AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NATIONAL WESTMINSTER BANK PLC,
NATWEST HOLDINGS INC.
AND
CITIZENS FIRST BANCORP, INC.
Dated as of March 21, 1994
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Effective Time of Merger . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Certificate of Incorporation and Bylaws of
the Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 Directors and Officers of the Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Capital Stock of the Company . . . . . . . . . . . . . . . . . . . . 3
(b) Cancellation of Treasury Stock and
Company-Owned Shares of Citizens
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Conversion of Citizens Common Stock . . . . . . . . . . . . . . . . . 3
(d) Allotment of Company Stock . . . . . . . . . . . . . . . . . . . . . 4
2.02 No Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.03 Election and Exchange Procedures . . . . . . . . . . . . . . . . . . . . . 4
2.04 Additional Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . 7
2.05 Fractional ADRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.06 Termination Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.07 Adjustments for Dilution and Other
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.08 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.09 Employee Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.10 Treatment of the 6.75% Debentures and
the 6.00% Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.11 Redemption of Citizens Preferred Stock . . . . . . . . . . . . . . . . . . 11
2.12. Withholding Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 11
3.01 Representations and Warranties of
Citizens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Due Organization, Good Standing and
Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Authorization and Validity of
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) Consents and Approvals; No
Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Citizens Reports and Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . 16
(g) Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(j) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 17
(k) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . 20
(n) Proxy Statement, Registration
Statement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(o) Broker's or Finder's Fee . . . . . . . . . . . . . . . . . . . . . . 23
(p) Agreements with Regulatory Agencies . . . . . . . . . . . . . . . . . 23
(q) Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 24
(r) Regulation O . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.02 Representations and Warranties of NatWest
and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Due Organization; Good Standing and
Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Authorization and Validity of
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Consents and Approvals; No
Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Company Reports and Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . 28
(g) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Proxy Statement, Registration
Statement, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Broker's or Finder's Fee . . . . . . . . . . . . . . . . . . . . . . 30
(j) Agreements with Regulatory Agencies . . . . . . . . . . . . . . . . . 30
(k) Ownership of Citizens Common Stock;
Affiliates and Associates . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV CONDUCT OF BUSINESS; TRANSACTIONS PRIOR
TO CLOSING DATE; ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . 31
4.01 Conduct of the Business of Citizens
Prior to the Effective Time . . . . . . . . . . . . . . . . . . . . . . 31
4.02 Confirming Accounting and Reserve
Policies and Restructuring Expense;
Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.03 Forbearance By Citizens, NatWest and the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.04 Access to Citizens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.06 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.07 Registration Statement; Stock Exchange
Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.08 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.09 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.10 Environmental Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.11 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.12 Antitakeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.13 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.14 Indemnification; Directors' and
Officers' Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.15 Letter of Citizens' Accountants . . . . . . . . . . . . . . . . . . . . . 42
4.16 Letter of Natwest's Accountants . . . . . . . . . . . . . . . . . . . . . 42
4.17 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.18 Rule 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.19 Executive Advisory Committee;
Directorships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.20 Additional Financial Statements . . . . . . . . . . . . . . . . . . . . . 43
4.21 Citizens Employee Stock Options . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE V CONDITIONS PRECEDENT TO MERGER . . . . . . . . . . . . . . . . . . . . . . 44
5.01 Conditions Precedent to Obligations of
NatWest, the Company and Citizens. . . . . . . . . . . . . . . . . . 44
(a) Approval of Citizens' Stockholders . . . . . . . . . . . . . . . . . 44
(b) Effectiveness of Registration
Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(c) Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(d) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(e) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.02 Conditions Precedent to Obligations of
NatWest and the Company . . . . . . . . . . . . . . . . . . . . . . . . 45
(a) Accuracy of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(b) Performance by Citizens . . . . . . . . . . . . . . . . . . . . . . . 45
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(d) Tax Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(e) Office of Fair Trading . . . . . . . . . . . . . . . . . . . . . . . 46
(f) Citizens Employee Stock Options . . . . . . . . . . . . . . . . . . . 46
(g) Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(h) Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.03 Conditions Precedent to Obligation of
Citizens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(a) Accuracy of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(b) Performance by NatWest and the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(c) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(d) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(e) International Stock Exchange . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VI TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . . 47
6.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.03 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.01 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.02 Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.03 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.04 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.06 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.07 Binding Effect; Benefit; Assignment . . . . . . . . . . . . . . . . . . . 52
7.08 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . 53
7.09 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.12 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.14 "Person" Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.15 Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
AGREEMENT AND PLAN OF MERGER, dated as of March 21, 1994 (this
"Agreement"), by and among National Westminster Bank Plc, a United Kingdom
public limited company ("NatWest"), NatWest Holdings Inc., a Delaware
corporation (the "Company"), and Citizens First Bancorp, Inc., a New Jersey
corporation ("Citizens").
W I T N E S S E T H:
WHEREAS, the Company, a wholly-owned Subsidiary (as hereinafter
defined) of NatWest, and Citizens are registered bank holding companies under
the Bank Holding Company Act of 1956, as amended (the "BHC Act");
WHEREAS, the respective Boards of Directors or a duly appointed
committee thereof of NatWest, the Company and Citizens have each determined
that it is in the best interests of their respective corporations,
shareholders and other constituencies to combine their respective businesses
by merging Citizens with and into the Company in accordance with the
applicable provisions of the Delaware General Corporation Law (the "DGCL"),
the New Jersey Business Corporation Act as amended (the "NJBC Act") and
pursuant to the terms and conditions set forth herein (the "Merger");
WHEREAS, the respective Boards of Directors or a duly appointed
committee thereof of NatWest, the Company and Citizens, have approved the
Merger pursuant to which each issued and outstanding share of common stock,
no par value, of Citizens ("Citizens Common Stock") not owned directly or
through a Subsidiary by NatWest or as treasury stock by Citizens will be con-
verted into the right to receive the Per Share Stock Consideration (as
hereinafter defined) or, as the case may be, the Per Share Cash Consideration
(as hereinafter defined);
WHEREAS, for United States Federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization with the meaning
of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the rules and regulations promulgated
thereunder;
WHEREAS, the respective Boards of Directors or a duly appointed
committee thereof of NatWest, the Company and Citizens have approved the
Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereinafter defined), Citizens shall be
merged with and into the Company in accordance with the NJBC Act and the
DGCL, and the separate corporate existence of Citizens shall cease.
Thereafter, the Company shall continue as the surviving corporation under the
laws of the State of Delaware under the name of NatWest Holdings Inc. (the
"Surviving Corporation").
1.02 Effective Time of Merger. The Merger shall be consummated
and become effective upon the filing of certificates of merger (collectively,
the "Certificate of Merger") with the Secretary of State of the State of New
Jersey and the Secretary of State of the State of Delaware or at such time
thereafter as is provided in the Certificate of Merger. The date and time
when the Merger shall become effective is hereinafter referred to as the
"Effective Time."
1.03 Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in Section 14A:10-6 of the NJBC
Act and Section 259 of the DGCL.
1.04 Certificate of Incorporation and Bylaws of the Surviving
Corporation. The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation. The Bylaws of the Company, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation.
1.05 Directors and Officers of the Surviving Corporation. The
directors and officers of the Company, immediately prior to the Effective
Time, shall be the directors and officers of the Surviving Corporation
immediately following the Effective Time. Each of such directors and
officers shall hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation and applicable
provisions of the DGCL.
ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Citizens Common Stock:
(a) Capital Stock of the Company. Each share of the capital stock
of the Company issued and outstanding prior to the Effective Time shall
remain outstanding and shall, subject to subparagraph (d) below, be unchanged
after the Merger, all of which shares shall be issued to NatWest and shall
thereafter constitute the only outstanding shares of capital stock of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Company-Owned Shares of
Citizens Common Stock. All shares of Citizens Common Stock that are owned by
Citizens as treasury stock and all shares of Citizens Common Stock owned by
NatWest or any of its Subsidiaries other than any shares of Citizens Common
Stock held directly or indirectly in trust accounts, managed accounts and
similar accounts or otherwise held in a fiduciary capacity that are
beneficially owned by third parties ("Trust Account Shares") and other than
any shares of Citizens Common Stock held by NatWest or any of its
Subsidiaries in respect of a debt previously contracted ("DPC Shares"),
shall be cancelled and retired and shall cease to exist and no consideration
shall be delivered in exchange therefor.
(c) Conversion of Citizens Common Stock. Subject to Sections 2.05
and 2.06, each share of Citizens Common Stock outstanding at the Effective
Time (other than shares to be cancelled in accordance with Section 2.01(b))
shall be converted into, and shall be cancelled in exchange for the right to
receive, at the election of the holder thereof (but subject to the limits
contained in Section 2.03), either:
(i) a number of ordinary shares of Pound/Sterling 1 each of NatWest
("NatWest Stock") issued credited as fully paid equal to 6
multiplied by .22034 (the "Exchange Ratio"), such NatWest Stock to
be evidenced by American Depositary Receipts ("NatWest ADRs"), each
NatWest ADR representing six ordinary shares of NatWest (the "Per
Share Stock Consideration"), or
(ii) $9.75 in United States Dollars (the "Per Share Cash
Consideration"),
provided that the number of the NatWest ADRs (the "ADR Amount") that shall be
issued in the Merger shall not be less than 5,923,652 (the "Lower Stock
Amount") or more than 7,108,383 (the "Upper Stock Amount").
At the Effective Time of the Merger, all such shares of Citizens
Common Stock shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the consideration hereinabove
set forth upon the surrender of such certificate in accordance with Section
2.04, without interest.
(d) Allotment of Company Stock. In consideration of and in
exchange for the issue to NatWest by the Surviving Corporation of such number
of shares of common stock of the Surviving Corporation as NatWest shall
specify and the cancellation of the shares of Citizens Common Stock, NatWest
shall allot the NatWest Stock represented by the NatWest ADRs to be issued in
the Merger to the Exchange Agent (as defined in Section 2.03 of this
Agreement) on behalf of the persons entitled thereto for the purpose of
giving effect to the conversion and exchange referred to in Sections 2.01(c),
2.03 and 2.04.
2.02 No Dissenters' Rights. In accordance with Section 14A:11-1
of the NJBC Act, no holder of Citizens Common Stock or Citizens Preferred
Stock shall have the right to dissent.
2.03 Election and Exchange Procedures. (a) The parties shall
designate an exchange agent to act as agent (the "Exchange Agent") for
purposes of conducting the election procedure and the exchange procedure as
described in Sections 2.03 and 2.04. The Exchange Agent shall act for the
purpose of exchanging certificates representing shares of Citizens Common
Stock as provided in Section 2.01. Promptly following the Effective Time,
NatWest shall cause the Exchange Agent to mail or make available to each
holder of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Citizens Common Stock
(i) a notice and letter of transmittal (which shall specify that delivery
shall be effected and risk of loss and title to the certificates theretofore
representing shares of Citizens Common Stock shall pass only upon proper
delivery of such certificates to the Exchange Agent) advising such holder of
the effectiveness of the Merger and the procedure for surrendering to the
Exchange Agent such certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Citizens Common Stock in
exchange for either the Per Share Stock Consideration or the Per Share Cash
Consideration deliverable in respect thereof pursuant to this Article II and
(ii) an election form in such form as NatWest and Citizens shall mutually
agree ("Election Form").
Each Election Form shall permit the holder (or the beneficial owner
through appropriate and customary documentation and instructions) to elect to
receive NatWest ADRs with respect to all shares of such holder's Citizens
Common Stock ("Stock Election Shares"), to elect to receive cash with respect
to all shares of such holder's Citizens Common Stock ("Cash Election Shares")
or to indicate that such holder makes no election ("No Election Shares").
Any shares of Citizens Common Stock with respect to which the
holder (or the beneficial owner, as the case may be) shall not have submitted
to the Exchange Agent, an effective, properly completed Election Form on or
before 5:00 p.m., on the 20th day following the Mailing Date (or such other
time and date as NatWest and Citizens may mutually agree) (the "Election
Deadline") shall also be deemed to be "No Election Shares."
Any such election shall have been properly made only if the
Exchange Agent shall have actually received a properly completed Election
Form by the Election Deadline. An Election Form shall be deemed properly
completed only if accompanied by one or more certificates (or customary affi-
davits and indemnification regarding the loss or destruction of such
certificates or the guaranteed delivery of such certificates) representing
all shares of Citizens Common Stock covered by such Election Form, together
with duly executed transmittal materials included with the Election Form.
Any Election Form may be revoked or changed by the person submitting such
Election Form at or prior to the Election Deadline. In the event an Election
Form is revoked prior to the Election Deadline, the shares of Citizens Common
Stock represented by such Election Form shall become No Election Shares.
Subject to the terms of this Agreement and of the Election Form, NatWest or
the Exchange Agent shall have reasonable discretion to determine whether any
election, revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Forms, and any good faith
decisions of NatWest or the Exchange Agent regarding such matters shall be
binding and conclusive. Neither NatWest nor the Exchange Agent shall be
under any obligation to notify any person of any defect in an Election Form.
To the extent required the Exchange Agent will requisition from
Morgan Guaranty Trust Company of New York, as the Depositary, from time to
time, such number of ADRs as are issuable in respect of shares of Citizens
Common Stock properly delivered to the Exchange Agent.
Within five business days after the Election Deadline, NatWest
shall cause the Exchange Agent to effect the allocation among the holders of
Citizens Common Stock of rights to receive NatWest ADRs or cash in the Merger
in accordance with the Election Form as follows:
(i) Stock Elections Less Than Lower Stock Amount. If the ADR
Amount (on the basis of Election Forms received prior to the Election
Deadline) is less than the Lower Stock Amount, then:
(A) all Stock Election Shares shall be converted into and
cancelled in exchange for the right to receive the NatWest ADRs,
(B) the Exchange Agent shall select first from among the
holders of No Election Shares and then (if necessary) shall
allocate among all the holders of Cash Election Shares (by the
method of allocation described below), a sufficient number of Cash
Election Shares ("Reallocated Shares") such that the ADR Amount
equals as closely as practicable (but in no event shall it be
below) the Lower Stock Amount, and all Reallocated Shares shall be
converted into and cancelled in exchange for the right to receive
NatWest ADRs, and
(C) the No Election Shares and Cash Election Shares which are
not Reallocated Shares shall be converted into and cancelled in
exchange for the right to receive the Per Share Cash Consideration;
or
(ii) Stock Elections More Than Upper Stock Amount. If the ADR
Amount (on the basis of Election Forms received prior to the Election
Deadline) is greater than the Upper Stock Amount, then:
(A) all Cash Election Shares and No Election Shares shall be
converted into and cancelled in exchange for the right to receive
cash,
(B) the Exchange Agent shall allocate among all the holders
of Stock Election Shares, (by the method of allocation described
below) a sufficient number of Stock Election Shares ("Reallocated
Cash Shares") such that the ADR Amount equals as closely as
practicable the Upper Stock Amount, and all Reallocated Cash Shares
shall be converted into and cancelled in exchange for the right to
receive cash, and
(C) the Stock Election Shares which are not Reallocated Cash
Shares shall be converted into and cancelled in exchange for the
right to receive NatWest ADRs; or
(iii) Stock Elections between Lower Stock Amount and Upper Stock
Amount. If the ADR Amount that would be issued upon conversion into
NatWest ADRs of the Stock Election Shares falls between the Lower Stock
Amount and the Upper Stock Amount, then subparagraphs (i) and (ii) above
shall not apply and all Stock Election Shares shall be converted into
the right to receive NatWest ADRs and all Cash Election Shares and No
Election Shares shall be converted into the right to receive cash.
In the event the Exchange Agent is required pursuant to Section
2.03(i)(B) to designate from among all Cash Election Shares, the Reallocated
Shares to receive NatWest ADRs, each holder of Cash Election Shares shall be
allocated a pro rata portion of the remainder of the total Reallocated Shares
over the number of No Election Shares which are Reallocated Shares. In the
event the Exchange Agent is required pursuant to Section 2.03 (ii)(B) to
designate from among all holders of Stock Election Shares, the Reallocated
Cash Shares to receive cash, each holder of Stock Election Shares shall be
allocated a pro rata portion of the remainder of the total Reallocated Cash
Shares over the number of No Election Shares which are Reallocated Shares.
2.04 Additional Exchange Procedures.
(a) Each holder of shares of Citizens Common Stock that has been
converted into a right to receive the consideration set forth in Section
2.01(c), upon surrender to the Exchange Agent of a certificate or
certificates representing such Citizens Common Stock, together with a prop-
erly completed letter of transmittal covering such shares of Citizens Common
Stock will be entitled to receive the Per Share Stock Consideration or the
Per Share Cash Consideration, as the case may be, in respect of each share of
Citizens Common Stock. Until so surrendered, each share of Citizens Common
Stock shall, after the Effective Time, represent for all purposes, only the
right to receive the Per Share Stock Consideration, or, as the case may be,
the Per Share Cash Consideration.
(b) If any Merger consideration is to be issued to a person other
than the registered holder of the Citizens Common Stock represented by the
certificate or certificates surrendered with respect thereto, it shall be a
condition to such issuance that the certificate or certificates so sur-
rendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such issuance shall pay to the
Exchange Agent any transfer or other taxes required as a result of such
issuance to a person other than the registered holder of such Citizens Common
Stock or establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(c) As of the Effective Time, there shall be no further
registration of transfers of shares of Citizens Common Stock that were
outstanding prior to the Merger. After the Effective Time, certificates
representing shares of Citizens Common Stock presented to the Surviving Cor-
poration for transfer shall be cancelled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this
Article II.
(d) At the close of business on the Effective Time, the stock
ledger of Citizens with respect to the issuance of Citizens Common Stock
shall be closed. One year after the Effective Time, any NatWest ADRs or cash
made available to the Exchange Agent that remains unclaimed by the holders of
Citizens Common Stock shall be returned to NatWest upon demand. Any such
holder who has not delivered his shares of Citizens Common Stock to the
Exchange Agent in accordance with this Section 2.04 prior to that time shall
thereafter look only to NatWest and the Surviving Corporation for issuance of
NatWest ADRs or cash in respect of shares of Citizens Common Stock. Not-
withstanding the foregoing, none of NatWest, the Company or the Surviving
Corporation shall be liable to any holder of Citizens Common Stock for any
securities delivered or any amount paid to a public official pursuant to
applicable abandoned property laws. Any NatWest ADRs remaining unclaimed by
holders of shares of Citizens Common Stock six years after the Effective Time
(or such earlier date immediately prior to such time as such securities would
otherwise escheat to or become property of any governmental entity or as is
otherwise provided by applicable law) shall, to the extent permitted by
applicable law, be free and clear of any claims or interest or any person
previously entitled thereto.
(e) No dividends, interest or other distributions with respect to
securities of NatWest issuable with respect to Citizens Common Stock shall be
paid to the holder of any unsurrendered certificates representing Citizens
Common Stock until such certificates are surrendered as provided in this
Section. Upon such surrender, there shall be paid, without interest, to the
person in whose name the NatWest ADRs representing such securities are
registered, all dividends and other distributions payable in respect of such
securities on a date subsequent to, and in respect of a record date after,
the Effective Time.
(f) Notwithstanding anything in this Agreement to the contrary,
for a period of ninety (90) days after the date of the Effective Time, owners
of Citizens Common Stock convertible into NatWest ADRs shall be entitled to
vote as holders of shares of NatWest ADRs notwithstanding that such
certificates shall not have been exchanged.
2.05 Fractional ADRs. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional NatWest ADRs shall
be issued in the Merger. Each holder who otherwise would have been entitled
to a fraction of a NatWest ADR shall receive in lieu thereof cash (without
interest) in an amount determined by multiplying the fractional share
interest to which such holder would otherwise be entitled by the Final
NatWest ADR Price (as defined in Section 2.06). No such holder shall be
entitled to dividends, voting rights or any other rights in respect of any
fractional NatWest ADR.
2.06 Termination Rights. (a) Citizens shall have the right to
elect to abandon the Merger and, subject to Section 6.01(c), terminate this
Agreement if its Board of Directors so determines, prior to the Effective
Time in the event the Final NatWest ADR Price shall be less than $36.25.
(b) NatWest and the Company shall have the right to elect to
abandon the Merger and terminate this Agreement prior to the Effective Time
in the event the Final NatWest ADR Price shall be less than $30.00.
(c) The Final NatWest ADR Price shall mean the average of the
closing sale prices for NatWest ADRs as reported on the New York Stock
Exchange, Inc. Composite Transactions Tape (or in the absence thereof from
such other source upon which NatWest and Citizens shall mutually agree) dur-
ing the ten consecutive days on which shares of NatWest ADRs are traded on
the New York Stock Exchange, Inc. (the "NYSE"), ending on the tenth day
immediately prior to the anticipated Effective Time.
2.07 Adjustments for Dilution and Other Matters. If, prior to the
Effective Time, NatWest shall declare a stock dividend (other than pursuant
to NatWest's Share Dividend Scheme) or stock distribution upon, or subdivide,
split up, reclassify or combine, the NatWest Stock or declare a stock
dividend or make a distribution on, the NatWest Stock of any security
convertible into NatWest Stock, appropriate adjustment or adjustments will be
made to the Per Share Stock Consideration and the ADR Amount or other
appropriate adjustments, if any.
2.08 Closing. The closing of the Merger (the "Closing") shall
take place at the offices of White & Case (or such other place as the parties
shall mutually agree), as soon as practicable after the last of the
conditions set forth in Article V hereof is fulfilled or waived (subject to
applicable law) but in no event later than the fifth business day thereafter,
or at such other time and place and on such other date as Citizens and the
Company shall mutually agree (the "Closing Date").
2.09 Employee Stock Options. At the Effective Time, each option
with respect to Citizens Common Stock (a "Citizens Employee Stock Option")
issued pursuant to the 1983 Incentive Stock Option Plan or the 1985 Stock
Incentive Plan of Citizens (together the "Citizens Option Plans") that is
outstanding at the Effective Time, whether or not then exercisable, shall be
cancelled and converted into the right to receive an amount equal to the
difference between the exercise price of such Citizens Employee Stock Option
and the Per Share Cash Consideration for each share of Citizens Common Stock
subject to such Citizens Employee Stock Option.
2.10 Treatment of the 6.75% Debentures and the 6.00% Bonds. On or
prior to the Effective Time, Citizens shall have redeemed each then
outstanding 6.75% convertible subordinated debenture due August 1, 2001 (each
a "6.75% Debenture") in accordance with the applicable provisions of the
Indentures under which the 6.75% Debentures were issued. The parties hereto
agree that, prior to the Effective Time, they will cooperate with respect to
the treatment of the 6.00% Bonds in connection with the Merger, with the
intent, if permitted by the terms of the indenture pursuant to which such
Bonds were issued, of redeeming such 6.00% Bonds.
2.11 Redemption of Citizens Preferred Stock. On or prior to the
Effective Time, Citizens shall redeem each of its issued and outstanding
shares of Series A $2.50 cumulative convertible preferred stock ("Citizens
Preferred Stock") in accordance with the Restated Certificate of
Incorporation of Citizens, and holders of Citizens Preferred Stock shall
thereby be entitled to receive (unless earlier converted into Citizens Common
Stock) $23.00 per share in cash, plus accrued and unpaid dividends through
the date on which Citizens Preferred Stock is redeemed, without interest.
2.12. Withholding Rights. NatWest shall be entitled to deduct and
withhold from any amounts otherwise payable pursuant to this Agreement to any
holder of shares of Citizens Common Stock or Citizens Employee Stock Options
such amounts as NatWest is required under the Code or any provision of state,
local or foreign tax law to deduct and withhold with respect to the making of
such payment. Any amounts so withheld shall be treated for all purposes of
this Agreement as having been paid to the holder of Citizens Common Stock or
Citizens Employee Stock Options in respect of which such deduction and
withholding was made by NatWest.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Citizens. Citizens hereby
represents and warrants to NatWest and the Company as follows:
(a) Due Organization, Good Standing and Corporate Power. Each of
Citizens and its Subsidiaries is a corporation (or, in the case of
Citizens First National Bank of New Jersey (the "Bank"), a national
banking association) duly organized, validly existing and in good stand-
ing under the laws of the jurisdiction of its incorporation and each
such corporation has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted. Each of Citizens and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be so
qualified or licensed and in good standing would not have a Material
Adverse Effect (as defined below) on Citizens. Citizens is registered
as a bank holding company with the Federal Reserve Board under the BHC
Act. For purposes of this Agreement, the term "Material Adverse Effect"
shall mean, with respect to NatWest, the Company, Citizens or the
Surviving Corporation, as the case may be, a material adverse effect on
the business, results of operations or financial condition of such party
and its Subsidiaries taken as a whole, other than any such effect
attributable to or resulting from general economic conditions.
For the purposes of this Agreement, "Subsidiary" shall mean, as to
any Person, any corporation, association or other entity in which such
Person owns or controls, directly or indirectly, 50% or more of the
total outstanding voting securities or 50% or more of the total equity
interest; provided, however, that the term shall not include any such
entity in which such voting securities or equity interest is owned or
controlled in a fiduciary capacity, without sole voting power, or was
acquired in securing or collecting a debt previously contracted in good
faith; and, provided further, that, in the case of Citizens, the term
shall not include Venture Prize, Inc. or Bear Park, Inc.
(b) Authorization and Validity of Agreement. Citizens has full
power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by Citizens, and the consummation by it of the transactions
contemplated hereby, have been duly authorized and approved by its Board
of Directors. No other corporate action on the part of Citizens is
necessary to authorize the execution, delivery and performance of this
Agreement by Citizens and the consummation of the transactions
contemplated hereby (other than the approval of this Agreement by the
holders of a majority of the shares of Citizens Common Stock voting in
person or by proxy at the special meeting of shareholders called for the
purpose of such vote). This Agreement has been duly executed and
delivered by Citizens and is a valid and binding obligation of Citizens
enforceable against Citizens in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and general equitable
principles.
(c) Capitalization. The authorized capital stock of Citizens
consists of 56,393,972 shares of Citizens Common Stock, no par value,
and 3,000,000 shares of preferred stock. As of December 31, 1993, (1)
49,859,824 shares of Citizens Common Stock are issued and outstanding,
(2) 1,547,127 shares of Citizens Common Stock are reserved for issuance
pursuant to outstanding Citizens Employee Stock Options, (3) 604,195
shares of Citizens Common Stock are reserved for issuance pursuant to
outstanding Citizens Preferred Stock, (4) 1,863,591 shares of Citizens
Common Stock are reserved for issuance pursuant to outstanding 6.75%
Debentures, (5) 68,815 shares of Citizens Preferred Stock are issued and
outstanding and (6) 146,690 shares of Citizens Common Stock are held in
the Company's treasury. All issued and outstanding shares of Citizens
Common Stock have been validly issued and are fully paid and non-
assessable, and are not subject to, nor were they issued in violation
of, any preemptive rights. Except as set forth in this Section 3.01(c),
(i) there are no shares of capital stock of Citizens authorized, issued
or outstanding and (ii) there are not as of the date hereof, and at the
Effective Time there will not be, any outstanding or authorized options,
warrants, rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commit-
ments, contingent or otherwise, relating to Citizens Common Stock or any
other shares of capital stock of Citizens, pursuant to which Citizens is
or may become obligated to issue shares of Citizens Common Stock, any
other shares of its capital stock or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares
of the capital stock of Citizens. The list of Citizens Employee Stock
Options previously disclosed in writing to NatWest lists all outstanding
Citizens Employee Stock Options, and such list includes the holder,
issue date, exercise date and exercise price of each such Citizens
Employee Stock Option.
All of the outstanding shares of capital stock of each of Citizens
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable, are not subject to, nor were they issued in
violation of, any preemptive rights, and are owned, of record and bene-
ficially, solely by Citizens in the case of the Bank, and solely by the
Bank in the case of all other Subsidiaries, free and clear of all liens,
encumbrances, options or claims whatsoever. No shares of capital stock
of any of Citizens Subsidiaries are reserved for issuance and there are
no outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or otherwise,
relating to the capital stock of any Subsidiary of Citizens, pursuant to
which such Subsidiary is or may become obligated to issue any shares of
capital stock of such Subsidiary or any securities convertible into, ex-
changeable for, or evidencing the right to subscribe for, any shares of
such Subsidiary.
(d) Consents and Approvals; No Violations. Assuming (i) the
requirements of the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "Securities Act"), the
Securities and Exchange Act of 1934, as amended, and the rules and regu-
lations promulgated thereunder (the "Exchange Act") and the securities
and "blue sky" laws of the various states relating to the Registration
Statement (as defined in Section 3.01(n)(i)) and the Proxy Statement (as
defined in Section 3.01(n)(ii)) are met, (ii) any filings or approvals
required under or pursuant to the BHC Act, the Change in Bank Control
Act (the "CBCA"), the Bank Merger Act, the New York Banking Law (the
"NYBL") and the New Jersey Banking Law (the "NJBL") are made or
obtained, (iii) the filing of the Certificate of Merger and other
appropriate merger documents, if any, as required by the NJBC Act and
the DGCL is made, (iv) the approval of the Merger and this Agreement by
the holders of Citizens Common Stock is obtained in accordance with the
relevant provisions of the NJBC Act, and (v) such other consents as have
been disclosed to the Company in writing on or prior to the date hereof,
are made or obtained, the execution and delivery of this Agreement by
Citizens and the consummation by Citizens of the transactions contem-
plated hereby will not (except as disclosed to the Company in writing on
or prior to the date hereof): (1) violate any provision of the Restated
Certificate of Incorporation or By-Laws of Citizens; (2) violate any
statute, ordinance, rule, regulation, order or decree of any court or of
any governmental or regulatory body, agency or authority applicable to
Citizens or any of its Subsidiaries or by which any of their respective
properties or assets may be bound; (3) require any filing with, or
permit, consent or approval of, or the giving of any notice to any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, constitute a default (or give rise to any right
of termination, cancellation or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of Citizens or any of its Subsidiaries
under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit, agreement, lease or
other instrument or obligation to which Citizens or any of its
Subsidiaries is a party, or by which they or their respective properties
or assets may be bound, except for, in the case of clauses (3) and (4),
filings, notices, permits, consents and approvals the absence of which,
and violations, breaches, defaults, conflicts and liens which, in the
aggregate, would not have a Material Adverse Effect on Citizens or on
the ability of the parties hereto to consummate the transactions
contemplated hereby.
(e) Citizens Reports and Financial Statements. As of their
respective dates, none of the Reports (as hereinafter defined) of
Citizens contained or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circum-
stances under which they were made, not misleading. Each of the
consolidated balance sheets contained or incorporated by reference in
its Reports (including any related notes and schedules) fairly presented
or will fairly present the financial position of the entity or entities
to which it relates as of its date and each of the consolidated
statements of income, consolidated statements of cash flows and
consolidated statements of changes in shareholders' equity contained or
incorporated by reference in its Reports (including any related notes
and schedules) fairly presented or will fairly present the results of
operations and cash flows of the entity or entities to which it relates
for the periods set forth therein (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments that are not
material in amount or effect), in each case in accordance with generally
accepted accounting principles applicable to bank holding companies in
the United States ("US GAAP") (as in effect from time to time) applied
on a consistent basis, except as may be noted in the Reports. Citizens'
financial statements delivered to the Company as of and for the period
ended December 31, 1993 fairly presented the financial position and
results of operations of Citizens, in each case in accordance with US
GAAP, except as may be noted therein. Each monthly accounting report of
Citizens delivered pursuant to Section 4.20 of this Agreement will be
prepared in accordance with the historic accounting practices of
Citizens, and in a manner substantially consistent with the interim
reports filed by Citizens on Form 10-Q, except for financial footnotes
and other disclosure required to be made on Form 10-Q.
For purposes of this Agreement, the word "Reports" shall mean, (i)
when used with respect to Citizens, the Annual Report on Form 10-K or
equivalent report for the fiscal year ended December 31, 1992 of
Citizens and each other document filed by Citizens subsequent to
December 31, 1992 under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act each in the form filed with the Securities and Exchange
Commission (the "Commission"), and (ii) when used with respect to
NatWest, the Annual Report on Form 20-F or equivalent report for the
fiscal year ended December 31, 1992 of NatWest and each other document
filed by NatWest subsequent to December 31, 1992 under Section 13(a),
13(c), 13(d) or 15(d) of the Exchange Act, each in the form filed with
the Commission.
To the best knowledge of Citizens, neither Citizens nor its
Subsidiaries has any material liabilities, contingent or otherwise that
would have a Material Adverse Effect on Citizens and that have not been
reflected or provided for in the Citizens Reports.
(f) Absence of Certain Changes. Except as previously disclosed in
Citizens' Reports or otherwise disclosed to the Company in writing on or
prior to the date hereof, since December 31, 1993, there has not been
any changes or occurrences that has resulted in any Material Adverse
Effect on Citizens.
(g) Title to Assets. Except as disclosed in Citizens' Reports or
otherwise disclosed to the Company in writing on or prior to the date
hereof, each of Citizens and its Subsidiaries has good and marketable
title to its properties and assets (other than property as to which it
is lessee), except for such defects in title which would not, in-
dividually or in the aggregate, have a Material Adverse Effect on
Citizens.
(h) Compliance with Laws. Except as disclosed in Citizens'
Reports or otherwise disclosed to the Company in writing on or prior to
the date hereof, Citizens and its Subsidiaries are in compliance with
all applicable laws, regulations, orders, judgments and decrees except
where the failure to so comply would not have a Material Adverse Effect
on Citizens.
(i) Litigation. Except as disclosed in Citizens' Reports or
otherwise disclosed to the Company in writing prior to the date hereof,
there is no action, suit, proceeding at law or in equity, or any
arbitration or any administrative or other proceeding by or before (or
to the best knowledge of Citizens, any investigation by) any
governmental or other instrumentality or agency, pending or, to the best
knowledge of Citizens, threatened, against Citizens or any of its
Subsidiaries which could have a Material Adverse Effect on Citizens.
Except as disclosed in Citizens' Reports or otherwise disclosed to the
Company in writing prior to the date hereof, neither Citizens nor any of
its Subsidiaries is subject to any judgment, order or decree entered in
any lawsuit or proceeding which could have a Material Adverse Effect on
Citizens.
(j) Employee Benefit Plans. Each Plan (as hereinafter defined) of
Citizens has been provided to the Company in writing. Except as
disclosed previously to the Company in writing, and except to the extent
that any breach of the representations set forth in this sentence would
not have a Material Adverse Effect on Citizens, as to Citizens: (i) each
Plan is in substantial compliance with applicable law and has been ad-
ministered and operated in all material respects in accordance with its
terms; (ii) each Plan which is intended to be "qualified" within the
meaning of Section 401(a) of the Code, (A) has received a favorable
determination letter from the Internal Revenue Service ("IRS") and, to
the knowledge of Citizens, no event has occurred and no condition exists
which could reasonably be expected to result in the revocation of any
such determination, or (B) will have an application for a determination
letter filed with the IRS with respect to its initial qualification
prior to the Effective Time; (iii) no Plan subject to Title IV of ERISA
(as hereinafter defined) has been terminated or is or has been the
subject of termination proceedings pursuant to Title IV of ERISA nor has
Citizens or any Subsidiary or ERISA Affiliate (as hereinafter defined)
been required to provide security to a Plan that is subject to Title IV
of ERISA pursuant to Section 307 of ERISA or Section 401(a)(29) of the
Code; (iv) neither Citizens nor any of its Subsidiaries has engaged in
any transactions in connection with any Plan that could reasonably be
expected to result in the imposition of a material penalty pursuant to
Section 502(i) of ERISA, damages pursuant to Section 409 of ERISA or a
tax pursuant to Section 4975(a) of the Code; (v) no material liability,
claim, action or litigation has been made, commenced or, to the
knowledge of Citizens, threatened, with respect to any Plan involving
any employees of Citizens or any of its Subsidiaries (other than for
benefits payable in the ordinary course and insurance premiums payable
to the Pension Benefit Guaranty Corporation); (vi) with respect to all
Plans which are subject to Title IV of ERISA, as of the most recent
actuarial valuation prepared for each such Plan, the aggregate present
value of the accrued liabilities thereof did not exceed the aggregate
fair market value of the assets allocable thereto; (vii) none of the
"reportable events" which are subject to the 30-day notice requirement
of Section 4043(b) of ERISA in respect to any Plan which is subject to
Title IV of ERISA has occurred; (viii) no Plan is a "Multiemployer Plan"
(as defined in Section 4001(a)(3) of ERISA) (a "Multiemployer Plan") and
neither Citizens, any Subsidiary nor any ERISA Affiliate has ever been
required to contribute to any Multiemployer Plan; and (ix) neither
Citizens nor any of its Subsidiaries has been advised by any
Multiemployer Plan that it has any withdrawal liability under Section
4201 or 4204 of ERISA with respect to any Multiemployer Plan, nor is
Citizens or any of its Subsidiaries aware of any such withdrawal
liability.
For purposes of this Agreement, "Plan" shall mean, as to any
Person, any material employee benefit plan within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by such Person or any of its Subsidiaries or to
which such Person or any of its Subsidiaries contributes or is a party.
For purposes of this Agreement, "ERISA Affiliate" shall mean any
corporation, person or trade or business which is a member of a group
which is under common control with Citizens within the meaning of Code
Sections 414(b) and (c), and, if applicable, ERISA Sections 4001(a)(14)
and (b).
(k) Labor Matters. No work stoppage involving Citizens or its
Subsidiaries is pending or, to the best of knowledge of Citizens,
threatened which reasonably could be expected to have a Material Adverse
Effect on Citizens. Citizens and its Subsidiaries are not involved in,
or threatened with or affected by, any labor dispute, arbitration, law
suit or administrative proceeding which reasonably could be expected to
have a Material Adverse Effect on Citizens. Employees of Citizens and
its Subsidiaries are not represented by any labor union or any
collective bargaining organization and there is no organizational effort
involving Citizens and its Subsidiaries pending or threatened.
(l) Taxes. Citizens has filed or caused to be filed, within the
times and in the manner prescribed by law, all material federal, state,
local and foreign Tax Returns which are required to be filed by, or with
respect to, Citizens or any of its Subsidiaries. All material federal,
state, local and foreign Taxes payable by, or due from, Citizens or any
of its Subsidiaries have been fully paid or adequately disclosed and
fully provided for in the books and financial statements of Citizens and
its Subsidiaries. Except as disclosed to the Company in writing on or
prior to the date hereof, Citizens and its Subsidiaries have not
received any written notice of deficiency or assessment or revenue or
other agent's report asserting deficiency from any federal, state, local
or foreign taxing authority with respect to material liability for Taxes
which have not been fully paid or finally settled or adequately provided
for on the books and financial statements of Citizens. There is no
pending litigation or other contention as to Taxes of any nature payable
by Citizens or any of its Subsidiaries, which could reasonably be
expected to have, in the aggregate, a Material Adverse Effect on
Citizens. Except as previously disclosed to the Company in writing,
there are no pending tax examinations of the business conducted by
Citizens or any of its Subsidiaries. Citizens is not, and has not been
at any time during the five-year period ending on the Effective Time, a
United States real property holding corporation, as that term is defined
in Section 897(c)(2) of the Code. For purposes of this Agreement:
(i) the term "Taxes" shall mean all taxes, levies or other
like assessments, charges or fees (including estimated taxes,
charges and fees), including, without limitation, income, corpora-
tion, advance corporation, gross receipts, transfer, excise,
property, sales, use, value-added, license, payroll, pay as you
earn ("PAYE"), withholding, social security and franchise or other
governmental taxes or charges, imposed by the United States, or any
state, county, local or foreign government or subdivision or agency
thereof; and such term shall include any interest, penalties or
additions to tax attributable to such taxes; provided, however,
that such term shall not include any property taxes imposed on any
properties securing extensions of credit by the Bank; and
(ii) the term "Tax Return" shall mean any report, return, or
other written statement required to be supplied to a taxing
authority in connection with Taxes.
(m) Environmental Matters.
(i) For purposes of this Section 3.01(m), the following terms
shall have the indicated meaning:
"Branch Property" means all real property presently or
formerly owned or operated by Citizens or any Subsidiary on which
branches or facilities are or were located.
"Environmental Law" means any applicable federal, state or
local statute, law, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, order, judgment, decree,
injunction, directive, requirement or agreement with any
governmental entity, existing as of the date hereof and as amended
hereafter, relating to: (a) the protection, preservation or
restoration of the environment (including, without limitation, air,
water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (b) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release
or disposal of Hazardous Substances.
"Hazardous Substance" means any substance, whether liquid,
solid or gas, which is listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, under any Environmental
Law, whether by type or by quantity. Hazardous Substance includes,
without limitation, (i) any "hazardous substance" as defined in the
Comprehensive Environmental Response Compensation and Liability
Act, (ii) any "hazardous waste" as defined in the Resource
Conservation and Recovery Act and (iii) any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum product or any derivative or by-product
thereof, radon, radioactive material, friable asbestos, friable
asbestos-containing material, urea formaldehyde foam insulation,
lead and regulated levels of polychlorinated biphenyls ("PCBs").
"Real Property" means the Branch Property, all real property
classified by Citizens or any Subsidiary as other real estate owned
("OREO"), all real property (including property held as trustee or
in any other fiduciary capacity) over which Citizens or any
Subsidiary currently or formerly has exercised dominion, management
or control, and all real property in which Citizens or any
Subsidiary holds a security interest.
(ii) Except as previously disclosed in writing to the Company
or as would not individually or in the aggregate have a Material Adverse
Effect on Citizens:
(A) each of Citizens and each Subsidiary is and has been in
material compliance with all applicable Environmental Laws and
operates all Branch Property in material compliance with all
Environmental Laws;
(B) no Hazardous Substance has been disposed on, in, under,
at or from the Real Property in violation of any Environmental Law;
(C) neither Citizens nor any Subsidiary has knowledge of or
has received any written notices, demand letters or written
requests for information regarding any Real Property from any
governmental entity or any third party indicating that Citizens or
such Subsidiary may be in violation of, or have liability under,
any Environmental Law;
(D) there are no civil, criminal or administrative actions,
suits, demands, claims, hearings, investigations or proceedings
pending or, to the best knowledge of Citizens, threatened against
Citizens or any Subsidiary with respect to Citizens or any
Subsidiary or the Real Property relating to any violation or
alleged violation of, or liability or alleged liability for, any
Environmental Law;
(E) no reports have been filed, or are required to be filed,
by Citizens or any Subsidiary with any government agency,
concerning the release of any Hazardous Substance or the threatened
or actual violation of any Environmental Law on, from, in, at or
under the Real Property; and
(F) to the best knowledge of Citizens, neither Citizens nor
any Subsidiary has incurred, and none of the Real Property is
presently subject to, any liabilities (fixed or, to the best knowl-
edge of Citizens, contingent) or liens (whether or not perfected)
relating to any suit, settlement, court order, administrative
order, judgment or claim asserted or arising under any
Environmental Law.
(iii) There are no permits, registrations, notifications or
licenses required under any Environmental Law for the Branch Property
presently operated by Citizens or any Subsidiary or in respect of any
OREO presently held by Citizens or in respect of any Real Property held
as trustee or in any other fiduciary capacity, that are not held and
that the absence of which could, individually or in the aggregate, have
a Material Adverse Effect on Citizens.
(iv) Neither Citizens nor any Subsidiary has received written
notice from any government agency that any Hazardous Substance has been
disposed on, in, under, at or from any part of the Real Property or that
such Real Property has been or is listed as a site suspected of or
containing any Hazardous Substance.
(n) Proxy Statement, Registration Statement, Etc. None of the
information regarding Citizens and its Subsidiaries supplied or to be
supplied by Citizens in writing for inclusion or included in (i) the
registration statement on Form F-4 to be filed with the Commission by
NatWest for the purpose of registering the shares of NatWest Stock to be
exchanged for shares of Citizens Common Stock pursuant to the provisions
of this Agreement (the "Registration Statement"), (ii) the Proxy
Statement to be mailed to Citizens' stockholders in connection with the
meeting to be called to consider the Merger (the "Proxy Statement") and
(iii) any other documents to be filed with the Commission or any other
regulatory authority in connection with the transactions contemplated
hereby will, at the respective times such documents are filed with the
Commission or regulatory authority and, in the case of the Registration
Statement, when it becomes effective and, with respect to the Citizens
Proxy Statement, when mailed, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to
make the statements therein not misleading.
(o) Broker's or Finder's Fee. Except for Keefe, Bruyette & Woods
(whose fees and expenses have been disclosed in writing to NatWest and
will be paid by Citizens in accordance with Citizens' agreement with
such firm), no agent, broker, Person or firm acting on behalf of
Citizens is, or will be, entitled to any fee, commission or broker's or
finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the par-
ties hereto, in connection with this Agreement or any of the
transactions contemplated hereby.
(p) Agreements with Regulatory Agencies. Except as previously
disclosed in writing to the Company, neither Citizens nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued
by, or a party to any written agreement or memorandum of understanding
with or is a party to any commitment letter or similar undertaking to,
or is subject to any order or directive, or is a recipient of any
extraordinary supervisory letter from, or has adopted any board
resolutions at the request of (each a "Regulatory Agreement") with or
from any regulatory agency that materially restricts the conduct of its
business or that in any manner relates to its capital adequacy, its
credit policies, its management or its business, nor has Citizens or any
of its Subsidiaries been advised by any regulatory agency that it is
considering issuing or requesting any Regulatory Agreement.
(q) Material Contracts. Except as otherwise disclosed in writing
to the Company on or prior to the date hereof, Citizens has no (a)
employment, severance, termination, consulting or retirement agreement
to which Citizens or any of its Subsidiaries is a party or by which it
or any of them is bound, (b) material agreement, indenture or other
material instrument relating to the borrowing of money by Citizens or
any Subsidiary or the guarantee by Citizens or any such Subsidiary of
any such obligation other than trade payables and instruments relating
to transactions entered into in the ordinary course of business and (c)
other contracts or agreements or amendments thereto that place any
material restrictions on the ability of Citizens or any Subsidiary to
engage in any business activity (collectively, the "Citizens
Contracts"). Except as otherwise disclosed to the Company prior to the
date hereof, neither Citizens nor any of its Subsidiaries nor, to the
best knowledge of Citizens, any other party thereto is in default under
any Citizens Contract, which default could have, either individually or
in the aggregate, a Material Adverse Effect on Citizens, and there has
not occurred any event that with the lapse of time or the giving of
notice or both would constitute such a default.
(r) Regulation O. Except as otherwise disclosed in writing to the
Company on or prior to the date hereof, Citizens has no loan made by it
which is subject to Regulation O promulgated by the Board of Governors
of the federal Reserve System.
3.02 Representations and Warranties of NatWest and the Company.
Each of NatWest and the Company represents and warrants to Citizens as
follows:
(a) Due Organization; Good Standing and Corporate Power. Each of
NatWest and its material Subsidiaries is a company or corporation
(whether or not having limited liability) duly organized, validly
existing and in good standing (where applicable) under the laws of the
jurisdiction of its incorporation and each such limited company and
corporation has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is
now being conducted. Each of NatWest and its material Subsidiaries is
duly qualified or licensed to do business and is in good standing (where
applicable) in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or license necessary, except in such jurisdictions where
the failure to be so qualified or licensed and in good standing would
not have a Material Adverse Effect on NatWest. The Company is
registered as a bank holding company with the Federal Reserve Board
under the BHC Act.
(b) Authorization and Validity of Agreement. Each of NatWest and
the Company has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, deliv-
ery and performance of this Agreement by NatWest and the Company, and
the consummation by each of them of the transactions contemplated
hereby, have been duly authorized by the respective Boards of Directors
of NatWest and the Company or a duly appointed committee thereof. No
other corporate action on the part of any of NatWest or the Company and
no action on the part of the shareholders of NatWest is necessary to
authorize the execution, delivery and performance of this Agreement by
each of NatWest and the Company and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by each of NatWest and the Company and is a valid and binding
obligation of each of NatWest and the Company, enforceable against each
of NatWest and the Company in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, and general equitable principles.
(c) Capitalization. The authorized share capital of NatWest is
Pound/Sterling 2,365,000,000 divided into 15,000,000 7% Cumulative
Preference Shares of Pound/Sterling 1 each, 500,000,000 Sterling
Preference Shares of Pound/Sterling 1 each and 1,850,000,000 Ordinary
Shares of Pound/Sterling 1 each and US$1,000,000,000 divided into
40,000,000 Dollar Preference Shares of US$25 each. As of March 17, 1994
NatWest's issued and outstanding share capital comprised 1,662,634,277
Ordinary Shares of Pound/Sterling 1 each, 13,872,174 7% Cumulative
Preference Shares of Pound/Sterling 1 each, 140,000,000 Sterling
Preference Shares of Pound/Sterling 1 each and 20,000,000 Dollar
Preference Shares of US $25 each. Except as set forth in this Section
3.02(c) and except for the proposed cancellation and repurchase of
13,872,174 7% Cumulative Preference Shares, the issue of ordinary shares
pursuant to the NatWest Executive and Savings Related Share Option
Schemes, the issue of Shares in lieu of the proposed final dividend for
the year ended December 31, 1993 pursuant to the NatWest Share Dividend
Scheme, shares issuable on exchange of the Company's US$500,000,000
Exchangeable Capital Securities and Pound/Sterling 200,000,000
Exchangeable Capital Securities, (i) there is no share capital of
NatWest authorized, issued or outstanding and (ii) there are not as of
March 17, 1994, any outstanding or authorized options, warrants, rights,
subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments, contingent
or otherwise, relating to the NatWest Stock or any other share capital
of NatWest pursuant to which NatWest is or may become obligated to issue
shares of NatWest Stock, any other shares of its capital stock or any
securities convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of the capital stock of NatWest. The
NatWest Stock which the holders of Citizens Common Stock will be
entitled to receive pursuant to the terms of this Agreement will, at the
Effective Time, be duly authorized and will, when issued pursuant to
this Agreement and the Registration Statement, be validly issued as
fully paid or credited as fully paid and no further contributions in
respect thereof will be required to be made to NatWest by the holders
thereof by reason of their being such holders and will not have been
issued in violation of any preemptive right.
(d) Consents and Approvals; No Violations. Assuming (i) the
requirements of the Securities Act, the Exchange Act and the securities
and "blue sky" laws of the various states relating to the Registration
Statement and the Proxy Statement are met, (ii) any filings or approvals
required under or pursuant to the BHC Act, the CBCA, the Bank Merger
Act, the NJBL or the NYBL are made or obtained, (iii) the filing of the
Certificate of Merger and other appropriate merger documents, if any, as
required by the NJBC Act and the DGCL is made, (iv) that the United
Kingdom Office of Fair Trading shall have indicated that it is not the
intention of the Secretary of State for Trade and Industry to refer any
of the transactions contemplated by this Agreement or any matters
arising from this Agreement to the Monopolies and Mergers Commission,
(v) filings with and the approval of the NYSE and The International
Stock Exchange (as hereinafter defined), (vi) that the Inland Revenue
shall have granted consent under Section 765 of the UK Income and
Corporation Taxes Act 1988 and (vii) such other consents as have been
disclosed to Citizens in writing on or prior to the date hereof are made
or obtained, the execution and delivery of this Agreement by NatWest and
the Company and the consummation by Natwest and the Company of the
transactions contemplated hereby will not: (1) violate any provision of
the Memorandum of Association, or Articles of Association or other
organizational documents of NatWest or the Certificate of Incorporation
or By-Laws of the Company; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or
regulatory body, agency or authority applicable to NatWest, the Company
or any of their material Subsidiaries or by which either of their re-
spective properties or assets may be bound; (3) require any filing with,
or permit, consent or approval of, or the giving of any notice to any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, constitute a default (or give rise to any right
of termination, cancellation or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of NatWest or the Company or any of their
material Subsidiaries under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, lease or other instrument or obligation to which NatWest or
the Company or any of their material Subsidiaries is a party, or by
which they or their respective properties or assets may be bound, except
for, in the case of clauses (3) and (4), filings, notices, permits,
consents and approvals the absence of which, and violations, breaches,
defaults, conflicts and liens which, in the aggregate, would not have a
Material Adverse Effect on NatWest or on the ability of the parties
hereto to consummate the transactions contemplated hereby. Neither
NatWest nor the Company have any reason to believe that they will be
unable to obtain each and every required consent and approval referred
to in this Section 3.02(d) so that the transactions contemplated by this
Agreement may be consummated on or prior to March 31, 1995.
(e) Company Reports and Financial Statements. As of their
respective dates, none of the Reports of NatWest contained or will
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial
statements of NatWest included in its annual reports to shareholders
have been prepared in accordance with accounting principles generally
accepted in the United Kingdom applied on a consistent basis (except as
may be indicated in the notes thereto) and give a true and fair view of
the state of affairs and profits of NatWest and its Subsidiaries as of
the dates thereof and for the periods then ended (subject to normal year
end adjustments in the case of any unaudited interim results). The
financial information contained in the interim unaudited statements of
the results of operations of NatWest and its Subsidiaries for the six
months ended June 30, 1993 and June 30, 1994 have been, and will be, as
the case may be, prepared with all due care and attention and in
accordance with accounting principles generally accepted in the United
Kingdom or practice consistent with those used in the preparation of the
audited consolidated accounts of NatWest and its Subsidiaries insofar as
appropriate in the preparation of an interim unaudited statement.
(f) Absence of Certain Changes. Except as previously disclosed in
the Reports of NatWest or otherwise provided to Citizens in writing
prior to the date hereof, since December 31, 1992, there have not been
any changes or occurrences that has resulted in any Material Adverse
Effect on NatWest.
(g) Employee Benefit Plans. Each Plan of National Westminster
Bancorp Inc. ("Bancorp") has been provided to Citizens in writing.
Except as disclosed previously to Citizens in writing, and except to the
extent that any breach of the representations set forth in this sentence
would not have a Material Adverse Effect on Bancorp, as to Bancorp: (i)
each Plan is in substantial compliance with applicable law and has been
administered and operated in all material respects in accordance with
its terms; (ii) each Plan which is intended to be "qualified" within the
meaning of Section 401(a) of the Code, has either (A) received a
favorable determination letter from the Internal Revenue Service ("IRS")
and, to the knowledge of Bancorp, no event has occurred and no condition
exists which could reasonably be expected to result in the revocation of
any such determination, or (B) had an application for a determination
letter filed with the IRS with respect to its initial qualification;
(iii) no Plan subject to Title IV of ERISA has been terminated or is or
has been the subject of termination proceedings pursuant to Title IV of
ERISA; (iv) neither Bancorp nor any of its Subsidiaries has engaged in
any transactions in connection with any Plan that could reasonably be
expected to result in the imposition of a material penalty pursuant to
Section 502(i) of ERISA, damages pursuant to Section 409 of ERISA or a
tax pursuant to Section 4975(a) of the Code; (v) no material liability,
claim, action or litigation has been made, commenced or, to the
knowledge of Bancorp, threatened, with respect to any Plan involving any
employees of Bancorp or any of its Subsidiaries (other than for benefits
payable in the ordinary course and insurance premiums payable to the
Pension Benefit Guaranty Corporation); (vi) with respect to all Plans
which are subject to Title IV of ERISA, as of the most recent actuarial
valuation prepared for each such Plan, the aggregate present value of
the accrued liabilities thereof did not exceed the aggregate fair market
value of the assets allocable thereto; (vii) no Plan is a Multiemployer
Plan; and (viii) neither Bancorp nor any of its Subsidiaries has been
advised by any Multiemployer Plan that it has any withdrawal liability
under Section 4201 or 4204 of ERISA with respect to any Multiemployer
Plan, nor is Bancorp or any of its Subsidiaries aware of any such
withdrawal liability.
(h) Proxy Statement, Registration Statement, Etc. None of the
information regarding NatWest or its Subsidiaries supplied or to be
supplied by NatWest in writing for inclusion or included in (i) the
Registration Statement, (ii) the Proxy Statement and (iii) any other
documents to be filed with the Commission or any regulatory authority in
connection with the transactions contemplated hereby will, at the
respective times such documents are filed with the Commission or regula-
tory authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed,
be false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements
therein not misleading.
(i) Broker's or Finder's Fee. Except for Lehman Brothers (whose
fees and expenses as financial advisor to NatWest will be paid by
NatWest in accordance with NatWest's agreement with such firm), no
agent, broker, Person or firm acting on behalf of NatWest or the Company
is, or will be, entitled to any fee, commission or broker's or finder's
fees from any of the parties hereto, or from any Person controlling,
controlled by, or under common control with any of the parties hereto,
in connection with this Agreement or any of the transactions
contemplated hereby.
(j) Agreements with Regulatory Agencies. Except as previously
disclosed in writing to Citizens, neither NatWest nor any of its
Subsidiaries is subject to, a party to or recipient of any Regulatory
Agreement with or from any regulatory agency that materially restricts
its ability to consummate the transactions contemplated hereby, nor has
NatWest or any of its Subsidiaries been advised by any regulatory agency
that it is considering issuing or requesting any such Regulatory
Agreement.
(k) Ownership of Citizens Common Stock; Affiliates and Associates.
(i) Neither NatWest nor any of its affiliates or associates (as such
terms are defined under the Exchange Act), (A) beneficially own,
directly or indirectly, or (B) is a party to any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, any shares of capital stock of Citizens
(other than Trust Account Shares and DPC Shares); and
(ii) Neither NatWest nor any of its Subsidiaries is an "affiliate"
(as such term is defined in NJBC Act Section 14A:10A-3(a) or an
"associate" (as such term is defined in NJBC Act Section 14A:10A-3(c))
of Citizens.
ARTICLE IV
CONDUCT OF BUSINESS; TRANSACTIONS PRIOR
TO CLOSING DATE; ADDITIONAL AGREEMENTS
4.01 Conduct of the Business of Citizens Prior to the Effective
Time. Citizens agrees that, except as permitted, required or specifically
contemplated by, or otherwise described in, this Agreement or otherwise
consented to or approved in writing by the Company during the period commenc-
ing on the date hereof and ending at the Effective Time:
(a) Citizens and each of its Subsidiaries will conduct their
respective operations only according to their ordinary and usual course
of business and will use their reasonable best efforts to preserve
intact their respective business organizations and keep available the
services of their officers and employees, and shall give the Company
prompt notice of any default under any agreement, contract or
obligation, which could have a Material Adverse Effect on Citizens;
(b) Neither Citizens nor any of its Subsidiaries shall (i) make
any change in or amendment to its Restated Certificate of Incorporation
or By-Laws; (ii) issue or sell any shares of its capital stock (other
than in connection with the exercise of any Citizens Employee Stock
Options, Citizens Preferred Stock, or 6.75% Debentures) or any of its
other securities, or issue any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any
shares of its capital stock or any of its other securities; (iii) in the
case of Citizens only, declare, pay or make any dividend or other
distribution or payment with respect to, or split, redeem or reclassify,
any shares of its capital stock (other than (i) cash dividends declared
and payable on the Citizens Preferred Stock in accordance with its
terms, (ii) cash dividends declared and payable on the Citizens Common
Stock in an amount equal to $.0425 per share per quarter during the
months of February, May, August and November and an additional $.125 per
share payable at any time and (iv) distributions from the Citizens First
National Bank of New Jersey Employee Stock Ownership Plan and redemption
payments with respect to the Citizens Preferred Stock); (iv) enter into
any contract or commitment relating to (A) any acquisition of assets or
securities, which would be material, individually or in the aggregate,
to Citizens and its Subsidiaries taken as a whole, other than in
connection with foreclosures, settlements in lieu of foreclosure or
troubled loan or debt restructurings or otherwise in the ordinary course
of business, or to (B) any disposition of assets or securities or any
release or relinquishment of any contract rights, which would be
material, individually or in the aggregate to Citizens and its Sub-
sidiaries taken as a whole, other than in the ordinary course of
business; (v) enter into any new material line of business; (vi) change
its methods of accounting in effect at December 31, 1993, except as
required by changes in US GAAP or regulatory accounting principles with
which Citizens' independent auditors concur; (vii) amend any employee or
non-employee benefit plan or program, employment agreement, license
agreement or retirement agreement or any Plan, or pay any bonus or
contingent compensation, or otherwise increase the compensation or
fringe benefits of any employee (other than regularly scheduled
increases not to exceed 8% for any individual employee, provided that
all such increases shall not exceed 4% of the total aggregate
compensation of all employees on the date hereof) provided that nothing
in this Section 4.01(b) shall be construed to limit payments made under
the Change in Control Agreements described in Section 4.13, without
giving effect to any changes thereto after the date hereof or grant any
stock options or stock appreciation rights, except as required pursuant
to applicable law to maintain the tax-qualified status of the plan or
arrangement; (viii) without prior consultation with the Company, take
any action that results or would be likely to result in it being deemed
to exercise dominion, management or control over collateral with respect
to any outstanding extension of credit with a contractual amount due of
$750,000 or more; (ix) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed
money, assume, guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other individual,
corporation or other entity; or (x) agree, in writing or otherwise, to
take any of the foregoing actions;
(c) Citizens shall not, and shall not permit any of its
Subsidiaries to take any action, engage in any transaction or enter into
any agreement which would cause any of the representations or warranties
set forth in Section 3.01 hereof to be untrue as of the Closing Date
except as required by applicable law; and
(d) Citizens shall not elect or appoint any new director or
officer of Citizens.
4.02 Confirming Accounting and Reserve Policies and Restructuring
Expense; Integration. (a) Notwithstanding Citizens' belief that it has
established all reserves and taken all provisions for possible loan losses
required by US GAAP and applicable laws, rules and regulations, Citizens
recognizes that the Company has adopted different loan, accrual and reserve
policies (including loan classifications and levels of reserves for possible
loan losses). From and after the date of this Agreement to the Effective
Time, Citizens and the Company shall consult and cooperate with each other
with respect to conforming (subject to the conditions set forth in Section
4.02(d)), as specified in a written notice from the Company to Citizens based
upon such consultation, Citizens' loan, accrual and reserve policies to those
policies of the Company.
(b) In addition, from and after the date of this Agreement to the
Effective Time, Citizens and the Company shall consult and cooperate with
each other with respect to determining (subject to the conditions set forth
in Section 4.02(d)), as specified in a written notice from the Company to
Citizens, based upon such consultation, appropriate accruals, reserves and
charges to establish and take in respect of excess facilities and equipment
capacity, severance costs, litigation matters, write-off or write-down of
various assets and other appropriate accounting adjustments taking into
account the Company's business plan following the Merger.
(c) The Company and Citizens shall consult and cooperate with each
other with respect to determining the amount and the timing of recognition
for financial accounting purposes of the expenses of the Merger and the
restructuring charges related to or to be incurred in connection with the
Merger.
(d) At the request of the Company, Citizens shall, prior to the
Closing, use its reasonable best efforts to (i) establish and take such
reserves and accruals as the Company shall reasonably request to conform, on
a mutually satisfactory basis, Citizens' loan, accrual and reserve policies
to the Company's policies and (ii) establish and take such accruals, reserves
and charges in order to implement such policies in respect of excess
facilities and equipment capacity, severance costs, litigation matters,
write-off or write-down of various assets and other appropriate accounting
adjustments, and to recognize for financial accounting purposes such expenses
of the Merger and restructuring charges related to or to be incurred in con-
nection with the Merger; provided, however, that Citizens shall not be
obligated to take any such action pursuant to this Section 4.02(d) unless and
until (x) the Company specifies its request in a writing delivered to
Citizens, and acknowledges that all conditions to its obligation to
consummate the Merger set forth in Sections 5.01 and 5.02 have been irre-
vocably waived or irrevocably satisfied and (y) Citizens acknowledges that
the conditions to its obligation to consummate the Merger set forth in
Sections 5.01 and 5.03 have been satisfied or waived by Citizens. Citizens
shall not be required to take any such action that is not consistent with US
GAAP, that would make any of its representations or warranties untrue or
otherwise impair Citizens' ability to perform its obligations hereunder, that
impairs its regulatory capital, that is inconsistent with any formal or
informal undertaking by Citizens to any banking regulatory agency which has
been disclosed in writing to the Company prior to the date hereof, or which
is inconsistent with any requirement hereinafter imposed on Citizens by any
bank regulatory agency.
(e) During the period from the date of this Agreement to the
Effective Time, Citizens shall, and shall cause its officers, directors and
employees to, cooperate with and assist the Company in the formulation of a
plan of integration for the Company and Citizens.
4.03 Forbearance By Citizens, NatWest and the Company. During the
period from the date of this Agreement to the Effective Time, without the
prior written consent of the other party, none of NatWest, the Company or
Citizens will take any action that would (a) delay or adversely affect in any
material respect the ability of Citizens, NatWest or the Company to obtain
any necessary approvals, consents or waivers of any governmental authority
required for the transactions contemplated hereby or (b) adversely affect in
any material respect the ability of Citizens, NatWest or the Company to
perform its covenants and agreements on a timely basis under this Agreement.
4.04 Access to Citizens. Citizens shall, upon reasonable notice,
afford to NatWest and its counsel, accountants and other authorized repre-
sentatives, reasonable access during normal business hours to its properties,
books and records in order that NatWest may have the opportunity to make such
investigations as it shall desire of the affairs of Citizens and its
Subsidiaries. Citizens agrees to cause its agents, officers and employees to
furnish such additional financial and operating data and other information
and respond to such inquiries as NatWest shall from time to time reasonably
request. Citizens shall also permit employees and agents of NatWest to have
reasonable access during normal business hours to the properties and
facilities of Citizens and its Subsidiaries including, without limitation, to
customer account data and files of Citizens to facilitate the planning and
installation of data communications equipment and other technological
interfaces between the systems of the Company and those of Citizens and its
Subsidiaries. Neither Citizens nor its Subsidiaries shall be required to
provide access to or to disclose information (i) with respect to any customer
of Citizens who is a customer of NatWest or any of its affiliates or (ii)
when such access or disclosure would violate or prejudice the rights of
Citizens' customers, jeopardize the attorney-client privilege of Citizens or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement.
Citizens will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
Notwithstanding anything in this Section 4.04 to the contrary, neither
NatWest nor the Company nor any of their representatives shall be permitted
to have access to the properties and facilities of Citizens and its
Subsidiaries until the thirtieth day following the date of this Agreement
without the prior consent of Citizens.
4.05 Confidentiality. Information obtained by NatWest or the
Company pursuant to Section 4.04 hereof shall be subject to the provisions of
the Confidentiality Agreement between Citizens and National Westminster
Bancorp, Inc. (the "Company Confidentiality Agreement"), and NatWest and the
Company hereby agree to comply with all the provisions of the Company
Confidentiality Agreement as if they were original signatories thereto.
4.06 Proxy Statement. Citizens will, in cooperation with NatWest
and the Company, prepare and file with the Commission a preliminary Proxy
Statement in connection with the Merger and related transactions contemplated
hereby (which Proxy Statement shall be combined with the Registration
Statement) and will use its best efforts to respond to the comments of the
Commission in connection therewith and to furnish all information required to
prepare the definitive Proxy Statement (including, without limitation,
financial statements and supporting schedules and certificates and reports of
independent public accountants). Citizens will cause the Proxy Statement to
be mailed to its stockholders and, if necessary, after the Proxy Statement
shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy material and, if required in connection therewith,
resolicit proxies. Citizens will not use any proxy material in connection
with the meeting of its stockholders with respect to the approval of this
Agreement to which the Company shall reasonably object.
4.07 Registration Statement; Stock Exchange Listing. NatWest
will, in cooperation with Citizens, prepare and file with the Commission the
Registration Statement with respect to the NatWest Stock (which Registration
Statement shall be combined with the Proxy Statement) to be issued in the
Merger and shall use its best efforts to cause such Registration Statement to
be declared effective by the Commission as promptly as practicable. NatWest
will not use in the Registration Statement any information to which Citizens
shall reasonably object. NatWest and the Company shall promptly take any
action required to be taken under state securities laws and the securities
exchanges on which the NatWest Stock will be listed in connection with the
issuance of NatWest Stock. NatWest shall use its best efforts to list on the
NYSE upon official notice of issuance, and to obtain admission to the
Official List of the International Stock Exchange the NatWest Stock and/or
the NatWest ADRs to be issued in the Merger.
4.08 Stockholder Approval. Citizens, acting through its Board of
Directors, shall call a special meeting of the holders of Citizens Common
Stock for the purpose of voting upon this Agreement and the Merger. Subject
to the fiduciary duties of the Board of Directors of Citizens, Citizens
agrees that it will include in the Proxy Statement the recommendation of its
Board of Directors that holders of Citizens Common Stock approve and adopt
this Agreement and approve the Merger.
4.09 Reasonable Best Efforts. Each of Citizens, NatWest and the
Company shall, and Citizens and NatWest, shall cause each of its Subsidiaries
to, cooperate and use their respective reasonable best efforts to take, or
cause to be taken as promptly as practicable, all appropriate action, and to
make, or cause to be made as promptly as practicable, all filings necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, their respective reasonable best efforts to obtain,
promptly, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities as are necessary for
consummation of the transactions contemplated by this Agreement and to
fulfill the conditions to the Merger. With respect to any such actions or
filings, each party shall consult and cooperate with the other prior to
taking any such actions or making any such filings and, in the case of any
such filings, to afford reasonable consideration of the comments of the other
party. NatWest and the Company agree to cooperate fully in obtaining the
consents described in Section 5.02(f).
4.10 Environmental Actions. Promptly after the execution of this
Agreement and in any event within five days thereof, each of Citizens and
each of its Subsidiaries shall notify the New Jersey Department of
Environmental Protection and Energy ("NJDEPE") of the transactions contem-
plated by this Agreement and shall use its reasonable best efforts (including
taking any actions required in connection therewith) to obtain (i) all
letters, declarations and no further action letters required under applicable
environmental laws or (ii) a remediation agreement from the NJDEPE permitting
completion of the Merger prior to obtaining a no further action letter under
the New Jersey Industrial Site Recovery Act ("ISRA"), and take all other
necessary actions under ISRA, and each party will fully cooperate with and
assist the other in connection therewith. Such cooperation and assistance
shall include, but not be limited to, providing a "remediation funding
source" as that term is defined in ISRA, in connection with any remediation
agreement, remediation plan or other arrangement with the NJDEPE pursuant to
ISRA in connection with the Merger.
4.11 Acquisition Proposals. Citizens shall not, directly or
indirectly, and shall instruct and otherwise use its best efforts to cause
its respective officers, directors, employees, agents or advisors or other
representatives or consultants not to, directly or indirectly, (i) encourage,
solicit or initiate any proposals or offers from any person relating to any
acquisition or purchase of all or a material amount of the assets of, or any
securities of, or any merger, consolidation or business combination with,
Citizens or any of its Subsidiaries (such transactions are referred to herein
as "Acquisition Transactions") or (ii) except as the Board of Directors of
Citizens deems necessary, on the advice of outside counsel, in the exercise
of its fiduciary obligations under applicable law, participate in any
discussions or negotiations regarding, or furnish to any other person any in-
formation with respect to, an Acquisition Transaction; provided, however,
that nothing contained in this Section 4.11 shall restrict or prohibit any
disclosure by Citizens that is required on the advice of outside counsel in
any document to be filed with the Commission after the date of this Agreement
or any disclosure that, in the opinion of the Board of Directors of Citizens
on advice of outside counsel, is otherwise required under applicable law.
Citizens shall promptly notify the Company orally and in writing of any
proposal or offer regarding an Acquisition Transaction or any inquiries with
respect thereto.
4.12 Antitakeover Statutes. Citizens will take all reasonable
steps to exempt NatWest and the Company from the requirements of any state
antitakeover law by action of its board of directors or otherwise.
4.13 Employee Benefits. (a) The Company hereby unconditionally
agrees to, and agrees to cause its Subsidiaries to, honor and continue to
perform, without modification, all contracts and agreements (including but
not limited to, employment, consulting and severance agreements but excluding
any Plan (as defined in Section 3.01(j)) of Citizens or any of its
Subsidiaries authorized by Citizens or any of its Subsidiaries prior to the
date of this Agreement which apply to any current or former employee or
current or former director of Citizens or any of its Subsidiaries, provided
that nothing contained in this Agreement shall require the Company to honor
or continue to perform any such contract or agreement with respect to which
there is an actual pending litigation prior to the execution of this
Agreement. In accordance with the terms of such contracts and agreements,
the Company hereby assumes, as of the Effective Time, all of Citizens'
obligations under such contracts and agreements and commitments. The
Company agrees for itself and its Subsidiaries that the execution of this
Agreement and the consummation of the transactions contemplated hereby are
both a "Change in Control" as defined in the change in control agreements
entered into between the Bank and its officers, a list of which has been
provided in writing to the Company by Citizens (the "Change in Control
Agreements").
(b) With respect to benefits payable (i) pursuant to the Citizens
First National Bank of New Jersey Benefit Equalization Plan and (ii) to
employees who shall have retired from Citizens and its Subsidiaries before
the Effective Time, neither the Company nor any of its Subsidiaries shall
take any action to reduce such benefits, including, without limitation,
retiree health benefits. The Company and NatWest agree to honor all benefits
payable pursuant to the Citizens First Bancorp, Inc. Director Retirement
Plan. All Citizens Employees (as hereinafter defined) shall be provided with
retiree health benefits to the same extent as those provided upon retirement
in the future to employees of Bancorp who were employed on December 31, 1993.
Employees of Citizens and its Subsidiaries immediately prior to the Effective
Time (the "Citizens Employees") who are terminated on or within one year
after the Effective Time (except for Citizens Employees terminated for
engaging in criminal conduct in connection with their employment) shall be
provided, in addition to all other applicable benefits (except severance and
similar termination benefits), the following existing Citizens severance and
other benefits: (i) one month of salary for every five years of service or
partial five year period plus, in the case of Senior Vice Presidents or above
of Citizens or any of its Subsidiaries (at the date of this Agreement), two
months of salary; and (ii) continuation of health benefits during the period
when any severance payments are made and the provision of COBRA benefits
thereafter.
(c) For purposes of all employee benefit plans, programs and
arrangements maintained by or contributed to by the Company and its
Subsidiaries (including, without limitation, the Surviving Corporation), the
Company shall, or shall cause its Subsidiaries to, cause such plan, program
or arrangement to treat the prior service with Citizens or its Subsidiaries
of each person who is a Citizens Employee as service rendered to the Company
or its Subsidiaries, as the case may be, for purposes of eligibility to
participate and for special benefits and vesting thereunder. The Company or
the Company's Subsidiaries shall cause their respective tax-qualified defined
benefit pension plans to be amended to recognize, for purposes of vesting,
eligibility and benefit accrual thereunder, each Citizens Employee's
compensation and term of service with Citizens.
(d) Each Citizens Employee who becomes an employee of the Company
or any of its Subsidiaries following the Effective Time (each a "Continued
Employee") shall be entitled, as an employee of the Company or of any of its
Subsidiaries, to participate in whatever employee benefit plans, as defined
in Section 3(3) of ERISA, or whatever nonqualified employee benefit or
deferred compensation plans, stock option, bonus or incentive plans or other
employee benefit or fringe benefit programs, that may be in effect generally
for employees of the Company or its Subsidiaries from time to time ("Company
Plans") if such Continued Employee shall be eligible for participation
therein and otherwise shall not be participating in a similar plan which
continues to be maintained by the Surviving Corporation and its Subsidiaries.
Continued Employees will be eligible to participate on the same basis as
similarly situated employees of the Company or its Subsidiaries. All such
participation shall be subject to such terms of such plans as may be in
effect from time to time.
(e) As soon as practicable after the Effective Time, the Company
shall cause the merger of the Employees' Retirement Plan of Citizens First
National Bank of New Jersey (the "Retirement Plan") into the National
Westminster Bancorp Retirement Plan (the "NatWest Retirement Plan"), in
accordance with Section 414(1) of the Code, so that each participant in the
Retirement Plan would, if the merged plan then terminated, receive a benefit
which is equal to or greater than the benefit he would have received
immediately before the merger if the Retirement Plan had then terminated,
notwithstanding the funded status of the Retirement Plan. The benefit of
each Continued Employee under the NatWest Retirement Plan shall be the
greater of (i) the accrued benefit he would have received under the
Retirement Plan had he terminated employment immediately prior to the
Effective Time or (ii) his accrued benefit under the NatWest Retirement Plan
taking into account his years of service and compensation with Citizens or
any of its Subsidiaries.
(f) The provisions of this Section 4.13 are expressly intended to
be for the irrevocable benefit of, and shall be enforceable by, each current
and former director, officer and employee of Citizens and its Subsidiaries
and his or her heirs and representatives.
4.14 Indemnification; Directors' and Officers' Insurance. (a)
From and after the Effective Time, the Company shall and shall cause its
Subsidiaries to indemnify and advance costs and expenses (including reason-
able attorneys' fees, disbursements and expenses) and hold harmless each
present and former director and/or officer of Citizens or its Subsidiaries
determined as of the Effective Time (the "Indemnified Parties"), against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, settlements or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative (each
a "Claim"), arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that Citizens would have been
permitted under New Jersey law and its Restated Certificate of Incorporation
or Bylaws in effect on the date hereof to indemnify such person (and also
advance expenses as incurred to the fullest extent permitted under applicable
law).
(b) Any Indemnified Party wishing to claim indemnification under
Section 4.14(a), shall notify the Company within forty-five days of the
Indemnified Party's receipt of a notice of any Claim, but the failure to so
notify shall not relieve the Company of any liability it may have to such
Indemnified Party if such failure does not materially prejudice the indem-
nifying party. In the event of any Claim (whether arising before or after
the Effective Time), (i) the Company shall have the right to assume the
defense thereof and the Company shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if the Company elects not to assume such defense
or counsel for the Indemnified Parties advises that there are issues which
raise conflicts of interest between the Company and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and the
Company shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties promptly after statements therefor are received;
provided, however, that the Company shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all Indemnified Parties
in any jurisdiction unless the use of one counsel for such Indemnified
Parties would present such counsel with a conflict of interest, (ii) the
Indemnified Parties will cooperate in the defense of any such matter and
(iii) the Company shall not be liable for any settlement effected without its
prior written consent which shall not be unreasonably withheld. If such
indemnity with respect to any Indemnified Party is unenforceable against the
Company, then the Company and the Indemnified Party shall contribute to the
amount payable in such proportion as is appropriate to reflect relative
faults and benefits.
(c) For a period of six years after the Effective Time, the
Company shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Citizens (provided
that the Company may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous to such directors and officers) with respect to claims arising
from facts or events which occurred before the Effective Time.
(d) If the Company or the Surviving Corporation or any of their
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) shall transfer
all or substantially all of its properties and assets to any individual,
corporation or other entity, then in each such case, proper provision shall
be made so that the successors or assigns of the Company and the Surviving
Corporation shall assume the obligations set forth in this section.
(e) The provisions of this Section 4.14 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, and each
Indemnified Party's heirs and representatives.
4.15 Letter of Citizens' Accountants. Citizens shall cause to be
delivered to NatWest a letter of Deloitte & Touche, Citizens' independent
auditors, dated a date within two business days before the date on which the
Registration Statement shall become effective and customary in scope and
substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration
Statement.
4.16 Letter of Natwest's Accountants. NatWest shall cause to be
delivered to Citizens a letter of KPMG Peat Marwick, NatWest's independent
auditors, dated a date within two business days before the date of the Proxy
Statement, customary in scope and substance for letters delivered by
independent public accountants in connection with proxy statements similar to
the Proxy Statement.
4.17 Tax. Neither Citizens nor NatWest nor any of their
respective Subsidiaries shall take or cause to be taken any action, prior to
or after the Effective Time, which would disqualify the Merger as a "re-
organization" within the meaning of Section 368 of the Code.
4.18 Rule 145. On or prior to the Closing Date, Citizens shall
deliver to NatWest a letter identifying all Persons who are, at the time this
Agreement is submitted for approval to the stockholders of Citizens, an
"affiliate" of Citizens for purposes of Rule 145 under the Securities Act.
Citizens shall use all reasonable efforts to cause each such Person to
deliver to NatWest prior to the Closing Date a written agreement in form and
substance satisfactory to NatWest to the effect that such Person will not
offer to sell, sell or otherwise dispose of any NatWest Stock except pursuant
to an effective registration statement or in compliance with Rule 145 or
other exemption from the registration requirements of the Securities Act.
4.19 Executive Advisory Committee; Directorships. (a) The
Company agrees, promptly following the Effective Time, to cause all the
members of Citizens' Board of Directors immediately prior to the Effective
Time who are nominated by Citizens and are willing so to serve to be elected
or appointed as members of a newly formed executive advisory committee, the
function of which shall be to advise the Company on deposit and lending
activities in Citizens' former market area.
(b) The Company agrees, following the Effective Time, to cause two
members of the current Board of Directors of Citizens chosen by the Company
(and who are willing so to serve) to be elected or appointed as directors of
National Westminster Bank NJ.
4.20 Additional Financial Statements. On or prior to the 22nd day
of each month, commencing April 22, 1994, Citizens shall provide to the
Company an unaudited consolidated balance sheet and income statement for each
month ending on the last day of the calendar month ending immediately
preceding such 22nd day, or if such day is not a business day, the next
succeeding business day.
4.21 Citizens Employee Stock Options. Prior to the Effective
Time, Citizens shall use its reasonable best efforts, as to Citizens Employee
Stock Options not exercised, to either (a) obtain, from each holder of
Citizens Employee Stock Options, such holder's consent to receive in the
Merger, for each share of Citizens Common Stock subject to such Citizens
Employee Stock Option, the consideration specified in Section 2.09, or (b)
duly amend the Citizens Option Plans and the agreements entered into pursuant
thereto to provide that upon the Merger each outstanding Citizens Employee
Stock Option shall be converted into the right to receive, for each share of
Citizens Common Stock subject to such Citizens Employee Stock Option, the
consideration specified in Section 2.09, in each case in full satisfaction of
the rights of such holder and subject to federal and state tax withholding
obligations.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of NatWest, the Company
and Citizens. The respective obligations of NatWest and the Company, on the
one hand, and Citizens on the other hand, to effect the Merger are subject to
the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:
(a) Approval of Citizens' Stockholders. This Agreement and the
Merger shall have been approved and adopted by the requisite vote or
consent of the stockholders of Citizens in accordance with applicable
law;
(b) Effectiveness of Registration Statement. The Registration
Statement shall have become effective and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been initiated or threatened
by the Commission;
(c) Injunction. No preliminary or permanent injunction or other
order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of
the Merger and the transactions contemplated by this Agreement and which
is in effect at the Effective Time; no litigation or proceeding shall be
pending against Citizens, NatWest or the Company or any of their
affiliates brought by any governmental entity seeking to prevent consum-
mation of the transactions contemplated hereby;
(d) Consents. Consents or approvals from third parties,
regulatory authorities and other governmental entities (including
relevant bank regulatory approvals and filings) which are required in
order to consummate the Merger and the other transactions contemplated
hereby, shall have been obtained; except, where any such consents or
approvals are not required by law to consummate the Merger, and the
failure to obtain any such consents or approvals would not have a
Material Adverse Effect on the Company after giving effect to the
Merger; and
(e) Tax Opinion. Each of Citizens and the Company shall have
received the opinion of White & Case, counsel to Citizens, to the effect
that the Merger will be treated for United States federal income tax
purposes as a reorganization pursuant to Section 368(a) of the Code, and
that Citizens and the Company will each be a party to the reorganization
pursuant to Section 368(b) of the Code, dated on or about the date no
more than two business days prior to the date the Proxy Statement is
first mailed to the stockholders of Citizens, which opinion shall not
have been withdrawn or modified in any material respect.
5.02 Conditions Precedent to Obligations of NatWest and the
Company. The obligations of NatWest and the Company to effect the Merger are
also subject to the satisfaction or waiver, at or prior to the Effective
Time, of each of the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Citizens contained herein shall be
true and correct (without giving effect to any Material Adverse Effect
qualification contained in any such representation or warranty) as of
the date hereof and at and as of the Closing, with the same force and
effect as though made on and as of the Closing Date, except as to
representations and warranties made as of a specific date, which shall
be true and correct as of such date, provided that this condition shall
be satisfied unless all such untruths and inaccuracies in the aggregate
have a Material Adverse Effect on Citizens;
(b) Performance by Citizens. Citizens shall have performed in all
material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to the Closing
Date;
(c) Certificate. Citizens shall have furnished NatWest a
certificate dated the date of the Closing, signed by the President and
CEO or CFO of Citizens, that, to the best of his knowledge and belief
after due inquiry, the conditions set forth in Sections 5.02(a) and
5.02(b) have been satisfied;
(d) Tax Consents. NatWest shall have received the consent under
Section 765 of the Income and Corporation Taxes Act 1988;
(e) Office of Fair Trading. The Office of Fair Trading shall have
indicated that it is not the intention of the Secretary of State for
Trade and Industry to refer any of the transactions contemplated by this
Agreement or any matters arising from this Agreement to the Monopolies
and Mergers Commission; and
(f) Citizens Employee Stock Options. Prior to the Effective Time,
Citizens shall, as to Citizens Employee Stock Options not exercised,
either (a) have obtained, from each holder of Citizens Employee Stock
Options, such holder's consent to receive, for each share of Citizens
Common Stock subject to such Citizens Employee Stock Option, the
consideration specified in Section 2.09, or (b) have duly amended the
Citizens Option Plans and the agreements entered into pursuant thereto
to provide that upon the Merger each outstanding Citizens Employee Stock
Option shall be converted into the right to receive, for each share of
Citizens Common Stock subject to such Citizens Employee Stock Option,
the consideration specified in Section 2.09, in each case in full
satisfaction of the rights of such holder and subject to federal and
state tax withholding obligations;
(g) Redemption. The Citizens Preferred Stock and the 6.75%
Debentures shall have been redeemed; and
(h) Affiliate Letters. The affiliate letters from "affiliates"
referred to in Section 4.18 shall have been obtained.
5.03 Conditions Precedent to Obligation of Citizens. The
obligation of Citizens to effect the Merger is also subject to the
satisfaction or waiver, at or prior to the Effective Time, of each of the
following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of NatWest and the Company contained
herein shall be true and correct (without giving effect to any Material
Adverse Effect qualification contained in any such representation or
warranty) in all material respects as of the date hereof and at and as
of the Closing, with the same force and effect as though made on and as
of the Closing Date, except as to representations and warranties made as
of a specific date, which shall be true and correct as of such date,
provided that this condition shall be satisfied unless all such untruths
and inaccuracies in the aggregate have a Material Adverse Effect on
NatWest;
(b) Performance by NatWest and the Company. Each of NatWest and
the Company shall have performed in all material respects all
obligations and agreements, and complied in all material respects with
all covenants and conditions, contained in this Agreement to be per-
formed or complied with by it prior to the Closing Date;
(c) Certificate. Natwest shall have furnished Citizens a
certificate dated the date of the Closing, signed by a responsible
officer of NatWest, that, to the best of his knowledge and belief after
due inquiry, the conditions set forth in Sections 5.03(a) and 5.03(b)
have been satisfied;
(d) NYSE Listing. The NatWest ADRs to be issued in the Merger
shall have been approved for listing on the NYSE; and
(e) International Stock Exchange. The International Stock
Exchange shall have admitted the NatWest Stock to the Official List
(subject to allotment) and such admission shall not have been withdrawn
prior to the Effective Time.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by Citizens'
stockholders:
(a) by mutual consent of Citizens, NatWest and the Company;
(b) by Citizens or the Company, if the Effective Time shall not
have occurred on or prior to March 31, 1995, unless the failure to so
consummate by such time is due to the material breach of any
representation or warranty, or failure to satisfy any covenant or condi-
tion contained in this Agreement by the party seeking to so terminate;
(c) by Citizens, whether before or after the Merger has been
approved by Citizens' stockholders, upon five business days' prior
written notice to the Company prior to the Effective Time, in accordance
with Section 2.06 hereof, provided, that the Company may, within three
days after it has received such notice, change the Exchange Ratio to an
amount so that such Adjusted Exchange Ratio multiplied by the Final
NatWest ADR Price shall equal or exceed 7.987, and in such event
Citizens shall not have the right to terminate this Agreement under this
subsection (c);
(d) by either Citizens or the Company, if there shall be any law
or regulation of any competent authority that makes consummation of the
Merger illegal or otherwise prohibited, or if any judgment, injunction,
order or decree of any competent authority prohibiting such transaction
is entered and such judgment, injunction, order or decree shall have
become final and nonappealable;
(e) by either Citizens or the Company, in the event (i) the
shareholders of Citizens fail to approve the Merger at the meeting
called to consider such approval or (ii) a breach by the other party of
any representation, warranty or covenant, which breach, individually or
together with all other such breaches, has a Material Adverse Effect on
the breaching party, provided, that any such breach is not cured (or
cannot reasonably be expected to be cured) within 60 days following
receipt by the breaching party of notice of such breach;
(f) by Citizens, NatWest or the Company, if the Board of Directors
of Citizens reasonably determines that an Acquisition Proposal will
result in a Superior Proposal, provided that, in the case of termination
by Citizens, Citizens has not breached Section 4.11. "Acquisition
Proposal" shall mean any proposed merger or other business combination,
sale or other disposition of any material amount of assets, sale of
shares of capital stock, tender offer or exchange offer or similar tran-
sactions involving Citizens or any of its Subsidiaries. "Superior
Proposal" shall mean a bona fide proposal made by a third party to
acquire Citizens pursuant to a tender or exchange offer, a merger or a
sale of all or substantially all of the assets of Citizens, on terms
which a majority of the Board of Directors of Citizens determines to be
more favorable to Citizens and its shareholders than the transaction
contemplated hereby; or
(g) by NatWest or the Company, if the Board of Directors of
Citizens withdraws or modifies its approval or recommendation of this
Agreement or the transactions contemplated hereby or shall have
recommended acceptance of an Acquisition Proposal from any person other
than NatWest or an affiliate of NatWest.
6.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.01 hereof by the Company, on the one
hand, or Citizens, on the other hand, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof pursu-
ant to which such termination is made, and this Agreement shall become void
and have no effect, and there shall be no liability hereunder on the part of
NatWest, the Company, or Citizens, except that Sections 4.05, 6.02, 7.01 and
7.04 hereof shall survive any termination of this Agreement. Nothing in this
Section 6.02 shall relieve any party to this Agreement of liability for
breach of this Agreement.
6.03 Fees and Expenses. (a) If this Agreement is terminated by
Citizens pursuant to Section 6.01(f) or by the Company pursuant to Sections
6.01(e)(i) or 6.01(e)(ii) (but, with respect to 6.01(e)(ii) only a
termination arising as a result of a breach of covenant), 6.01(f) or 6.01(g)
and prior thereto or within twelve months after the termination
(i) Citizens, without having received the Company's prior written
consent, shall have entered into an agreement to engage in an
Acquisition Transaction with any person (the term "person" for purposes
of this Section 6.03 having the meaning assigned thereto in Sections 3
(a)(9) and 13(d) (3) of the Exchange Act and the rules and regulations
thereunder) other than NatWest or one of its affiliates, (ii) the Board
of Directors of Citizens shall have approved an Acquisition Transaction
or shall have recommended that the shareholders of Citizens approve or
accept any Acquisition Transaction (as hereinafter defined) in each case
other than as contemplated by this Agreement or (iii) any person other
than NatWest or one of its affiliates shall have acquired beneficial
ownership of 20% or more of the outstanding shares of Citizens Common
Stock (the term "beneficial ownership" for purposes of this Agreement
having the meaning assigned thereto in Rule 13d-3 of the Exchange Act),
then Citizens shall promptly, but in no event later than one day after
the first of such events shall have occurred, pay the Company a fee
equal to $17.5 million plus all costs and expenses (but not in excess of
$2.5 million) incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby (including without
limitation financial advisory fees and reasonable legal fees); provided,
however, that the Fee shall not be paid pursuant to this Section 6.03 if
NatWest or the Company were in material breach of its material covenants
or agreements contained in this Agreement when this Agreement was
terminated. For purposes of this Section 6.03 "Acquisition
Transaction" shall mean (x) a merger or consolidation, or any similar
transaction involving Citizens, (y) a purchase, lease or other
acquisition of all or substantially all of the assets of Citizens, or
(z) a purchase or other acquisition (including by way of merger, consol-
idation, share exchange or otherwise) of securities representing 20% or
more of the voting power of Citizens.
ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. Except to the extent set forth in Section
6.03 hereof all costs and expenses incurred in connection with this Agreement
and the consummation of the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.
7.02 Representations, Warranties and Agreements. Except for
Article VI hereof which will remain in full force and effect and as provided
below, the respective representations, warranties and agreements of the
parties hereto contained herein shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of NatWest, the Company or
Citizens shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 7.02 shall have no effect upon any
obligations of the parties hereto, that are to be performed in whole or in
part after the Effective Time, including without limitation those contained
in Article II and in Sections 4.13, 4.14, 4.17 and 4.19 of this Agreement.
7.03 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken by or on behalf of the respective Boards
of Directors of NatWest, the Company, or Citizens may (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 by any other applicable party or in any document,
certificate or writing delivered pursuant hereto by any other applicable
party or (iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party to any such exten-
sion or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
7.04 Press Announcements. Citizens, on the one hand, and NatWest
and the Company, on the other hand, agree to consult promptly with each other
prior to issuing any press release with respect to the transactions
contemplated hereby, and shall not issue any such press release prior to such
consultation and review by the other party of a copy of such release, unless
required by applicable law.
7.05 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered in
person or mailed, certified or registered mail with postage prepaid, or sent
by telex, telegram or telecopier, as follows:
(a) if to NatWest or the Company, to it at:
National Westminster Bancorp, Inc.
175 Water Street
New York, New York 10038
Fax: (212) 602-3434
Attention: Robert E. Bostrom
Executive Vice President
Legal and Regulatory and
General Counsel
with a copy to:
Winston & Strawn
175 Water Street
New York, New York 10038
Fax: (212) 952-1474
Attention: Robert W. Ericson, Esq.
(b) if to Citizens, to it at:
Citizens First Bancorp, Inc.
208 Harristown Road
Glen Rock, New Jersey 07452
Fax: (201) 445-9023
Attention: James R. Van Horn, Esq.
General Counsel
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Fax: (212) 354-8113
Attention: John M. Reiss, Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date
of delivery unless if mailed, in which case on the third business day after
the mailing thereof except for a notice of a change of address, which shall
be effective only upon receipt thereof.
7.06 Entire Agreement. This Agreement and the schedules, exhibits
and other documents referred to herein or delivered pursuant hereto,
collectively contain the entire understanding of the parties hereto with
respect to the subject matter contained herein and supersede all prior agree-
ments and understandings, oral and written, with respect thereto.
7.07 Binding Effect; Benefit; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties except that the Company may without such consent assign its rights
hereunder to a direct wholly-owned Subsidiary of NatWest. Except pursuant to
Sections 4.13, 4.14 and 4.19, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
7.08 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
stockholder approval), by action taken by the respective Boards of Directors
of NatWest, the Company and Citizens or by the respective officers authorized
by such Boards of Directors, provided, however, that after any such
stockholder approval, no amendment shall be made which by applicable law
requires further approval by such stockholders without such further approval.
7.09 Further Actions. Each of the parties hereto agrees that,
subject to its legal obligations, it will use its best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate
the transactions contemplated hereby.
7.10 Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
7.11 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument.
7.12 Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of
laws rules thereof except to the extent the matters provided for herein are
required to be governed by the laws of England.
7.13 Severability. If any term, provision, covenant or
restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
7.14 "Person" Defined. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a group and a government or other department or
agency thereof.
7.15 Jurisdiction. Any judicial action, suit or proceeding
against any of the parties hereto involving any dispute arising out of this
Agreement or any matter relating hereto shall be brought before the courts of
the State of New York in the borough of Manhattan, or in the United States
District Court for the Southern District of New York, and each party hereto
accepts, the exclusive personal jurisdiction of such courts, and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement.
IN WITNESS WHEREOF, each of NatWest, the Company, and Citizens have
caused this Agreement to be executed by their respective officers thereunto
duly authorized, all as of the date first above written.
NATIONAL WESTMINSTER BANK PLC
By /s/ John Tugwell
Name: John Tugwell
Title: Director
NATWEST HOLDINGS INC.
By /s/ John Tugwell
Name: John Tugwell
Title: Chairman
CITIZENS FIRST BANCORP, INC.
By /s/ Allan D. Nicholas
Name: Allan D. Nichols
Title: Chairman and Chief
Executive Officer