMPLOYEE BENEFIT PLANS.
(a) Valley and its Subsidiaries maintain or contribute
to certain "employee pension benefit plans" (the "Valley Pension
Plans"), as such term is defined in Section 3 of ERISA, and
"employee welfare benefit plans" (the "Valley Welfare Plans"), as
such term is defined in Section 3 of ERISA. Since September 2,
1974, neither Valley nor its Subsidiaries have contributed to any
"Multiemployer Plan", as such term is defined in Section 3(37) of
ERISA.
(b) To the knowledge of Valley, each of the Valley
Pension Plans and each of the Valley Welfare Plans has been
operated in compliance in all material respects with the provisions
of ERISA, the Code, all regulations, rulings and announcements
promulgated or issued thereunder, and all other applicable
governmental laws and regulations.
(c) To the knowledge of Valley, no "accumulated funding
deficiency" within the meaning of Section 412 of the Code has been
incurred with respect to any of the Valley Pension Plans.
(d) Except with respect to customary health, life and
disability benefits or as disclosed on the Valley Disclosure
Schedule, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the financial statements of
Valley and established under GAAP or otherwise noted on such
financial statements.
4.13. REPORTS.
(a) Each communication mailed by Valley to its
stockholders since January 1, 1992, and each annual, quarterly or
special report, proxy statement or communication, as of its date,
complied in all material respects with all applicable statutes,
rules and regulations enforced or promulgated by the applicable
regulatory agency and did not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading; provided that disclosures as of a later date shall
be deemed to modify disclosures as of an earlier date.
(b) Valley and VNB have, since January 1, 1992, duly
filed with the OCC and the FRB in correct form in all material
respects the monthly, quarterly and annual reports required to be
filed under applicable laws and regulations, and Valley, upon
written request from Lakeland, promptly will deliver or make
available to Lakeland accurate and complete copies of such reports.
The Valley Disclosure Schedule lists the dates of all examinations
of Valley or VNB conducted by either the OCC, the FRB or the FDIC
since January 1, 1992, and the dates of any responses thereto
submitted by Valley or VNB.
4.14. COMPLIANCE WITH APPLICABLE LAW. Valley and its
Subsidiaries hold all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to each, and has complied with and is
not in default in any respect under any, applicable law, statute,
order, rule, regulation, policy and/or guideline of any federal,
state or local governmental authority relating to Valley and its
Subsidiaries (other than where such default or non-compliance will
not result in a material adverse effect on the business,
operations, assets or financial condition of Valley and its
Subsidiaries on a consolidated basis) and Valley has not received
notice of violations of, and does not know of any violations of,
any of the above. Without limiting the foregoing, to its knowledge
VNB has complied in all material respects with the CRA and Valley
has no reason to believe that any person or group would object to
the consummation of the Merger due to the CRA performance or rating
of VNB. To the knowledge of Valley, except as listed on the Valley
Disclosure Schedule, no person or group has adversely commented
upon VNB's CRA performance.
4.15. PROPERTIES AND INSURANCE.
(a) Valley and its Subsidiaries have good and, as to
owned real property, marketable title to all material assets and
properties, whether real or personal, tangible or intangible,
reflected in Valley's consolidated balance sheet as of December 31,
1993, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for
fair value in the ordinary course of business since December 31,
1993), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure
liabilities that are reflected in such balance sheet or the notes
thereto or incurred in the ordinary course of business after the
date of such balance sheet, (ii) statutory liens for amounts not
yet delinquent or which are being contested in good faith, (iii)
such encumbrances, liens, mortgages, security interests, pledges
and title imperfections that are not in the aggregate material to
the business, operations, assets, and financial condition of Valley
and its subsidiaries taken as a whole and (iv) with respect to
owned real property, title imperfections noted in title reports
delivered to Lakeland prior to the date hereof. Valley and its
Subsidiaries as lessees have the right under valid and subsisting
leases to occupy, use, possess and control all property leased by
them in all material respects as presently occupied, used,
possessed and controlled by them.
(b) The business operations and all insurable properties
and assets of Valley and its Subsidiaries are insured for their
benefit against all risks which, in the reasonable judgment of the
management of Valley should be insured against, in each case under
valid, binding and enforceable policies or bonds, with such
deductibles and against such risks and losses as are in the opinion
of the management of Valley adequate for the business engaged in by
Valley and its Subsidiaries. As of the date hereof, neither Valley
nor any of its Subsidiaries has received any notice of cancellation
or notice of a material amendment of any such insurance policy or
bond or is in default under such policy or bond, no coverage
thereunder is being disputed and all material claims thereunder
have been filed in a timely fashion.
4.16. MINUTE BOOKS. The minute books of Valley and its
Subsidiaries contain records that are accurate in all material
respects of all meetings and other corporate action held of their
respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
4.17. ENVIRONMENTAL MATTERS. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor any of its
Subsidiaries has received any written notice, citation, claim,
assessment, proposed assessment or demand for abatement alleging
that Valley or any of its Subsidiaries (either directly or as a
successor-in-interest in connection with the enforcement of
remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or
clean-up of any condition material to the business, operations,
assets or financial condition of Valley or its Subsidiaries.
Except as disclosed in the Valley Disclosure Schedule, Valley has
no knowledge that any toxic or hazardous substances or materials
have been emitted, generated, disposed of or stored on any property
owned or leased by Valley or any of its Subsidiaries in any manner
that violates or, after the lapse of time may violate, any
presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials, the
violation of which would have a material adverse effect on the
business, operations, assets or financial condition of Valley and
its Subsidiaries on a consolidated basis.
4.18. RESERVES. As of the date hereof, the reserve for
loan and lease losses in the Valley Financial Statements is, to
Valley's knowledge, adequate based upon past loan loss experiences
and potential losses in the current portfolio to cover all known or
anticipated loan losses.
4.19. DISCLOSURES. Except for other acquisition
transactions which Valley may not yet have publicly disclosed,
there are no material facts concerning the business, operations,
assets or financial condition of Valley which could have a material
adverse effect on the business, operations or financial condition
of Valley which have not been disclosed to Lakeland directly or
indirectly by access to any filing by Valley under the 1934 Act.
The representations and warranties contained in Article IV of this
Agreement are accurate in all material respects.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. CONDUCT OF THE BUSINESS OF LAKELAND. During the
period from the date of this Agreement to the Effective Time,
Lakeland shall, and shall cause each of its Subsidiaries to,
conduct its respective business and engage in transactions
permitted hereunder only in the ordinary course and consistent with
prudent banking practice, except with the prior written consent of
Valley, which consent will not be unreasonably withheld. Lakeland
also shall use its best efforts to (i) preserve its business
organization and that of each Lakeland Subsidiary intact, (ii) keep
available to itself the present services of its employees and those
of its Subsidiaries, provided that neither Lakeland nor any of its
Subsidiaries shall be required to take any unreasonable or
extraordinary act or any action which would conflict with any other
term of this Agreement, and (iii) preserve for itself and Valley
the goodwill of its customers and those of its Subsidiaries and
others with whom business relationships exist.
5.2. NEGATIVE COVENANTS AND DIVIDEND COVENANTS.
(a) Lakeland agrees that from the date hereof to the
Effective Time, except as otherwise approved by Valley in writing
or as permitted or required by this Agreement, it will not, nor
will it permit any of its Subsidiaries to:
(i) change any provision of its Certificate of
Incorporation or Bylaws or any similar governing documents;
(ii) except for the issuance of Lakeland Common Stock
pursuant to the present terms of the outstanding Lakeland
Options, change the number of shares of its authorized or
issued common or preferred stock or issue or grant any option,
warrant, call, commitment, subscription, right to purchase or
agreement of any character relating to the authorized or
issued capital stock of Lakeland or any Lakeland Subsidiary or
any securities convertible into shares of such stock, or
split, combine or reclassify any shares of its capital stock,
or redeem or otherwise acquire any shares of such capital
stock, or declare, set aside or pay any dividend, or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other
than Lakeland's regular quarterly dividends of $.15 per share
and one special dividend, to be declared after the Scheduled
Closing Date has been set, in an amount such that between
January 26, 1995 and the Closing Date, Lakeland shareholders
will receive dividends equivalent to those they would have
received as Valley shareholders during the same time period if
the Merger had closed on January 26, 1995;
(iii) grant any severance or termination pay (other than
pursuant to policies of Lakeland in effect on the date hereof
and disclosed to Valley in the Lakeland Disclosure Schedule or
as agreed to by Valley in writing) to, or enter into or amend
any employment agreement with, any of its directors, officers
or employees, other than the severance payment to William H.
McNear, Chairman of Lakeland's Board of Directors, in the
amount of $150,000 in settlement of his Retainer Agreement
with Lakeland upon the Effective Time (which payment shall be
reduced in such manner and to such extent so that, when
aggregated with all other payments to be made to such person
by Lakeland, such payment shall not be deemed an "excess
parachute payment" in accordance with Section 280G of the Code
or be subject to the excise tax provided in Section 4999(a) of
the Code); adopt any new employee benefit plan or arrangement
of any type or amend any such existing benefit plan or
arrangement; or award any increase in compensation or benefits
to its directors, officers or employees except with respect to
salary increases in the ordinary course of business and
consistent with past practices and policies;
(iv) sell or dispose of any substantial amount of assets
or incur any significant liabilities other than in the
ordinary course of business consistent with past practices and
policies;
(v) make any capital expenditures in excess of $100,000
other than pursuant to binding commitments existing on the
date hereof and other than expenditures necessary to maintain
existing assets in good repair;
(vi) file any applications or make any contract with
respect to branching or site location or relocation, other
than branching initiatives already underway as disclosed to
Valley on the Lakeland Disclosure Schedule. Any such
initiative requiring a competitive bid to an independent third
party or requiring a competitive bid to an instrumentality of
a government or quasi-governmental body will be disclosed only
on a direct confidential basis;
(vii) agree to acquire in any manner whatsoever (other
than to foreclose on collateral for a defaulted loan) any
business or entity;
(viii) make any material change in its accounting
methods or practices, other than changes required in
accordance with generally accepted accounting principles;
(ix) take any action that would result in any of the
representations and warranties contained in Article III of
this Agreement not being true and correct in any material
respect at the Effective Time; or
(x) agree to do any of the foregoing.
(b) Valley agrees that from the date hereof to the
Effective Time, except as otherwise approved by Lakeland in writing
or as permitted or required by this Agreement, it will not, nor
will it permit any of it Subsidiaries to:
(i) take any action that is intended or may
reasonably be expected to result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in
any material respect, or that may result in any condition,
agreement or covenant set forth in this Agreement not being
satisfied;
(ii) take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section
368 of the Code;
(iii) consolidate with or merge with any other person
or entity in which Valley is not the surviving entity, or convey,
transfer or lease its properties and assets substantially as an
entirety to any person or entity unless such person or entity shall
expressly assume the obligations of Valley under this Agreement; or
(iv) authorize or enter into any agreement or
commitment to do any of the foregoing.
5.3. NO SOLICITATION. Lakeland and the Bank shall not,
directly or indirectly, encourage or solicit or hold discussions or
negotiations with, or provide any information to, any person,
entity or group (other than Valley) concerning any merger or sale
of shares of capital stock or sale of substantial assets or
liabilities not in the ordinary course of business, or similar
transactions involving Lakeland or the Bank (an "Acquisition
Transaction"). Notwithstanding the foregoing, Lakeland may enter
into discussions or negotiations or provide information in
connection with an unsolicited possible Acquisition Transaction if
the Board of Directors of Lakeland, after consulting with counsel,
determines that such discussions or negotiations should be
commenced in the exercise of its fiduciary responsibilities or such
information should be furnished in the exercise of its fiduciary
responsibilities. Lakeland will promptly communicate to Valley the
terms of any proposal, whether written or oral, which it may
receive in respect of any Acquisition Transaction and the fact that
it is having discussions or negotiations with, or supplying
information to, a third party in connection with a possible
Acquisition Transaction.
5.4. CURRENT INFORMATION. During the period from the
date of this Agreement to the Effective Time, Lakeland will cause
one or more of its designated representatives to confer on a
monthly or more frequent basis with representatives of Valley
regarding Lakeland's business, operations, properties, assets and
financial condition and matters relating to the completion of the
transactions contemplated herein. Without limiting the foregoing,
Lakeland will send to Valley a monthly list of each new loan or
extension of credit, and each renewal of an existing loan or
extension of credit, in excess of $500,000, made during such month,
and provide Valley with a copy of the loan offering for any such
loan, extension of credit, or renewal upon request. As soon as
reasonably available, but in no event more than 45 days after the
end of each fiscal quarter (other than the last fiscal quarter of
each fiscal year) ending after the date of this Agreement, Lakeland
will deliver to Valley the Bank's call reports filed with the
Commissioner and FDIC and Lakeland's quarterly reports on Form 10-Q
as filed with the SEC under the 1934 Act, and Valley will deliver
to Lakeland Valley's quarterly reports on Form 10-Q, as filed with
the SEC under the 1934 Act, and VNB's call reports filed with the
OCC and the FDIC. As soon as reasonably available, but in no event
more than 90 days after the end of each fiscal year, Lakeland will
deliver to Valley and Valley will deliver to Lakeland their
respective audited Annual Reports, in each case as filed on Form
10-K with the SEC under the 1934 Act.
5.5. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) Lakeland and the Bank shall permit Valley and its
representatives, and Valley and VNB shall permit Lakeland and its
representatives, accompanied by an officer of the respective party,
reasonable access to their respective properties, and shall
disclose and make available to Valley and its representatives or
Lakeland and its representatives as the case may be, all books,
papers and records relating to their respective assets, stock
ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and
stockholders' meetings, organizational documents, bylaws, material
contracts and agreements, filings with any regulatory authority,
independent auditors' work papers (subject to the receipt by such
auditors of a standard access representation letter), litigation
files, plans affecting employees, and any other business activities
or prospects in which Valley and its representatives or Lakeland
and its representatives may have a reasonable interest. Neither
party shall be required to provide access to or to disclose
information where such access or disclosure would violate or
prejudice the rights of any customer or would contravene any law,
rule, regulation, order or judgment. The parties will use their
best efforts to obtain waivers of any such restriction and in any
event make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence
apply. Lakeland acknowledges that Valley may be involved in
discussions concerning other potential acquisitions and Valley
shall not be obligated to disclose such information to Lakeland
except as such information is publicly disclosed by Valley.
(b) All information furnished by the parties hereto
previously in connection with transactions contemplated by this
Agreement or pursuant hereto shall be used solely for the purpose
of evaluating the Merger contemplated hereby and shall be treated
as the sole property of the party delivering the information until
consummation of the Merger contemplated hereby and, if such Merger
shall not occur, each party and each party's advisors shall return
to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any
copies of such information, shall use its best efforts to keep
confidential all such information, and shall not directly or
indirectly use such information for any competitive or other
commercial purposes. In the event that the Merger contemplated
hereby does not occur, all documents, notes and other writings
prepared by a party hereto or its advisors based on information
furnished by the other party shall be promptly destroyed. The
obligation to keep such information confidential shall continue for
five years from the date the proposed Merger is abandoned but shall
not apply to (i) any information which (A) the party receiving the
information can establish by convincing evidence was already in its
possession prior to the disclosure thereof to it by the other
party; (B) was then generally known to the public; (C) became known
to the public through no fault of the party receiving such
information; or (D) was disclosed to the party receiving such
information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal
requirement or in accordance with an order of a court of competent
jurisdiction.
5.6. REGULATORY MATTERS.
(a) For the purposes of holding the meeting of Lakeland
shareholders referred to in Section 5.7 hereof and registering or
otherwise qualifying under applicable federal and state securities
laws Valley Common Stock to be issued to Record Holders and
optionees in connection with the Merger, the parties hereto shall
cooperate in the preparation and filing by Valley of a Registration
Statement with the SEC which shall include an appropriate proxy
statement and prospectus satisfying all applicable requirements of
applicable state and federal laws, including the Securities Act of
1933, as amended (the "1933 Act"), the 1934 Act and applicable
state securities laws and the rules and regulations thereunder.
(Such proxy statement and prospectus in the form mailed by Lakeland
to the Lakeland shareholders and optionees together with any and
all amendments or supplements thereto, is herein referred to as the
"Proxy Statement/Prospectus" and the various documents to be filed
by Valley under the 1933 Act with the SEC to register for sale the
Valley Common Stock to be issued to Record Holders and optionees,
including the Proxy Statement/Prospectus, are referred to herein as
the "Registration Statement").
(b) Valley shall furnish information concerning Valley
as is necessary in order to cause the Proxy Statement/Prospectus,
insofar as it relates to Valley, to comply with Section 5.6(a)
hereof. Valley agrees promptly to advise Lakeland if at any time
prior to the Lakeland shareholder meeting referred to in Section
5.7 hereof, any information provided by Valley in the Proxy
Statement/Prospectus becomes incorrect or incomplete in any
material respect and to provide Lakeland with the information
needed to correct such inaccuracy or omission. Valley shall
furnish Lakeland with such supplemental information as may be
necessary in order to cause the Proxy Statement/Prospectus, insofar
as it relates to Valley, to comply with Section 5.6(a) after the
mailing thereof to Lakeland shareholders.
(c) Lakeland shall furnish Valley with such information
concerning Lakeland and the Bank as is necessary in order to cause
the Proxy Statement/Prospectus, insofar as it relates to such
corporations, to comply with Section 5.6(a) hereof. Lakeland
agrees promptly to advise Valley if, at any time prior to the
Lakeland shareholder's meeting referred to in Section 5.6(a)
hereof, information provided by Lakeland in the Proxy
Statement/Prospectus becomes incorrect or incomplete in any
material respect and to provide Valley with the information needed
to correct such inaccuracy or omission. Lakeland shall furnish
Valley with such supplemental information as may be necessary in
order to cause the Proxy Statement/Prospectus, insofar as it
relates to Lakeland and the Bank, to comply with Section 5.6(a)
after the mailing thereof to Lakeland shareholders.
(d) Valley shall as promptly as practicable, at its sole
expense, make such filings as are necessary in connection with the
offering of the Valley Common Stock with applicable state
securities agencies and shall use all reasonable efforts to qualify
the offering of the Valley Common Stock under applicable state
securities laws at the earliest practicable date. Lakeland shall
promptly furnish Valley with such information regarding the
Lakeland shareholders as Valley requires to enable it to determine
what filings are required hereunder. Lakeland authorizes Valley to
utilize in such filings the information concerning Lakeland and the
Bank provided to Valley in connection with, or contained in, the
Proxy Statement/ Prospectus. Valley shall furnish Lakeland with
copies of all such filings and keep Lakeland advised of the status
thereof. Valley and Lakeland shall as promptly as practicable file
the Registration Statement containing the Proxy
Statement/Prospectus with the SEC, and each of Valley and Lakeland
shall promptly notify the other of all communications, oral or
written, with the SEC concerning the Registration Statement and the
Proxy Statement/Prospectus.
(e) Valley shall cause the Valley Common Stock to be
issued in connection with the Merger to be listed on the New York
Stock Exchange.
(f) The parties hereto will cooperate with each other
and use their best efforts to prepare all necessary documentation,
to effect all necessary filings and to obtain all necessary
permits, consents, waivers, approvals and authorizations of all
third parties and governmental bodies necessary to consummate the
transactions contemplated by this Agreement as soon as possible,
including, without limitation, those required by the OCC and the
FRB. The parties shall each have the right to review in advance
all information relating to the other, as the case may be, and any
of their respective subsidiaries, which appears in any filing made
with, or written material submitted to, any third party or
governmental body in connection with the transactions contemplated
by this Agreement. Valley and VNB shall cause at least a draft of
their respective applications to the FRB and an actual application
to the OCC to be filed within 45 days of the date hereof, so long
as Lakeland and the Bank provide all information necessary to
complete the application within 30 days of the date hereof.
(g) Each of the parties will promptly furnish each other
with copies of written communications received by them or any of
their respective subsidiaries from, or delivered by any of the
foregoing to, any governmental body in respect of the transactions
contemplated hereby.
5.7. APPROVAL OF SHAREHOLDERS. Lakeland will (a) take
all steps necessary duly to call, give notice of, convene and hold
a meeting of the shareholders of Lakeland as soon as reasonably
practicable for the purpose of securing the approval by such
shareholders of this Agreement, (b) subject to the qualification
set forth in Section 5.3 hereof, recommend to the shareholders of
Lakeland the approval of this Agreement and the transactions
contemplated hereby and use its best efforts to obtain, as promptly
as practicable, such approvals, and (c) cooperate and consult with
Valley with respect to each of the foregoing matters. In
connection therewith, each director of Lakeland agrees (i) to vote
in favor of the Merger, and (ii) take such action as is necessary
or is reasonably required by Valley to consummate the Merger.
5.8. FURTHER ASSURANCES. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to satisfy the
conditions to Closing and to consummate and make effective the
transactions contemplated by this Agreement, including, without
limitation, using reasonable efforts to lift or rescind any
injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions
contemplated by this Agreement and using its best efforts to
prevent the breach of any representation, warranty, covenant or
agreement of such party contained or referred to in this Agreement
and to promptly remedy the same. Nothing in this section shall be
construed to require any party to participate in any threatened or
actual legal, administrative or other proceedings (other than
proceedings, actions or investigations to which it is otherwise a
party or subject or threatened to be made a party or subject) in
connection with consummation of the transactions contemplated by
this Agreement unless such party shall consent in advance and in
writing to such participation and the other party agrees to
reimburse and indemnify such party for and against any and all
costs and damages related thereto.
5.9. PUBLIC ANNOUNCEMENTS. The parties hereto shall
cooperate with each other in the development and distribution of
all news releases and other public disclosures with respect to this
Agreement or any of the transactions contemplated hereby, except as
may be otherwise required by law or regulation or as to which the
party releasing such information has used its best efforts to
discuss with the other party in advance.
5.10. FAILURE TO FULFILL CONDITIONS. In the event that
Valley or Lakeland determines that a material condition to its
obligation to consummate the transactions contemplated hereby
cannot be fulfilled on or prior to October 31, 1995 and that it
will not waive that condition, it will promptly notify the other
party. Except for any acquisition or merger discussions Valley may
enter into with other parties, Lakeland and Valley will promptly
inform the other of any facts applicable to Lakeland or Valley,
respectively, or their respective directors or officers, that would
be likely to prevent or materially delay approval of the Merger by
any governmental authority or which would otherwise prevent or
materially delay completion of the Merger.
5.11. DISCLOSURE SUPPLEMENTS. From time to time prior
to the Effective Time, each party hereto will promptly supplement
or amend (by written notice to the other) its respective Disclosure
Schedules delivered pursuant hereto with respect to any matter
hereafter arising which, if existing, occurring or known at the
date of this Agreement, would have been required to be set forth or
described in such Schedules or which is necessary to correct any
information in such Schedules which has been rendered materially
inaccurate thereby. For the purpose of determining satisfaction of
the conditions set forth in Article VI, no supplement or amendment
to such Schedules shall correct or cure any warranty which was
untrue when made, but supplements or amendments may be used to
disclose subsequent facts or events to maintain the truthfulness of
any warranty.
5.12. TRANSACTION EXPENSES OF LAKELAND. Lakeland shall
mutually agree with Valley about printing arrangements for the
Proxy Statement/Prospectus before entering into any binding
contract for such expenses.
5.13. CLOSING. The parties hereto shall cooperate and
use reasonable efforts to try to cause the Effective Time to occur
on July 1 or October 1, 1995.
5.14. INDEMNIFICATION. After the Effective Time, to the
extent permitted by applicable law, and the Certificate of
Incorporation or Articles of Association, Valley agrees that it
will, or will cause VNB to, provide to the directors and officers
of Lakeland and the Bank indemnification equivalent to that
provided by the Certificate of Incorporation and Bylaws of each of
Lakeland and the Bank with respect to acts or omissions occurring
prior to the Effective Time, including without limitation, the
authorization of this Agreement and the transactions contemplated
hereby, for a period of six years from the Effective Time, or in
the case of matters occurring prior to the Effective Time which
have not been resolved prior to the sixth anniversary of the
Effective Time, until such matters are finally resolved. To the
extent permitted by applicable law, and the Certificate of
Incorporation or Articles of Association, Valley or VNB (as
applicable) shall advance expenses in connection with the foregoing
indemnification.
5.15. NEW VALLEY DIRECTORS; OFFICERS.
(a) DIRECTORS. As of the Effective Time, Valley shall
cause its Board of Directors to take action to appoint at the
Effective Time two directors of Lakeland to the Board of Directors
of Valley. One of the Lakeland directors to be so elected shall be
William H. McNear and the other director shall be selected by the
nominating committee of the Board of Directors of Valley from two
nominees submitted by the Board of Directors of Lakeland. In
addition, John Grabovetz shall be designated as a Director Emeritus
of Valley at the Effective Time.
(b) OFFICERS. As of the Effective Time, Valley shall
appoint Michael Halpin a First Senior Vice President of VNB and
Valley shall assume in writing Mr. Halpin's employment contract, a
copy of which is included in the Lakeland Disclosure Schedule.
5.16. EMPLOYMENT MATTERS. Valley intends to continue
the employment of all officers and employees of the 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.
5.17. POOLING AND TAX-FREE REORGANIZATION TREATMENT.
Neither Valley nor Lakeland shall intentionally take, fail to take
or cause to be taken or not be taken, any action within its
control, whether before or after the Effective Time, which would
disqualify the Merger as a "pooling of interests" for accounting
purposes or as a "reorganization" within the meaning of Section
368(a) of the Code.
5.18 LAKELAND OPTION PLAN. From and after the Effective
Time, each Lakeland Option which is converted to an option to
purchase Valley Common Stock under Section 2.1(b)(i) shall be
administered, operated and interpreted by a committee comprised of
members of the Board of Directors of Valley appointed by the Board
of Directors of Valley. Valley shall reserve for issuance the
number of shares of Valley Common Stock necessary to satisfy
Valley's obligations. Valley shall also register, if not
previously registered pursuant to the 1933 Act, the shares
authorized for issuance under the Lakeland Options so converted.
5.19. AFFILIATES.
(a) Promptly, but in any event within 30 days, after the
execution and delivery of this Agreement, (i) Lakeland shall
deliver to Valley (x) a letter identifying all persons who, to the
knowledge of Lakeland, may be deemed to be affiliates of Lakeland
under Rule 145 of the 1933 Act, including without limitation all
directors and executive officers of Lakeland and (y) a letter
identifying all persons who, to the knowledge of Lakeland, may be
deemed to be affiliates of Lakeland as that term (affiliate) is
used for purposes of qualifying for pooling-of-interests accounting
treatment; and (ii) Valley shall identify to Lakeland all persons
who, to the knowledge of Valley, may be deemed affiliates of Valley
as that term (affiliates) is used for purposes of qualifying for
pooling-of-interests accounting treatment.
(b) Lakeland shall cause each director of Lakeland to,
and Lakeland shall use its best efforts to cause each executive
officer of Lakeland and each other person who may be deemed an
affiliate of Lakeland (under either Rule 415 of the 1933 Act or the
accounting treatment rules) to, execute and deliver to Valley
within 30 days after the execution and delivery of this Agreement,
a letter substantially in the form of Exhibit 5.19 hereto agreeing
to be bound by the restrictions of Rule 145, as set forth in
Exhibit 5.19 and agreeing to be bound by the rules which permit the
Merger to be treated as a pooling of interests for accounting
purposes. In addition, Valley shall cause each director and
executive officer of Valley to, and Valley shall use its best
efforts to cause each other person who may be deemed an affiliate
of Valley (as that term is used for purposes of qualifying for
pooling of interests) to, execute and deliver to Valley within 30
days after the execution and delivery of this Agreement, a letter
in which such persons agree to be bound by the rules which permit
the Merger to be treated as a pooling of interests for accounting
treatment.
(c) Valley agrees to publish financial results covering
at least 30 days of combined operations of Valley and Lakeland as
soon as practicable after consummation of the Merger.
5.20. COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY ACT.
Lakeland, at its sole cost and expense, shall use its best efforts
to obtain prior to the Effective Time, with respect to each
facility located in New Jersey owned or operated by Lakeland or any
Lakeland Subsidiary (each, a "Facility"), either: (a) a Letter of
Non-Applicability ("LNA") from the New Jersey Department of
Environmental Protection ("NJDEP") stating that the Facility is not
an "industrial establishment," as such term is defined under the
Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement
issued by the NJDEP pursuant to ISRA authorizing the consummation
of the transactions contemplated by this Agreement; (c) a Negative
Declaration approval, Remedial Action Workplan approval, No Further
Action letter or other document or documents issued by the NJDEP
advising that the requirements of ISRA have been satisfied with
respect to the Facility; or (d) an opinion addressed to Valley from
New Jersey legal counsel reasonably acceptable to Valley to the
effect that ISRA has been complied with, or is inapplicable, with
respect to the Facility. In the event Lakeland obtains a
Remediation Agreement, Lakeland will post or have posted an
appropriate Remediation Funding Source or will have obtained the
NJDEP's approval to self-guaranty any Remediation Funding Source
required under any such Remediation Agreement.
ARTICLE VI
CLOSING CONDITIONS
6.1. CONDITIONS OF EACH PARTY'S OBLIGATIONS UNDER THIS
AGREEMENT. The respective obligations of each party under this
Agreement to consummate the Merger shall be subject to the
satisfaction, or, where permissible under applicable law, waiver at
or prior to the Effective Time of the following conditions:
(a) APPROVAL OF LAKELAND SHAREHOLDERS; SEC REGISTRATION.
This Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote of the shareholders of
Lakeland. The Registration Statement shall have been declared
effective by the SEC and shall not be subject to a stop order or
any threatened stop order, and the issuance of the Valley Common
Stock shall have been qualified in every state where such
qualification is required under the applicable state securities
laws. The Valley Common Stock to be issued in connection with the
Merger, including Valley Common Stock to be issued for the Lakeland
Options, shall have been approved for listing on the New York Stock
Exchange.
(b) REGULATORY FILINGS. All necessary regulatory or
governmental approvals and consents (including without limitation
any required approval of the OCC and any approval or waiver
required by the FRB) required to consummate the transactions
contemplated hereby shall have been obtained without any term or
condition which would materially impair the value of Lakeland and
the Bank, taken as a whole, to Valley or which would materially
impair the value of Valley and VNB, taken as a whole, to Lakeland.
All conditions required to be satisfied prior to the Effective Time
by the terms of such approvals and consents shall have been
satisfied; and all statutory waiting periods in respect thereof
shall have expired.
(c) SUITS AND PROCEEDINGS. No order, judgment or decree
shall be outstanding against a party hereto or a third party that
would have the effect of preventing completion of the Merger; no
suit, action or other proceeding shall be pending or threatened by
any governmental body in which it is sought to restrain or prohibit
the Merger or the Bank Merger; and no suit, action or other
proceeding shall be pending before any court or governmental agency
in which it is sought to restrain or prohibit the Merger or the
Bank Merger or obtain other substantial monetary or other relief
against one or more parties hereto in connection with this
Agreement and which Valley or Lakeland determines in good faith,
based upon the advice of their respective counsel, makes it
inadvisable to proceed with the Merger because any such suit,
action or proceeding has a significant potential to be resolved in
such a way as to deprive the party electing not to proceed of any
of the material benefits to it of the Merger or the Bank Merger.
(d) TAX FREE EXCHANGE. Valley and Lakeland shall have
received an opinion, satisfactory to Valley and Lakeland, of
Pitney, Hardin, Kipp & Szuch, counsel for Valley, to the effect
that the transactions contemplated hereby will result in a
reorganization (as defined in Section 368(a) of the Code), and
accordingly no gain or loss will be recognized for federal income
tax purposes to Valley, Lakeland, VNB or the Bank or to the
shareholders of Lakeland who exchange their shares of Lakeland for
Valley Common Stock (except to the extent that cash is received in
lieu of fractional shares of Valley Common Stock).
(e) POOLING OF INTERESTS. The Merger shall be qualified
to be treated by Valley as a pooling-of-interests for accounting
purposes and Valley shall have received a letter from KPMG Peat
Marwick LLP (and a concurring or back-up letter from Stephen P.
Radics, as necessary or appropriate to enable KPMG Peat Marwick to
issue its letter) to the effect that the Merger will qualify for
pooling-of-interests accounting treatment if closed and consummated
in accordance with the Agreement.
6.2. CONDITIONS TO THE OBLIGATIONS OF VALLEY UNDER THIS
AGREEMENT. The obligations of Valley under this Agreement shall be
further subject to the satisfaction or waiver, at or prior to the
Effective Time, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
OBLIGATIONS OF LAKELAND AND BANK. The representations and
warranties of Lakeland contained in this Agreement shall be true
and correct in all material respects on the Closing Date as though
made on and as of the Closing Date. Lakeland shall have performed
in all material respects the agreements, covenants and obligations
necessary to be performed by it prior to the Closing Date. With
respect to any representation or warranty which as of the Closing
Date has required a supplement or amendment to the Lakeland
Disclosure Schedule to render such representation or warranty true
and correct as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i)
the information contained in the supplement or amendment to the
Disclosure Schedule related to events occurring following the
execution of this Agreement and (ii) the facts disclosed in such
supplement or amendment would not either alone, or together with
any other supplements or amendments to the Lakeland Disclosure
Schedule, materially adversely effect the representation as to
which the supplement or amendment relates.
(b) CONSENTS. Valley shall have received the written
consents of any person whose consent to the transactions
contemplated hereby is required under the applicable instrument.
(c) OPINION OF COUNSEL. Valley shall have received an
opinion of counsel to Lakeland, dated the date of the Closing, in
form and substance reasonably satisfactory to Valley, covering the
matters set forth on Schedule 6.2 hereto and any other matters
reasonably requested by Valley.
(d) BANK ACTION. The Bank shall have taken all
necessary corporate action to effectuate the Bank Merger
immediately following the Effective Time.
(e) CERTIFICATES. Lakeland shall have furnished Valley
with such certificates of its officers or other documents to
evidence fulfillment of the conditions set forth in this Section
6.2 as Valley may reasonably request.
(f) ENVIRONMENTAL LAW COMPLIANCE. Lakeland shall have
obtained, with respect to each Facility, an LNA, a Remediation
Agreement, a Negative Declaration approval, a Remedial Action
Workplan approval (in which event Lakeland will post or have posted
an appropriate Remediation Funding Source or will have obtained the
NJDEP's approval to self-guaranty any Remediation Funding Source
required under any such Remediation Agreement), a No Further Action
letter or other document or documents issued by the NJDEP advising
that the requirements of ISRA have been satisfied with respect to
the Facility or an opinion of the type referred to in Section
5.20(d) hereof.
6.3. CONDITIONS TO THE OBLIGATIONS OF LAKELAND UNDER
THIS AGREEMENT. The obligations of Lakeland under this Agreement
shall be further subject to the satisfaction or waiver, at or prior
to the Effective Time, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
OBLIGATIONS OF VALLEY. The representations and warranties of
Valley contained in this Agreement shall be true and correct in all
material respects on the Closing Date as though made on and as of
the Closing Date. Valley shall have performed in all material
respects, the agreements, covenants and obligations to be performed
by it prior to the Closing Date. With respect to any
representation or warranty which as of the Closing Date has
required a supplement or amendment to the Valley Disclosure
Schedule to render such representation or warranty true and correct
as of the Closing Date, the representation and warranty shall be
deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the
Disclosure Schedule related to events occurring following the
execution of this Agreement and (ii) the facts disclosed in such
supplement or amendment would not either alone, or together with
any other supplements or amendments to the Valley Disclosure
Schedule, materially adversely effect the representation as to
which the supplement or amendment relates.
(b) OPINION OF COUNSEL TO VALLEY. Lakeland shall have
received an opinion of counsel to Valley, dated the date of the
Closing, in form and substance reasonably satisfactory to Lakeland,
covering the matters set forth on Schedule 6.3 hereto.
(c) FAIRNESS OPINION. Lakeland shall have received an
opinion from Hopper Soliday as of the date of this Agreement and
the date the Proxy Statement/Prospectus is mailed to Lakeland's
stockholders, to the effect that, in its opinion, the consideration
to be paid to stockholders of Lakeland hereunder is fair to such
stockholders from a financial point of view.
(d) LAKELAND DIRECTORS AND OFFICERS. Valley shall have
taken all action necessary to appoint two directors of Lakeland to
the Board of Directors of Valley, shall have appointed Michael
Halpin a First Senior Vice President of Valley and shall have
assumed in writing the contract of Michael Halpin, all as provided
in Section 5.15 and shall appoint John Grabovetz as Director
Emeritus.
(e) CERTIFICATES. Valley shall have furnished Lakeland
with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in
this Section 6.3 as Lakeland may reasonably request.
(f) VNB ACTION. VNB shall have taken all necessary
corporate action to effectuate the Bank Merger immediately
following the Effective Time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. TERMINATION. This Agreement may be terminated
prior to the Effective Time, whether before or after approval of
this Agreement by the stockholders of Lakeland:
(a) By mutual written consent of the parties hereto.
(b) By Valley or Lakeland (i) if the Effective Time
shall not have occurred on or prior to October 31, 1995 or (ii) if
a vote of the stockholders of Lakeland is taken and such
stockholders fail to approve this Agreement at the meeting (or any
adjournment thereof) held for such purpose, unless in each case the
failure of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe its
agreement set forth herein to be performed or observed by such
party (or the directors of Lakeland) at or before the Effective
Time.
(c) By Valley or Lakeland upon written notice to the
other if any application for regulatory or governmental approval
necessary to consummate the Merger and the other transactions
contemplated hereby shall have been denied or withdrawn at the
request or recommendation of the applicable regulatory agency or
governmental authority or by Valley upon written notice to Lakeland
if any such application is approved with conditions which
materially impair the value of Lakeland and the Bank, taken as a
whole, to Valley.
(d) By Valley if (i) there shall have occurred a
material adverse change in the business, operations, assets, or
financial condition of Lakeland or the Bank, taken as a whole, from
that disclosed by Lakeland on the date of this Agreement; or (ii)
if the net operating income excluding security gains and losses
(after tax but excluding expenses related to this Agreement) of
Lakeland for any full fiscal quarter after December 31, 1994, is
materially less than the net income of Lakeland for each of the
last two fiscal quarters of calendar year 1994; or (iii) there was
a material breach in any representation, warranty, covenant,
agreement or obligation of Lakeland hereunder.
(e) By Lakeland, if (i) there shall have occurred a
material adverse change in the business, operations, assets or
financial condition of Valley or VNB from that disclosed by Valley
on the date of this Agreement; or (ii) if the net operating income
excluding security gains and losses (after tax but excluding
expenses related to this Agreement) of Valley for any full fiscal
quarter after December 31, 1994, is materially less than the net
income of Valley for each of the last two fiscal quarters of
calendar year 1994; or (iii) there was a material breach in any
representation, warranty, covenant, agreement or obligation of
Valley hereunder.
(f) By Valley or Lakeland if any condition to Closing
specified under Article VI hereof applicable to such party cannot
reasonably be met after giving the other party a reasonable
opportunity to cure any such condition.
(g) By Lakeland in the event that, as provided in
Section 5.3 hereof, the fiduciary responsibilities of the Board of
Directors of Lakeland established under applicable law require
Lakeland to participate or authorize participation in any
Acquisition Transaction.
7.2. EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement by either Valley or
Lakeland pursuant to Section 7.1, this Agreement shall forthwith
become void and have no effect, without any liability on the part
of any party or its officers, directors or stockholders. Nothing
contained herein, however, shall relieve any party from any
liability for any breach of this Agreement.
7.3. AMENDMENT. This Agreement may be amended by mutual
action taken by the parties hereto at any time before or after
adoption of this Agreement by the stockholders of Lakeland but,
after any such adoption, no amendment shall be made which reduces
or changes the amount or form of the consideration to be delivered
to the shareholders of Lakeland without the approval of such
stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of Valley and Lakeland.
7.4. EXTENSION; WAIVER. The parties may, at any time
prior to the Effective Time of the Merger, (i) extend the time for
the performance of any of the obligations or other acts of the
other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document
delivered pursuant thereto; or (iii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on
the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on
behalf of such party against which the waiver is sought to be
enforced.
ARTICLE VIII
MISCELLANEOUS
8.1. EXPENSES. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby (including legal, accounting and investment banking fees and
expenses) shall be borne by the party incurring such costs and
expenses, except that the cost of printing and mailing the Proxy
Statement/Prospectus shall be borne equally by the parties hereto
if the transaction is terminated.
8.2. NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and
sufficient if delivered personally or sent by telecopier with
confirming copy sent the same day by registered or certified mail,
postage prepaid, as follows:
(a) If to Valley, to:
Valley National Bancorp
1445 Valley Road
Wayne, New Jersey 07474-0558
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
Telecopier No. (201) 305-0024
Copy to:
Pitney, Hardin, Kipp & Szuch
Delivery:
200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Ronald H. Janis, Esq.
Telecopier No. (201) 966-1550
(b) If to Lakeland, to:
Lakeland First Financial Group, Inc.
250 Route 10
Succasunna, New Jersey 07876
Attn: Michael Halpin,
President and Chief Executive Officer
Telecopier No. (201) 584-2234
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.
Telecopier No. (202) 434-4661
or such other addresses as shall be furnished in writing by any
party, and any such notice or communications shall be deemed to
have been given as of the date so delivered or telecopied and
mailed.
8.3. PARTIES IN INTEREST. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Nothing in
this Agreement is intended to confer, expressly or by implication,
upon any other person any rights or remedies under or by reason of
this Agreement, except for the indemnitees covered by Section 5.14
hereof, the persons referred to in Section 5.15 and the persons
signing letter agreements pursuant to Section 5.19 hereof who shall
be entitled to the benefits of such Section 5.19. No assignment of
this Agreement may be made except upon the written consent of the
other parties hereto.
8.4. ENTIRE AGREEMENT. This Agreement, which includes
the Disclosure Schedules hereto and the other documents, agreements
and instruments executed and delivered pursuant to or in connection
with this Agreement, contains the entire Agreement between the
parties hereto with respect to the transactions contemplated by
this Agreement and supersedes all prior negotiations, arrangements
or understandings, written or oral, with respect thereto, including
the Letter of Intent. If any provision of this Agreement is found
invalid, it shall be considered deleted and shall not invalidate
the remaining provisions.
8.5. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and
the same agreement and each of which shall be deemed an original.
8.6. GOVERNING LAW. This Agreement shall be governed by
the laws of the State of New Jersey, without giving effect to the
principles of conflicts of laws thereof.
8.7. DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are for convenience only and shall not control or
affect the meaning or construction of any provision of this
Agreement.
8.8 SURVIVAL. All representations, warranties and,
except to the extent specifically provided otherwise herein,
agreements and covenants, other than those agreements and covenants
set forth in Sections 5.14, 5.15 and 5.18 which shall survive the
Merger, shall terminate as of the Effective Time.
IN WITNESS WHEREOF, Valley, VNB, the Bank and Lakeland
have caused this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
ATTEST: VALLEY NATIONAL BANCORP
By: PETER SOUTHWAY By: GERALD H. LIPKIN
------------------------- -------------------------
Peter Southway, President Gerald H. Lipkin
Chairman and Chief
Executive Officer
ATTEST: LAKELAND FIRST FINANCIAL GROUP, INC.
By: WILLIAM H. McNEAR By: MICHAEL HALPIN
------------------------- -------------------------
William H. McNear, Michael Halpin, President
Chairman and Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
By: PETER SOUTHWAY By: GERALD H. LIPKIN
------------------------- -------------------------
Peter Southway, President Gerald H. Lipkin
Chairman and Chief
Executive Officer
ATTEST: LAKELAND SAVINGS BANK
By: WILLIAM H. McNEAR By: MICHAEL HALPIN
------------------------- -------------------------
William H. McNear, Michael Halpin, President
Chairman and Chief Executive Officer
ANNEX B
HOPPER SOLIDAY & CO., INC.
May __, 1995
The Board of Directors
Lakeland First Financial Group, Inc.
250 Route 10
Succasunna, New Jersey 07876
Members of the Board:
You have requested our opinion as to the fairness, from
a financial point of view, to Lakeland First Financial Group,
Inc. ("Lakeland") and its shareholders of the financial terms of
the proposed merger ("Proposed Merger") between Lakeland and
Valley National Bancorp ("Valley").
The terms of the Amended and Restated Agreement and
Plan of Merger dated as of April 21, 1995 (the "Agreement"), by
and between Lakeland and Valley indicate that the consummation
of the Proposed Merger is subject to receipt of approvals from
the shareholders of Lakeland and from various regulatory
agencies, and is further subject to the satisfaction of certain
other conditions. As provided for in the Agreement, Lakeland will
merge with and into Valley. Under the terms of the Agreement,
each outstanding share of Lakeland common stock will be converted
into 1.286 shares (the "Exchange Ratio") of Valley common stock.
The Exchange Ratio has been adjusted to reflect the five percent
stock dividend declared by Valley on March 23, 1995 and payable
May 2, 1995 to stockholders of record as of April 14, 1995. No
adjustment in the Exchange Ratio will be made as of the Closing
Date to compensate for any change in the market value of the
common stock of Valley between January 26, 1995 (the date of the
Letter of Intent between Lakeland and Valley) and the Closing
Date.
Hopper Soliday & Co., Inc. ("Hopper Soliday") as a
customary part of its investment banking business, is engaged in
the valuation of securities and companies in connection with
mergers, acquisitions, private placements and other corporate
transactions.
In arriving at our opinion we have reviewed among other
things: (i) the Agreement; (ii) the Agreement and Plan of Merger
dated November 9, 1994 by and between American Union Bank
("American Union") and Valley concerning the proposed merger of
American Union with and into Valley (the "American Union Merger")
as well as the American Union Proxy Statement/Prospectus for this
transaction; (iii) the Proxy Statement/Prospectus on Form S-4
concerning the Proposed Merger; (iv) Valley Annual Reports for
the years ended December 31, 1992 through December 31, 1994 and
annual Reports on Form 10-K for the years ended December 31, 1992
and 1993; (v) Lakeland Annual Reports for the years ended June
30, 1992 through June 30, 1994, Annual Reports on Form 10-K for
the same periods; and Quarterly Reports on Form 10-Q for the
quarters ending September 30, 1994 and December 31, 1994; (vi)
financial forecasts of Valley reviewed with the management of
Valley; (vii) financial forecasts of Lakeland reviewed with the
management of Lakeland; (viii) the views of senior management of
Lakeland and Valley of their respective past and current business
operations, results thereof, financial condition and future
prospects; (ix) historical and current publicly available market
information concerning the trading of and the trading markets for
Lakeland common stock and Valley common stock; (x) the financial
terms of recent mergers and acquisitions in the savings industry
which we deem to be comparable to the Proposed Merger; (xi) the
current banking environment; and (xii) such other information,
financial studies, analyses and investigations and financial
economic and market criteria as we consider relevant.
In reaching our opinion, we have assumed and relied
upon, without independent verification, the accuracy and
completeness of all the financial information, analyses and other
information reviewed by and discussed with us, and we did not
make or obtain from any other source, any independent evaluation
or appraisal of the specific assets, the collateral securing
assets or the liabilities of Valley or Lakeland or any of their
subsidiaries, or the collectability of any such assets. With
respect to the financial projections reviewed with management, we
have assumed that they have been reasonably prepared on the best
currently available estimates and judgments of the respective
managements of the respective future financial performances of
Lakeland and Valley and that such performances will be achieved.
We have also assumed that there has been no material change in
Lakeland's or Valley's assets, financial condition, results of
operations, business or future prospects since the date of the
last financial statements noted above. We have further assumed
that in the course of obtaining the necessary regulatory approvals
for the Proposed Merger, no conditions will be imposed that will
have a material adverse effect on the amount or form of
consideration or on the results of operations, the financial
condition or the prospects of Lakeland or, on a pro forma basis,
Valley.
Our opinion is based upon information provided to us by
the managements of Lakeland and Valley, as well as market,
economic, financial and other conditions as they exist and can be
evaluated only as of the date hereof. Events occurring after the
date hereof could materially effect the assumptions used in
preparing this opinion. We have not undertaken to reaffirm or
revise this opinion or otherwise comment upon any events
occurring after the date hereof. Our opinion pertains only to
the financial consideration offered in the Proposed Merger and
does not constitute a recommendation to the Board of Lakeland.
We have acted as Lakeland's financial advisor in
connection with the Proposed Merger and will receive a fee for
our services, a significant portion of which is contingent upon
the consummation of the Proposed Merger. We received an initial
retainer for our engagement as financial advisor, but have not
received an additional fee for rendering this opinion.
It is understood that this opinion is not to be quoted
or referred to, in whole or in part, in a registration statement,
prospectus, or proxy statement, or in any other document used in
connection with the offering or sale of securities, nor shall
this letter be used for any other purpose, without Hopper
Soliday's prior written consent; provided, however, that we
hereby consent to the inclusion of this opinion in any
registration statement or proxy statement used in connection with
the Proposed Merger so long as the opinion is quoted in full in
such registration statement or proxy statement.
Based upon and subject to the foregoing, it is our
opinion that, as of the date hereof, the terms of the Proposed
Merger as provided and described in the Agreement are fair, from
a financial point of view, to Lakeland and its shareholders.
Very truly yours,
ANNEX C
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
ANNEX D
VALLEY NATIONAL BANCORP
1445 VALLEY ROAD
WAYNE, NEW JERSEY 07474-0558
As of February 27, 1995
Mr. Michael Halpin
President and CEO
Lakeland First Financial
Dear Mike:
This letter will acknowledge the intentions of Valley
National Bank regarding Lakeland employees and benefits. This
letter replaces and supersedes my letter to you dated February
23, 1995. This letter does not supersede or overrule any
provision of the Agreement and Plan of Merger, dated as of
February 27, 1995, among Valley National Bancorp, Valley National
Bank, Lakeland First Financial Group, Inc. and Lakeland Savings
Bank.
Valley National Bank will provide eligible, actively
employed Lakeland employees who join Valley National Bank with
the same Valley National Bank benefits plans coverage under which
VNB employees participate under the terms and conditions as
required by VNB plan contracts. Specific Valley benefit plans,
as described in the attached Valley employees handbooks, include
but are not limited to, medical, dental and disability plans,
pension and 401(K) plans, vacation and paid personal days and
sick days. Lakeland employees will retain their date of
employment with Lakeland for purposes of calculating Valley
National Bank employee seniority and eligibility for VNB benefit
plans.
Lakeland employees will be eligible to participate in
the VNB 401(K) and Retirement plans as soon as feasible after the
date of merger assuming all legal and financial requirements of
the Valley National and Lakeland Retirement plans are
satisfactory and complete. Lakeland employees will receive full
eligible credit, sick leave accrual and vesting for prior pension
services under the Lakeland Retirement plan when merged into the
Valley Retirement Plan. Valley National Bank maintains the sole
right to determine the terms and conditions of VNB benefit plans
for service after the Effective Time of the Merger, but in no
event shall such benefits, in the aggregate, be less than those
applicable to Lakeland prior to the Merger.
Any Lakeland or Bank employee relocated as a result of
departmental consolidations following the Effective Time into a
location, other than that of an acquired Lakeland office or
facility, shall be given, on a priority basis, the opportunity to
accept a job posting position to relocate to a Lakeland office or
facility at the salary and position so posted. Valley National
Bank will offer the same severance arrangements to Lakeland
employees as prior Valley mergers, a copy of which is attached.
Valley, consistent with Lakeland's past practice, shall
provide each Director of Lakeland who continues as or becomes a
retired Director of Lakeland, with supplemental medical insurance
which supplements their coverage under Medicare. Any Director or
retired Director who is not 65 years of age shall be provided a
supplementary medical insurance policy or a primary medical
insurance policy until age 65 at which time the supplementary
policy will apply. Valley will also continue the Lakeland
Directors Post Retirement Plan as outlined in Lakeland's 1994
Proxy.
This letter is a statement of Valley's intentions.
This letter does not grant, and shall not be construed as
granting, rights of enforcement to any current or prior director,
officer or employee of Lakeland. Without limiting the foregoing,
Valley does not hereby make any promise of future employment to
any person.
GERALD H. LIPKIN
---------------------------
Gerald H. Lipkin
Chairman of the Board &
Chief Executive Officer
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Indemnification. Article VI of the certificate of
incorporation of Valley National Bancorp provides that the corporation
shall indemnify its present and former officers, directors, employees, and
agents and persons serving at its request against expenses, including
attorney's fees, judgments, fines or amounts paid in settlement, incurred
in connection with any pending or threatened civil or criminal proceeding
to the full extent permitted by the New Jersey Business Corporation Act.
The Article also provides that such indemnification shall not exclude any
other rights to indemnification to which a person may otherwise be
entitled, and authorizes the corporation to purchase insurance on behalf of
any of the persons enumerated against any liability whether or not the
corporation would have the power to indemnify him under the provisions of
Article VI.
The New Jersey Business Corporation Act empowers a
corporation to indemnify a corporate agent against his expenses and
liabilities incurred in connection with any proceeding (other than a
derivative lawsuit) involving the corporate agent by reason of his being or
having been a corporate agent if (a) the agent acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and (b) with respect to any criminal proceeding, the
corporate agent had no reasonable cause to believe his conduct was
unlawful. For purposes of the Act, the term "corporate agent" includes any
present or former director, officer, employee or agent of the corporation,
and a person serving as a "corporate agent" at the request of the
corporation for any other enterprise.
With respect to any derivative action, the corporation
is empowered to indemnify a corporate agent against his expenses (but not
his liabilities) incurred in connection with any proceeding involving the
corporate agent by reason of his being or having been a corporate agent if
the agent acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation. However, only
the court in which the proceeding was brought can empower a corporation to
indemnify a corporate agent against expenses with respect to any claim,
issue or matter as to which the agent was adjudged liable for negligence or
misconduct.
The corporation may indemnify a corporate agent in a
specific case if a determination is made by any of the following that the
applicable standard of conduct was met: (i) the Board of Directors, or a
committee thereof, acting by a majority vote of a quorum consisting of
disinterested directors; (ii) by independent legal counsel, if there is not
a quorum of disinterested directors or if the disinterested quorum empowers
counsel to make the determination; or (iii) by the shareholders.
A corporate agent is entitled to mandatory
indemnification to the extent that the agent is successful on the merits or
otherwise in any proceeding, or in defense of any claim, issue or matter in
the proceeding. If a corporation fails or refuses to indemnify a corporate
agent, whether the indemnification is permissive or mandatory, the agent
may apply to a court to grant him the requested indemnification. In
advance of the final disposition of a proceeding, the corporation may pay
an agent's expenses if the agent agrees to repay the expenses unless it is
ultimately determined he is entitled to indemnification.
Exculpation. Article VIII of the certificate of
incorporation of Valley National Bancorp provides:
A director or officer of the Corporation shall not be
personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation
or its shareholders, except that this provision shall not
relieve a director or officer from liability for any breach
of duty based upon an act or omission (i) in breach of such
person's duty of loyalty to the Corporation or its
shareholders, (ii) not in good faith or involving a knowing
violation of law, or (iii) resulting in receipt by such
person of an improper personal benefit. If the New Jersey
Business Corporation Act is amended after approval by the
shareholders of this provision to authorize corporate
action further eliminating or limiting the personal
liability of directors or officers, then the liability of a
director and/or officer of the Corporation shall be
eliminated or limited to the fullest extent permitted by
the New Jersey Business Corporation Act as so amended.
Any repeal or modification of the foregoing
paragraph by the shareholders of the Corporation or
otherwise shall not adversely affect any right or
protection of a director or officer of the Corporation
existing at the time of such repeal or modification.
The New Jersey Business Corporation Act, as it affects exculpation, has not
been changed since the adoption of this provision by Valley National
Bancorp in 1987.
Item 21.
Exhibit No. Description
----------- -----------
A. 2(a)* Amended and Restated Agreement and Plan of Merger,
dated as of April 21, 1995, by and among Valley
National Bancorp, Valley National Bank, Lakeland
First Financial Group, Inc. and Lakeland Savings
Bank (included as Annex A to the Proxy
Statement/Prospectus).
2(b)* Stock Option Agreement, dated January 26, 1995, by
and between Valley National Bancorp and Lakeland
First Financial Group, Inc. (included as Annex C
to the Proxy Statement/Prospectus).
5*** Opinion of Pitney, Hardin, Kipp & Szuch as to the
legality of the securities to be registered.
8*** Opinion of Pitney, Hardin, Kipp & Szuch as to
certain tax consequences of the Merger.
10(a)** "Employment Agreements" dated June 6, 1986 between
Valley National Bancorp, Valley National Bank and
Gerald H. Lipkin and Sam P. Pinyuh, are hereby
incorporated by reference from the Registrant's
Form 10-K Annual Report for the fiscal period
ending December 31, 1992.
10(b)** "The Valley National Bancorp Long-Term Stock
Incentive Plan" dated January 18, 1994, is hereby
incorporated by reference from the Registrant's
Notice of Annual Meeting of Shareholders and Proxy
dated March 1, 1994.
10(c)** "Warrant Agreement" by and between Valley National
Bancorp and Valley National Bank, Trust Department
governing the terms of 450,000 warrants to
purchase Valley National Bancorp common stock
dated as of December 31, 1990, is hereby
incorporated by reference from the Registrant's
Form 10-K Annual Report for the fiscal period
ending December 31, 1990.
10(d)** Amendment to "Employment Agreements" between
Valley National Bancorp, Valley National Bank and
Gerald H. Lipkin and Sam P. Pinyuh dated December
10, 1991, is hereby incorporated by reference from
the Registrant's Form 10-K Annual Report for the
fiscal period ending December 31, 1991.
10(e)** "Employment Agreement" dated December 10, 1991
between Valley National Bancorp, Valley National
Bank and Peter Southway, is hereby incorporated by
reference from the Registrant's Form 10-K Annual
Report for the fiscal period ending December 31,
1991.
10(f)** "Severance Agreements" dated August 17, 1994
between Valley National Bancorp, Valley National
Bank, and Gerald H. Lipkin, Peter Southway, and
Sam P. Pinyuh, is hereby incorporated by reference
from the Registrant's Registration Statement (No.
33-55765) on Form S-4 filed on October 4, 1994 in
connection with the merger of the Registrant with
Rock Financial Corporation.
23(a)*** Consent of KPMG Peat Marwick LLP with respect to
Valley National Bancorp
23(b)*** Consent of Stephen P. Radics & Co. with respect to
Lakeland First Financial Group, Inc.
23(c)*** Consent of Pitney, Hardin, Kipp & Szuch (included
in Exhibits 5 and 8 hereto).
23(d)*** Consent of Hopper Soliday & Co., Inc.
24 Powers of Attorney of directors of Valley National
Bancorp, in favor of Gerald Lipkin and/or Peter
Southway.
99 Form of Proxy Card for Special Meeting of Stockholders
of Lakeland First Financial Group, Inc.
C. 4(b)* Fairness Opinion of Hopper Soliday & Co., Inc.
(included as Annex B to the Proxy
Statement/Prospectus).
___________________________________
* Included elsewhere in this registration statement.
** Incorporated by Reference from other filed documents, as
indicated.
*** Previously filed.
Item 22. Undertakings
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11, or 13 of this form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date
of the registration statement through the date of responding to the
request.
The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was not
the subject of and included in the registration statement when it becomes
effective.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned registrant hereby undertakes as
follows: that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
The registrant undertakes that every prospectus (i)
that is filed pursuant to the paragraph immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a) (3) of the Act and is
used in connection with an offering of securities subject to Rule 415, will
be filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such post
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-4 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Wayne, State of New
Jersey, on the 25th day of April, 1995.
VALLEY NATIONAL BANCORP
By:GERALD H. LIPKIN
--------------------------
Gerald H. Lipkin,
Chairman & Chief Executive
Officer
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
GERALD H. LIPKIN Chairman of the Board April 25, 1995
------------------------- and Director (Chief
Gerald H. Lipkin Executive Officer)
PETER SOUTHWAY President and Chief April 25, 1995
------------------------- Operating Officer
Peter Southway (Principal Financial
Officer) and Director
ALAN D. ESKOW Corporate Secretary April 25, 1995
------------------------- and Senior Vice
Alan D. Eskow President (Principal
Accounting Officer)
* Director April 25, 1995
---------------------------
Andrew B. Abramson
* Director April 25, 1995
---------------------------
Pamela Bronander
* Director April 25, 1995
---------------------------
Joseph Coccia, Jr.
* Director April 25, 1995
---------------------------
Austin C. Drukker
* Director April 25, 1995
---------------------------
Thomas P. Infusino
* Director April 25, 1995
---------------------------
Gerald Korde
* Director April 25, 1995
---------------------------
Robert L. Marcalus
* Director April 25, 1995
---------------------------
Robert E. McEntee
* Director April 25, 1995
---------------------------
Sam P. Pinyuh
* Director April 25, 1995
---------------------------
Robert Rachesky
* Director April 25, 1995
---------------------------
Barnett Rukin
* Director April 25, 1995
---------------------------
Richard F. Tice
* Director April 25, 1995
---------------------------
Leonard Vorcheimer
* Director April 25, 1995
---------------------------
Joseph L. Vozza
GERALD H. LIPKIN
____________________________
* By Gerald H. Lipkin,
Attorney-in-fact
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
2(a)* Amended and Restated Agreement and Plan of Merger,
dated as of April 21, 1995, by and among Valley
National Bancorp, Valley National Bank, Lakeland
First Financial Group, Inc. and Lakeland Savings
Bank (included as Annex A to the Proxy
Statement/Prospectus).
2(b)* Stock Option Agreement, dated January 26, 1995, by
and between Valley National Bancorp and Lakeland
First Financial Group, Inc. (included as Annex C
to the Proxy Statement/Prospectus).
5*** Opinion of Pitney, Hardin, Kipp & Szuch as to the
legality of the securities to be registered.
8*** Opinion of Pitney, Hardin, Kipp & Szuch as to
certain tax consequences of the Merger.
10(a)** "Employment Agreements" dated June 6, 1986 between
Valley National Bancorp, Valley National Bank and
Gerald H. Lipkin and Sam P. Pinyuh, are hereby
incorporated by reference from the Registrant's
Form 10-K Annual Report for the fiscal period
ending December 31, 1992.
10(b)** "The Valley National Bancorp Long-Term Stock
Incentive Plan" dated January 18, 1994, is hereby
incorporated by reference from the Registrant's
Notice of Annual Meeting of Shareholders and Proxy
dated March 1, 1994.
10(c)** "Warrant Agreement" by and between Valley National
Bancorp and Valley National Bank, Trust Department
governing the terms of 450,000 warrants to
purchase Valley National Bancorp common stock
dated as of December 31, 1990, is hereby
incorporated by reference from the Registrant's
Form 10-K Annual Report for the fiscal period
ending December 31, 1990.
10(d)** Amendment to "Employment Agreements" between
Valley National Bancorp, Valley National Bank and
Gerald H. Lipkin and Sam P. Pinyuh dated December
10, 1991, is hereby incorporated by reference from
the Registrant's Form 10-K Annual Report for the
fiscal period ending December 31, 1991.
10(e)** "Employment Agreement" dated December 10, 1991
between Valley National Bancorp, Valley National
Bank and Peter Southway, is hereby incorporated by
reference from the Registrant's Form 10-K Annual
Report for the fiscal period ending December 31,
1991.
10(f)** "Severance Agreements" dated August 17, 1994
between Valley National Bancorp, Valley National
Bank, and Gerald H. Lipkin, Peter Southway, and
Sam P. Pinyuh, is hereby incorporated by reference
from the Registrant's Registration Statement (No.
33-55765) on Form S-4 filed on October 4, 1994 in
connection with the merger of the Registrant with
Rock Financial Corporation.
23(a)*** Consent of KPMG Peat Marwick LLP with respect to
Valley National Bancorp
23(b)*** Consent of Stephen P. Radics & Co. with respect to
Lakeland First Financial Group, Inc.
23(c)*** Consent of Pitney, Hardin, Kipp & Szuch (included
in Exhibits 5 and 8 hereto).
23(d)*** Consent of Hopper Soliday & Co., Inc.
24 Powers of Attorney of directors of Valley National
Bancorp, in favor of Gerald Lipkin and/or Peter
Southway.
99 Form of Proxy Card for Special Meeting of Stockholders
of Lakeland First Financial Group, Inc.
4(b)* Fairness Opinion of Hopper Soliday & Co.,
Inc. (included as Annex B to the Proxy
Statement/Prospectus).
___________________________________
* Included elsewhere in this registration statement.
** Incorporated by Reference from other filed documents, as indicated.
*** Previously filed.