Exhibit 2
AGREEMENT AND PLAN OF MERGER
between
UNITED BANKSHARES, INC.
and
EAGLE BANCORP, INC.
dated as of August 18, 1995
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
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ARTICLE I.. DEFINITIONS........................................... 1
ARTICLE II. THE MERGER AND THE BANK MERGER........................ 5
2.1 The Merger............................................ 5
2.2 Effects of the Merger................................. 5
2.3 Effective Time; Closing............................... 6
2.4 Treatment of Acquiror Common Stock.................... 6
2.5 Conversion of Company Common Stock.................... 7
2.6 Exchange of Shares.................................... 7
2.7 Additional Actions.................................... 8
2.8 The Bank Merger....................................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY......... 9
3.1 Capital Structure..................................... 9
3.2 Organization, Standing and Authority of the Company... 10
3.3 Ownership of the Company Subsidiaries................. 10
3.4 Organization, Standing and Authority of the
Company Subsidiaries.................................. 10
3.5 Authorized and Effective Agreement.................... 11
3.6 Securities Documents and Regulatory Reports........... 12
3.7 Financial Statements.................................. 13
3.8 Material Adverse Change............................... 13
3.9 Environmental Matters................................. 14
3.10 Tax Matters........................................... 14
3.11 Legal Proceedings..................................... 15
3.12 Compliance with Laws.................................. 16
3.13 Deposit Insurance and Other Regulatory Matters........ 16
3.14 Certain Information................................... 17
3.15 Employee Benefit Plans................................ 17
3.16 Certain Contracts..................................... 19
3.17 Brokers and Finders................................... 19
3.18 Insurance............................................. 20
3.19 Properties............................................ 20
3.20 Labor................................................. 20
3.21 Required Vote and Status of the Acquiror.............. 21
3.22 Accounting for the Merger............................. 21
3.23 Disclosures........................................... 21
Page
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES
OF THE ACQUIROR....................................... 21
4.1 Capital Structure..................................... 21
4.2 Organization, Standing and Authority of the Acquiror.. 22
4.3 Ownership of the Acquiror Subsidiaries................ 22
4.4 Organization, Standing and Authority of the
Acquiror Subsidiaries................................. 22
4.5 Authorized and Effective Agreement.................... 23
4.6 Securities Documents and Regulatory Reports........... 24
4.7 Financial Statements.................................. 25
4.8 Material Adverse Change............................... 25
4.9 Environmental Matters................................. 26
4.10 Tax Matters........................................... 26
4.11 Legal Proceedings..................................... 27
4.12 Compliance with Laws.................................. 27
4.13 Deposit Insurance..................................... 28
4.14 Certain Information................................... 28
4.15 Employee Benefit Plans................................ 28
4.16 Brokers and Finders................................... 30
4.17 Insurance............................................. 30
4.18 Required Vote......................................... 30
4.19 Accounting for the Merger............................. 30
4.20 Disclosures........................................... 30
ARTICLE V.. COVENANTS............................................. 31
5.1 Shareholder Meetings.................................. 31
5.2 Regulatory Matters.................................... 31
5.3 Investigation and Confidentiality..................... 32
5.4 Press Releases........................................ 33
5.5 Business of the Parties............................... 33
5.6 Current Information................................... 37
5.7 Indemnification; Insurance, Etc....................... 37
5.8 Directors, Officers and Employees..................... 38
5.9 Mortgage Banking Company.............................. 41
5.10 Certain Policies of the Company....................... 41
5.11 Restrictions on Resale................................ 41
5.12 Disclosure Supplements................................ 42
5.13 Failure to Fulfill Conditions......................... 42
Page
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ARTICLE VI CONDITIONS PRECEDENT.............................. 43
6.1 Conditions Precedent - The Acquiror and the Company 43
6.2 Conditions Precedent - The Company................. 44
6.3 Conditions Precedent - The Acquiror................ 45
ARTICLE VII TERMINATION, WAIVER AND AMENDMENT.................. 46
7.1 Termination........................................ 46
7.2 Effect of Termination.............................. 47
7.3 Survival of Representations, Warranties
and Covenants...................................... 47
7.4 Waiver............................................. 48
7.5 Amendment or Supplement............................ 48
ARTICLE VII MISCELLANEOUS...................................... 48
8.1 Expenses; Termination Fee.......................... 48
8.2 Entire Agreement................................... 49
8.3 No Assignment...................................... 50
8.4 Notices............................................ 50
8.5 Interpretation..................................... 51
8.6 Counterparts....................................... 51
8.7 Governing Law...................................... 51
Annex I Form of Affiliate's Letter
Annex II Form of Opinion of Counsel to the Acquiror
Annex III Form of Opinion of Counsel to the Company
Schedule I Severance Policy
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger (the "Agreement"), dated as of August 18,
1995, by and among United Bankshares, Inc. (the "Acquiror"), a West Virginia
corporation, and Eagle Bancorp, Inc. (the "Company"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the parties hereto desire to provide for the Acquiror's
acquisition of the Company on the terms and conditions herein contained; and
WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby; and
WHEREAS, simultaneously with the execution of this Agreement, certain
stockholders of the Company are entering into a Stockholder Agreement dated as
of the date hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
"Association" shall mean First Empire Federal Savings and Loan Association.
"Acquiror Closing Price" shall mean the average closing price of the
Acquiror Common Stock on the Nasdaq Stock Market's National Market over the 20
trading days commencing on the first business day following the receipt of the
required approval of the FRB and the OCC, whichever is later, as reported by the
Nasdaq Stock Market's National Market or other authoritative source.
"Acquiror Common Stock" shall mean the common stock, par value $2.50 per
share, of the Acquiror.
"Acquiror Employee Stock Benefit Plans" shall mean the following employee
benefit plans of the Acquiror: 1988 Incentive Stock Option Plan, 1991 Incentive
Stock Option Plan, United Savings and Stock Investment Plan and United Dividend
Reinvestment Plan.
"Acquiror Financial Statements" shall mean (i) the consolidated statements
of financial condition (including related notes and schedules, if any) of the
Acquiror as of December 31, 1994, 1993 and 1992 and the consolidated statements
of operations, shareholders' equity and cash flows (including related notes and
schedules, if any) of the Acquiror for each of the three years ended December
31, 1994, 1993 and 1992 as filed by the Acquiror in its Securities Documents,
and (ii)
the consolidated statements of financial condition of the Acquiror (including
related notes and schedules, if any) and the consolidated statements of
operations, shareholders' equity and cash flows (including related notes and
schedules, if any) of the Acquiror included in the Securities Documents filed by
the Acquiror with respect to the quarterly and annual periods ended subsequent
to December 31, 1994.
"Bank" shall mean United National Bank.
"Bank Merger" shall have the meaning set forth in Section 2.8 hereof.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"BIF" means the Bank Insurance Fund administered by the FDIC or any
successor thereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Company Common Stock" shall mean the common stock, par value $0.10 per
share, of the Company.
"Company Financial Statements" shall mean (i) the consolidated statements
of financial condition (including related notes and schedules, if any) of the
Company as of December 31, 1994, 1993 and 1992 and the consolidated statements
of operations, shareholders' equity and cash flows (including related notes and
schedules, if any) of the Company for each of the three years ended December 31,
1994, 1993 and 1992 as filed by the Company in its Securities Documents, and
(ii) the consolidated statements of financial condition of the Company
(including related notes and schedules, if any) and the consolidated statements
of operations, shareholders' equity and cash flows (including related notes and
schedules, if any) of the Company included in the Securities Documents filed by
the Company with respect to the quarterly and annual periods ended subsequent to
December 31, 1994.
"Company Preferred Stock" shall mean the shares of preferred stock, par
value $.10 per share, of the Company.
"DGCL" shall mean the General Corporation Law of the State of Delaware.
"Dissenting Shares" shall have the meaning set forth in Section 2.4(b)
hereof.
"Effective Time" shall mean the date and time specified pursuant to Section
2.3 hereof as the effective time of the Merger.
"Environmental Claim" means any written notice from any governmental
authority or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern.
"Environmental Laws" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any governmental
entity relating to (1) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environment Concern.
The term Environmental Law includes without limitation (1) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
(S)9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
-- ---
U.S.C. (S)6901, et seq; the Clean Air Act, as amended, 42 U.S.C. (S)7401, et
-- --- --
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S)1251, et
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seq; the Toxic Substances Control Act, as amended, 15 U.S.C. (S)9601, et seq;
- --- -- ---
the Emergency Planning and Community Right to Know Act, 42 U.S.C. (S)1101, et
--
seq; the Safe Drinking Water Act, 42 U.S.C. (S)300f, et seq; and all comparable
- --- -- ---
state and local laws, and (2) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"FDIA" shall mean the Federal Deposit Insurance Act.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FEFS" means First Empire Federal Services, Inc.
"FHLB" shall mean Federal Home Loan Bank.
"FRB" means the Board of Governors of the Federal Reserve System or any
successor thereto.
"Form S-4" shall mean the registration statement on Form S-4 (or on any
successor or other appropriate form) to be filed by the Acquiror in connection
with the issuance of shares of Acquiror Common Stock pursuant to the Merger, as
amended and supplemented.
"Governmental Entity" shall mean any federal or state court, administrative
agency or commission or other governmental authority or instrumentality.
"HOLA" shall mean the Home Owners' Loan Act.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"MBS" shall mean the mortgage banking subsidiary to be established by the
Acquiror pursuant to the terms of Section 5.9 hereof.
"Merger" shall mean the merger of the Company with and into the Acquiror
pursuant to the terms hereof.
"OCC" shall mean the Office of the Comptroller of the Currency of the U.S.
Department of the Treasury, or any successor thereto.
"OTS" shall mean the Office of Thrift Supervision of the U.S. Department of
the Treasury and its predecessor, the Federal Home Loan Bank Board, or any
successor thereto.
"Previously Disclosed" shall mean disclosed (i) in a letter dated the date
hereof delivered from the disclosing party to the other party specifically
referring to this Agreement and describing in reasonable detail the matters
contained therein, or (ii) a letter dated after the date hereof from the
disclosing party specifically referring to this Agreement and describing in
reasonable detail the matters contained therein and delivered by the other party
pursuant to Section 5.12 hereof.
"Proxy Statement" shall mean the prospectus/proxy statement contained in
the Form S-4, as amended or supplemented, and to be delivered to shareholders of
the Acquiror and the Company in connection with the solicitation of their
approval of this Agreement and the transactions contemplated hereby.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests.
"SAIF" means the Savings Association Insurance Fund administered by the
FDIC or any successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"WVCA" shall mean the West Virginia Corporation Act.
"WVBB" shall mean the West Virginia Board of Banking and Financial
Institutions.
"Subsidiaries" shall mean any corporation, bank, savings association,
partnership, joint venture or other organization more than 10% of the stock or
ownership interest of which is owned, directly or indirectly, by an entity.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE II
THE MERGER AND THE BANK MERGER
2.1 The Merger
----------
Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 2.3 hereof), the Company shall be merged with and
into the Acquiror (the "Merger") in accordance with the applicable provisions of
the DGCL and the WVCA. Acquiror shall be the surviving corporation (hereinafter
sometimes called the "Surviving Corporation") of the Merger, and shall continue
its corporate existence under the laws of the State of West Virginia. The name
of the Surviving Corporation shall continue to be "United Bankshares, Inc." The
Articles of Incorporation and Bylaws of Acquiror, as in effect immediately prior
to the Effective Time, shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation, respectively, until altered, amended or repealed in
accordance with their terms and applicable law. Upon consummation of the
Merger, the separate corporate existence of the Company shall terminate.
2.2 Effects of the Merger
---------------------
Upon consummation, the Merger shall have the following effects, in addition
to the effects set forth elsewhere herein and in applicable law:
(i) The Surviving Corporation will possess all of the rights, privileges,
immunities and franchises of both the Acquiror and the Company.
(ii) All property, real, personal and mixed, and all debts due in whatever
amount, and all other choses in action, and all other interests belonging to or
due to the Company will be taken and deemed to be transferred to and vested in
the Acquiror as the Surviving Corporation and all property, real, personal and
mixed, and all debts due in whatever amount, and all other choses in action, and
all other interests belonging to or due to the Acquiror shall remain in the
Surviving Corporation without further act; and the title to any real estate, or
any interest therein, vested in the Acquiror or the Company shall not revert or
be in any way impaired by reason of the Merger.
(iii) The Surviving Corporation will be responsible and liable for all
of the liabilities and obligations of the Acquiror or the Company and neither
the rights of creditors nor liens upon the property of the Acquiror and the
Company shall be impaired by the Merger.
2.3 Effective Time; Closing
-----------------------
The Merger shall become effective upon the occurrence of the filing of (i)
Articles of Merger with the Secretary of State of the State of West Virginia
pursuant to the WVCA and (ii) a Certificate of Merger with the Secretary of
State of the State of Delaware pursuant to the DGCL, unless a later date and
time is specified as the effective time in such Articles of Merger and
Certificate of Merger (the "Effective Time"). A closing (the "Closing") shall
take place immediately prior to the Effective Time at 10:00 a.m., on the fifth
business day following the satisfaction or waiver, to the extent permitted
hereunder, of the conditions to the consummation of the Merger specified in
Article VI of this Agreement (other than the delivery of certificates, opinions
and other instruments and documents to be delivered at the Closing), at the
principal executive offices of the Acquiror in Charleston, West Virginia or at
such other place, at such other time, or on such other date as the parties may
mutually agree upon. At the Closing, there shall be delivered to the Acquiror
and the Company the opinions, certificates and other documents required to be
delivered under Article VI hereof.
2.4 Treatment of Acquiror Common Stock
----------------------------------
(a) Each share of Acquiror Common Stock that is issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding and
be unchanged by the Merger, subject to paragraph (b) of this Section 2.4.
(b) Each holder of Acquiror Common Stock shall be entitled to dissent from
the Merger and obtain the fair value of such holder's shares of Acquiror Common
Stock ("Dissenting Shares") in accordance with Sections 31-1-122 and 31-1-123 of
the WVCA. The Acquiror shall give the Company prompt notice upon receipt by the
Acquiror of any such written demands for payment of the fair value of such
shares of Acquiror Common Stock and of withdrawals of such demands and any other
instruments provided pursuant to the WVCA (any shareholder duly making such
demand being hereinafter called a "Dissenting Shareholder"). Any payments made
in respect of Dissenting Shares shall be made by the Surviving Corporation.
2.5 Conversion of Company Common Stock
----------------------------------
(a) At the Effective Time, each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than any shares held
by the Acquiror or any wholly-owned subsidiary thereof other than in a fiduciary
capacity or in satisfaction of a debt previously contracted) shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into the right to receive 1.15 shares of Acquiror Common Stock, plus
the right to receive cash in lieu of any fractional share, as determined in
accordance with paragraph (b) of this Section 2.5.
(b) Notwithstanding any other provision hereof, no fractional shares of
Acquiror Common Stock shall be issued to holders of Company Common Stock. In
lieu thereof, each holder of shares of Company Common Stock entitled to a
fraction of a share of Acquiror Common Stock shall, at the time of surrender of
the certificate or certificates representing such holder's
shares, receive an amount of cash equal to the product arrived at by multiplying
such fraction of a share of Acquiror Common Stock by the closing price of the
Acquiror Common Stock on the Nasdaq Stock Market's National Market on the
business day preceding the Effective Time, as reported by the Nasdaq Stock
Market's National Market or other authoritative source. No such holder shall be
entitled to dividends, voting rights or any other rights in respect of any
fractional share.
2.6 Exchange of Shares
------------------
(a) At or after the Effective Time, each holder of a certificate or
certificates theretofore evidencing issued and outstanding shares of Company
Common Stock, upon surrender of the same to an agent, duly appointed by the
Acquiror ("Exchange Agent"), shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of full shares of Acquiror
Common Stock for which the shares of Company Common Stock theretofore
represented by the certificate or certificates so surrendered shall have been
converted as provided in Section 2.5 hereof. The Exchange Agent shall mail to
each holder of record of an outstanding certificate which immediately prior to
the Effective Time evidenced shares of Company Common Stock, and which is to be
exchanged for Acquiror Common Stock as provided in Section 2.5 hereof, a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to such certificate shall pass, only upon delivery of
such certificate to the Exchange Agent) advising such holder of the terms of the
exchange effected by the Merger and of the procedure for surrendering to the
Exchange Agent such certificate in exchange for a certificate or certificates
evidencing Acquiror Common Stock.
(b) No holder of a certificate theretofore representing shares of Company
Common Stock shall be entitled to receive any dividends in respect of the
Acquiror Common Stock into which such shares shall have been converted by virtue
of the Merger until the certificate representing such shares is surrendered in
exchange for certificates representing shares of Acquiror Common Stock. In the
event that dividends are declared and paid by the Acquiror in respect of
Acquiror Common Stock after the Effective Time but prior to surrender of
certificates representing shares of Company Common Stock, dividends payable in
respect of shares of Acquiror Common Stock not then issued shall accrue (without
interest). Any such dividends shall be paid (without interest) upon surrender
of the certificates representing such shares of Company Common Stock. The
Acquiror shall be entitled, after the Effective Time, to treat certificates
representing shares of Company Common Stock as evidencing ownership of the
number of full shares of Acquiror Common Stock into which the shares of Company
Common Stock represented by such certificates shall have been converted,
notwithstanding the failure on the part of the holder thereof to surrender such
certificates.
(c) The Acquiror shall not be obligated to deliver a certificate or
certificates representing shares of Acquiror Common Stock to which a holder of
Company Common Stock would otherwise be entitled as a result of the Merger until
such holder surrenders the certificate or certificates representing the shares
of Company Common Stock for exchange as provided in this Section 2.6, or, in
default thereof, an appropriate affidavit of loss and indemnity agreement and/or
a bond as may be required in each case by the Acquiror. If any certificates
evidencing
shares of Acquiror Common Stock is to be issued in a name other than that in
which the certificate evidencing Company Common Stock surrendered in exchange
therefor is registered, it shall be a condition of the issuance thereof that the
certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange pay to the
Exchange Agent any transfer or other tax required by reason of the issuance of a
certificate for shares of Acquiror Common Stock in any name other than that of
the registered holder of the certificate surrendered or otherwise establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) If, between the date hereof and the Effective Time, the shares of
Acquiror Common Stock shall be changed into a different number or class of
shares by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment, or a stock dividend thereon
shall be declared with a record date within said period, the exchange ratio set
forth in Section 2.5(a) hereof shall be adjusted accordingly. Nothing contained
herein shall be deemed to permit any action which may be proscribed by this
Agreement.
2.7 Additional Actions
------------------
If, at any time after the Effective Time, the Surviving Corporation shall
consider that any further assignments or assurances in law or any other acts are
necessary or desirable to (i) vest, perfect or confirm, of record or otherwise,
in the Surviving Corporation its rights, title or interest in, to or under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger, or
(ii) otherwise carry out the purposes of this Agreement, the Company and its
proper officers and directors shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts necessary or
proper to vest, perfect or confirm title to and possession of such rights,
properties or assets in the Surviving Corporation and otherwise to carry out the
purposes of this Agreement; and the proper officers and directors of the
Surviving Corporation are fully authorized in the name of the Company or
otherwise to take any and all such action.
2.8 The Bank Merger
---------------
The Acquiror and the Company shall take all action necessary and
appropriate, including causing the entering into of a merger agreement by the
Bank and the Association (the "Bank Merger Agreement"), to cause the Association
to merge with and into the Bank (the "Bank Merger") immediately after
consummation of the Merger in accordance with the applicable laws of the United
States and regulations of the OCC and the OTS thereunder. The Bank shall be the
surviving corporation in the Bank Merger, and shall continue its corporate
existence under the laws of the United States as a wholly-owned subsidiary of
the Acquiror. Upon consummation of the Bank Merger, the separate corporate
existence of the Association shall cease.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Acquiror as follows:
3.1 Capital Structure
-----------------
The authorized capital stock of the Company consists of 5,000,000
shares of Company Common Stock and 2,500,000 shares of Company Preferred Stock.
As of the date hereof, there are 2,729,468 shares of Company Common Stock issued
and outstanding and no shares of Company Common Stock are directly or indirectly
held as treasury stock by the Company and no shares of Company Preferred Stock
are issued and outstanding. All outstanding shares of Company Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable.
Except for issued and outstanding shares of Company Common Stock which may be
acquired by employees of the Company and its Subsidiaries pursuant to the
Company's Employee Stock Ownership Plan, which holds 147,682 shares of Company
Common Stock as of the date hereof, there are no Rights authorized, issued or
outstanding with respect to the capital stock of the Company. None of the
shares of the Company capital stock has been issued in violation of the
preemptive rights of any person, firm or entity.
3.2 Organization, Standing and Authority of the Company
---------------------------------------------------
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate power
and authority to own or lease all of its properties and assets and to carry on
its business as now conducted and is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which its ownership or leasing
of property or the conduct of its business requires such licensing or
qualification and where the failure to be so licensed, qualified or in good
standing would have a material adverse effect on the financial condition,
results of operations or business of the Company on a consolidated basis. The
Company is duly registered as a savings and loan holding company under the HOLA
and the regulations of the OTS thereunder. The Company has heretofore delivered
to the Acquiror true and complete copies of the Certificate of Incorporation and
Bylaws of the Company as in effect as of the date hereof.
3.3 Ownership of the Company Subsidiaries
-------------------------------------
The only Company Subsidiaries are the Association and FEFS. Except
for the Company Subsidiaries, stock in the FHLB of Pittsburgh and securities and
other interests taken in consideration of debts previously contracted, the
Company does not own or have the right to acquire, directly or indirectly, any
outstanding capital stock or other voting securities or ownership interests of
any corporation, bank, savings association, partnership, joint venture or other
organization. The outstanding shares of capital stock or other ownership
interests of each of the Company Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are directly or indirectly
owned by the Company free and clear of all liens, claims, encumbrances, charges,
restrictions or rights of third parties of any kind whatsoever.
Except as Previously Disclosed, no Rights are authorized, issued or outstanding
with respect to the capital stock or other ownership interests of any Company
Subsidiaries and there are no agreements, understandings or commitments relating
to the right of the Company to vote or to dispose of said shares or other
ownership interests.
3.4 Organization, Standing and Authority of the Company Subsidiaries
----------------------------------------------------------------
The Association is a savings association duly organized, validly
existing and in good standing under the laws of the United States, and FEFS is a
corporation duly organized, validly existing and in good standing under the laws
of the State of West Virginia. Each of the Company Subsidiaries (i) has full
power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted, and (ii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires such
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a material adverse effect on the financial condition,
results of operations or business of the Company on a consolidated basis. The
Company has heretofore delivered to the Acquiror true and complete copies of the
Charter or Articles of Incorporation and Bylaws of each Company Subsidiary as in
effect as of the date hereof.
3.5 Authorized and Effective Agreement
----------------------------------
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and (subject to receipt of all necessary governmental
approvals and the approval of the Company's shareholders of this Agreement) to
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of the Company, except for the approval of this
Agreement by the Company's shareholders. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company which is enforceable against the Company in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(b) Neither the execution and delivery of this Agreement, nor
consummation of the transactions contemplated hereby (including the Merger and
the Bank Merger), nor compliance by the Company with any of the provisions
hereof (i) conflict with or result in a breach of any provisions of the
Certificate of Incorporation or Bylaws of the Company or the equivalent
documents of any Company Subsidiary, (ii) except as Previously Disclosed,
violate, conflict with or result in a breach of any term, condition or provision
of, or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of the
Company or any Company Subsidiary pursuant to, any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or any Company Subsidiary is a
party, or by which any of their respective properties or assets may be bound or
affected, or
(iii) subject to receipt of all required governmental approvals, violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or any Company Subsidiary.
(c) Except for (i) the filing of applications and notices with, and
the consents and approvals of, as applicable, the FRB, the OCC, the OTS and the
WVBB, (ii) the filing and effectiveness of the Form S-4 with the Commission,
(iii) compliance with applicable state securities or "blue sky" laws in
connection with the issuance of Acquiror Common Stock pursuant to this
Agreement, (iv) the approval of this Agreement by the requisite vote of the
shareholders of the Company and the Acquiror, (v) the filing of Articles of
Merger with the Secretary of State of West Virginia pursuant to the WVCA in
connection with the Merger and (vi) the filing of a Certificate of Merger with
the Secretary of State of Delaware pursuant to the DGCL in connection with the
Merger, and except for such filings, authorizations or approvals which are
Previously Disclosed, no consents or approvals of or filings or registrations
with any Governmental Entity or with any third party are necessary on the part
of the Company or any Company Subsidiary in connection with (i) the execution
and delivery by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby and (ii) the execution and
delivery by the Association of the Bank Merger Agreement and the consummation by
the Association of the transactions contemplated thereby.
(d) As of the date hereof, neither the Company nor any of the Company
Subsidiaries is aware of any reasons relating to the Company or any of the
Company Subsidiaries (including without limitation Community Reinvestment Act
compliance) why all consents and approvals shall not be procured from all
regulatory agencies having jurisdiction over the transactions contemplated by
this Agreement as shall be necessary for (i) consummation of the transactions
contemplated by this Agreement and (ii) the continuation by the Acquiror after
the Effective Time of the business of the Company as such business is carried on
immediately prior to the Effective Time, free of any conditions or requirements
which, in the reasonable opinion of the Company, could have a material adverse
effect upon the financial condition, results of operations or business of the
Acquiror on a consolidated basis or materially impair the value of the Company
and the Company Subsidiaries to the Acquiror.
3.6 Securities Documents and Regulatory Reports
-------------------------------------------
(a) The Company has previously delivered or made available to the
Acquiror a complete copy of all Securities Documents filed by the Company
pursuant to the Securities Laws or mailed by the Company to its shareholders as
a class since January 1, 1993. The Company has timely filed with the Commission
all Securities Documents required by the Securities Laws and such Securities
Documents complied in all material respect with the Securities Laws and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that information as of a later date shall be deemed to
modify information as of an earlier date.
(b) Since January 1, 1993, each of the Company and the Association has
duly filed with the OTS and the FDIC in correct form the reports required to be
filed under applicable laws
and regulations and such reports were in all material respects complete and
accurate and in compliance with the requirements of applicable laws and
regulations, provided that information as of a later date shall be deemed to
modify information as of an earlier date; and the Company has previously
delivered or made available to the Acquiror accurate and complete copies of all
such reports. In connection with the most recent examinations of the Company
and the Association by the OTS, neither the Company nor the Association was
required to correct or change any action, procedure or proceeding which the
Company or the Association believes has not been corrected or changed as
required.
3.7 Financial Statements
--------------------
(a) The Company has previously delivered or made available to the
Acquiror accurate and complete copies of the Company Financial Statements which,
in the case of the consolidated statements of financial condition of the Company
as of December 31, 1994, 1993 and 1992 and the consolidated statements of
operations, shareholders' equity and cash flows for each of the three years
ended December 31, 1994, 1993 and 1992, are accompanied by the audit reports of
Ernst & Young LLP, independent public accountants with respect to the Company.
The Company Financial Statements referred to herein, as well as the Company
Financial Statements to be delivered pursuant to Section 5.6 hereof, fairly
present or will fairly present, as the case may be, the consolidated financial
condition of the Company as of the respective dates set forth therein, and the
consolidated results of operations, shareholders' equity and cash flows of the
Company for the respective periods or as of the respective dates set forth
therein.
(b) Each of the Company Financial Statements referred to in Section
3.7(a) has been or will be, as the case may be, prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except as stated therein. The audits of the Company and the Company
Subsidiaries have been conducted in accordance with generally accepted auditing
standards. The books and records of the Company and the Company Subsidiaries
are being maintained in material compliance with applicable legal and accounting
requirements, and such books and records accurately reflect in all material
respects all dealings and transactions in respect of the business, assets,
liabilities and affairs of the Company and the Company Subsidiaries.
(c) Except and to the extent (i) reflected, disclosed or provided for
in the consolidated statement of financial condition of the Company as of June
30, 1995 (including related notes) and (ii) of liabilities incurred since June
30, 1995 in the ordinary course of business, neither the Company nor any Company
Subsidiary has any liabilities, whether absolute, accrued, contingent or
otherwise, material to the financial condition, results of operations or
business of the Company on a consolidated basis.
3.8 Material Adverse Change
-----------------------
There has not occurred any material adverse change in the Company's
consolidated financial condition, results of operations or business since June
30, 1995, other than changes resulting from or attributable to (i) changes in
laws or regulations, generally accepted accounting
principles, or interpretations thereof, that affect the banking or savings
industries generally (including without limitation prospective changes which
result in assessments of all SAIF-insured institutions which are intended to
recapitalize the SAIF), (ii) changes in the general level of interest rates or
(iii) expenses incurred in connection with the transactions contemplated by this
Agreement.
3.9 Environmental Matters
---------------------
(a) To the best of the Company's knowledge, the Company and the
Company Subsidiaries are in compliance with all Environmental Laws, except for
any violations of any Environmental Law which would not, singly or in the
aggregate, have a material adverse effect on the consolidated financial
condition, results of operations or business of the Company. Neither the
Company nor any Company Subsidiary has received any communication alleging that
the Company or any Company Subsidiary is not in such compliance and, to the best
knowledge of the Company, there are no present circumstances that would prevent
or interfere with the continuation of such compliance.
(b) To the best of the Company's knowledge, none of the properties
owned, leased or operated by the Company or the Company Subsidiaries has been or
is in violation of or liable under any Environmental Law, except any such
violations or liabilities which would not singly or in the aggregate have a
material adverse effect on the financial condition, results of operations or
business of the Company on a consolidated basis.
(c) To the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability arising under any Environmental Law against the Company or any Company
Subsidiary or against any person or entity whose liability for any Environmental
Claim the Company or any Company Subsidiary has or may have retained or assumed
either contractually or by operation of law, except such which would not have a
material adverse effect on the financial condition, results of operations or
business of the Company on a consolidated basis.
(d) The Company has not conducted any environmental studies during the
past five years with respect to any properties owned by it or any Company
Subsidiary as of the date hereof.
3.10 Tax Matters
-----------
(a) The Company and the Company Subsidiaries, and each of their
predecessors, have timely filed all federal, state and local (and, if
applicable, foreign) income, franchise, bank, excise, real property, personal
property and other tax returns required by applicable law to be filed by them
(including, without limitation, estimated tax returns, income tax returns,
information returns and withholding and employment tax returns) and have paid,
or where payment is not required to have been made, have set up an adequate
reserve or accrual for the payment of, all taxes required to be paid in respect
of the periods covered by such returns and, as of the Effective
Time, will have paid, or where payment is not required to have been made, will
have set up an adequate reserve or accrual for the payment of, all taxes for any
subsequent periods ending on or prior to the Effective Time. Neither the
Company nor any of the Company Subsidiaries will have any material liability for
any such taxes in excess of the amounts so paid or reserves or accruals so
established.
(b) All federal, state and local (and, if applicable, foreign) income,
franchise, bank, excise, real property, personal property and other tax returns
filed by the Company and the Company Subsidiaries are complete and accurate in
all material respects. Neither the Company nor any of the Company Subsidiaries
is delinquent in the payment of any tax, assessment or governmental charge
(other than non-material real and personal property taxes), and except as
Previously Disclosed none of them has requested any extension of time within
which to file any tax returns in respect of any fiscal year or portion thereof
which have not since been filed. Except as Previously Disclosed, the federal,
state and local income tax returns of the Company and the Company Subsidiaries
have been examined by the applicable tax authorities (or are closed to
examination due to the expiration of the applicable statute of limitations) and
no deficiencies for any tax, assessment or governmental charge have been
proposed, asserted or assessed (tentatively or otherwise) against the Company or
any Company Subsidiary as a result of such examinations or otherwise which have
not been settled and paid. There are currently no agreements in effect with
respect to the Company or any Company Subsidiary to extend the period of
limitations for the assessment or collection of any tax. As of the date hereof,
no audit, examination or deficiency or refund litigation with respect to such
return is pending or, to the best of the Company's knowledge, threatened.
(c) Except as Previously Disclosed, none of the Company or the Company
Subsidiaries (i) is a party to any agreement providing for the allocation or
sharing of taxes, (ii) is required to include in income any adjustment pursuant
to Section 481(a) of the Code by reason of a voluntary change in accounting
method initiated by the Company or the Company Subsidiaries (nor does the
Company have any knowledge that the Internal Revenue Service has proposed any
such adjustment or change of accounting method) or (iii) has filed a consent
pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply.
3.11 Legal Proceedings
-----------------
Except as Previously Disclosed, there are no actions, suits, claims,
governmental investigations or proceedings instituted, pending or, to the best
knowledge of the Company, threatened against the Company or any Company
Subsidiary or against any asset, interest or right of the Company or any Company
Subsidiary, or against any officer, director or employee of any of them that in
any such case, if decided adversely, would have a material adverse effect on the
financial condition, results of operations or business of the Company on a
consolidated basis. Neither the Company nor any of the Company Subsidiaries is a
party to any order, judgment or decree which has or would have a material
adverse effect on the financial condition, results of operations or business of
the Company on a consolidated basis.
3.12 Compliance with Laws
--------------------
(a) Each of the Company and each of the Company Subsidiaries has all
permits, licenses, certificates of authority, orders and approvals of, and has
made all filings, applications and registrations with, federal, state, local and
foreign governmental or regulatory bodies that are required in order to permit
it to carry on its business as it is presently being conducted and the absence
of which could have a material adverse effect on the financial condition,
results of operations or business of the Company on a consolidated basis; all
such permits, licenses, certificates of authority, orders and approvals are in
full force and effect; and to the best knowledge of the Company, no suspension
or cancellation of any of the same is threatened.
(b) Neither the Company nor any of the Company Subsidiaries is in
violation of its respective Certificate of Incorporation, Charter or other
chartering instrument or Bylaws, or of any applicable federal, state or local
law or ordinance or any order, rule or regulation of any federal, state, local
or other governmental agency or body (including, without limitation, all banking
(including without limitation all regulatory capital requirements), securities,
municipal securities, safety, health, environmental, zoning, anti-
discrimination, antitrust, and wage and hour laws, ordinances, orders, rules and
regulations), or in default with respect to any order, writ, injunction or
decree of any court, or in default under any order, license, regulation or
demand of any governmental agency, any of which violations or defaults could
have a material adverse effect on the financial condition, results of operations
or business of the Company on a consolidated basis; and neither the Company nor
any Company Subsidiary has received any notice or communication from any
federal, state or local governmental authority asserting that the Company or any
Company Subsidiary is in violation of any of the foregoing which could have a
material adverse effect on the financial condition, results of operations or
business of the Company on a consolidated basis. Neither the Company nor any
Company Subsidiary is subject to any regulatory or supervisory cease and desist
order, agreement, written directive, memorandum of understanding or written
commitment (other than those of general applicability to all savings
associations or holding companies thereof issued by governmental authorities),
and none of them has received any written communication requesting that they
enter into any of the foregoing.
3.13 Deposit Insurance and Other Regulatory Matters
----------------------------------------------
(a) The deposit accounts of the Association are insured by the SAIF to
the maximum extent permitted by the FDIA, and the Association has paid all
premiums and assessments required by the FDIA and the regulations thereunder.
(b) The Association is a member in good standing of the FHLB of
Pittsburgh and owns the requisite amount of stock in the FHLB of Pittsburgh.
(c) The Association is a "qualified thrift lender," as such term is
defined in the HOLA and the regulations thereunder.
(d) The Association has at all times qualified as a "domestic building
and loan association," as such term is defined in Section 7701(a)(19) of the
Code, for purposes of Section 593 of the Code.
3.14 Certain Information
-------------------
None of the information relating to the Company and the Company
Subsidiaries to be contained in (i) the Form S-4 will, at the time the Form S-4
becomes effective, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) the Proxy
Statement, as of the date(s) such Proxy Statement is mailed to shareholders of
the Company and the Acquiror and up to and including the date(s) of the meetings
of shareholders to which such Proxy Statement relates, will contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, provided that information as of a later date shall be
deemed to modify information as of an earlier date. The Proxy Statement mailed
by the Company to its shareholders in connection with the meeting of
shareholders at which this Agreement will be considered by such shareholders
will comply as to form in all material respects with the Exchange Act and the
rules and regulations promulgated thereunder.
3.15 Employee Benefit Plans
----------------------
(a) The Company has Previously Disclosed all stock option, employee
stock purchase and stock bonus plans, qualified pension or profit-sharing plans,
any deferred compensation, consultant, bonus or group insurance contract or any
other incentive, welfare or employee benefit plan or agreement maintained for
the benefit of employees or former employees of the Company or any Company
Subsidiary (the "Company Employee Plans"), and the Company has previously
furnished or made available to the Acquiror accurate and complete copies of the
same together with (i) the most recent actuarial and financial reports prepared
with respect to any qualified plans, (ii) the most recent annual reports filed
with any governmental agency, and (iii) all rulings and determination letters
and any open requests for rulings or letters that pertain to any qualified plan.
(b) None of the Company, any Company Subsidiary, any pension plan
maintained by any of them and qualified under Section 401 of the Code or, to the
best of the Company's knowledge, any fiduciary of such plan has incurred any
material liability to the Pension Benefit Guaranty Corporation or the Internal
Revenue Service with respect to any employees of the Company or any Company
Subsidiary. To the best of the Company's knowledge, no reportable event under
Section 4043(b) of ERISA has occurred with respect to any such pension plan.
(c) Neither the Company nor any Company Subsidiary participates in or
has incurred any liability under Section 4201 of ERISA for a complete or partial
withdrawal from a multi-employer plan (as such term is defined in ERISA).
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each Company Employee Plan which is an "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) (a "Company Pension
Plan") which is intended to qualify under Section 401 of the Code to the effect
that such plan is qualified under Section 401 of the Code and the trust
associated with such employee pension plan is tax exempt under Section 501 of
the Code.
No such letter has been revoked or, to the best of the Company's knowledge, is
threatened to be revoked and the Company does not know of any ground on which
such revocation may be based. Neither the Company nor any Company Subsidiary has
any liability under any such plan that is not reflected on the consolidated
statement of financial condition of the Company at June 30, 1995 included in the
Company Financial Statements, other than liabilities incurred in the ordinary
course of business in connection therewith subsequent to the date thereof.
(e) To the best of the Company's knowledge, no prohibited transaction
(which shall mean any transaction prohibited by Section 406 of ERISA and not
exempt under Section 408 of ERISA or Section 4975 of the Code) has occurred with
respect to any Company Employee Plan which would result in the imposition,
directly or indirectly, of a material excise tax under Section 4975 of the Code
or otherwise have a material adverse effect on the financial condition, results
of operations or business of the Company on a consolidated basis.
(f) Full payment has been made (or proper accruals have been
established) of all contributions which are required for periods prior to the
date hereof, and full payment will be so made (or proper accruals will be so
established) of all contributions which are required for periods after the date
hereof and prior to the Effective Time, under the terms of each Company Employee
Plan or ERISA; no accumulated funding deficiency (as defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived, exists with respect to
any Company Pension Plan, and there is no "unfunded current liability" (as
defined in Section 412 of the Code) with respect to any Company Pension Plan.
(g) To the best of the Company's knowledge, the Company Employee Plans
have been operated in compliance in all material respects with the applicable
provisions of ERISA, the Code, all regulations, rulings and announcements
promulgated or issued thereunder and all other applicable governmental laws and
regulations.
(h) There are no pending or, to the best knowledge of the Company,
threatened claims (other than routine claims for benefits) by, on behalf of or
against any of the Company Employee Plans or any trust related thereto or any
fiduciary thereof.
3.16 Certain Contracts
-----------------
(a) Except as Previously Disclosed, neither the Company nor any
Company Subsidiary is a party to, is bound or affected by, receives, or is
obligated to pay, benefits under (i) any agreement, arrangement or commitment,
including without limitation any agreement, indenture or other instrument,
relating to the borrowing of money by the Company or any Company Subsidiary or
the guarantee by the Company or any Company Subsidiary of any obligation, (ii)
any agreement, arrangement or commitment relating to the employment of a
consultant or the employment, election or retention in office of any present or
former director or officer of the Company or any Company Subsidiary, (iii) any
agreement, arrangement or understanding pursuant to which any payment (whether
of severance pay or otherwise) became or may become due to any director, officer
or employee of the Company or any of the Company Subsidiaries upon execution of
this Agreement or upon or following consummation of the transactions
contemplated
by this Agreement (either alone or in connection with the occurrence of any
additional acts or events); (iv) any agreement, arrangement or understanding to
which the Company or any of the Company Subsidiaries is a party or by which any
of the same is bound which limits the freedom of the Company or any of the
Company Subsidiaries to compete in any line of business or with any person, (v)
any assistance agreement, supervisory agreement, memorandum of understanding,
consent order, cease and desist order or condition of any regulatory order or
decree with or by the OTS, the FDIC, or any other regulatory agency, or (vi) any
other agreement, arrangement or understanding which would be required to be
filed as an exhibit to the Company's Annual Report on Form 10-K under the
Exchange Act and which has not been so filed.
(b) Neither the Company nor any Company Subsidiary is in default or in
non-compliance, which default or non-compliance would have a material adverse
effect on the financial condition, results of operations or business of the
Company on a consolidated basis or the transactions contemplated hereby, under
any contract, agreement, commitment, arrangement, lease, insurance policy or
other instrument to which it is a party or by which its assets, business or
operations may be bound or affected, whether entered into in the ordinary course
of business or otherwise and whether written or oral, 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 or non-compliance.
3.17 Brokers and Finders
-------------------
Except as Previously Disclosed, neither the Company nor any Company
Subsidiary, nor any of their respective directors, officers or employees, has
employed any broker or finder or incurred any liability for any broker or finder
fees or commissions in connection with the transactions contemplated hereby.
3.18 Insurance
---------
The Company and each Company Subsidiary is insured for reasonable
amounts with financially sound and reputable insurance companies against such
risks as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured and has maintained all insurance
required by applicable laws and regulations.
3.19 Properties
----------
All real and personal property owned by the Company or any of the
Company Subsidiaries or presently used by any of them in their respective
business is in an adequate condition (ordinary wear and tear excepted) and is
sufficient to carry on the business of the Company and the Company Subsidiaries
in the ordinary course of business consistent with their past practices. The
Company and the Company Subsidiaries have good and marketable title free and
clear of all liens, encumbrances, charges, defaults or equities (other than
equities of redemption under applicable foreclosure laws) to all of the material
properties and assets, real and personal, reflected on the consolidated
statement of financial condition of the Company as of June 30, 1995 included in
the Company Financial Statements or acquired after such date, except (i) liens
for current taxes not yet due or payable (ii) pledges to secure deposits and
other liens incurred in the ordinary course
of its banking business, (iii) such imperfections of title, easements and
encumbrances, if any, as are not material in character, amount or extent and
(iv) as reflected on the consolidated statement of financial condition of the
Company as of June 30, 1995 included in the Company Financial Statements. All
real and personal property which is material to the Company's business on a
consolidated basis and leased or licensed by the Company or any Company
Subsidiary is held pursuant to leases or licenses which are valid and
enforceable in accordance with their respective terms and such leases will not
terminate or lapse prior to the Effective Time.
3.20 Labor
-----
No work stoppage involving the Company or any Company Subsidiary is
pending or, to the best knowledge of the Company, threatened. Neither the
Company nor any Company Subsidiary is involved in, or threatened with or
affected by, any labor dispute, arbitration, lawsuit or administrative
proceeding involving the employees of the Company or any Company Subsidiary
which could materially and adversely affect the financial condition, results of
operations or business of the Company on a consolidated basis. Employees of the
Company and the Company Subsidiaries are not represented by any labor union nor
are any collective bargaining agreements otherwise in effect with respect to
such employees, and to the best of the Company's knowledge, there have been no
efforts to unionize or organize any employees of the Company or any Company
Subsidiary during the past five years.
3.21 Required Vote and Status of the Acquiror
----------------------------------------
(a) The affirmative vote of the holders of a majority of the issued
and outstanding shares of Company Common Stock is necessary to approve this
Agreement and the transactions contemplated hereby (assuming the accuracy of the
representation and warranty of the Acquiror contained in the first sentence of
Section 4.3 hereof).
(b) The Acquiror is not an "interested stockholder," as defined in
Section 203(c)(5) of the DGCL (assuming the accuracy of the representation and
warranty of the Acquiror contained in the first sentence of Section 4.3 hereof),
and as a result the provisions of Section 203 of the DGCL do not apply to the
Merger and the other transactions contemplated hereby. The Acquiror is not a
"Related Person," as defined in Article 9.1(i) of the Company's Certificate of
Incorporation (assuming the accuracy of the representation and warranty of the
Acquiror contained in the first sentence of Section 4.3 hereof), and as a result
Article 9.2 of such Certificate does not apply to the Merger and the other
transactions contemplated hereby.
3.22 Accounting for the Merger
-------------------------
The Company has taken no action that would cause the Merger to fail to
qualify for pooling-of-interests accounting treatment under generally accepted
accounting principles.
3.23 Disclosures
-----------
None of the representations and warranties of the Company or any of
the written
information or documents furnished or to be furnished by the Company to the
Acquiror in connection with or pursuant to this Agreement or the consummation of
the transactions contemplated hereby, when considered as a whole, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact required to be stated or necessary to make any such
information or document, in light of the circumstances, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
The Acquiror represents and warrants to the Company as follows:
4.1 Capital Structure
-----------------
The authorized capital stock of the Acquiror consists of 20,000,000
shares of Acquiror Common Stock. As of the date hereof, there are 11,954,453
shares of Acquiror Common Stock issued and outstanding and 138,520 shares of
Acquiror Common Stock are held as treasury stock. All outstanding shares of
Acquiror Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable. Except for (i) shares of Acquiror Common Stock issuable
pursuant to the Acquiror Employee Stock Benefit Plans, now or hereafter, and
(ii) shares of Acquiror Common Stock issuable pursuant to the Agreement and Plan
of Merger dated March 6, 1995 among the Acquiror, First Commercial Bank and
Commercial Interim Bank, there are no Rights authorized, issued or outstanding
with respect to the capital stock of the Acquiror. None of the shares of the
Acquiror capital stock has been issued in violation of the preemptive rights of
any person, firm or entity.
4.2 Organization, Standing and Authority of the Acquiror
----------------------------------------------------
The Acquiror is a corporation duly organized, validly existing and in
good standing under the laws of the State of West Virginia with full corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted and is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such licensing or
qualification and where the failure to be so licensed, qualified or in good
standing would have a material adverse effect on the financial condition,
results of operations or business of the Acquiror on a consolidated basis. The
Acquiror is duly registered as a bank holding company under the BHCA and the
regulations of the FRB thereunder. The Acquiror has heretofore delivered to the
Company true and complete copies of the Articles of Incorporation and Bylaws of
the Acquiror as in effect as of the date hereof.
4.3 Ownership of the Acquiror Subsidiaries
--------------------------------------
The Acquiror has Previously Disclosed each Acquiror Subsidiary, and
except for the Acquiror Subsidiaries and securities and other interests held in
a fiduciary capacity or taken in consideration of debts previously contracted,
the Acquiror does not own or have the right to acquire, directly or indirectly,
any outstanding capital stock or other voting securities or ownership
interests of any corporation, bank, savings association, partnership, joint
venture or other organization. The outstanding shares of capital stock or other
ownership interests of each of the Acquiror Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable (except as
otherwise provided with respect to the capital stock of national bank
subsidiaries of the Acquiror by the National Bank Act) and are directly or
indirectly owned by the Acquiror free and clear of all liens, claims,
encumbrances, charges, restrictions or rights of third parties of any kind
whatsoever. No Rights are authorized, issued or outstanding with respect to the
capital stock or other ownership interests of any Acquiror Subsidiaries and
there are no agreements, understandings or commitments relating to the right of
the Acquiror to vote or to dispose of said shares or other ownership interests.
4.4 Organization, Standing and Authority of the Acquiror Subsidiaries
-----------------------------------------------------------------
Each Acquiror Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the United States or the laws of
the jurisdiction in which it is organized, as applicable. Each of the Acquiror
Subsidiaries (i) has full power and authority to own or lease all of its
properties and assets and to carry on its business as now conducted, and (ii) is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification and where the failure to be so licensed,
qualified or in good standing would have a material adverse effect on the
financial condition, results of operations or business of the Acquiror on a
consolidated basis. The Acquiror has heretofore delivered to the Company true
and complete copies of the Articles of Incorporation, Charter or other governing
instrument and Bylaws of each Acquiror Subsidiary which is a "significant
subsidiary," as defined in Regulation S-X of the Commission as in effect as of
the date hereof.
4.5 Authorized and Effective Agreement
----------------------------------
(a) The Acquiror has all requisite corporate power and authority to
enter into this Agreement and (subject to receipt of all necessary governmental
approvals and the approval of the Acquiror's shareholders of this Agreement) to
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of the Acquiror, except for the approval of this
Agreement by the Acquiror's shareholders. This Agreement has been duly and
validly executed and delivered by the Acquiror and constitutes a legal, valid
and binding obligation of the Acquiror which is enforceable against the Acquiror
in accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(b) Neither the execution and delivery of this Agreement, nor
consummation of the transactions contemplated hereby (including the Merger and
the Bank Merger), nor compliance by the Acquiror with any of the provisions
hereof (i) conflict with or result in a breach of any provisions of the Articles
of Incorporation or Bylaws of the Acquiror, (ii) violate, conflict with or
result in a breach of any term, condition or provision of, or constitute a
default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or give rise to any right of termination, cancellation or acceleration with
respect to, or result in the creation of any lien, charge or encumbrance upon
any property or asset of the Acquiror or any Acquiror Subsidiary pursuant to,
any material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Acquiror or any
Acquiror Subsidiary is a party, or by which any of their respective properties
or assets may be bound or affected, or (iii) subject to receipt of all required
governmental approvals, violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Acquiror or any Acquiror Subsidiary.
(c) Except for (i) the filing of applications and notices with, and
the consents and approvals of, as applicable, the FRB, the OCC, the OTS and the
WVBB, (ii) the filing and effectiveness of the Form S-4 with the Commission,
(iii) compliance with applicable state securities or "blue sky" laws in
connection with the issuance of Acquiror Common Stock pursuant to this
Agreement, (iv) the approval of this Agreement by the requisite vote of the
shareholders of the Company and the Acquiror, (v) the filing of Articles of
Merger with the Secretary of State of West Virginia pursuant to the WVCA in
connection with the Merger and (vi) the filing of a Certificate of Merger with
the Secretary of State of Delaware pursuant to the DGCL in connection with the
Merger, no consents or approvals of or filings or registrations with any
Governmental Entity or with any third party are necessary on the part of the
Acquiror or any Acquiror Subsidiary in connection with (i) the execution and
delivery by the Acquiror of this Agreement and the consummation by the Acquiror
of the transactions contemplated hereby and (ii) the execution and delivery by
the Bank of the Bank Merger Agreement and the consummation by the Bank of the
transactions contemplated thereby.
(d) As of the date hereof, neither the Acquiror nor any of the
Acquiror Subsidiaries is aware of any reasons relating to the Acquiror or any of
the Acquiror Subsidiaries (including without limitation Community Reinvestment
Act compliance) why all consents and approvals shall not be procured from all
regulatory agencies having jurisdiction over the transactions contemplated by
this Agreement as shall be necessary for (i) consummation of the transactions
contemplated by this Agreement and (ii) the continuation by the Acquiror after
the Effective Time of the business of the Acquiror as such business is carried
on immediately prior to the Effective Time, free of any conditions or
requirements which, in the reasonable opinion of the Acquiror, could have a
material adverse effect upon the financial condition, results of operations or
business of the Acquiror on a consolidated basis or materially impair the value
of the Company and the Company Subsidiaries to the Acquiror.
4.6 Securities Documents and Regulatory Reports
-------------------------------------------
(a) The Acquiror has previously delivered or made available to the
Company a complete copy of all Securities Documents filed by the Acquiror
pursuant to the Securities Laws or mailed by the Acquiror to its shareholders as
a class since January 1, 1993. The Acquiror has timely filed with the
Commission all Securities Documents required by the Securities Laws and such
Securities Documents complied in all material respect with the Securities Laws
and did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading, provided that information as of a
later date shall be deemed to modify information as of an earlier date.
(b) Since January 1, 1993, the Acquiror and each Acquiror Subsidiary
which is an insured depository institution under the FDIA has duly filed with
the FRB, the OCC, the FDIC and each other appropriate federal or state banking
agency in correct form the reports required to be filed under applicable laws
and regulations and such reports were in all material respects complete and
accurate and in compliance with the requirements of applicable laws and
regulations, provided that information as of a later date shall be deemed to
modify information as of an earlier date; and the Acquiror has previously
delivered or made available to the Company accurate and complete copies of such
reports. In connection with the most recent examinations of the Acquiror or an
Acquiror Subsidiary by the FRB, the OCC or another applicable Governmental
Entity, neither the Acquiror nor any Acquiror Subsidiary was required to correct
or change any action, procedure or proceeding which the Acquiror or the Acquiror
Subsidiary believes has not been corrected or changed as required.
4.7 Financial Statements
--------------------
(a) The Acquiror has previously delivered or made available to the
Company accurate and complete copies of the Acquiror Financial Statements which,
in the case of the consolidated statements of financial condition of the
Acquiror as of December 31, 1994, 1993 and 1992 and the consolidated statements
of operations, shareholders' equity and cash flows for each of the three years
ended December 31, 1994, 1993 and 1992, are accompanied by the audit reports of
Ernst & Young LLP, independent public accountants with respect to the Acquiror.
The Acquiror Financial Statements referred to herein, as well as the Acquiror
Financial Statements to be delivered pursuant to Section 5.6 hereof, fairly
present or will fairly present, as the case may be, the consolidated financial
condition of the Acquiror as of the respective dates set forth therein, and the
consolidated results of operations, shareholders' equity and cash flows of the
Acquiror for the respective periods or as of the respective dates set forth
therein.
(b) Each of the Acquiror Financial Statements referred to in Section
4.7(a) has been or will be, as the case may be, prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except as stated therein. The audits of the Acquiror and the Acquiror
Subsidiaries have been conducted in accordance with generally accepted auditing
standards. The books and records of the Acquiror and the Acquiror Subsidiaries
are being maintained in material compliance with applicable legal and accounting
requirements, and all such books and records accurately reflect in all material
respects all dealings and transactions in respect of the business, assets,
liabilities and affairs of the Acquiror and the Acquiror Subsidiaries.
(c) Except and to the extent (i) reflected, disclosed or provided for
in the consolidated statement of financial condition of the Acquiror as of June
30, 1995 (including related notes) and (ii) of liabilities incurred since June
30, 1995 in the ordinary course of business, neither the Acquiror nor any
Acquiror Subsidiary has any liabilities, whether absolute, accrued, contingent
or otherwise, material to the financial condition, results of operations or
business of the Acquiror on a consolidated basis.
4.8 Material Adverse Change
-----------------------
There has not occurred any material adverse change in the Acquiror's
consolidated financial condition, results of operations or business since June
30, 1995, other than changes resulting from or attributable to (i) changes in
laws or regulations, generally accepted accounting principles, or
interpretations thereof, that affect the banking or savings industries
generally, (ii) changes in the general level of interest rates or (iii) expenses
incurred in connection with the transactions contemplated by this Agreement.
4.9 Environmental Matters
---------------------
(a) To the best of the Acquiror's knowledge, the Acquiror and the
Acquiror Subsidiaries are in compliance with all Environmental Laws, except for
any violations of any Environmental Law which would not, singly or in the
aggregate, have a material adverse effect on the consolidated financial
condition, results of operations or business of the Acquiror. Neither the
Acquiror nor any Acquiror Subsidiary has received any communication alleging
that the Acquiror or any Acquiror Subsidiary is not in such compliance and, to
the best knowledge of the Acquiror, there are no present circumstances that
would prevent or interfere with the continuation of such compliance.
(b) To the best of the Acquiror's knowledge, none of the properties
owned, leased or operated by the Acquiror or the Acquiror Subsidiaries has been
or is in violation of or liable under any Environmental Law, except any such
violations or liabilities which would not singly or in the aggregate have a
material adverse effect on the financial condition, results of operations or
business of the Acquiror on a consolidated basis.
(c) Except as Previously Disclosed, to the best of the Acquiror's
knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the basis of any
Environmental Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Law against the Acquiror or any Acquiror Subsidiary or against any person or
entity whose liability for any Environmental Claim the Acquiror or any Acquiror
Subsidiary has or may have retained or assumed either contractually or by
operation of law, except such which would not have a material adverse effect on
the financial condition, results of operations or business of the Acquiror on a
consolidated basis.
4.10 Tax Matters
-----------
The Acquiror and the Acquiror Subsidiaries, and each of their
predecessors, have timely filed all federal, state and local (and, if
applicable, foreign) income, franchise, bank, excise, real property, personal
property and other tax returns required by applicable law to be filed by them
(including, without limitation, estimated tax returns, income tax returns,
information returns and withholding and employment tax returns) and have paid,
or where payment is not required to have been made, have set up an adequate
reserve or accrual for the payment of, all taxes required to
be paid in respect of the periods covered by such returns and, as of the
Effective Time, will have paid, or where payment is not required to have been
made, will have set up an adequate reserve or accrual for the payment of, all
taxes for any subsequent periods ending on or prior to the Effective Time.
Neither the Acquiror nor any of the Acquiror Subsidiaries will have any material
liability for any such taxes in excess of the amounts so paid or reserves or
accruals so established. Except as Previously Disclosed, as of the date hereof,
no audit, examination or deficiency or refund litigation with respect to any
federal, state and local (and, if applicable, foreign) income, franchise, bank,
excise, real property, personal property and other tax returns filed by the
Acquiror and the Acquiror Subsidiaries is pending or, to the best of the
Acquiror's knowledge, threatened.
4.11 Legal Proceedings
-----------------
Except as Previously Disclosed, there are no actions, suits, claims,
governmental investigations or proceedings instituted, pending or, to the best
knowledge of the Acquiror threatened against the Acquiror or any Acquiror
Subsidiary or against any asset, interest or right of the Acquiror or any
Acquiror Subsidiary, or against any officer, director or employee of any of them
that in any such case, if decided adversely, would have a material adverse
effect on the financial condition, results of operations or business of the
Acquiror on a consolidated basis. Neither the Acquiror nor any of the Acquiror
Subsidiaries is a party to any order, judgment or decree which has or would have
a material adverse effect on the financial condition, results of operations or
business of the Acquiror on a consolidated basis.
4.12 Compliance with Laws
--------------------
(a) Each of the Acquiror and each of the Acquiror Subsidiaries has all
permits, licenses, certificates of authority, orders and approvals of, and has
made all filings, applications and registrations with, federal, state, local and
foreign governmental or regulatory bodies that are required in order to permit
it to carry on its business as it is presently being conducted and the absence
of which could have a material adverse effect on the financial condition,
results of operations or business of the Acquiror on a consolidated basis; all
such permits, licenses, certificates of authority, orders and approvals are in
full force and effect; and to the best knowledge of the Acquiror, no suspension
or cancellation of any of the same is threatened.
(b) Neither the Acquiror nor any of the Acquiror Subsidiaries is in
violation of its respective Articles of Incorporation, Charter or other
chartering instrument or Bylaws, or of any applicable federal, state or local
law or ordinance or any order, rule or regulation of any federal, state, local
or other governmental agency or body (including, without limitation, all banking
(including without limitation all regulatory capital requirements), securities,
municipal securities, safety, health, environmental, zoning, anti-
discrimination, antitrust, and wage and hour laws, ordinances, orders, rules and
regulations), or in default with respect to any order, writ, injunction or
decree of any court, or in default under any order, license, regulation or
demand of any governmental agency, any of which violations or defaults could
have a material adverse effect on the financial condition, results of operations
or business of the Acquiror on a consolidated basis; and neither the Acquiror
nor any Acquiror Subsidiary has received any notice or communication
from any federal, state or local governmental authority asserting that the
Acquiror or any Acquiror Subsidiary is in violation of any of the foregoing
which could have a material adverse effect on the financial condition, results
of operations or business of the Acquiror on a consolidated basis. Neither the
Acquiror nor any Acquiror Subsidiary is subject to any regulatory or supervisory
cease and desist order, agreement, written directive, memorandum of
understanding or written commitment (other than those of general applicability
to all banks, savings associations or holding companies thereof, as applicable,
issued by governmental authorities), and none of them has received any written
communication requesting that they enter into any of the foregoing.
4.13 Deposit Insurance
-----------------
The deposit accounts of each Acquiror Subsidiary which is an insured
depository institution under the FDIA are insured by the BIF to the maximum
extent permitted by the FDIA, and each such entity has paid all premiums and
assessments required by the FDIA and the regulations thereunder.
4.14 Certain Information
-------------------
None of the information relating to the Acquiror and the Acquiror
Subsidiaries to be contained in (i) the Form S-4 will, at the time the Form S-4
becomes effective, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) the Proxy
Statement, as of the date(s) such Proxy Statement is mailed to shareholders of
the Acquiror and the Company and up to and including the date(s) of the meetings
of shareholders to which such Proxy Statement relates, will contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, provided that information as of a later date shall be
deemed to modify information as of an earlier date. The Proxy Statement mailed
by the Acquiror to shareholders of the Company and the Acquiror in connection
with the meetings of shareholders at which this Agreement will be considered by
such shareholders will comply as to form in all material respects with the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder.
4.15 Employee Benefit Plans
----------------------
(a) The Acquiror has Previously Disclosed all stock option, employee
stock purchase and stock bonus plans, qualified pension or profit-sharing plans,
any deferred compensation, consultant, bonus or group insurance contract or any
other incentive, welfare or employee benefit plan or agreement maintained for
the benefit of employees or former employees of the Acquiror or any Acquiror
Subsidiary (the "Acquiror Employee Plans").
(b) None of the Acquiror, any Acquiror Subsidiary, any pension plan
maintained by any of them and qualified under Section 401 of the Code or, to the
best of the Acquiror's knowledge, any fiduciary of such plan has incurred any
material liability to the Pension Benefit Guaranty Corporation or the Internal
Revenue Service with respect to any employees of the
Acquiror or any Acquiror Subsidiary. To the best of the Acquiror's knowledge,
no reportable event under Section 4043(b) of ERISA has occurred with respect to
any such pension plan.
(c) Neither the Acquiror nor any Acquiror Subsidiary participates in
or has incurred any liability under Section 4201 of ERISA for a complete or
partial withdrawal from a multi-employer plan (as such term is defined in
ERISA).
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each Acquiror Employee Plan which is an
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) (a
"Acquiror Pension Plan") which is intended to qualify under Section 401 of the
Code to the effect that such plan is qualified under Section 401 of the Code and
the trust associated with such employee pension plan is tax exempt under Section
501 of the Code. No such letter has been revoked or, to the best of the
Acquiror's knowledge, is threatened to be revoked and the Acquiror does not know
of any ground on which such revocation may be based. Neither the Acquiror nor
any Acquiror Subsidiary has any liability under any such plan that is not
reflected on the consolidated statement of financial condition of the Acquiror
at June 30, 1995 included in the Acquiror Financial Statements, other than
liabilities incurred in the ordinary course of business in connection therewith
subsequent to the date thereof.
(e) To the best of the Acquiror's knowledge, no prohibited transaction
(which shall mean any transaction prohibited by Section 406 of ERISA and not
exempt under Section 408 of ERISA or Section 4975 of the Code) has occurred with
respect to any Acquiror Employee Plan which would result in the imposition,
directly or indirectly, of a material excise tax under Section 4975 of the Code
or otherwise have a material adverse effect on the financial condition, results
of operations or business of the Acquiror on a consolidated basis.
(f) Full payment has been made (or proper accruals have been
established) of all contributions which are required for periods prior to the
date hereof, and full payment will be so made (or proper accruals will be so
established) of all contributions which are required for periods after the date
hereof and prior to the Effective Time, under the terms of each Acquiror
Employee Plan or ERISA; no accumulated funding deficiency (as defined in Section
302 of ERISA or Section 412 of the Code), whether or not waived, exists with
respect to any Acquiror Pension Plan, and there is no "unfunded current
liability" (as defined in Section 412 of the Code) with respect to any Acquiror
Pension Plan.
(g) To the best of the Acquiror's knowledge, the Acquiror Employee
Plans have been operated in compliance in all material respects with the
applicable provisions of ERISA, the Code, all regulations, rulings and
announcements promulgated or issued thereunder and all other applicable
governmental laws and regulations.
(h) There are no pending or, to the best knowledge of the Acquiror,
threatened claims (other than routine claims for benefits) by, on behalf of or
against any of the Acquiror Employee Plans or any trust related thereto or any
fiduciary thereof.
4.16 Brokers and Finders
-------------------
Except as Previously Disclosed, neither the Acquiror nor any Acquiror
Subsidiary, nor any of their respective directors, officers or employees, has
employed any broker or finder or incurred any liability for any broker or finder
fees or commissions in connection with the transactions contemplated hereby.
4.17 Insurance
---------
The Acquiror and each Acquiror Subsidiary is insured for reasonable
amounts with financially sound and reputable insurance companies against such
risks as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured and has maintained all insurance
required by applicable laws and regulations.
4.18 Required Vote
-------------
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Acquiror Common Stock is necessary to approve this
Agreement and the transactions contemplated hereby (assuming the accuracy of the
representation and warranty of the Company contained in the first sentence of
Section 3.3 hereof).
4.19 Accounting for the Merger
-------------------------
The Acquiror has taken no action that would cause the Merger to fail
to qualify for pooling-of-interests treatment under generally accepted
accounting principles.
4.20 Disclosures
-----------
None of the representations and warranties of the Acquiror or any of
the written information or documents furnished or to be furnished by the
Acquiror to the Company in connection with or pursuant to this Agreement or the
consummation of the transactions contemplated hereby, when considered as a
whole, contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact required to be stated or necessary
to make any such information or document, in light of the circumstances, not
misleading.
ARTICLE V
COVENANTS
5.1 Shareholder Meetings
--------------------
Each of the Acquiror and the Company shall take all action necessary
to properly call and convene a meeting of its shareholders as soon as
practicable after the date hereof. The Board of Directors of the Acquiror and,
except to the extent legally required for the discharge of its fiduciary duties
as advised by counsel, the Board of Directors of the Company will recommend that
the shareholders of the Acquiror and the Company, respectively, approve this
Agreement and
the transactions contemplated hereby. The Acquiror agrees to cause the Board of
Directors of the Bank to vote the shares of Acquiror Common Stock held in a
fiduciary capacity by the Bank's Trust Department in favor of the Agreement at
the meeting of stockholders of the Acquiror to be held pursuant to this Section
5.1, except to the extent otherwise required for the discharge of the Bank's
fiduciary duties as advised by counsel.
5.2 Regulatory Matters
------------------
(a) The parties hereto shall promptly cooperate with each other in the
preparation and filing of the Form S-4, including the Proxy Statement. Each of
the Acquiror and the Company shall use its best efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing, and the Acquiror and the Company shall thereafter promptly mail the
Proxy Statement to its respective shareholders. The Acquiror also shall use its
best efforts to obtain all necessary state securities law or "blue sky" permits
and approvals required to carry out the transactions contemplated by this
Agreement, and the Company shall furnish all information concerning the Company
and the holders of the Company Common Stock as may be reasonably requested in
connection with any such action.
(b) The parties hereto shall cooperate with each other and use their
best efforts to promptly prepare and file all necessary documentation, to effect
all applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all
Governmental Entities and third parties which are necessary or advisable to
consummate the transactions contemplated by this Agreement (including without
limitation the Merger). The Acquiror and the Company shall have the right to
review in advance, and to the extent practicable each will consult with the
other on, in each case subject to applicable laws relating to the exchange of
information, all the information which appears in any filing made with or
written materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) The Acquiror and the Company shall, upon request, furnish each
other with all information concerning themselves, their respective Subsidiaries,
directors, officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Proxy Statement, the Form S-4 or
any other statement, filing, notice or application made by or on behalf of the
Acquiror, the Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other transactions
contemplated hereby.
(d) The Acquiror and the Company shall promptly furnish each other
with copies of written communications received by the Acquiror or the Company,
as the case may be, or any of their respective Subsidiaries from, or delivered
by any of the foregoing to, any Governmental Entity in respect of the
transactions contemplated hereby.
5.3 Investigation and Confidentiality
---------------------------------
(a) Each party shall permit the other party and its representatives
reasonable access to its properties and personnel, and shall disclose and make
available to such other party all books, papers and records relating to the
assets, stock ownership, properties, operations, obligations and liabilities of
it and its Subsidiaries, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of meetings of boards
of directors (and any committees thereof) and shareholders, organizational
documents, bylaws, material contracts and agreements, filings with any
regulatory authority, accountants' work papers, litigation files, loan files,
plans affecting employees, and any other business activities or prospects in
which the other party may have a reasonable interest, provided that such access
shall be reasonably related to the transactions contemplated hereby and not
unduly interfere with normal operations. Each party and its Subsidiaries shall
make their respective directors, officers, employees and agents and authorized
representatives (including counsel and independent public accountants) available
to confer with the other party and its representatives, provided that such
access shall be reasonably related to the transactions contemplated hereby and
not unduly interfere with normal operations.
(b) All information furnished previously in connection with the
transactions contemplated by this Agreement or pursuant hereto shall be treated
as the sole property of the party furnishing the information until consummation
of the transactions contemplated hereby and, if such transactions shall not
occur, the party receiving the information shall return to the party which
furnished such information all documents or other materials containing,
reflecting or referring to such information, shall use its best efforts to keep
confidential all such information, and shall not directly or indirectly use such
information for any competitive or other commercial purposes. The obligation to
keep such information confidential shall continue for five years from the date
the proposed transactions are abandoned but shall not apply to (i) any
information which (x) the party receiving the information can establish by
convincing evidence was already in its possession prior to the disclosure
thereof by the party furnishing the information; (y) was then generally known to
the public; or (z) became known to the public through no fault of the party
receiving the information; or (ii) disclosures pursuant to a legal requirement
or in accordance with an order of a court of competent jurisdiction, provided
that the party which is the subject of any such legal requirement or order shall
use its best efforts to give the other party at least ten business days prior
notice thereof.
5.4 Press Releases
--------------
The Acquiror and the Company shall agree with each other as to the
form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and consult with each other as to the form and
substance of other public disclosures which may relate to the transactions
contemplated by this Agreement, provided, however, that nothing contained herein
shall prohibit either party, following notification to the other party, from
making any disclosure which is required by law or regulation.
5.5 Business of the Parties
-----------------------
(a) During the period from the date of this Agreement and continuing
until the Effective Time, except as expressly contemplated or permitted by this
Agreement or with the prior written consent of the Acquiror, the Company and the
Company Subsidiaries shall carry on their respective businesses in the ordinary
course consistent with past practice. The Company will use all reasonable
efforts to (x) preserve its business organization and that of the Company
Subsidiaries intact, (y) keep available to itself and the Acquiror the present
services of the employees of the Company and the Company Subsidiaries and (z)
preserve for itself and the Acquiror the goodwill of the customers of the
Company and the Company Subsidiaries and others with whom business relationships
exist. Without limiting the generality of the foregoing, except with the prior
written consent of the Acquiror, as expressly contemplated hereby or as
Previously Disclosed as of the date hereof, between the date hereof and the
Effective Time, the Company shall not, and shall cause each the Company
Subsidiary not to:
(i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect
of the Company Common Stock, except for regular quarterly cash dividends
at a rate per share of Company Common Stock not in excess of $0.14 per
share, which shall have the same record and payment dates as the record
and payment dates relating to dividends on the Acquiror Common Stock (as
Previously Disclosed by the Acquiror), it being the intention of the
parties that the shareholders of the Company receive dividends for any
particular quarter on either the Company Common Stock or the Acquiror
Common Stock but not both, provided that if the Effective Time does not
occur prior to the record date for the dividend which relates to the
second quarter of 1996 (June 14, 1996), the regular per share quarterly
dividend on the Company Common Stock for such quarter shall be increased
to an amount determined by multiplying the per share dividend declared on
the Acquiror Common Stock for such quarter by 1.15.
(ii) issue any shares of its capital stock; purchase any shares of
Company Common Stock; issue, grant, modify or authorize any Rights; or
effect any recapitalization, reclassification, stock dividend, stock split
or like change in capitalization;
(iii) amend its Certificate of Incorporation, Charter or other
governing instrument or Bylaws; impose, or suffer the imposition, on any
share of stock held by the Company in any Company Subsidiary of any
material lien, charge or encumbrance or permit any such lien to exist; or
waive or release any material right or cancel or compromise any material
debt or claim;
(iv) increase the rate of compensation of any of its directors,
officers or employees, or pay or agree to pay any bonus or severance to,
or provide any other new employee benefit or incentive to, any of its
directors, officers or employees, except (i) as may be required pursuant
to binding commitments existing on the date hereof and (ii) such as may be
granted in the ordinary course of business consistent with past practice;
(v) enter into or, except as may be required by law, modify any
pension, retirement, stock option, stock purchase, stock appreciation
right, savings, profit sharing, deferred compensation, supplemental
retirement, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or
employees; or make any contributions to the Company's defined benefit
Pension Plan or Employee Stock Ownership Plan not in the ordinary course
of business consistent with past practice;
(vi) enter into (w) any agreement, arrangement or commitment not made
in the ordinary course of business, (x) any agreement, indenture or other
instrument relating to the borrowing of money by the Company or any
Company Subsidiary or guarantee by the Company or any Company Subsidiary
of any such obligation, except for deposits and FHLB advances in the
ordinary course of business consistent with past practice, (y) except as
Previously Disclosed, any agreement, arrangement or commitment relating to
the employment of an employee, or amend any such existing agreement,
provided that the Company and any Company Subsidiary may employ an
employee if necessary to operate the business of the Company or a Company
Subsidiary in the ordinary course of business consistent with past
practice and if the employment of such employee is terminable by the
Company and any successor at will without liability, other than as
required by law; or (z) any contract, agreement or understanding with a
labor union;
(vii) change its method of accounting in effect for the year ended
December 31, 1994, except as required by changes in laws or regulations or
generally accepted accounting principles, or change any of its methods of
reporting income and deductions for federal income tax purposes from those
employed in the preparation of its federal income tax return for the year
ended December 31, 1994, except as required by changes in laws or
regulations;
(viii) make any capital expenditures in excess of $50,000
individually or $250,000 in the aggregate, other than pursuant to binding
commitments existing on the date hereof and other than expenditures
necessary to maintain existing assets in good repair;
(ix) file any applications or make any contract with respect to
branching or site location or relocation;
(x) acquire in any manner whatsoever (other than to realize upon
collateral for a defaulted loan) any business or entity;
(xi) enter into any futures contract, option contract, interest rate
caps, interest rate floors, interest rate exchange agreement or other
agreement for purposes of hedging the exposure of its interest-earning
assets and interest-bearing liabilities to changes in market rates of
interest (other than forward commitments to sell loans in the ordinary
course of business);
(xii) enter or agree to enter into any agreement or arrangement
granting any preferential right to purchase any of its assets or rights or
requiring the consent of any party to the transfer and assignment of any
such assets or rights;
(xiii) take any action that would result in any of the
representations and warranties of the Company contained in this Agreement
not to be true and correct in any material respect at the Effective Time;
or
(xiv) agree to do any of the foregoing.
(b) Neither the Company nor any Company Subsidiary, nor any of the
directors, officers, employees, representatives or agents of the Company or
other persons controlled by the Company, shall solicit or encourage inquiries or
proposals with respect to, furnish any information relating to, or participate
in any negotiations or discussions concerning, any acquisition, lease or
purchase of all or a substantial portion of the assets of, or any equity
interest in, the Company or any Company Subsidiary or any business combination
with the Company or any Company Subsidiary other than as contemplated by this
Agreement (except where the failure to furnish such information or participate
in such negotiations or discussions would in the reasonable advice of counsel to
the Company constitute a breach of the fiduciary or legal obligations of the
Company's Board of Directors). The Company will immediately notify the Acquiror
orally and in writing if any such inquiries or proposals are received by, and
such information is required from, or any such negotiations or discussions are
sought to be initiated with, the Company or any Company Subsidiary.
(c) During the period from the date of this Agreement and continuing
until the Effective Time, except as expressly contemplated or permitted by this
Agreement or with the prior written consent of the Company, the Acquiror and the
Acquiror Subsidiaries shall carry on their respective businesses in the ordinary
course consistent with past practice and use all reasonable efforts to preserve
intact their present business organizations and relationships. Without limiting
the generality of the foregoing, except with the prior written consent of the
Company or as expressly contemplated hereby, between the date hereof and the
Effective Time, the Acquiror shall not, and shall cause each Acquiror Subsidiary
not to:
(i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect
of the Acquiror Common Stock, other than regular quarterly cash dividends
which are not in excess of $.30 per share of Acquiror Common Stock;
(ii) issue any shares of its capital stock other than pursuant to (i)
Rights granted pursuant to the Acquiror Employee Stock Benefit Plans, (ii)
the Agreement and Plan of Merger referred to in the second sentence of
Section 4.1 or (iii) any acquisition to the extent permitted under
subsection (v) below;
(iii) effect any recapitalization, reclassification, stock split
or like change in capitalization;
(iv) amend its Articles of Incorporation, Charter or other governing
instrument or Bylaws in a manner which would adversely affect in any
manner the terms of the Acquiror Common Stock or the ability of the
Acquiror to consummate the transactions contemplated hereby;
(v) make any acquisition (including acquisitions of branch offices and
related deposit liabilities) or take any other action that individually or
in the aggregate could materially adversely affect the ability of the
Acquiror to consummate the transactions contemplated hereby in a
reasonably timely manner, or participate in any merger, consolidation or
other transaction in which the Acquiror is not the surviving corporation;
(vi) take any action that would result in any of the representations
and warranties of the Acquiror contained in this Agreement not to be true
and correct in any material respect at the Effective Time; or
(vii) agree to do any of the foregoing.
5.6 Current Information
-------------------
During the period from the date of this Agreement to the Effective
Time, each party shall, upon the request of the other party, cause one or more
of its designated representatives to confer on a monthly or more frequent basis
with representatives of the other party regarding its financial condition,
operations and business and matters relating to the completion of the
transactions contemplated hereby. As soon as reasonably available, but in no
event more than 45 days after the end of each calendar quarter ending after the
date of this Agreement (other than the last quarter of each fiscal year ending
December 31), each party will deliver to the other party its quarterly report on
Form 10-Q under the Exchange Act, and, as soon as reasonably available, but in
no event more than 90 days after the end of each fiscal year, each party will
deliver to the other party its Annual Report on Form 10-K. Within 25 days after
the end of each month, each party will deliver to the other party a consolidated
balance sheet and a consolidated statement of operations, without related notes,
for such month prepared in accordance with generally accepted accounting
principles.
5.7 Indemnification; Insurance, Etc.
--------------------------------
(a) From and after the Effective Time through the sixth anniversary of
the Effective Time, the Acquiror (the "Indemnifying Party") shall indemnify and
hold harmless each present and former director, officer, employee or agent of
the Company or any Company Subsidiary determined as of the Effective Time (the
"Indemnified Parties") against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of 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 to which such Indemnified Parties were entitled
under the Bylaws of the Company as in effect on the date hereof. From and after
the Effective
Time, the Acquiror also shall honor the limitation on liability of directors of
the Company contained in Article 7E of the Company's Certificate of
Incorporation.
(b) Any Indemnified Party wishing to claim indemnification under
Section 5.7(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the appropriate Indemnifying Party thereof,
but the failure to so notify shall not relieve the Indemnifying Party of any
liability it may have to such Indemnified Party if such failure does not
materially prejudice the Indemnifying Party. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Indemnifying Party shall have the right to assume the
defense thereof and the Indemnifying Party 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 Indemnifying Party elects not to assume
such defense or counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between the Indemnifying Party and the
Indemnified Parties, the Indemnified Parties may retain counsel which is
reasonably satisfactory to the Indemnifying Party, and the Indemnifying Party
shall pay, promptly as statements therefor are received, the reasonable fees and
expenses of such counsel for the Indemnified Parties (which may not exceed one
firm 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 Indemnifying Party shall not be liable for any settlement effected without
its prior written consent.
(c) On or prior to the Effective Time, the Company shall purchase
insurance coverage on substantially the same terms and conditions as the
liability insurance provided by the Company for its directors and officers as of
the date hereof for a period of two years following the Effective Time,
provided, however, that in no event shall the Company expend, in order to obtain
such insurance, any amount per annum in excess of 125% of the amount of the
actual premiums paid as of the date hereof by the Company for such insurance
(the "Maximum Amount"). If the amount of the annual premiums necessary to
maintain or procure such insurance coverage exceeds the Maximum Amount, the
Company shall use all reasonable efforts to maintain the most advantageous
policies of directors' and officers' insurance obtainable for an annual premium
equal to the Maximum Amount.
(d) In the event that the Acquiror or any of its respective successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors and assigns of such entity shall assume the obligations set
forth in this Section 5.7, which obligations are expressly intended to be for
the irrevocable benefit of, and shall be enforceable by, each director and
officer covered hereby.
(e) The obligations of the Acquiror under this Section 5.7 are
intended to benefit, and be enforceable against the Acquiror directly by, the
Indemnified Parties and their respective heirs and representatives, and shall be
binding on all successors and permitted assigns of the Acquiror.
5.8 Directors, Officers and Employees
---------------------------------
(a) The Acquiror agrees to take all action necessary to elect,
effective as of the Effective Time, J. Christopher Thomas, William W. Wagner and
Paul Clinton Winter, Jr. as directors of the Acquiror. Such persons shall serve
until the first annual meeting of shareholders of the Acquiror following the
Effective Time and until their successors are elected and qualified. The
Acquiror shall include such persons on the list of nominees for director
presented by the Board of Directors of the Acquiror and for which said Board
shall solicit proxies at the first annual meeting of shareholders of the
Acquiror following the Effective Time.
(b) Following the Merger, the Acquiror and the Bank shall honor the
terms of (i) the Supplemental Employment Retirement Plan maintained by the
Association for its executive officers, as in effect on the date of this
Agreement, and (ii) the employment agreements among the Company, the Association
and each of Messrs. William W. Wagner, J. Christopher Thomas, A. Lawrence
Crimmins, Jr. and T. Sam Scipio, Jr., as in effect on the date of this
Agreement.
(c) The Acquiror and its Subsidiaries shall have the right, but not
the obligation, to offer employment, as officers and employees of the Acquiror
or its Subsidiaries, immediately following the Effective Time, to any persons
who are officers and employees of the Company or any Company Subsidiary
immediately before the Effective Time. To the extent that the employment of any
employee of the Company or any Company Subsidiary (other than any employee who
is party to an employment agreement) is involuntarily terminated at or during
the one-year period following the Effective Time as a result of the elimination
of a job position, such employee will be entitled to receive severance payments
in accordance with, and to the extent provided in, Schedule I hereto. For
purposes of determining severance benefits, each employee whose employment is
terminated will be credited with his or her years of service with the Company or
a Company Subsidiary (and any entities acquired by the Company or the
Association to the same extent as they recognize such service) prior to the
Effective Time.
(d) Notwithstanding the first sentence of Section 5.8(c) hereof, the
Acquiror agrees as follows: (i) to offer employment to J. Christopher Thomas as
Executive Vice President of the Acquiror and President and Chief Executive
Officer of MBS with a base annual salary equal to his base annual salary with
the Company and the Association immediately prior to the Effective Time; (ii) to
offer employment to William W. Wagner as Executive Vice President of the
Acquiror and Chairman of MBS with a base annual salary equal to his base annual
salary with the Company and the Association immediately prior to the Effective
Time; (iii) to offer employment to T. Sam Scipio, Jr. as Executive Vice
President and Chief Operating Officer of MBS with a base annual salary equal to
his base annual salary with the Company and the Association immediately prior to
the Effective Time; and (iv) to offer employment to Lonnie R. Stringer, Cindy S.
McGhee and Alecia J. Tyson in such capacities with the Acquiror or an Acquiror
Subsidiary as may be selected by the Acquiror with a base annual salary equal to
the respective employee's base annual salary with the Association immediately
prior to the Effective Time.
(e) During the one-year period following the Effective Time, the
Acquiror shall give employees of the Company and the Company Subsidiaries the
same priority for open positions at
the Acquiror or any Acquiror Subsidiary for which they may qualify as existing
employees of the Acquiror and the Acquiror Subsidiaries, provided that any
decision to offer employment shall be made in the sole discretion of the
Acquiror.
(f) Each person employed by the Company or a Company Subsidiary prior
to the Effective Time who becomes an employee of the Acquiror or an Acquiror
Subsidiary following the Effective Time (each a "Continued Employee") shall be
entitled, as an employee of the Acquiror or an Acquiror Subsidiary, to
participate in such employee benefit plans as may be in effect generally for
employees of the Acquiror and its Subsidiaries from time to time (the "Acquiror
Plans"), if such Continued Employee shall be eligible or selected for
participation therein and otherwise shall not be participating in a similar plan
formerly maintained by the Company or a Company Subsidiary which continues to be
maintained by the Acquiror and its Subsidiaries following the Effective Time.
Continued Employees will be eligible to participate on the same basis as
similarly-situated employees of the Acquiror or its Subsidiaries. All such
participation shall be subject to the terms of the Acquiror Plans as may be in
effect from time to time. Notwithstanding anything in this Section 5.8(f) to
the contrary, participation by Continued Employees in employee benefit plans of
the Acquiror or its Subsidiaries with respect to which eligibility to
participate is at the discretion of the employer shall be discretionary with
such employer, and any Continued Employee who is party to an employment
agreement with the Company or a Company Subsidiary which is assumed by the
Acquiror or any of its Subsidiaries shall not be permitted to participate in the
Acquiror severance plan.
(g) The Acquiror and its Subsidiaries shall, solely for purposes of
vesting and eligibility to begin participation with respect to the Acquiror
Plans, recognize credit for each Continued Employee's term of service with the
Company and the Company Subsidiaries as such service is recognized by the
Company and its Subsidiaries for purposes of its benefit plans. The Acquiror
will waive all pre-existing condition limitations for Continued Employees with
respect to its health and dental plans, provided that such Continued Employees
shall have been employed with the Company or its Subsidiaries for at least one-
year prior to the Effective Time.
(h) The parties hereto agree that the Company's Employee Stock
Ownership Plan shall be terminated in accordance with the terms thereof and
applicable laws and regulations effective as of the Effective Time, or as soon
thereafter as practicable. In the event of the merger of the Company's defined
benefit pension plan (the "Company Pension Plan") into the defined benefit
pension plan maintained by or on behalf of the Acquiror or one of its
subsidiaries (the "Acquiror Pension Plan"), the accrued benefit immediately
following the merger of each participant in the Company Pension Plan who was an
employee of the Company or a Company Subsidiary shall be no less than the
accrued benefit of each such participant in the Company Pension Plan immediately
prior to the merger of the Company Pension Plan.
(i) The obligations of the Acquiror under this Section 5.8 are
intended to benefit, and be enforceable against the Acquiror directly by, each
person covered thereby and his or her heirs and representatives, and shall be
binding on all successors and permitted assigns of the Acquiror.
5.9 Mortgage Banking Company
------------------------
In order to take advantage of the Association's expertise in the
origination of single-family residential loans, the Acquiror agrees to
establish, as soon as practicable after the Effective Time, a subsidiary of the
Bank which shall be engaged in the mortgage banking business ("MBS"). The
initial number and composition of the Board of Directors of MBS shall be
determined by mutual agreement between the Company and the Acquiror. The
executive officers of MBS shall include William W. Wagner, Chairman; J.
Christopher Thomas, President and Chief Executive Officer; T. Sam Scipio,
Executive Vice President and Chief Operating Officer. Other employees of MBS
shall be determined by mutual agreement by the Acquiror and MBS. MBS will seek
to develop a business which emphasizes the origination of single-family
residential loans throughout the geographic areas served by the resulting
banking subsidiaries of the Acquiror, as well as related loan servicing and
secondary market activities. The Acquiror agrees that it will initially provide
MBS with a level of capitalization and funding which is appropriate to the goals
and objectives of MBS as mutually agreed to by the Acquiror and MBS.
5.10 Certain Policies of the Company
-------------------------------
At the request of the Acquiror, the Company shall, prior to the
Effective Time, (i) establish and take such reserves and accruals as the
Acquiror shall reasonably request to conform, on a mutually satisfactory basis,
the Company's loan, real estate, accrual and reserve policies to the Acquiror's
policies and (ii) establish and take such accruals, reserves and charges in
order to implement such policies in respect of severance costs, write-off or
write-down of various assets and other appropriate accounting adjustments in
connection with the Merger, provided, however, that (i) the Company shall not be
obligated to take any such action pursuant to this Section 5.10 unless and until
the Acquiror specifies its request in a writing delivered by the Acquiror to the
Company and acknowledges therein that all conditions to its obligations to
consummate the Merger set forth in Sections 6.1 and 6.3 have been satisfied or
waived (if waivable) by the Acquiror, (ii) the Company acknowledges that the
conditions to its obligation to consummate the Merger set forth in Sections 6.1
and 6.2 have been satisfied or waived (if waivable) by the Company, (iii) the
Company shall not be required to take any action that is inconsistent with any
requirement applicable to the Company or any Company Subsidiary by any bank
regulatory agency and (iv) the Company shall not be required to take any such
action that is not consistent with generally accepted accounting principles.
The representations, warranties and covenants of the Company contained in this
Agreement shall not be deemed to be untrue or breached in any respect for any
purpose as a consequence of any action undertaken on account of this Section
5.10.
5.11 Restrictions on Resale
----------------------
The Company has Previously Disclosed to the Acquiror all persons who
are deemed by it to be "affiliates" of the Company for purposes of Rule 145
under the Securities Act and shall use its best efforts to cause each of such
persons to promptly execute and deliver to the Acquiror a written agreement,
substantially in the form of Annex I hereto, providing that such person will not
sell, pledge, transfer or otherwise dispose of (i) the shares of Acquiror Common
Stock or Company Common Stock owned by such person during the period commencing
30 business days
prior to the Effective Time (the anticipated date of which shall be set forth in
a notice by the Company to such persons as soon as such information is
available) and continuing to the date on which financial results covering at
least 30 days combined operations of the Acquiror and the Company have been
published within the meaning of Topic 2-E of the Staff Accounting Bulletin
Series of the Commission or (ii) any shares of Acquiror Common Stock received by
such person in the Merger except in compliance with the applicable provisions of
the Securities Act and the rules and regulations thereunder. The Acquiror shall
use its best efforts to comply with Rule 144(c) under the Securities Act in
order that all such persons may resell such Acquiror Common Stock pursuant to
Rule 145(d) under the Securities Act.
5.12 Disclosure Supplements
----------------------
From time to time prior to the Effective Time, each party shall
promptly supplement or amend any materials Previously Disclosed and delivered to
the other party pursuant hereto with respect to any matter hereafter arising
which, if existing, occurring or known at the date of this Agreement, would have
been required to be set forth or described in materials Previously Disclosed to
the other party or which is necessary to correct any information in such
materials which has been rendered materially inaccurate thereby; no such
supplement or amendment to such materials shall be deemed to have modified the
representations, warranties and covenants of the parties for the purpose of
determining whether the conditions set forth in Article VI hereof have been
satisfied, provided that the receiving party's obligations to consummate the
Merger shall not be deemed to be affected by any such supplement or amendment
unless such party, within 20 days after receipt thereof, objects and exercises
its right to terminate this Agreement pursuant to Section 7.1(b) hereof.
5.13 Failure to Fulfill Conditions
-----------------------------
In the event that either of the parties hereto determines that a
condition to its respective obligations to consummate the transactions
contemplated hereby cannot be fulfilled on or prior to the termination of this
Agreement, it will promptly notify the other party. Each party will promptly
inform the other party of any facts applicable to it that would be likely to
prevent or materially delay approval of the Merger or the Bank Merger by any
Governmental Entity or third party or which would otherwise prevent or
materially delay completion of the Merger or the Bank Merger.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent - The Acquiror and the Company
---------------------------------------------------
The respective obligations of the Acquiror and the Company to effect
the transactions contemplated by this Agreement shall be subject to satisfaction
of the following conditions at or prior to the Effective Time.
(a) All corporate action necessary to authorize the execution and
delivery of this
Agreement and consummation of the transactions contemplated hereby shall have
been duly and validly taken by the Acquiror and the Company, including approval
by the requisite vote of the shareholders of the Acquiror and the Company of
this Agreement, and all corporate and shareholder action necessary to authorize
the execution and delivery of the Bank Merger Agreement and consummation of the
transactions contemplated thereby shall have been duly and validly taken by the
Bank and the Association.
(b) All approvals and consents for the transactions contemplated
hereby and the Bank Merger Agreement from the FRB, the OCC, the OTS, the WVBB
and any other Governmental Entity the approval or consent of which is required
for the consummation of the Merger, the Bank Merger and the other transactions
contemplated hereby shall have been received and all statutory waiting periods
in respect thereof shall have expired; and the Acquiror and the Company shall
have procured all other approvals, consents and waivers of each person (other
than the Governmental Entities referred to above) whose approval, consent or
waiver is necessary to the consummation of the Merger, the Bank Merger and the
other transactions contemplated hereby and the failure of which to obtain would
have the effects set forth in clauses (i) or (ii) to the following proviso
clause; provided, however, that no approval, consent or waiver referred to in
this Section 6.1(b) shall be deemed to have been received if it shall include
any condition or requirement that, individually or in the aggregate, would (i)
result in a material adverse effect on the financial condition, results of
operations or business of the Acquiror on a consolidated basis or (ii) reduce
the economic or business benefits of the transactions contemplated by this
Agreement to the Acquiror in so significant a manner that the Acquiror, in its
reasonable judgment, would not have entered into this Agreement.
(c) None of the Acquiror, the Company or their respective Subsidiaries
shall be subject to any statute, rule, regulation, order or decree which shall
have been enacted, entered, promulgated or enforced by any governmental or
judicial authority which prohibits, restricts or makes illegal consummation of
the Merger and the Bank Merger or any of the other transactions contemplated
hereby.
(d) The Form S-4 shall have become effective under the Securities Act,
and the Acquiror shall have received all state securities laws or "blue sky"
permits and other authorizations or there shall be exemptions from registration
requirements necessary to issue the Acquiror Common Stock in connection with the
Merger, and neither the Form S-4 nor any such permit, authorization or exemption
shall be subject to a stop order or threatened stop order by the Commission or
any state securities authority.
(e) The shares of Acquiror Common Stock to be issued in connection
with the Merger shall have been approved for listing on the Nasdaq Stock
Market's National Market.
(f) Ernst & Young LLP, the Acquiror's independent public accountants,
shall have issued letters, dated as of the Effective Time, to the Acquiror and
to the Company to the effect that, based on a review of this Agreement and
related agreements and the facts and circumstances then known to it, the Merger
shall be accounted for as a pooling-of-interests under generally accepted
accounting principles.
6.2 Conditions Precedent - The Company
----------------------------------
The obligations of the Company to effect the transactions contemplated
by this Agreement shall be subject to satisfaction of the following conditions
at or prior to the Effective Time unless waived by the Company pursuant to
Section 7.4 hereof.
(a) The representations and warranties of the Acquiror as set forth in
Article IV hereof shall be true and correct as of the date of this Agreement and
as of the Effective Time as though made on and as of the Effective Time (or on
the date when made in the case of any representation and warranty which
specifically relates to an earlier date), provided, however, that
notwithstanding anything herein to the contrary, this Section 6.2(a) shall be
deemed to have been satisfied even if such representations or warranties are not
true and correct unless the failure of any of the representations or warranties
to be so true and correct would have, individually or in the aggregate, a
material adverse effect on the financial condition, results of operations or
business of the Acquiror on a consolidated basis or on the ability of the
Acquiror or the Company to consummate the transactions contemplated hereby.
(b) The Acquiror shall have performed all material obligations and
covenants required to be performed by it on or prior to the Effective Time.
(c) The Acquiror shall have delivered to the Company a certificate,
dated the date of the Closing and signed by its Chairman or President, to the
effect that the conditions set forth in Sections 6.2(a) and 6.2(b) have been
satisfied.
(d) The Company shall have received the written opinion of Bowles Rice
McDavid Graff & Love that addresses the matters set forth in Annex II hereto.
(e) The Company shall have received the written opinion of Elias,
Matz, Tiernan & Herrick L.L.P. to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the Code and that, except
for cash received in lieu of fractional shares, holders of Company Common Stock
who receive Acquiror Common Stock in the Merger will not recognize income, gain
or loss for federal income tax purposes, the basis of such Acquiror Common Stock
will equal the basis of the Company Common Stock for which it is exchanged, and
the holding period of such Acquiror Common Stock will include the holding period
of the Company Common Stock for which it is exchanged, assuming that such stock
is a capital asset in the hands of the holder thereof at the Effective Time,
which opinion shall be based on such written representations from the Acquiror
and the Company as such counsel shall reasonably request as to factual matters.
(f) An opinion shall have been received by the Company from Wheat
First Butcher Singer, dated as of the date of the Proxy Statement, to the effect
that the consideration to be received by the Company's shareholders pursuant to
this Agreement is fair to the shareholders of the Company from a financial point
of view, and such opinion shall not have been withdrawn or materially modified
prior to the vote of the shareholders of the Company on this Agreement.
(g) The Acquiror shall have furnished the Company with such
certificates of its respective officers or others and such other documents to
evidence fulfillment of the conditions set forth in Sections 6.1 and 6.2 as such
conditions relate to the Acquiror as the Company may reasonably request.
6.3 Conditions Precedent - The Acquiror
-----------------------------------
The obligations of the Acquiror to effect the transactions
contemplated by this Agreement shall be subject to satisfaction of the following
conditions at or prior to the Effective Time unless waived by the Acquiror
pursuant to Section 7.4 hereof.
(a) The representations and warranties of the Company set forth in
Article III hereof shall be true and correct as of the date of this Agreement
and as of the Effective Time as though made on and as of the Effective Time (or
on the date when made in the case of any representation and warranty which
specifically relates to an earlier date), provided, however, that
notwithstanding anything herein to the contrary, this Section 6.3(a) shall be
deemed to have been satisfied even if such representations or warranties are not
true and correct unless the failure of any of the representations or warranties
to be so true and correct would have, individually or in the aggregate, a
material adverse effect on the financial condition, results of operations or
business of the Company on a consolidated basis or on the ability of the
Acquiror or the Company to consummate the transactions contemplated hereby.
(b) The Company shall have performed all material obligations and
covenants required to be performed by it on or prior to the Effective Time.
(c) The Company shall have delivered to the Acquiror a certificate,
dated the date of the Closing and signed by its Chairman or President, to the
effect that the conditions set forth in Sections 6.3(a) and 6.3(b) have been
satisfied.
(d) The Acquiror shall have received the written opinions of Elias,
Matz, Tiernan & Herrick L.L.P. and Hamb & Poffenbarger, dated the date of the
Closing, that collectively address the matters set forth in Annex III hereto.
(e) The Acquiror shall have received the written opinion of Bowles
Rice McDavid Graff & Love to the effect that the Merger will constitute a
reorganization within the meaning of Section 368 of the Code and that no income,
gain or loss will be recognized by the Acquiror, the Company or the Association
in connection therewith, which opinion shall be based on such written
representations from the Acquiror, the Company and the Association as such
counsel shall reasonably request as to factual matters.
(f) The Acquiror shall have received from each affiliate of the
Company the affiliates letter referred to in Section 5.11 hereof, to the extent
necessary to assure in the reasonable judgment of the Acquiror that the
transactions contemplated hereby will qualify for pooling-of-interests
accounting treatment.
(g) The Company shall have furnished the Acquiror with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in Sections 6.1 and 6.3 as such
conditions relate to the Company as the Acquiror may reasonably request.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
-----------
This Agreement may be terminated:
(a) at any time on or prior to the Effective Time, by the mutual consent
in writing of the parties hereto;
(b) at any time on or prior to the Effective Time, by the Acquiror in
writing if the Company has, or by the Company in writing if the Acquiror has, in
any material respect, breached (i) any material covenant or undertaking
contained herein or (ii) any representation or warranty contained herein, in any
case if such breach has not been cured by the earlier of 30 days after the date
on which written notice of such breach is given to the party committing such
breach or the Effective Time;
(c) at any time, by either party hereto in writing, if any of the
applications for prior approval referred to in Section 5.2 hereof are denied or
are approved in a manner which does not satisfy the requirements of Section
6.1(b) hereof, and the time period for appeals and requests for reconsideration
has run;
(d) at any time, by either party hereto in writing, if the
shareholders of the Acquiror or the Company do not approve this Agreement after
a vote taken thereon at a meeting duly called for such purpose unless the
failure of such occurrence shall be due to the failure of the party seeking to
terminate to perform or observe in any material respect its agreements set forth
herein to be performed or observed by such party at or before the Effective
Time;
(e) by either party hereto in writing, if the Effective Time has not
occurred by the close of business on June 30, 1996, provided that this right to
terminate shall not be available to any party whose failure to perform an
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Merger and the other transactions contemplated hereby to be
consummated by such date;
(f) by the Company in the event that the Acquiror Closing Price is less
than $25.00; and
(g) at any time by either party hereto in writing if such party is not
in default hereunder and such party determines in good faith that any condition
precedent to such party's obligations to consummate the Merger and the other
transactions contemplated hereby is or would be impossible to satisfy, and such
condition is not waived by the other party.
7.2 Effect of Termination
---------------------
In the event that this Agreement is terminated pursuant to Section 7.1
hereof, this Agreement shall become void and have no effect, except that (i) the
provisions relating to confidentiality and expenses set forth in Section 5.3 and
Section 8.1, respectively, shall survive any such termination and (ii) a
termination pursuant to Section 7.1(b), (d) or (e) shall not relieve the
breaching party from liability for willful breach of any covenant, undertaking,
representation or warranty giving rise to such termination.
7.3 Survival of Representations, Warranties and Covenants
-----------------------------------------------------
All representations, warranties and covenants in this Agreement or in
any instrument delivered pursuant hereto or thereto shall expire on, and be
terminated and extinguished at, the Effective Time other than covenants that by
their terms are to be performed after the Effective Time (including without
limitation the covenants set forth in Sections 5.7, 5.8 and 5.9 hereof),
provided that no such representations, warranties or covenants shall be deemed
to be terminated or extinguished so as to deprive the Acquiror or the Company
(or any director, officer or controlling person thereof) of any defense at law
or in equity which otherwise would be available against the claims of any
person, including, without limitation, any shareholder or former shareholder of
either the Acquiror or the Company, the aforesaid representations, warranties
and covenants being material inducements to consummation by the Acquiror and the
Company of the transactions contemplated hereby.
7.4 Waiver
------
Each party hereto by written instrument signed by an executive officer
of such party, may at any time (whether before or after approval of this
Agreement by the shareholders of the Acquiror and the Company) extend the time
for the performance of any of the obligations or other acts of the other party
hereto and may waive (i) any inaccuracies of the other party in the
representations or warranties contained in this Agreement or any document
delivered pursuant hereto, (ii) compliance with any of the covenants,
undertakings or agreements of the other party or, to the extent permitted by
law, satisfaction of any of the conditions precedent to its obligations
contained herein or (iii) the performance by the other party of any of its
obligations set forth herein, provided that any such waiver granted, or any
amendment or supplement pursuant to Section 7.5 hereof executed, after
shareholders of the Acquiror or the Company have approved this Agreement shall
not modify either the amount or form of the consideration to be provided hereby
to the holders of Company Common Stock upon consummation of the Merger or
otherwise materially adversely affect either of such shareholders without the
approval of the shareholders who are so affected.
7.5 Amendment or Supplement
-----------------------
This Agreement may be amended or supplemented at any time by mutual
agreement of the Acquiror and the Company, subject to the proviso to Section 7.4
hereof. Any such amendment or supplement must be in writing and approved by
their respective Boards of Directors.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses; Termination Fee
-------------------------
(a) Each party hereto shall bear and pay all costs and expenses
incurred by it in connection with the transactions contemplated by this
Agreement, including fees and expenses of its own financial consultants,
accountants and counsel.
(b) Notwithstanding any provision in this Agreement to the contrary,
in order to induce the Acquiror to enter into this Agreement and as a means of
compensating the Acquiror for the substantial direct and indirect monetary and
other costs incurred and to be incurred in connection with this Agreement and
the transactions contemplated hereby, the Company agrees that if this Agreement
is terminated in accordance with its terms (other than if terminated by the
Company pursuant to Section 7.1(b) hereof) and prior to such termination a
Termination Event, as defined in paragraph (c) below, shall have occurred, the
Company will upon demand pay to the Acquiror in immediately available funds
$1,500,000.
(c) For purposes of this Agreement, a Termination Event shall mean
either of the following:
(i) The Company or any Company Subsidiary, without having received the
Acquiror's prior written consent, shall have entered into an agreement to engage
in an Acquisition Transaction (as defined below) with any person (the term
"person" for purposes of this Agreement 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 the Acquiror or any affiliate of the Acquiror (the term
"affiliate" for purposes of this Agreement having the meaning assigned thereto
in Rule 405 under the Securities Act) or the Board of Directors of the Company
shall have recommended that the shareholders of the Company approve or accept
any Acquisition Transaction with any person other than the Acquiror or any
affiliate of the Acquiror. For purposes of this Agreement, "Acquisition
Transaction" shall mean (x) a merger or consolidation, or any similar
transaction, involving the Company or any Company Subsidiary, (y) a purchase,
lease or other acquisition of all or substantially all of the assets of the
Company or any Company Subsidiary or (z) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise) of any
equity securities of the Company or any Company Subsidiary; or
(ii) After a bona fide proposal is made by any person other than the
Acquiror or any affiliate of the Acquiror to the Company or its shareholders to
engage in an Acquisition Transaction, either (i) the Company shall have breached
any covenant or obligation contained in this Agreement and such breach would
entitle the Acquiror to terminate this Agreement, or (ii) the holders of the
Company Common Stock shall not have approved this Agreement at the meeting of
such shareholders held for the purpose of voting on this Agreement, such meeting
shall not have been held or such meeting shall have been canceled prior to
termination of this Agreement.
8.2 Entire Agreement
----------------
This Agreement contains the entire agreement among the parties with
respect to the transactions contemplated hereby and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
documents referred to herein or therein. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and thereto and their respective successors. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, and their respective successors, any rights, remedies,
obligations or liabilities other than as set forth in Sections 5.7 and 5.8
hereof.
8.3 No Assignment
-------------
Neither of the parties hereto may assign any of its rights or obligations
under this Agreement to any other person.
8.4 Notices
-------
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
overnight express or by registered or certified mail, postage prepaid, addressed
as follows:
If to the Acquiror:
United Bankshares, Inc.
P.O. Box 1508
United Square
Fifth and Avery Streets
Parkersburg, West Virginia 26102
Attention: Steven E. Wilson
With a required copy to:
Bowles Rice McDavid Graff & Love
1600 Commerce Square
P.O. Box 1386
Charleston, West Virginia 25325-1386
Attention: Deborah A. Sink, Esq.
If to the Company:
Eagle Bancorp, Inc.
P.O. Box 233
227 Capital Street
Charleston, West Virginia 25321-0233
Attn: Chairman and President
With a required copy to:
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, DC 20005
Attn: Gerard L. Hawkins, Esq.
and
Hamb & Poffenbarger
515 Bank One Center
P.O. Box 1671
Charleston, West Virginia 25326-1671
Attention: William E. Hamb, Esq.
8.5 Interpretation
--------------
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement.
8.6 Counterparts
------------
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
8.7 Governing Law
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of West Virginia applicable to agreements made and
entirely to be performed within such jurisdiction except to the extent federal
law may be applicable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in counterparts by their duly authorized officers and their
corporate seal to be hereunto affixed and attested by their officers thereunto
duly authorized, all as of the day and year first above written.
Attest: UNITED BANKSHARES, INC.
/s/ Joseph W. Sowards By: /s/ Richard M. Adams
- ----------------------- -------------------------------
Name: Joseph W. Sowards Name: Richard M. Adams
Title: Executive Vice President Title: Chairman, President and
Chief Executive Officer
Attest: EAGLE BANCORP, INC.
/s/ J. Christopher Thomas By: /s/ William W. Wagner
- --------------------------- --------------------------
Name: J. Christopher Thomas Name: William W. Wagner
Title: President and Chief Title: Chairman and Chief
Operating Officer Executive Officer
ANNEX I
, 1995
------- --
United Bankshares, Inc.
P.O. Box 1508
United Square
Fifth and Avery Streets
Parkersburg, West Virginia 26102
Gentlemen:
Pursuant to Section 5.11 of the Agreement and Plan of Merger, dated as
of August 18, 1995 (the "Agreement"), between United Bankshares, Inc. (the
"Acquiror") and Eagle Bancorp, Inc. (the "Company"), I hereby agree as follows:
1. I will not sell, pledge, transfer or otherwise
dispose of the shares of Acquiror Common Stock or Company Common Stock (both as
defined in the Agreement) owned by me during the period commencing 30 business
days prior to the Effective Time (as defined in the Agreement) (the anticipated
date of which shall be set forth in a notice by the Company to me as soon as
such information is available) and continuing to the date on which financial
results covering at least 30 days combined operations of the Acquiror and the
Company have been published within the meaning of Topic 2-E of the Staff
Accounting Bulletin Series of the Securities and Exchange Commission.
2. I will comply with paragraph (d) of Rule 145 under
the Securities Act of 1933 and will not sell, pledge, transfer or otherwise
dispose of any shares of Acquiror Common Stock received by me in exchange for
shares of Company Common Stock pursuant to the Merger (as defined in the
Agreement), except upon the Acquiror's receipt of an opinion of counsel, at the
Acquiror's expense, that the proposed disposition will not violate paragraph (d)
of Rule 145.
The Acquiror's transfer agent shall be given an appropriate stop
transfer order and shall not be required to register any attempted transfer of
shares of Acquiror Common Stock acquired by me in exchange for Company Common
Stock pursuant to the Merger, unless the transfer has been effected in
compliance with the terms of this letter agreement. In addition, the
certificates evidencing such shares of Acquiror Common Stock shall bear a legend
noting the restrictions on transfer set forth in this letter agreement.
United Bankshares, Inc.
, 1995
- ------- --
Page 2
Very truly yours,
----------------------------
Name:
Agreed and accepted this
____ day of _______ 1995 by
United Bankshares, Inc.
By: _________________________
Name:
Title:
ANNEX II
[Matters to be covered in Opinion(s) of Counsel to be delivered to the Company
pursuant to Section 6.2(d) of the Agreement]
(a) The Acquiror and each Acquiror Subsidiary which is a "significant
subsidiary" as defined in Regulation S-X of the Commission is duly incorporated,
validly existing and in good standing under the laws of the United States or the
laws of the jurisdiction of its incorporation, as applicable, and the Acquiror
is duly registered as a bank holding company under the BHCA.
(b) The authorized capital stock of the Acquiror consists of
20,000,000 shares of Acquiror Common Stock, of which _______ are issued and
outstanding of record as of the date hereof. All of the outstanding shares of
Acquiror Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable, and the shareholders of the Acquiror have no preemptive
rights with respect to any shares of capital stock of the Acquiror. All of the
outstanding shares of capital stock of each Acquiror Subsidiary which is a
"significant subsidiary" as defined in Regulation S-X of the Commission have
been duly authorized and validly issued, are fully paid and nonassessable
(except as otherwise provided with respect to the capital stock of national bank
subsidiaries of the Acquiror by the National Bank Act) and, to the knowledge of
such counsel, are directly or indirectly owned by the Acquiror free and clear of
all liens, claims, encumbrances, charges, restrictions or rights of third
parties of any kind whatsoever. To such counsel's knowledge, except for (i)
shares of Acquiror Common Stock issuable pursuant to the Acquiror Employee Stock
Benefit Plans and (ii) shares of Acquiror Common Stock issuable pursuant to the
Agreement and Plan of Merger dated March 6, 1995 among the Acquiror, First
Commercial Bank and Commercial Interim Bank, there are no Rights authorized,
issued or outstanding with respect to the capital stock of the Acquiror.
(c) The Agreement has been duly authorized, executed and delivered by
the Acquiror and constitutes a valid and binding obligation of the Acquiror
enforceable in accordance with its terms, except that the enforceability of the
obligations of the Acquiror may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors,
(ii) equitable principles limiting the right to obtain specific performance or
other similar equitable relief and (iii) considerations of public policy, and
except that certain remedies may not be available in the case of a nonmaterial
breach of the Agreement.
(d) The Bank Merger Agreement has been duly authorized, executed and
delivered by the Bank and constitutes a valid and binding obligation of the Bank
enforceable in accordance with its terms, except that enforceability of the
obligations of the Bank may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or transfer or similar laws
affecting the rights of creditors, (ii) equitable principles limiting the right
to obtain specific performance or other similar equitable relief and (iii)
considerations of public policy, and except that certain remedies may not be
available in the case of a nonmaterial breach of the Bank Merger Agreement.
(e) All corporate and shareholder actions required to be taken by the
Acquiror by law and its Articles of Incorporation and Bylaws to authorize the
execution and delivery of the Agreement and consummation of the Merger have been
taken, and all corporate and shareholder actions required to be taken by the
Bank by law and its Articles of Association and Bylaws to authorize the
execution and delivery of the Bank Merger Agreement and consummation of the Bank
Merger have been taken.
(f) All permits, consents, waivers, clearances, approvals and
authorizations of any Governmental Entity which are necessary to be obtained by
(i) the Acquiror to permit the execution, delivery and performance of the
Agreement and consummation of the Merger have been obtained, and (ii) the Bank
to permit the execution, delivery and performance of the Bank Merger Agreement
and consummation of the Bank Merger have been obtained.
(g) The shares of Acquiror Common Stock to be issued pursuant to the
terms of the Agreement have been duly authorized by all necessary corporate
action on the part of the Acquiror and, when issued in accordance with the terms
of the Agreement, will be validly issued, fully paid and nonassessable.
(h) To such counsel's knowledge, there are no material legal or
governmental proceedings pending to which the Acquiror or any Acquiror
Subsidiary is a party or to which any property of the Acquiror or any Acquiror
Subsidiary is subject and no such proceedings are threatened by governmental
authorities or by others.
Such counsel also shall state that it has no reason to believe that
the information relating to the Acquiror or any Acquiror Subsidiary contained in
(i) the Form S-4, at the time the Form S-4 became effective, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) the Proxy Statement, as of the
date(s) such Proxy Statement was mailed to shareholders of the Acquiror and the
Company and up to and including the date(s) of the meetings of shareholders to
which such Proxy Statement relates, contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering their opinion, such counsel may rely, to the extent such
counsel deems such reliance necessary or appropriate, upon certificates of
governmental officials and, as to matters of fact, certificates of officers of
the Acquiror or any Acquiror Subsidiary. The opinion of such counsel need refer
only to matters of West Virginia and federal law, and may add other
qualifications and explanations of the basis of their opinion as may be
reasonably acceptable to the Company.
ANNEX III
[Matters to be collectively covered in Opinions of Counsel to be delivered to
the Acquiror pursuant to Section 6.3(d) of the Agreement]
(a) Each of the Company and each of the Company Subsidiaries is duly
incorporated and validly existing under the laws of the United States or the
laws of the jurisdiction of its incorporation, as applicable, and the Company is
duly registered as a savings and loan holding company under the HOLA.
(b) The authorized capital stock of the Company consists of 5,000,000
shares of Company Common Stock, of which 2,729,468 shares are issued and
outstanding of record as of the date hereof. All of the outstanding shares of
Company Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable, and the shareholders of the Company have no preemptive
rights with respect to any shares of capital stock of the Company. All of the
outstanding shares of capital stock of each of the Company Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable, and,
to the knowledge of such counsel, are directly or indirectly owned by the
Company free and clear of all liens, claims, encumbrances, charges, restrictions
or rights of third parties of any kind whatsoever. To such counsel's knowledge,
except for issued and outstanding shares of Company Common Stock which may be
acquired by employees of the Company and its Subsidiaries pursuant to the
Company's Employee Stock Ownership Plan, there are no Rights authorized, issued
or outstanding with respect to the capital stock of the Company.
(c) The Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except that the enforceability of the
obligations of the Company may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors,
(ii) equitable principles limiting the right to obtain specific performance or
other similar equitable relief and (iii) considerations of public policy, and
except that certain remedies may not be available in the case of a nonmaterial
breach of the Agreement.
(d) The Bank Merger Agreement has been duly authorized, executed and
delivered by the Association and constitutes a valid and binding obligation of
the Association enforceable in accordance with its terms, except that
enforceability of the obligations of the Association may be limited by (i)
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors, (ii) equitable principles limiting the right to obtain
specific performance or other similar equitable relief and (iii) considerations
of public policy, and except that certain remedies may not be available in the
case of a nonmaterial breach of the Bank Merger Agreement.
(e) All corporate and shareholder actions required to be taken by the
Company by law and the Certificate of Incorporation and Bylaws of the Company to
authorize the execution and delivery of the Agreement and consummation of the
Merger have been taken, and all corporate
and shareholder actions required to be taken by the Association by law and its
Charter and Bylaws to authorize the execution and delivery of the Bank Merger
Agreement and consummation of the Bank Merger have been taken.
(f) All permits, consents, waivers, clearances, approvals and
authorizations of any Governmental Entity which are necessary to be obtained by
(i) the Company to permit the execution, delivery and performance of the
Agreement and consummation of the Merger have been obtained, and (ii) the
Association to permit the execution, delivery and performance of the Bank Merger
Agreement and consummation of the Bank Merger have been obtained.
(g) To such counsel's knowledge, there are no material legal or
governmental proceedings pending to which the Company or any Company Subsidiary
is a party or to which any property of the Company or any the Company Subsidiary
is subject and no such proceedings are threatened by governmental authorities or
by others.
Such counsel also shall state that it has no reason to believe that
the information relating to the Company or a Company Subsidiary contained in (i)
the Form S-4, at the time the Form S-4 became effective, contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (ii) the Proxy Statement, as of the date(s) such Proxy
Statement was mailed to shareholders of the Acquiror and the Company and up to
and including the date(s) of the meetings of shareholders to which such Proxy
Statement relates, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering their opinion, such counsel may rely, to the extent such
counsel deems such reliance necessary or appropriate, upon certificates of
governmental officials and, as to matter of fact, certificates of officers of
the Company or any Company Subsidiary. The opinion of such counsel need refer
only to matters of Delaware, West Virginia and federal law and may add other
qualifications and explanations of the basis of their opinion as may be
reasonably acceptable to the Acquiror.
SCHEDULE I
SEVERANCE POLICY
Eligibility:
. Available only to those employees whose position has been
eliminated.
. All regular full-time and regular part-time employees who are
not party to an employment agreement.
. Severance paid in installments, regular bi-weekly pay periods.
. Subject to federal and state tax deductions and withholding.
. Policy does not apply if an employee is offered a position at
the same level and salary and the commute is 40 miles or less.
Salary and Benefit Continuance:
. 2 weeks base salary and benefits for each year of service.
Minimum - 4 weeks
Maximum - 13 weeks
Vacation:
. Paid in lump sum at beginning of severance period.