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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
F.N.B. CORPORATION,
SOUTHWEST BANKS, INC.
AND
WEST COAST BANCORP, INC.
DATED AS OF NOVEMBER 15, 1996
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TABLE OF CONTENTS
PAGE
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PREAMBLE..................................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER................................. 1
1.1 Merger.......................................................... 1
1.2 Time and Place of Closing....................................... 2
1.3 Effective Time.................................................. 2
1.4 Execution of Stock Option Agreement............................. 2
ARTICLE 2 - TERMS OF MERGER.................................................. 2
2.1 Articles of Incorporation....................................... 2
2.2 Bylaws.......................................................... 2
2.3 Directors....................................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES...................................... 2
3.1 Conversion of Shares............................................ 2
3.2 Anti-Dilution Provisions........................................ 3
3.3 Shares Held by West Coast or FNB................................ 3
3.4 Fractional Shares............................................... 3
3.5 Conversion of Stock Options, Warrants, and Other Rights......... 3
ARTICLE 4 - EXCHANGE OF SHARES............................................... 4
4.1 Exchange Procedures............................................. 4
4.2 Rights of Former West Coast Shareholders........................ 5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF WEST COAST..................... 6
5.1 Organization, Standing, and Power............................... 6
5.2 Authority; No Breach by Agreement............................... 6
5.3 Capital Stock................................................... 7
5.4 West Coast Subsidiaries......................................... 7
5.5 SEC Filings; Financial Statements............................... 8
5.6 Absence of Certain Changes or Events............................ 8
5.7 Tax Matters..................................................... 9
5.8 Assets.......................................................... 10
5.9 Environmental Matters........................................... 10
5.10 Compliance With Laws........................................... 11
5.11 Labor Relations................................................ 11
5.12 Employee Benefit Plans......................................... 11
5.13 Material Contracts............................................. 12
5.14 Legal Proceedings.............................................. 13
5.15 Reports........................................................ 13
5.16 Statements True and Correct.................................... 13
5.17 Accounting, Tax and Regulatory Matters......................... 14
5.18 State Takeover Laws............................................ 14
5.19 Articles of Incorporation Provisions........................... 14
5.20 Derivatives Contracts.......................................... 14
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ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF FNB AND SOUTHWEST.............. 14
6.1 Organization, Standing, and Power............................... 14
6.2 Authority; No Breach By Agreement............................... 15
6.3 Capital Stock................................................... 15
6.4 FNB Subsidiaries................................................ 16
6.5 SEC Filings; Financial Statements............................... 16
6.6 Absence of Certain Changes or Events............................ 17
6.7 Tax Matters..................................................... 17
6.8 Compliance With Laws............................................ 17
6.9 Assets......................................................... 18
6.10 Legal Proceedings.............................................. 18
6.11 Reports........................................................ 19
6.12 Statements True and Correct.................................... 19
6.13 Accounting, Tax and Regulatory Matters......................... 19
6.14 Environmental Matters.......................................... 19
6.15 Derivatives Contracts.......................................... 20
6.16 Outstanding West Coast Shares.................................. 20
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION......................... 20
7.1 Affirmative Covenants of West Coast............................. 20
7.2 Negative Covenants of West Coast................................ 20
7.3 Covenants of FNB................................................ 23
7.4 Adverse Changes In Condition.................................... 23
7.5 Reports......................................................... 23
ARTICLE 8 - ADDITIONAL AGREEMENTS............................................ 24
8.1 Registration Statement; Proxy Statement; Shareholder Approval... 24
8.2 Applications.................................................... 24
8.3 Filings With State Offices...................................... 24
8.4 Agreement As To Efforts To Consummate........................... 24
8.5 Access to Information; Confidentiality ......................... 25
8.6 Divided Equivalency ............................................ 25
8.7 Current Information ............................................ 25
8.8 Other Actions .................................................. 26
8.9 Press Releases.................................................. 26
8.10 Certain Actions................................................ 26
8.11 Accounting and Tax Treatment................................... 26
8.12 Takeover Laws.................................................. 26
8.13 Articles of Incorporation Provisions........................... 26
8.14 Agreement of Affiliates........................................ 27
8.15 Employee Benefits.............................................. 27
8.16 Employment Contracts of Certain Officers of West Coast......... 27
8.17 Indemnification................................................ 28
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............... 28
9.1 Conditions to Obligations of Each Party......................... 28
9.2 Conditions to Obligations of FNB................................ 29
9.3 Conditions to Obligations of West Coast......................... 30
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ARTICLE 10 - TERMINATION..................................................... 31
10.1 Termination.................................................... 31
10.2 Effect of Termination.......................................... 33
10.3 Non-Survival of Representations and Covenants.................. 33
ARTICLE 11 - MISCELLANEOUS................................................... 33
11.1 Definitions.................................................... 33
11.2 Expenses....................................................... 40
11.3 Brokers and Finders............................................ 40
11.4 Entire Agreement............................................... 41
11.5 Amendments..................................................... 41
11.6 Obligations of FNB............................................. 41
11.7 Waivers........................................................ 41
11.8 Assignment..................................................... 42
11.9 Notices........................................................ 42
11.10 Governing Law................................................. 43
11.11 Counterparts.................................................. 43
11.12 Captions...................................................... 43
11.13 Enforcement of Agreement...................................... 43
11.14 Severability.................................................. 43
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LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1. FORM OF STOCK OPTION AGREEMENT. (SECTION 1.4).
2. FORM OF AGREEMENT OF AFFILIATES OF WEST COAST. (SECTION
8.14).
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of November 15, 1996, by and among F.N.B. CORPORATION ("FNB"), a
Pennsylvania corporation having its principal office located in Hermitage,
Pennsylvania; SOUTHWEST BANKS, INC. ("Southwest"), a Florida corporation having
its principal office located in Naples, Florida, which will be a wholly owned
subsidiary of FNB on or about January 19, 1997 pursuant to the terms of that
certain Agreement and Plan of Merger dated February 2, 1996 among Southwest, FNB
and Southwest Affiliation Corporation, a wholly owned subsidiary of FNB (the
"FNB/Southwest Merger"); and WEST COAST BANCORP, INC. ("West Coast"), a Florida
corporation having its principal office located in Cape Coral, Florida.
PREAMBLE
The Boards of Directors of West Coast and FNB are of the opinion that
the acquisition described herein is in the best interests of the parties and
their respective shareholders. This Agreement provides for the acquisition of
West Coast by FNB pursuant to the merger of West Coast with and into Southwest
(the "Merger"). In the event that the FNB/Southwest Merger has not been
consummated prior to the effective time of the Merger, FNB will substitute
another of its wholly owned subsidiaries as a party to this Agreement in place
of Southwest. At the effective time of such Merger, the outstanding shares of
the capital stock of West Coast shall be converted into the right to receive
shares of the common stock of FNB (except as provided herein). As a result,
shareholders of West Coast shall become shareholders of FNB. The transactions
described in this Agreement are subject to the approvals of the shareholders of
West Coast, the Board of Governors of the Federal Reserve System, the Florida
Department of Banking and Finance, and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties to
this Agreement that the Merger (as hereinafter defined) for federal income tax
purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code, and for accounting purposes shall qualify
for treatment as a pooling of interests.
Immediately after the execution and delivery of this Agreement, as a
condition and inducement to FNB's willingness to enter into this Agreement, West
Coast and FNB are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which West
Coast is granting to FNB an option to purchase shares of West Coast Common
Shares.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, West Coast shall be merged with and into Southwest in
accordance with the provisions of the Florida Business Corporation Act (the
"FBCA"). The separate corporate existence of West Coast shall thereupon cease,
and Southwest shall be the Surviving Corporation resulting from the Merger and
shall continue to be governed by the Laws of the State of Florida. The Merger
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shall have the effects specified in the FBCA. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective Boards of Directors of West Coast, FNB and Southwest.
1.2 Time and Place of Closing. The Parties shall use their reasonable
efforts to cause the closing of the transactions contemplated by this Agreement
to take place at 9:00 A.M. on or before the fifth business day (as designated by
FNB) but not prior to the second business day following the Effective Time, or
at such other time as the Parties, acting through their chief executive officers
or chief financial officers, may mutually agree. The place of closing shall be
at such location as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Florida
Articles of Merger containing the provisions required by, and executed in
accordance with the FBCA, shall have been accepted for filing by the Secretary
of State of the State of Florida or at such later date and time as is agreed
upon by the Parties as specified in the Florida Articles of Merger (the
"Effective Time"). Subject to the terms and conditions hereof, unless otherwise
mutually agreed upon in writing by each Party, the Effective Time shall occur on
the last to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger if such
action is required, and (ii) the date on which the shareholders of West Coast
approve this Agreement to the extent such approval is required by applicable
Law.
1.4 Execution of Stock Option Agreement. Concurrently with the
execution of this Agreement and as a condition thereto, West Coast is executing
and delivering to FNB the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 Articles of Incorporation. Pursuant to the Merger, the Articles of
Incorporation of Southwest in effect at the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until otherwise amended or
repealed.
2.2 Bylaws. Pursuant to the Merger, the Bylaws of Southwest in effect
at the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
2.3 Directors. Upon the Effective Time, the directors of West Coast
shall be elected as directors for a term of one year of a subsidiary bank of FNB
having its headquarters in Lee County, Florida and FNB shall cause directors
fees to be paid to such individuals for such term in an amount at least equal to
the higher of the amount currently paid to the directors of the Southwest
Subsidiaries or the amount currently paid to the West Coast directors.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of FNB, Southwest or West Coast, or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
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(a) Each of the Surviving Corporation common shares issued and
outstanding immediately prior to the Effective Time shall remain
outstanding and issued entirely to FNB.
(b) Each share of FNB Capital Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(c) Each of the West Coast Common Shares (excluding shares to
be canceled pursuant to Section 3.3 of the Agreement) issued and
outstanding at the Effective Time shall cease to be outstanding and
shall be converted into the right to receive and exchanged for.794
shares of FNB Common Stock (the "Exchange Ratio").
3.2 Anti-Dilution Provisions. In the event FNB changes the number of
shares of FNB Common Stock issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, recapitalization, reclassification or
similar transaction with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Shares Held by West Coast or FNB. Each of the West Coast Common
Shares held by West Coast or by any FNB Company, in each case other than those
West Coast Common Shares held in a fiduciary capacity or as a result of debts
previously contracted, shall be canceled and retired at the Effective Time and
no consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of West Coast Common Shares exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of FNB Common Stock (after taking into account all certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of FNB Common Stock multiplied
by the "market value" of one share of FNB Common Stock at the Effective Time.
The market value of one share of FNB Common Stock at the Effective Time shall be
the average of the high bid and low asked prices of such common stock in the
over-the-counter market, as reported by Nasdaq (or, if not reported thereby, any
other authoritative source selected by FNB) on the last trading day preceding
the Effective Time. No such holder will be entitled to dividends, voting rights,
or any other rights as a shareholder in respect of any fractional shares.
3.5 Conversion of Stock Options, Warrants, and Other Rights.
(a) At the Effective Time, each award, option, warrant, or other right
to purchase or acquire West Cost Common Shares pursuant to stock awards, stock
options, warrant agreements, or stock appreciation rights ("West Coast Options")
granted by West Coast under the West Coast Stock Plans or otherwise (including,
without limitation, those warrants issued to certain officers and directors of
West Coast), which are outstanding at the Effective Time and as were previously
listed and described in Section 3.5 of the West Coast Disclosure Memorandum,
whether or not vested or exercisable, shall be converted into and become rights
with respect to FNB Common Stock, and FNB shall assume each West Coast Option,
in accordance with the terms of the West Coast Stock Plan and stock option
agreement or warrant agreement by which it is evidenced, except that from and
after the Effective Time, (i) FNB and its Compensation Committee shall be
substituted for West Coast and the committee of West Coast's Board of Directors
(including, if applicable, the entire Board of Directors of West Coast)
administering such West Coast Stock Plan, (ii) each West Coast Option assumed by
FNB may be exercised solely for shares of FNB Common Stock (or cash in the case
of
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stock appreciation rights), (iii) the number of shares of FNB Common Stock
subject to such West Coast Option shall be equal to the number of shares of West
Coast Common Shares subject to such West Coast Option immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise
price (or similar threshold price, in the case of stock awards) under each such
West Coast Option shall be adjusted by dividing the per share exercise (or
threshold) price under each such West Coast Option by the Exchange Ratio and
rounding up to the nearest cent. Notwithstanding the provisions of clause (iii)
of the preceding sentence, FNB shall not be obligated to issue any fraction of a
share of FNB Common Stock upon exercise of West Coast Options and any fraction
of a share of FNB Common Stock that otherwise would be subject to a converted
West Coast Option shall represent the right to receive a cash payment equal to
the product of such fraction and the difference between the "market value" as
defined in Section 3.4 of one share of FNB Common Stock and the per share
exercise price of such right. In addition, notwithstanding the provisions of
clauses (iii) and (iv) of the first sentence of this Section 3.5(a), each West
Coast Option which is an "incentive stock option" shall be adjusted as required
by Section 424 of the Internal Revenue Code, and the regulations promulgated
thereunder, so as not to constitute a modification, extension, or renewal of the
option, within the meaning of Section 424(h) of the Internal Revenue Code. FNB
agrees to take all necessary steps to effectuate the foregoing provisions of
this Section 3.5.
(b) As soon as practicable after the Effective Time, FNB shall deliver
to the participants in each West Coast Stock Plan an appropriate notice setting
forth such participant's rights pursuant thereto and the grants pursuant to such
West Coast Stock Plan shall continue in effect on the same terms and conditions
(subject to the adjustments required by Section 3.5(a) of this Agreement after
giving effect to the Merger), and FNB shall comply with the terms of each West
Coast Stock Plan to ensure, to the extent required by, and subject to the
provisions of, such West Coast Stock Plan, the West Coast Options which
qualified as incentive stock options prior to the Effective Time continue to
qualify as incentive stock options after the Effective Time. At or prior to the
Effective Time, FNB shall take all corporate action necessary to reserve for
issuance sufficient shares of FNB Common Stock for delivery upon exercise of
West Coast Options assumed by FNB in accordance with this Section 3.5. As soon
as practicable after the Effective Time, FNB shall file a registration statement
on Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of FNB Common Stock subject to
such options and shall use its reasonable efforts to maintain the effectiveness
of such registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the Exchange
Act, where applicable, FNB shall administer the West Coast Stock Plan assumed
pursuant to this Section 3.5 in a manner that complies with Rule 16b-3
promulgated under the Exchange Act to the extent the West Coast Stock Plan
complied with such rule prior to the Merger.
(c) All restrictions or limitations on transfer with respect to West
Coast Common Shares awarded under the West Coast Stock Plans, to the extent that
such restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of FNB Common Stock into which
such restricted stock is converted pursuant to Section 3.1 of this Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. At the Effective Time, FNB shall deposit, or
shall cause to be deposited, with the Exchange Agent selected by FNB (the
"Exchange Agent") certificates evidencing shares of FNB
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Common Stock and cash in such amounts necessary to provide all consideration
required to be exchanged by FNB for West Coast Common Shares pursuant to the
terms of this Agreement. Promptly after the Effective Time, FNB shall cause the
Exchange Agent to mail to the former shareholders of West Coast appropriate
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing shares of
West Coast Common Shares shall pass, only upon proper delivery of such
certificates to the Exchange Agent). After the Effective Time, each holder of
shares of West Coast Common Shares (other than shares to be canceled pursuant to
Section 3.3 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall upon surrender thereof promptly receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all declared but undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 4.2 of this Agreement. To
the extent required by Section 3.4 of this Agreement, each holder of West Coast
Common Shares issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares, cash
in lieu of any fractional share of FNB Common Shares to which such holder may be
otherwise entitled (without interest). FNB shall not be obligated to deliver the
consideration to which any former holder of West Coast Common Shares is entitled
as a result of the Merger until such holder surrenders such holder's certificate
or certificates representing the West Coast Common Shares for exchange as
provided in this Section 4.1. The certificate or certificates of West Coast
Common Shares so surrendered shall be duly endorsed as the Exchange Agent may
require. Any other provision of this Agreement notwithstanding, neither FNB nor
the Exchange Agent shall be liable to a holder of West Coast Common Shares for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former West Coast Shareholders. At the Effective Time,
the stock transfer books of West Coast shall be closed as to holders of West
Coast Common Shares immediately prior to the Effective Time and no transfer of
West Coast Common Shares by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1 of this Agreement, each certificate theretofore representing West
Coast Common Shares (other than shares to be canceled pursuant to Section 3.3 of
this Agreement) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Sections 3.1
and 3.4 of this Agreement in exchange therefor, subject, however, to FNB's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which have been declared or made by West Coast
in respect of such West Coast Common Shares in accordance with the terms of this
Agreement and which remain unpaid at the Effective Time. Until 90 days after the
Effective Time, former shareholders of record of West Coast shall be entitled to
vote at any meeting of FNB stockholders the number of shares of FNB Common Stock
into which their respective West Coast Common Shares are converted, regardless
of whether such holders have exchanged their certificates representing West
Coast Common Shares for certificates representing FNB Common Stock in accordance
with the provisions of this Agreement. Whenever a dividend or other distribution
is declared by FNB on the FNB Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to this Agreement, but beginning
30 days after the Effective Time no dividend or other distribution payable to
the holders of record of FNB Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any certificate representing
shares of West Coast Common Shares issued and outstanding at the Effective Time
until such holder surrenders such certificate for exchange as provided in
Section 4.1 of this Agreement. However, upon surrender of such West Coast Common
Shares certificate, both the FNB Common Stock certificate (together with all
such undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate. Any
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portion of the consideration (including the proceeds of any investments thereof)
which had been made available to the Exchange Agent pursuant to Section 4.1 of
this Agreement that remain unclaimed by the shareholders of West Coast for six
months after the Effective Time shall be paid to FNB. Any shareholders of West
Coast who have not theretofore complied with this Article 4 shall thereafter
look only to FNB for payment of their shares of FNB Common Stock, cash in lieu
of fractional shares, and unpaid dividends and distributions on the FNB Common
Stock deliverable in respect of each West Coast Common Share such shareholder
holds as determined pursuant to this Agreement, in each case, without any
interest thereon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF WEST COAST
West Coast hereby represents and warrants to FNB as follows:
5.1 Organization, Standing, and Power. West Coast is a corporation
duly organized, validly existing, and in active status under the laws of the
State of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its material Assets.
West Coast is duly qualified or licensed to transact business as a foreign
corporation and is in good standing in each jurisdiction where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the West Coast and its Subsidiaries
taken as a whole.
5.2 Authority; No Breach by Agreement.
(a) West Coast has the corporate power and authority necessary to
execute and deliver this Agreement, and, subject to the approval and adoption of
this Agreement by the shareholders of West Coast, to perform its obligations
under this Agreement and consummate the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement by West Coast and the
consummation by West Coast of the transactions contemplated herein, including
the Merger, have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of West Coast, subject to the approval of
this Agreement by its shareholders as contemplated by Section 8.1 hereof.
Subject to such requisite shareholder approval (and assuming due authorization,
execution, and delivery by FNB and Surviving Corporation), this Agreement
represents a legal, valid, and binding obligation of West Coast, enforceable
against West Coast in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought). The affirmative vote
of the holders of a majority of the outstanding West Coast Common Shares is the
only shareholder vote necessary to approve this Agreement and the transactions
contemplated hereby. The West Coast Board of Directors has received from Advest,
Inc. a letter dated as of the date of this Agreement to the effect that, in the
opinion of such firm, the Exchange Ratio is fair, from a financial point of
view, to the holders of West Coast Common Shares.
(b) Except as disclosed in Section 5.2(b) of the West Coast Disclosure
Memorandum, neither the execution and delivery of this Agreement by West Coast,
nor the consummation by West Coast of the transactions contemplated hereby, nor
compliance by West Coast with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of West Coast's Articles of
Incorporation or Bylaws,
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or, (ii) constitute or result in a default under, or result in the creation of
any Lien on any material Asset of any West Coast Company under, or require any
consent pursuant to, any Contract or Permit of any West Coast Company, where
such default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
West Coast and its Subsidiaries taken as a whole, or, (iii) subject to receipt
of the requisite Consents referred to in Sections 9.1(a), (b) and (c) of this
Agreement, violate any Order or, to its knowledge, any law applicable to any
West Coast Company or any of their respective material Assets which will have a
Material Adverse Effect on West Coast and its Subsidiaries taken as a whole.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the Nasdaq, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Small Business Administration,
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act, and other than
Consents, filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on West Coast and its Subsidiaries, taken as a whole; no notice to,
filing with, or Consent of, any public body or authority is necessary for the
consummation by West Coast of the Merger and the other transactions contemplated
in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of West Coast consists of (i)
7,500,000 West Coast Common Shares, of which 1,544,466 shares are issued and
outstanding as of the date of this Agreement and not more than 1,718,691 shares
will be issued and outstanding at the Effective Time, and (ii) 2,500,000
preferred shares, par value $1.00 per share, none of which is issued and
outstanding. All of the issued and outstanding West Coast Common Shares are duly
and validly issued and outstanding and are fully paid and nonassessable under
the FBCA. None of the outstanding West Coast Common Shares has been issued in
violation of any preemptive rights. West Coast has reserved 239,700 West Coast
Common Shares for issuance under the West Coast Stock Plans, pursuant to which
options and warrants to purchase not more than 174,225 West Coast Common Shares
are outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement, or as
provided pursuant to the Stock Option Agreement, there are no shares of capital
stock or other equity securities of West Coast outstanding and no outstanding
Rights relating to the capital stock of West Coast.
5.4 West Coast Subsidiaries. Except as disclosed in Section 5.4 of the
West Coast Disclosure Memorandum, the list of Subsidiaries of West Coast filed
by West Coast with its most recent West Coast SEC Report on Form 10-KSB is a
true and complete list of all of the West Coast Subsidiaries as of the date of
this Agreement. Except as disclosed in Section 5.4 of the West Coast Disclosure
Memorandum, West Coast or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each West Coast Subsidiary. No equity
securities of any West Coast Subsidiary are or may become required to be issued
(other than to another West Coast Company) by reason of any Rights, and there
are no Contracts by which any West Coast Subsidiary is bound to issue (other
than to another West Coast Company) additional shares of its capital stock or
Rights or by which any West Coast Company is or may be bound to transfer any
shares of the capital stock of any West Coast Subsidiary (other than to another
West Coast Company). There are no Contracts relating to the rights of any West
Coast Company to vote or to dispose of any shares of the capital stock of any
West Coast Subsidiary. All of the shares of capital stock of each West Coast
Subsidiary held by a West Coast Company are fully paid and nonassessable under
the applicable corporation Law of the jurisdiction in
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which such Subsidiary is incorporated or organized (except, in the case of
Subsidiaries that are national banks, for the assessment contemplated by 12
U.S.C. ss. 55), and are owned by the West Coast Company free and clear of any
Lien. Each West Coast Subsidiary is either a bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under the
Laws of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each West Coast Subsidiary
is duly qualified or licensed to transact business as a foreign corporation and
is in good standing in each jurisdiction where the character of its Assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on West Coast and its Subsidiaries taken as a whole.
Each West Coast Subsidiary that is a depository institution is an "insured
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and the deposits in which are insured by the Bank
Insurance Fund.
5.5 SEC Filings; Financial Statements.
(a) West Coast has filed or will file and has made or will make
available to FNB all forms, reports, and documents required to be filed by West
Coast with the SEC since January 1, 1993 (collectively, the "West Coast SEC
Reports"). The West Coast SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the 1933 Act and the 1934
Act, as the case may be, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such West Coast SEC Reports or
necessary in order to make the statements in such West Coast SEC Reports, in
light of the circumstances under which they were made, not misleading (except
any statement or omission therein which has been corrected or otherwise
disclosed or updated in a subsequent West Coast SEC Report). Except for West
Coast Subsidiaries that are registered as a broker, dealer or investment
advisor, none of West Coast's Subsidiaries is required to file any forms,
reports, or other documents with the SEC. West Coast has made available to FNB a
copy of the balance sheets and the related consolidated statements of income,
consolidated statement of changes in shareholders' equity (including related
notes and schedules) of its subsidiary banks as of and for the three year period
ended December 31, 1995 and consolidated statements or earnings releases for
West Coast and its consolidated subsidiaries as of and for the three year period
ended December 31, 1995 and subsequent interim periods that have been prepared
by or for West Coast as of the date of this Agreement.
(b) Each of the West Coast Financial Statements (including, in each
case, any related notes) contained in any West Coast SEC Report on Form 10-QSB
or Form 10-KSB, including any West Coast SEC Report on Form 10-QSB or Form
10-KSB filed after the date of this Agreement until the Effective Time, are or
will be prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated therein or in the
notes to such financial statements, or, in the case of unaudited statements, as
permitted by Form 10-QSB of the SEC), and present or will present fairly the
consolidated financial position of West Coast and its Subsidiaries at the
respective dates and the consolidated results of its operations and cash flows
at and for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount, and except for the
absence of certain footnote information in the unaudited statements.
5.6 Absence of Certain Changes or Events. Except as disclosed in
Section 5.6 of the West Coast Disclosure Memorandum and except as set forth in
West Coast SEC Reports filed prior to the date of this
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Agreement, since June 30, 1996, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on West Coast and its Subsidiaries
taken as a whole, and (ii) the West Coast Companies have not taken any action,
or failed to take any action, prior to the date of this Agreement, which action
or failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of West
Coast provided in Article 7 of this Agreement.
5.7 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of any of the
West Coast Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
September 30, 1996, except to the extent that all such failures to file, taken
together, are not reasonably likely to have a Material Adverse Effect on West
Coast, and to the Knowledge of West Coast, all Tax Returns filed are complete
and accurate in all material respects. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a Material Adverse Effect on West
Coast and its Subsidiaries taken as a whole, except as reserved against in the
West Coast Financial Statements delivered prior to the date of this Agreement or
as disclosed in Section 5.7 of the West Coast Disclosure Memorandum. All Taxes
and other liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid, accrued or provided for as disclosed in
Section 5.7 of the West Coast Disclosure Memorandum.
(b) Except as disclosed in Section 5.7 of the West Coast Disclosure
Memorandum, none of the West Coast Companies has executed an extension or waiver
of any statute of limitations on the assessment or collection of any material
Tax due that is currently in effect.
(c) Except as disclosed in Section 5.7 of the West Coast Disclosure
Memorandum, adequate provision for any Taxes due or to become due for any of the
West Coast Companies for the period or periods through and including the date of
the respective West Coast Financial Statements has been made and is reflected on
such West Coast Financial Statements.
(d) Deferred Taxes of the West Coast Companies and related valuation
allowance have been adequately provided for in the West Coast Financial
Statements in accordance with GAAP.
(e) To the knowledge of West Coast, each of the West Coast Companies is
in compliance with, and its records contain all information and documents
(including properly completed Internal Revenue Service Forms W-9) necessary to
comply with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code, except for such instances of noncompliance and
such omissions as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on West Coast and its Subsidiaries taken as
a whole.
(f) There are no Liens with respect to Taxes upon any of the assets of
the West Coast Companies except for loans on the Subsidiaries' books generated
in the normal course of business.
(g) No West Coast Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporation.
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(h) All material elections with respect to Taxes affecting the West
Coast Companies as of the date of this Agreement have been or will be timely
made as set forth in Section 5.7 of the West Coast Disclosure Memorandum. After
the date hereof, other than as set forth in Section 5.7 of the West Coast
Disclosure Memorandum, no election with respect to Taxes will be made without
the prior written consent of FNB, which consent will not be unreasonably
withheld.
5.8 Assets. Except as disclosed in Section 5.8 of the West Coast
Disclosure Memorandum, the West Coast Companies have good and marketable title,
free and clear of all Liens (except for those Liens which are not likely to have
a Material Adverse Effect on West Coast or its Subsidiaries taken as a whole),
to all of their respective material Assets, reflected in West Coast Financial
Statements as being owned by West Coast as of the date hereof. All material
tangible properties used in the businesses of the West Coast Companies are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with West Coast's past practices. All
Assets which are material to West Coast's business on a consolidated basis, held
under leases or subleases by any of the West Coast Companies, are held under
valid Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The West Coast Companies currently
maintain insurance in amounts, scope, and coverage as disclosed in Section 5.8
of the West Coast Disclosure Memorandum. None of the West Coast Companies has
received written notice from any insurance carrier that (i) such insurance will
be canceled or that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. Except as disclosed in Section 5.8 of the West Coast Disclosure
Memorandum, to the Knowledge of West Coast there are presently no occurrences
giving rise to a claim under such policies of insurance and no notices have been
given by any West Coast Company under such policies.
5.9 Environmental Matters.
(a) To the Knowledge of West Coast, except as disclosed in Section 5.9
of the West Coast Disclosure Memorandum, each West Coast Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, a Material Adverse Effect on West Coast and its
Subsidiaries taken as a whole.
(b) Except as disclosed in Section 5.9 of the West Coast Disclosure
Memorandum, to the Knowledge of West Coast, there is no Litigation pending or
threatened before any court, governmental agency, or authority or other forum in
which any West Coast Company or any of its Loan Properties or Participation
Facilities has been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, or involving any of its Loan Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on West Coast and its Subsidiaries taken as a whole.
(c) To the Knowledge of West Coast, except as disclosed in Section 5.9
of the West Coast Disclosure Memorandum, there is no reasonable basis for any
Litigation of a type described above in Section 5.9(b), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on West Coast and its Subsidiaries taken as a whole.
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(d) To the Knowledge of West Coast, except as disclosed in Section 5.9
of the West Coast Disclosure Memorandum, during the period of (i) West Coast's
or any of its Subsidiaries' ownership or operation of any of their respective
properties, (ii) West Coast's or any of its Subsidiaries' participation in the
management of any Participation Facility, or (iii) West Coast's or any of its
Subsidiaries' holding a security interest in a Loan Property, to the Knowledge
of West Coast there have been no releases of Hazardous Material in, on, under,
or affecting any Participation Facility or Loan Property of a West Coast
Company, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on West Coast and its Subsidiaries
taken as a whole.
5.10 Compliance With Laws. West Coast is duly registered as a bank
holding company under the BHC Act. Each West Coast Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on West Coast and its Subsidiaries taken as a whole.
None of the West Coast Companies is presently in default under any such Permit,
other than defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on West Coast and its Subsidiaries
taken as a whole. Except as disclosed in Section 5.10 of the West Coast
Disclosure Memorandum, none of the West Coast Companies:
(a) to the Knowledge of West Coast is in violation of any Laws
or Orders, applicable to its business or employees conducting its
business, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
West Coast and its Subsidiaries taken as a whole; and
(b) has received any written notification or communication
from any agency or department of federal, state, or local government or
any Regulatory Authority or the staff thereof (i) asserting that any
West Coast Company is not in substantial compliance with any of the
Laws or Orders which such governmental authority or Regulatory
Authority enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
West Coast and its Subsidiaries taken as a whole, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to
have, a Material Adverse Effect on West Coast and its Subsidiaries
taken as a whole, or (iii) requiring any West Coast Company to enter
into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, or to
adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or
the payment of dividends.
5.11 Labor Relations. No West Coast Company is the subject of any
Litigation asserting that it or any other West Coast Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other West Coast Company to
bargain with any labor organization as to wages or conditions of employment, nor
is there any strike or other labor dispute involving any West Coast Company,
pending or to the Knowledge of West Coast threatened, nor is there any activity
involving any West Coast Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.12 Employee Benefit Plans.
(a) West Coast has disclosed in Section 5.12 of the West Coast
Disclosure Memorandum, and has delivered or made available to FNB prior to the
execution of this Agreement copies or summaries in each
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case of, all material pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
bonus, or other incentive plan, all other written employee programs,
arrangements, or agreements, all medical, vision, dental, or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" (as that term is defined in Section
3(3) of ERISA), currently adopted, maintained by, sponsored in whole or in part
by, or contributed to by West Coast or any of its Subsidiaries for the benefit
of employees, retirees, dependents, spouses, directors, independent contractors,
or other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "West Coast Benefit Plans"). Any of the West
Coast Benefit Plans which is an "employee pension benefit plan" (as that term is
defined in Section 3(2) of ERISA) is referred to herein as a "West Coast ERISA
Plan." No West Coast Benefit Plan is or has been a multi-employer plan within
the meaning of Section 3(37) of ERISA.
(b) Except as disclosed in the West Coast Disclosure Memorandum, all
West Coast Benefit Plans are in compliance in all material respects with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on West Coast and
its Subsidiaries on a consolidated basis.
(c) Except as disclosed in the West Coast Disclosure Memorandum, no
West Coast ERISA Plan which is a "defined benefit pension plan" (as defined in
Section 4140 of the Internal Revenue Code) has any "unfunded current liability"
(as that term is defined in Section 302(d)(8)(A) of ERISA) and the present fair
market value of the assets of any such plan exceeds the plan's "benefit
liabilities" (as that term is defined in Section 4001(a)(16) of ERISA) when
determined under actuarial factors that would apply if the plan terminated in
accordance with all applicable legal requirements.
(d) Except as disclosed in the West Coast Disclosure Memorandum or
otherwise provided by this Agreement, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, or otherwise) becoming due to any director or
any employee of West Coast or any of its Subsidiaries from West Coast or any of
its Subsidiaries under any West Coast Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any West Coast Benefit Plan or (iii) result
in any acceleration of the time of payment or vesting of any such benefits,
where such payment, increase, or acceleration is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on West Coast and
its Subsidiaries on a consolidated basis.
5.13 Material Contracts. Except as disclosed in Section 5.13 of the
West Coast Disclosure Memorandum, none of the West Coast Companies is a party to
or subject to the following: (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $100,000, (ii) any Contract relating to
the borrowing of money by any West Coast Company or the guarantee by any West
Coast Company of any such obligation exceeding $100,000 (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables, and Contracts relating to borrowings
or guarantees made in the ordinary course of business), and (iii) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-KSB filed by West Coast with the SEC as of the date of this
Agreement that has not been filed as an exhibit in an West Coast SEC Report, or
in another SEC Document (together with all Contracts referred to in Sections 5.8
and 5.12(a) of this Agreement, the "West Coast Contracts"). With respect to each
West Coast Contract and except as disclosed in Section 5.13 of the West Coast
Disclosure Memorandum: (i) each West
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Coast Contract is in full force and effect; (ii) no West Coast Company is in
default thereunder, other than defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on West Coast; (iii)
no West Coast Company has repudiated or waived any material provision of any
such West Coast Contract; and (iv) no other party to any such Contract is, to
the Knowledge of West Coast, in default in any material respect, other than
defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on West Coast and its Subsidiaries taken as
a whole, or has repudiated or waived any material provision thereunder. Except
for Federal Home Loan Bank advances, all of the indebtedness of any West Coast
Company for money borrowed is prepayable at any time by such West Coast Company
without penalty or premium.
5.14 Legal Proceedings. Except as disclosed in Section 5.14 of the
West Coast Disclosure Memorandum, there is no Litigation instituted or pending,
or, to the Knowledge of West Coast, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any West Coast Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on West Coast, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any West Coast Company, that are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on West Coast. Section 5.14 of the West
Coast Disclosure Memorandum includes a summary report of all Litigation as of
the date of this Agreement to which any West Coast Company is a party and which
names a West Coast Company as a defendant or cross-defendant and where the
estimated maximum exposure is $25,000 or more.
5.15 Reports. Since January 1, 1996, each West Coast Company has
timely filed all reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file, which failure to
file or amend is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on West Coast and its Subsidiaries taken as a whole,
with any Regulatory Authorities. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws
enforced or promulgated by the SEC. As of its respective date, no such report or
document contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading which is reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on West Coast and its Subsidiaries taken as a whole.
5.16 Statements True and Correct. None of the information supplied or
to be supplied by any West Coast Company or any Affiliate thereof for inclusion
in the Registration Statement to be filed by FNB with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any West Coast Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to West Coast's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by a West Coast
Company or any Affiliate thereof with the SEC or any other Regulatory Authority
in connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of West Coast, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier
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communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that any West Coast Company or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
5.17 Accounting, Tax and Regulatory Matters. To the Knowledge of West
Coast, neither West Coast nor any Affiliate thereof has taken or agreed to take
any action which would, or has any Knowledge of any fact or circumstance that is
reasonably likely to (i) prevent the transactions contemplated hereby, including
the Merger, from qualifying for pooling-of-interests accounting treatment or as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
5.18 State Takeover Laws. Each West Coast Company has taken all
necessary action to exempt the transactions contemplated by this Agreement from
the provisions of Sections 607.0901 through 607.0903, inclusive, of the FBCA
(collectively, "Takeover Laws").
5.19 Articles of Incorporation Provisions. Each West Coast Company has
taken all action so that the entering into this Agreement and the consummation
of the Merger and the other transactions contemplated by this Agreement do not
and will not result in any super-majority voting requirement or the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of any West Coast Company or restrict or impair the
ability of FNB or any of its Subsidiaries to vote, or otherwise to exercise the
rights of a shareholder with respect to, shares of any West Coast Company that
may be directly or indirectly acquired or controlled by it.
5.20 Derivatives Contracts. Except as disclosed in Section 5.20 of the
West Coast Disclosure Memorandum, neither West Coast nor any of its Subsidiaries
is a party to or has agreed to enter into an exchange-traded or over-the-counter
swap, forward, future, option, cap, floor, or collar financial contract, or any
other interest rate or foreign currency protection contract not included on its
balance sheet which is a financial derivative contract (including various
combinations thereof) (each a "Derivatives Contract"), except for those
Derivatives Contracts set forth in Section 5.20 of the West Coast Disclosure
Memorandum.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF FNB AND SOUTHWEST
FNB and Southwest hereby represent and warrant to West Coast as
follows:
6.1 Organization, Standing, and Power.
(a) FNB is a corporation duly organized, validly existing, and in good
standing under the Laws of the Commonwealth of Pennsylvania, and has the
corporate power and authority to carry on its business as now conducted and to
own, lease, and operate its material Assets. FNB is duly qualified or licensed
to transact business as a foreign corporation in good standing in the States of
the United States and foreign jurisdictions where the character of its Assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on FNB.
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(b) Southwest is a corporation duly organized, validly existing, and in
active status under the Laws of the State of Florida, and has the corporate
power and authority to carry on its business as now conducted and to own, lease,
and operate its material Assets. Southwest is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Southwest.
6.2 Authority; No Breach By Agreement.
(a) Each of FNB and Southwest has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of FNB and
Southwest. This Agreement represents a legal, valid, and binding obligation of
FNB and Southwest, enforceable against FNB and Southwest in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by FNB or
Southwest, nor the consummation by FNB or Southwest of the transactions
contemplated hereby, nor compliance by FNB or Southwest with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of FNB's Articles of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any FNB Company or Southwest under, any Contract or
Permit of any FNB Company or Southwest, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB or Southwest, or, (iii) subject
to receipt of the requisite Consents referred to in Section 9.1(b) of this
Agreement, violate any Law or Order applicable to any FNB Company or Southwest
or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
Nasdaq, and other than Consents required from Regulatory Authorities, and other
than notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any employee benefit plans, or
under the HSR Act, and other than Consents, filings, or notifications which, if
not obtained or made, are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB and Southwest, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by FNB and Southwest of the Merger and the other transactions
contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of FNB consists of
100,000,000 shares of FNB Common Stock, of which 9,233,377 shares were issued
and outstanding as of the date of this Agreement and (ii) 20,000,000 shares of
FNB Preferred Stock, of which 398,368 shares were issued and outstanding as of
September 30, 1996. All of the issued and outstanding shares of FNB Capital
Stock are, and all of the FNB Common Stock to be issued in exchange for West
Coast Common Shares upon consummation of the Merger will be authorized and
reserved for issuance prior to the Effective Time and, when issued in accordance
with the terms of this Agreement, will be, duly and validly issued and
outstanding and fully paid and nonassessable
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under the PBCL. None of the outstanding shares of FNB Capital Stock has been,
and none of the shares of FNB Common Stock to be issued in exchange for shares
of West Coast Common Shares upon consummation of the Merger will be, issued in
violation of any preemptive rights of the current or past shareholders of FNB.
6.4 FNB Subsidiaries. Except as disclosed in Section 6.4 of the FNB
Disclosure Memorandum, the list of Subsidiaries of FNB filed by FNB with its
most recent FNB Report on Form 10-K is a true and complete list of all of the
FNB Subsidiaries as of the date of this Agreement. Except as disclosed in
Section 6.4 of the FNB Disclosure Memorandum, FNB or one of its Subsidiaries
owns all of the issued and outstanding shares of capital stock of each FNB
Subsidiary. No equity securities of any FNB Subsidiary are or may become
required to be issued (other than to another FNB Company) by reason of any
Rights, and there are no Contracts by which any FNB Subsidiary is bound to issue
(other than to another FNB Company) additional shares of its capital stock or
Rights or by which any FNB Company is or may be bound to transfer any shares of
the capital stock of any FNB Subsidiary (other than to another FNB Company).
There are no Contracts relating to the rights of any FNB Company to vote or to
dispose of any shares of the capital stock of any FNB Subsidiary. All of the
shares of capital stock of each FNB Subsidiary held by a FNB Company are fully
paid and nonassessable under the applicable corporation Law of the jurisdiction
in which such Subsidiary is incorporated or organized (except, in the case of
Subsidiaries that are national banks, for the assessment contemplated by 12
U.S.C. ss. 55), and are owned by the FNB Company free and clear of any Lien.
Each FNB Subsidiary is either a bank or a corporation, and is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each FNB Subsidiary is duly qualified
or licensed to transact business as a foreign corporation and is in good
standing in each jurisdiction where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNB and its Subsidiaries taken as a whole. Each FNB Subsidiary that is
a depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or the Savings Association
Insurance Fund.
6.5 SEC Filings; Financial Statements.
(a) FNB has filed and made available to West Coast all forms, reports,
and documents required to be filed by FNB with the SEC since January 1, 1993,
(collectively, the "FNB SEC Reports"). The FNB SEC Reports (i) at the time
filed, complied in all material respects with the applicable requirements of the
1933 Act and the 1934 Act, as the case may be, and (ii) did not at the time they
were filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such FNB
SEC Reports or necessary in order to make the statements in such FNB SEC
Reports, in light of the circumstances under which they were made, not
misleading. Except for FNB Subsidiaries that are registered as brokers, dealers,
investment advisers, or associated persons thereof, none of the FNB Subsidiaries
is required to file any forms, reports or other documents with the SEC.
(b) Each of the FNB Financial Statements (including, in each case, any
related notes) contained in the FNB SEC Reports, including any FNB SEC Reports
filed after the date of this Agreement until the Effective Time, complied as to
form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements
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or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC),
and fairly presented the consolidated financial position of FNB and its
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount.
6.6 Absence of Certain Changes or Events. Since June 30, 1996, except
as disclosed in the FNB Financial Statements delivered prior to the date of this
Agreement, (i) there have been no events, changes or occurrences which have had,
or are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FNB, and (ii) the FNB Companies have not taken any action, or
failed to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result in
a material breach or violation of any of the covenants and agreements of FNB
provided in Articles 7 or 8 of this Agreement.
6.7 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of any of the
FNB Companies have been timely filed or requests for extensions have been timely
filed, granted, and have not expired for periods ended on or before December 31,
1995, and on or before the date of the most recent fiscal year end immediately
preceding the Effective Time, except to the extent that all such failures to
file, taken together, are not reasonably likely to have a Material Adverse
Effect on FNB, and all Tax Returns filed are complete and accurate in all
material respects. All Taxes shown on filed Tax Returns have been paid. There is
no audit examination, deficiency, or refund Litigation with respect to any Taxes
that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on FNB, except as
reserved against in the FNB Financial Statements delivered prior to the date of
this Agreement. All Taxes and other liabilities due with respect to completed
and settled examinations or concluded Litigation have been paid.
(b) Adequate provision for any Taxes due or to become due for any of
the FNB Companies for the period or periods through and including the date of
the respective FNB Financial Statements has been made and is reflected on such
FNB Financial Statements.
(c) Deferred Taxes of the FNB Companies have been adequately provided
for in the FNB Financial Statements.
(d) To the Knowledge of FNB, each of the FNB Companies is in compliance
with, and its records contain all information and documents (including properly
completed Internal Revenue Service Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code, except for such instances of noncompliance and such omissions as
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FNB.
6.8 Compliance With Laws. FNB is duly registered as a bank holding
company under the BHC Act. Each FNB Company has in effect all Permits necessary
for it to own, lease, or operate its material Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNB. None of the FNB Companies is presently in Default under or in
violation of any such Permit, other than Defaults which are not
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reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNB. No FNB Company:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any FNB
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB, or
(iii) requiring any FNB Company to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any board
resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management or the payment
of dividends.
6.9 Assets. Except as disclosed in Section 6.9 of the FNB Disclosure
Memorandum, the FNB Companies have good and marketable title, free and clear of
all Liens (except for those Liens which are not likely to have a Material
Adverse Effect on FNB or its Subsidiaries taken as a whole), to all of their
respective material Assets, reflected in FNB Financial Statements as being owned
by FNB as of the date hereof. All material tangible properties used in the
businesses of the FNB Companies are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
FNB's past practices. All Assets which are material to FNB's business on a
consolidated basis, held under leases or subleases by any of the FNB Companies,
are held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The FNB Companies currently maintain
insurance in amounts, scope, and coverage as disclosed in Section 6.9 of the FNB
Disclosure Memorandum. None of the FNB Companies has received written notice
from any insurance carrier that (i) such insurance will be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. Except as
disclosed in Section 6.9 of the FNB Disclosure Memorandum, to the Knowledge of
FNB there are presently no occurrences giving rise to a claim under such
policies of insurance and no notices have been given by any FNB Company under
such policies.
6.10 Legal Proceedings. Except as disclosed in Section 6.10 of the FNB
Disclosure Memorandum, there is no Litigation instituted or pending, or, to the
Knowledge of FNB, threatened (or unasserted but considered probable of assertion
and which if asserted would have at least a reasonable probability of an
unfavorable outcome) against any FNB Company, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any FNB Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB.
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6.11 Reports. Since January 1, 1996, or the date of organization if
later, each FNB Company has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was required to
file with Regulatory Authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB). As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such report and
document did not, in all material respects, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.12 Statements True and Correct. None of the information supplied or
to be supplied by any FNB Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by FNB with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any FNB Company or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to West Coast's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by any FNB Company or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of West Coast, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the Shareholders' Meeting. All
documents that any FNB Company or any Affiliate thereof is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
6.13 Accounting, Tax and Regulatory Matters. No FNB Company or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or result
in the imposition of a condition or restriction of the type referred to in the
last sentence of such Section.
6.14 Environmental Matters.
(a) To the Knowledge of FNB, except as disclosed in Section 6.14 of the
FNB Disclosure Memorandum, each FNB Company, its Participation Facilities, and
its Loan Properties are, and have been, in compliance with all Environmental
Laws, except for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB.
(b) Except as disclosed in Section 6.14 of the FNB Disclosure
Memorandum, there is no Litigation pending, or, to the Knowledge of FNB,
threatened before any court, governmental agency, or authority or other forum in
which any FNB Company or any of its Loan Properties or Participation Facilities
(or any FNB Company in respect of any such Loan Property or Participation
Facility) has been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into
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the environment of any Hazardous Material, whether or not occurring at, on,
under, or involving any of its Loan Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on FNB.
(c) To the Knowledge of FNB, except as disclosed in Section 6.14 of the
FNB Disclosure Memorandum, there is no reasonable basis for any Litigation of a
type described above in Section 6.14(b), except such as is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on FNB.
(d) To the Knowledge of FNB, except as disclosed in Section 6.14 of the
FNB Disclosure Memorandum, during the period of (i) FNB's or any of its
Subsidiaries' ownership or operation of any of their respective properties, (ii)
FNB's or any of its Subsidiaries' participation in the management of any
Participation Facility, or (iii) FNB's or any of its Subsidiaries' holding a
security interest in a Loan Property, to the Knowledge of FNB there have been no
releases of Hazardous Material in, on, under, or affecting any Participation
Facility or Loan Property of a FNB Company, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
FNB.
6.15 Derivatives Contracts. Neither FNB nor any of its Subsidiaries is
a party to or has agreed to enter into a Derivatives Contract, except for those
Derivatives Contracts set forth in Section 6.15 of the FNB Disclosure
Memorandum.
6.16 Outstanding West Coast Shares. As of the date of this Agreement,
FNB beneficially owns for its own account (not including those held in a
fiduciary or trust capacity for, or on behalf of, unaffiliated third parties)
35,000 West Coast Common Shares. During the term of this Agreement, no FNB
Company shall purchase or otherwise acquire beneficial ownership of any
additional West Coast Common Shares except pursuant to the terms of this
Agreement.
6.17 Material Contracts. All material Contracts to which FNB is a party
and which are required to be filed as exhibits to FNB SEC Reports have been so
filed.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of West Coast. Unless the prior written
consent of FNB shall have been obtained, and except as otherwise expressly
contemplated herein, West Coast shall and shall cause each of its Subsidiaries
to (i) operate its business only in the usual, regular, and ordinary course,
(ii) use its reasonable best efforts to preserve intact its business
organization and Assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would adversely affect the ability of any Party to obtain any
Consents of Regulatory Authorities required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentence of Section 9.1(b) of this Agreement.
7.2 Negative Covenants of West Coast. Except as described in Section
7.2 of the West Coast Disclosure Memorandum, from the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
West Coast covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written
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consent of the chief executive officer, president, chief financial officer, or
any executive vice president of FNB:
(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any West Coast Company or, except as expressly
contemplated by this Agreement; or
(b) make any new loan or other extension of credit to any
Person (except those who receive a commitment for a loan or extension
of credit prior to the date of this Agreement) in excess of $100,000
(except for loans secured by a owner occupied real property first
mortgage or single or 1-4 family residential loan properly margined or
secured by liquid assets each of which is less than $500,000);
provided, however, that FNB or its designate shall make every
reasonable effort to respond to West Coast's request for loan approval
in a timely manner and, under normal circumstances, make a decision
within three business days; or
(c) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a West Coast Company to
another West Coast Company) in excess of an aggregate of $100,000 (for
the West Coast Companies on a consolidated basis) except in the
ordinary course of the business of West Coast Subsidiaries consistent
with past practices (it being understood and agreed that the incurrence
of indebtedness in the ordinary course of business shall include,
without limitation, creation of deposit liabilities (except brokered
deposits), purchases of federal funds, sales of certificates of
deposit, advances from the Federal Reserve Bank or Federal Home Loan
Bank, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the imposition,
on any Asset of any West Coast Company of any Lien or permit any such
Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction of
legal requirements in the exercise of trust powers, and Liens in effect
as of the date hereof that are disclosed in the West Coast Disclosure
Memorandum); or
(d) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any West Coast
Company, or declare or pay any dividend or make any other distribution
in respect of West Coast's capital stock (except for (i) regular
quarterly dividends paid in accordance with Section 8.6 of this
Agreement, (ii) dividends paid by any West Coast Subsidiary, and (iii)
acquisition of West Coast Common Shares by any West Coast Subsidiary in
a fiduciary or trust capacity in the ordinary course of business; or
(e) except for this Agreement, or pursuant to the Stock Option
Agreement or pursuant to the exercise of stock options outstanding as
of the date hereof and pursuant to the terms thereof in existence on
the date hereof, or as disclosed in Section 7.2(e) of the West Coast
Disclosure Memorandum, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber,
or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of West Coast Common Shares or any
other capital stock of any West Coast Company, or any stock
appreciation rights, or any option, warrant, conversion, or other right
to acquire any such stock, or any security convertible into any such
stock; or
(f) adjust, split, combine, or reclassify any capital stock of
any West Coast Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of West Coast
Common Shares, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber (i)
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any shares of capital stock of any West Coast Subsidiary
(unless any such shares of stock are sold or otherwise transferred to
another West Coast Company) or (ii) any Asset other than in the
ordinary course of business for reasonable and adequate consideration;
or
(g) except for purchases of United States Treasury securities
or United States Government agency securities, which in either case
have maturities of five years or less, purchase any securities or make
any material investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any Assets,
in any Person other than a wholly owned West Coast Subsidiary, or
otherwise acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the ordinary course of
business, (ii) acquisitions of control by a depository institution
Subsidiary in its fiduciary capacity, or (iii) the creation of new
wholly owned Subsidiaries organized to conduct or continue activities
otherwise permitted by this Agreement; or
(h) grant any increase in compensation or benefits to the
employees or officers of any West Coast Company, except in accordance
with past practice disclosed in Section 7.2(h) of the West Coast
Disclosure Memorandum or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies or
written contracts in effect on the date of this Agreement or as
otherwise disclosed in Section 7.2(h) of the West Coast Disclosure
Memorandum; enter into or amend any severance agreements with officers
of any West Coast Company; grant any material increase in fees or other
increases in compensation or other benefits to directors of any West
Coast Company except in accordance with past practice disclosed in
Section 7.2(h) of the West Coast Disclosure Memorandum; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits; or
(i) except as described in Section 7.2(i) of the West Coast
Disclosure Memorandum and except for Employment Agreements that may be
entered into pursuant to Section 8.16 of this Agreement, enter into or
amend any employment Contract between any West Coast Company and any
Person (unless such amendment is required by Law) that the West Coast
Company does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered), at any
time on or after the Effective Time; or
(j) except as disclosed in Section 7.2(j) of the West Coast
Disclosure Memorandum, adopt any new employee benefit plan of any West
Coast Company or make any material change in or to any existing
employee benefit plans of any West Coast Company other than any such
change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan; or
(k) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(l) except as disclosed in Section 7.2(l) of the West Coast
Disclosure Memorandum, commence any Litigation other than in accordance
with past practice or settle any Litigation involving any liability of
any West Coast Company for material money damages or restrictions upon
the operations of any West Coast Company; or
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(m) except in the ordinary course of business, modify, amend,
or terminate any material Contract other than renewals without a
material adverse change of terms, or waive, release, compromise, or
assign any material rights or claims; or
(n) except for transactions in the ordinary course of business
consistent with past practice, make any investment in excess of
$100,000 either by purchase of stock or securities, contributions to
capital, property transfers, or purchase of any property or assets of
any other individual, corporation or other entity, other than a wholly
owned Subsidiary thereof, except as disclosed in Section 7.2 of the
West Coast Disclosure Memorandum; or
(o) sell, transfer, mortgage, encumber or otherwise dispose of
any of its properties or assets to any individual, corporation or other
entity other than a direct or indirect wholly owned Subsidiary, or
cancel, release or assign any indebtedness to any such Person or any
claims held by any such Person, except in the ordinary course of
business consistent with past practice or pursuant to contracts or
agreements in force at the date of this Agreement; or
(p) agree to, or make any commitment to, take any of the
actions prohibited by this Section 7.2.
7.3 Covenants of FNB. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, FNB
covenants and agrees that it shall (i) continue to conduct its business and the
business of its Subsidiaries in a manner designed in its reasonable judgment, to
enhance the long-term value of the FNB Common Stock and the business prospects
of the FNB Companies, and (ii) take no action which would (a) materially
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b) of
this Agreement, or (b) materially adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement; provided, that the
foregoing shall not prevent any FNB Company from discontinuing or disposing of
any of its Assets or business if such action is, in the judgment of FNB,
desirable in the conduct of the business of FNB and its Subsidiaries. FNB
further covenants and agrees that it will not, without the prior written consent
of the Chief Executive Officer of West Coast, which consent shall not be
unreasonably withheld, amend the Articles of Incorporation or Bylaws of FNB, in
each case in any manner adverse to the holders of West Coast Common Shares.
7.4 Adverse Changes In Condition. Except as disclosed in Section 7.4
of the West Coast Disclosure Schedule, each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.5 Reports. Each Party and their respective Subsidiaries shall file
all reports required to be filed by each of them with Regulatory Authorities
between the date of this Agreement and the Effective Time and shall deliver to
the other Party copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material and except for the absence of certain footnote information in the
unaudited
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financial statements). As of their respective dates, such reports filed with the
SEC will comply in all material respects with the Securities Laws and will not
contain any untrue statement of a material fact or omit to state a 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. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval. As
soon as practicable after execution of this Agreement (in no event, later than
January 31, 1997), FNB shall file the Registration Statement with the SEC, and
shall use its reasonable efforts to cause the Registration Statement to become
effective under the 1933 Act and take any action required to be taken under the
applicable state blue sky or securities Laws in connection with the issuance of
the shares of FNB Common Stock upon consummation of the Merger. West Coast shall
promptly furnish all information concerning it and the holders of its capital
stock as FNB may reasonably request in connection with such action. West Coast
shall call a Shareholders' Meeting, to be held on a date that is determined by
the Parties to be a mutually desirable date, which date shall be as soon as
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and such other related
matters as it deems appropriate. In connection with the Shareholders' Meeting,
(i) West Coast shall prepare and file with the SEC a Proxy Statement relating to
the Merger and mail such Proxy Statement to its shareholders, (ii) the Parties
shall promptly furnish to each other all information concerning them that they
may reasonably request in connection with such Proxy Statement, (iii) the Board
of Directors of West Coast shall recommend (subject to compliance with their
fiduciary duties under applicable law as advised by counsel) to its shareholders
the approval of this Agreement, (iv) shall vote all West Coast Common Shares
beneficially owned in favor of the approval of this Agreement, and (v) the Board
of Directors and officers of West Coast shall (subject to compliance with their
fiduciary duties as advised by counsel) use their reasonable best efforts to
obtain such shareholders' approval.
8.2 Applications. FNB shall promptly prepare and file, and West Coast
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement and
thereafter use its reasonable best efforts to cause the Merger to be consummated
as expeditiously as possible.
8.3 Filings With State Offices. Upon the terms and subject to the
conditions of this Agreement, FNB shall execute and file the Florida Articles of
Merger with the Secretary of State of the State of Florida in connection with
the Closing.
8.4 Agreement As To Efforts To Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including the use of their respective reasonable best efforts to
lift or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9 of this Agreement; provided, that nothing
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herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Permits and Consents of all third
parties and Regulatory Authorities necessary or desirable for the consummation
of the transactions contemplated by this Agreement.
8.5 Access to Information; Confidentiality. From the date hereof to
the Effective Time, upon reasonable notice and subject to applicable Laws, FNB
and West Coast shall afford each other, and each other's accountants, counsel,
and other representatives, during normal working hours for the period of time
prior to the Effective Time, reasonable access to all of its and its
Subsidiaries' properties, books, contracts, commitments, and records and, during
such period, each shall furnish promptly to the other party (i) a copy of each
report, schedule, and other document filed or received by it or any of its
Subsidiaries during such period pursuant to the requirements of the Securities
Laws, (ii) a copy of all filings made with any Regulatory Authorities or other
governmental entities in connection with the transactions contemplated by this
Agreement and all written communications received from such Regulatory
Authorities and governmental entities related thereto, and (iii) all other
information concerning its or its Subsidiaries' business, properties and
personnel as such other party may reasonably request, including reports of
condition filed with Regulatory Authorities. In this regard, without limiting
the generality of the foregoing, each of the parties hereto shall notify the
other parties hereto promptly upon the receipt by it of any comments from the
SEC, or its staff, and of any requests by the SEC for amendments or supplements
to the Registration Statement or the Proxy Statement or for additional
information and will supply the other parties hereto with copies of all
correspondence between it and its representatives, on the one hand, and the SEC
or the members of its staff or any other government official, on the other hand,
with respect to the Registration Statement or the Proxy Statement. Each party
hereto shall, and shall cause its advisors and representatives to (x) conduct
its investigation in such a manner which will not unreasonably interfere with
the normal operations, customers or employee relations of the other and shall be
in accordance with procedures established by the parties having the due regard
for the foregoing, and (y) refrain from using for any purposes other than as set
forth in this Agreement, and shall treat as confidential, all information
obtained by each hereunder or in connection herewith and not otherwise known to
them prior to the Effective Time. Except as otherwise agreed to in writing by
West Coast, unless and until the Florida Articles of Merger are filed with the
Secretary of State of the State of Florida, FNB, and their Subsidiaries and
Affiliates will be bound by, and all information received with respect to West
Coast pursuant to this Section 8.5 shall be subject to, the terms of that
certain confidentiality agreement entered into with West Coast, dated July 15,
1996 (the "Confidentiality Agreement").
8.6 Divided Equivalency. After the date of this Agreement and until
the Effective Time, West Coast may declare and pay quarterly cash dividends to
its shareholders in an amount equal to the regular quarterly cash dividend paid
by FNB on its Common Stock multiplied by the Exchange Ratio. After the date of
this Agreement, and prior to the Effective Time, West Coast shall make all
applicable payments due to participants under the West Coast Stock Plan and (the
employment agreements of West Coast, and all other applicable benefit plans,
including all payments due on or affected by a change in control of West Coast
under the terms of such plans).
8.7 Current Information. During the period from the date of this
Agreement until the Effective Time or the termination of this Agreement, each of
West Coast and FNB shall, and shall cause its representatives to, confer on a
regular and frequent basis with representatives of the other. Each of West Coast
and FNB shall promptly notify the other of (i) any material change in its
business or operations, (ii) any material complaints, investigations or hearings
(or communications indicating that the same may be contemplated) of any
Regulatory Authority, (iii) the institution or the threats of material
litigation involving such party, or (iv) the
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occurrence, or nonoccurrence, of any event or condition the occurrence, or
nonoccurrence, of which would reasonably be expected to cause any of such
party's representations or warranties set forth herein that are qualified as to
materiality to become untrue or inaccurate in any respect as of the Effective
Time, and in each case shall keep the other fully informed with respect thereto.
8.8 Other Actions. No Party shall, or shall permit any of its
Subsidiaries to, take any action, except in every case as may be required by
applicable Law, that would or is intended to result in (i) any of its
representations and warranties set forth in this Agreement that are qualified as
to materiality being or becoming untrue, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any material manner
having a Material Adverse Effect, (iii) any of the conditions set forth in this
Agreement not being satisfied or in a violation of any provision of this
Agreement, or (iv) adversely affecting the ability of any of them to obtain any
of the Consents or Permits from the Regulatory Authorities (unless such action
is required by sound banking practice).
8.9 Press Releases. Prior to the Effective Time, West Coast and FNB
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.9
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.10 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, from the date of this Agreement until the
Effective Time or termination pursuant to Article 10 hereof, no West Coast
Company nor any Affiliate thereof nor any Representatives thereof retained by
any West Coast Company shall directly or indirectly solicit any Acquisition
Proposal by any Person. Except to the extent necessary to comply with the
fiduciary duties of West Coast's Board of Directors as determined after
consultation with counsel, no West Coast Company or any Affiliate or
representative thereof shall furnish any nonpublic information that it is not
legally obligated to furnish or negotiate with respect to, any Acquisition
Proposal, but West Coast may communicate information about such an Acquisition
Proposal to its shareholders if and to the extent that it is required to do so
in order to comply with its legal obligations as advised by counsel. West Coast
shall promptly notify FNB orally and in writing in the event that it receives
any inquiry or proposal relating to any such transaction. West Coast shall (i)
immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable efforts to cause
of all its Representatives not to engage in any of the foregoing.
8.11 Accounting and Tax Treatment. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for federal
income tax purposes. FNB and West Coast undertake and agree to use their
reasonable efforts to cause the Merger, and to take no action that would cause
the Merger not to qualify for pooling-of-interests accounting treatment.
8.12 Takeover Laws. Each West Coast Company shall take all necessary
steps to exempt the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Laws.
8.13 Articles of Incorporation Provisions. Each West Coast Company
shall take all necessary action to ensure that the entering into of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby do not and will not result in any super-majority voting
requirements or the
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grant of any rights to any Person under the Articles of Incorporation, Bylaws,
or other governing instruments of any West Coast Company or restrict or impair
the ability of FNB or any of its Subsidiaries to vote, or otherwise to exercise
the rights of a shareholder with respect to, shares of any West Coast Company
that may be directly or indirectly acquired or controlled by it.
8.14 Agreement of Affiliates. West Coast has disclosed in Section 8.14
of the West Coast Disclosure Memorandum all Persons whom it reasonably believes
are "affiliates" of West Coast for purposes of Rule 145 under the 1933 Act. West
Coast shall use its reasonable efforts to cause each such Person to deliver to
FNB not later than 30 days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 2 hereto, providing that such Person will
not sell, pledge, transfer, or otherwise dispose of the shares of West Coast
Common Shares held by such Person except as contemplated by such agreement or by
this Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of FNB Common Stock to be received by such Person upon consummation of
the Merger except in compliance with applicable provisions of the 1933 Act and
the rules and regulations thereunder and until such time as financial results
covering at least 30 days of combined operations of FNB and West Coast have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. Shares of FNB Common Stock issued to such
affiliates of West Coast in exchange for shares of West Coast Common Shares
shall not be transferable until such time as financial results covering at least
30 days of combined operations of FNB and West Coast have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.11 (and FNB shall be entitled to place
restrictive legends upon certificates for shares of FNB Common Stock issued to
affiliates of West Coast pursuant to this Agreement to enforce the provisions of
this Section 8.11). FNB shall not be required to maintain the effectiveness of
the Registration Statement under the 1933 Act for the purposes of resale of FNB
Common Stock by such affiliates.
8.15 Employee Benefits. Following the Effective Time, FNB shall
provide generally to officers and employees of the West Coast Companies,
employee benefits under employee benefit plans (other than stock option or other
plans involving the potential issuance of FNB Common Stock), on terms and
conditions which when taken as a whole are no less favorable than those
currently provided by West Coast or those currently provided by the FNB
Companies to their similarly situated officers and employees; provided, that,
for a period of 12 months after the Effective Time, FNB shall provide generally
to officers and employees of West Coast Companies severance benefits in
accordance with the policies of Southwest which include a payment to terminated
officers and employees of West Coast equal to one week's pay for each year of
service. For purposes of participation and vesting (but not benefit accrual
under any employee benefit plans of FNB and its subsidiaries other than the West
Coast Benefit Plans) under such employee benefit plans, the service of the
employees of the West Coast Companies prior to the Effective Time shall be
treated as service with a FNB Company participating in such employee benefit
plans.
8.16 Employment Contracts of Certain Officers of West Coast. FNB shall
provide Messrs. Geml, Panicaro and Delmotte new FNB employment contracts with
such terms and conditions as shall be negotiated between the parties, in
exchange for the cancellation by such officers of their existing West Coast
employment contracts and corresponding severance pay agreements. In the event
any of such officers elect not to enter into such proposed new FNB employment
agreements, FNB shall honor the severance pay agreement in the existing West
Coast employment agreement of such officer.
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8.17 Indemnification.
(a) FNB shall, and shall cause the Surviving Corporation (and its
successors and assigns) to, indemnify, defend, and hold harmless each person who
is now, or has at anytime prior to the date hereof, or who becomes prior to the
Effective Time, an officer, director, employee, or agent of West Coast or its
Subsidiaries (each, an "Indemnified Party"), after the Effective Time against
any and all costs or expenses (including reasonable attorneys' fees), judgments,
fines, penalties, losses, claims, damages, liabilities, and amounts paid in
settlement in connection with any claim, action, suit, proceeding, or
investigation, whether civil, criminal, administrative, or investigative,
arising out of or pertaining to any action or omission occurring on or prior to
the Effective Time (including, without limitation, the transactions contemplated
by this Agreement) to the fullest extent then permitted under Florida law and by
the Articles of Incorporation and Bylaws of West Coast as in effect on the date
hereof, including provisions relating to advances of expenses incurred in the
defense of any action or suit. Without limiting the foregoing, in any case in
which approval by the Surviving Corporation is required to effectuate any
indemnification, FNB shall cause the Surviving Corporation to direct, at the
election of the Indemnified Party, that the determination of any such approval
shall be made by independent counsel selected by the Indemnified Party. FNB
shall, and shall cause the Surviving Corporation, to apply such rights of
indemnification in good faith and to the fullest extent permitted by applicable
law.
(b) If FNB or the Surviving Corporation or any of their successors or
assigns shall consolidate with or merge into any other Person and shall not be
the continuing or surviving Person of such consolidation or merger or shall
transfer all or substantially all of its assets to any Person, then and in each
case, proper provision shall be made so that the successors and assigns of FNB
shall assume the obligations set forth in this Section 8.17.
(c) The provisions of this Section 8.17 are intended to be for the
benefit of and shall be enforceable by, each Indemnified Party, his or her heirs
and representatives, and shall survive the consummation of the Merger and be
binding on all successors and assigns of FNB and the Surviving Corporation.
8.18 Listing of Shares on Nasdaq. FNB undertakes, prior to the
Effective Time, to cause the shares of FNB Common Stock to be issued pursuant to
the Merger to be listed on the Nasdaq Small Cap Market, or such other exchange
or Nasdaq market on which the FNB Common Stock trades at the Effective Time.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.7 of this Agreement:
(a) Shareholder Approval. The shareholders of West Coast shall
have approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent
required by Law and the rules and regulations of Nasdaq.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
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made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner
(including requirements relating to the raising of additional capital
or the disposition of Assets) which in the reasonable judgment of the
Board of Directors of either Party would so materially adversely impact
the economic or business benefits of the transactions contemplated by
this Agreement that, had such condition or requirement been known, such
Party would not, in its reasonable judgment, have entered into this
Agreement.
(c) Consents and Approvals. Other than the filing of the
Florida Articles of Merger, each Party shall have obtained any and all
Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement or listed in Section
9.1(c) of the West Coast Disclosure Memorandum) or for the preventing
of any default under any Contract of such Party which, if not obtained
or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party.
(d) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.
(e) Registration Statement. The Registration Statement shall
have been declared effective under the 1933 Act, and no stop orders
suspending the effectiveness of the Registration Statement shall have
been issued, and no action, suit, proceeding, or investigation by the
SEC to suspend the effectiveness thereof shall have been initiated and
be continuing, and all necessary approvals under state securities Laws
or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of FNB Common Stock issuable pursuant to the Merger shall have
been received.
(f) Pooling of Interests. Ernst & Young, LLP, FNB's
independent public accountants, shall have issued a letter dated as of
the Effective Time to West Coast and FNB, respectively, to the effect
that the Merger shall be accounted for as a pooling-of-interests under
GAAP.
(g) Tax Matters. Each Party shall have received a written
opinion or opinions from Smith, Gambrell and Russell, LLP in a form
reasonably satisfactory to such Parties (the "Tax Opinion"), to the
effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code and (ii) the
exchange in the Merger of West Coast Common Shares for FNB Common Stock
will not give rise to gain or loss to the shareholders of West Coast
with respect to such exchange (except to the extent of any cash
received). In rendering such Tax Opinion, such counsel shall be
entitled to rely upon representations of officers of West Coast and FNB
reasonably satisfactory in form and substance to such counsel.
9.2 Conditions to Obligations of FNB. The obligations of FNB to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by FNB pursuant to Section 11.7(a) of this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
West Coast set forth in this Agreement shall be assessed as of the date
of this Agreement and as of the Effective Time with the same effect as
though all such
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representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of West Coast set forth in Section 5.3
of this Agreement shall be true and correct (except for inaccuracies
which are de minimus in amount). The representations and warranties of
West Coast set forth in Sections 5.17, 5.18, 5.19, and 5.20 of this
Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of
West Coast set forth in this Agreement (including the representations
and warranties set forth in Sections 5.3, 5.17, 5.18, 5.19, and 5.20)
such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on West Coast;
provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of West Coast to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(c) Certificates. West Coast shall have delivered to FNB (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.2(a) and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by West Coast's Board of
Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery, and performance
of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as FNB and its
counsel shall request.
(d) Affiliates Agreements. FNB shall have received from each
affiliate of West Coast the affiliates letter referred to in Section
8.14 of this Agreement, to the extent necessary to assure in the
reasonable judgment of FNB that the transactions contemplated hereby
will qualify for pooling-of-interests accounting treatment.
9.3 Conditions to Obligations of West Coast. The obligations of West
Coast to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by West Coast pursuant to Section 11.7(b) of
this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
FNB set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of FNB set forth in Section
6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of FNB set forth in Section 6.11 of this Agreement shall be
true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of FNB set forth in
this Agreement (including the representations and warranties set forth
in Sections 6.3 and 6.11) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on FNB; provided that, for purposes of this sentence only, those
representations and warranties
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which are qualified by references to "material" or "Material
Adverse Effect" shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of FNB to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. FNB shall have delivered to West Coast (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by FNB's Board of
Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement,
and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Southwest and its counsel shall request.
(d) Fairness Opinion. West Coast shall have received from
Advest, Inc. a letter, dated not more than five business days prior to
the date of the Proxy Statement, to the effect that, in the opinion of
such firm, the Exchange Ratio plus the payment of the dividends to West
Coast Shareholders pursuant to Section 8.6 hereof is fair, from a
financial point of view, to the holders of West Coast Common Shares.
(e) Payment of Consideration. FNB shall have delivered to
Exchange Agent the consideration to be paid to holders of the West
Coast Common Shares pursuant to Sections 3.1 and 3.4 of this Agreement.
(f) Price Condition. The Average Market Price of a share of
FNB Common Stock shall not be less than $20.625.
(g) Opinion of Counsel. West Coast shall have received a
written opinion of Smith, Gambrell & Russell, LLP counsel to FNB, dated
as of the Effective Time, with respect to such matters and in such form
as shall be agreed upon between such firm and West Coast.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of West Coast, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual written consent of the Board of Directors of FNB
and the Board of Directors of West Coast; or
(b) By the Board of Directors of either FNB or West Coast
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in
the case of West Coast and Section 9.3(a) in the case of FNB or in
material breach of any covenant or other agreement contained
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in this Agreement) in the event of an inaccuracy of any
representation or warranty of the other Party contained in this
Agreement which cannot be or has not been cured within 30 days after
the giving of written notice to the breaching Party of such inaccuracy
and which inaccuracy would provide the terminating Party the ability to
refuse to consummate the Merger under the applicable standard set forth
in Section 9.2(a) of this Agreement in the case of West Coast and
Section 9.3(a) of this Agreement in the case of FNB; or
(c) By the Board of Directors of either FNB or West Coast in
the event of a material breach by the other Party of any covenant,
agreement or obligation contained in this Agreement which breach cannot
be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By the Board of Directors of either FNB or West Coast in
the event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed
within the time limit for appeal, or (ii) the shareholders of West
Coast fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the FBCA at the
Shareholders' Meeting where the transactions were presented to such
shareholders for approval and voted upon; or
(e) By the Board of Directors of either FNB or West Coast in
the event that the Merger shall not have been consummated by September
30, 1997, if the failure to consummate the transactions contemplated
hereby on or before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant to this Section
10.1(e); or
(f) By FNB in the event dissenters' rights are claimed,
pursuant to the applicable provisions of the FBCA, by persons owning in
the aggregate more than 10% of the issued and outstanding West Coast
Common Shares; or
(g) By West Coast, if its Board of Directors determines by a
vote of a majority of the members of its entire Board of Directors,
upon written notice to FNB at least 24 hours prior to the closing, if
the Average Market Price of FNB Common Shares shall be less than
$20.625; or
(h) By the Board of Directors of either FNB or West Coast
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in
the case of West Coast and Section 9.3(a) in the case of FNB or in
material breach of any covenant or other agreement contained in this
Agreement) in the event that any of the conditions precedent to the
obligations of such Party to consummate the Merger cannot be satisfied
or fulfilled by the date specified in Section 10.1(e) of this
Agreement; or
(i) By West Coast, if at any time prior to the Effective
Time, the fairness opinion of Advest, Inc. is withdrawn; or
(j) By West Coast if prior to the Effective Time, a
corporation, partnership, person or other entity or group shall have
made a bona fide Acquisition Proposal that the West Coast Board
determines in its good faith judgment and in the exercise of its
fiduciary duties, with respect to legal matters on the written opinion
of
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an investment banking firm of national reputation, is more
favorable to the West Coast stockholders and that the failure to
terminate this Agreement and accept such alternative Acquisition
Proposal would be inconsistent with the proper exercise of such
fiduciary duties.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and 11.1 and Section 8.5 of this Agreement shall survive
any such termination and abandonment, and (ii) a termination pursuant to
Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination; provided, further, that in the event of any termination of this
Agreement following the occurrence of an Initial Triggering Event (as defined in
the Stock Option Agreement) (other than termination due to (A) the failure of
FNB to satisfy a condition to closing, (B) failure to obtain the requisite
approval of West Coast shareholders following a favorable recommendation by the
West Coast Board, or (C) the withdrawal by the West Coast financial advisor of
its fairness opinion), FNB shall be entitled to a cash payment from West Coast
in an amount equal to $500,000 upon the occurrence of any Subsequent Triggering
Event (as defined in the Stock Option Agreement) within twelve months following
the date of such termination (or such longer period as shall exist under the
Stock Option Agreement until the occurrence of an Exercise Termination Date (as
defined in the Stock Option Agreement)). In the event this Agreement is
terminated as a result of FNB's failure to satisfy any of its representations,
warranties or covenants set forth herein, FNB shall reimburse West Coast for its
reasonable out-of-pocket expenses relating to the Merger in an amount not to
exceed $250,000, which amount shall not be deemed an exclusive remedy or
liquidated damages.
10.3 Non-Survival of Representations and Covenants. The respective
representations and warranties of the Parties shall not survive the Effective
Time. All agreements of the Parties to this Agreement which by their terms are
to be performed following the Effective Time shall survive the Effective Time
until performed in accordance with their terms.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or other business
combination involving such Party or any of its Subsidiaries or any
proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the assets of, such Party or
any of its Subsidiaries (other than the transactions contemplated or
permitted by this Agreement).
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"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person.
"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character,
and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"Average Market Price" shall mean the average of the high bid
and low asked prices of such common stock in the over-the-counter
market for the ten consecutive trading days prior to the Determination
Date, as reported by Nasdaq (or, if not reported thereby, any other
authoritative source selected by FNB).
"BHC Act" shall mean the Federal Bank Holding Company Act of
1956, as amended.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreement referenced to in Section 8.5.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person.
"Contract" shall mean any written agreement, commitment,
contract, note, bond, mortgage, indenture, instrument, lease,
obligation, license, plan, of any kind or character, or other document
to which any Person is a party or that is binding on any Person or its
capital stock or Assets.
"Default" shall mean (i) any breach or violation of or default
under any Contract, or (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, or (iii) any
occurrence of any event that with or without the passage of time or the
giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate,
increase, or impose any liability under, any Contract, Order, where, in
any such event, such default is reasonably likely to have a Material
Adverse Effect on a Party.
"Derivatives Contract" shall have the meaning set forth in
Section 5.20 hereof.
"Determination Date" shall mean the fifth business day prior
to the Effective Time.
"Effective Time" shall have the meaning set forth in Section
1.3 hereof.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface strata)
and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies
with jurisdiction over, and including
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common law in respect of, pollution or protection of the
environment, including the Comprehensive Environmental Response
Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq., the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et
seq., and other Laws relating to emissions, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall have the meaning set forth in Section
5.12(c) hereof.
"Exchange Agent" shall have the meaning set forth in Section
4.1 hereof.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exhibits" 1 and 2 shall mean the Exhibits so marked, copies
of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or
document without being attached hereto.
"FBCA" shall mean the Florida Business Corporation Act.
"FNB" shall have the meaning set forth in the first paragraph
hereof.
"FNB Capital Stock" shall mean, collectively, the FNB Common
Stock, the FNB Preferred Stock, and any other class or series of
capital stock of FNB.
"FNB Common Stock" shall mean the $2 par value common stock of
FNB.
"FNB Companies" shall mean, collectively, FNB and all FNB
Subsidiaries.
"FNB Disclosure Memorandum" shall mean the written information
entitled "FNB Corporation Disclosure Memorandum" delivered prior to the
date of this Agreement to Southwest describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made.
"FNB Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any)
of FNB as of June 30, 1996, and as of December 31, 1995 and 1994, and
the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the six
months ended June 30, 1996, and for each of the three years ended
December 31, 1995, 1994, and 1993, as filed by FNB in SEC Documents,
and (ii) the consolidated statements of condition of FNB (including
related notes and schedules, if any) and related statements of income,
changes in shareholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to June 30, 1995.
"FNB Preferred Stock" shall mean the $10 par value preferred
stock of FNB.
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"FNB SEC Reports" shall have the meaning set forth in Section
6.4(a) hereof.
"FNB Subsidiaries" shall mean the Subsidiaries of FNB, which
shall include any corporation, bank, savings association, or other
organization acquired as a Subsidiary of FNB in the future and owned by
FNB at the Effective Time.
"Florida Articles of Merger" shall mean the Articles of Merger
to be executed by the Parties and filed with the Secretary of State of
the State of Florida relating to the Merger as contemplated by Section
1.3 of this Agreement.
"GAAP" shall mean generally accepted accounting principles in
the United States consistently applied during the periods involved
applicable to banks or bank holding companies, as the case may be.
"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR Act" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" shall have the meaning set forth in
Section 8.13 hereof.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean the personal knowledge of the chairman, president, chief financial
officer, chief accounting officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior or
executive vice president of such Person and the knowledge of any such
persons obtained or which would have been obtained from a reasonable
investigation.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"Lien" with respect to any Asset shall mean any conditional
sale agreement, default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention, or other security
arrangement, or any adverse right or interest, charge, or claim of any
nature whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable,(ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits, and (iii) other Liens incurred in the
ordinary course of the banking business.
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"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice by any Person alleging
potential liability.
"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or its Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity) where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party
and its Subsidiaries, taken as a whole, or (ii) the ability of such
Party to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement,
provided that "Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles
generally applicable to banks and their holding companies, (c) actions
and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, (d) circumstances affecting regional
bank holding companies generally, and (e) the Merger and compliance
with the provisions of this Agreement on the operating performance of
the Parties.
"Merger" shall have the meaning set forth in Section 1.1
hereof.
"Nasdaq" shall mean the Nasdaq Stock Market.
"Order" shall mean any decree, injunction, judgment, order,
decision or award, ruling, or writ of any federal, state, local, or
foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"Party" shall mean either West Coast or FNB, and "Parties"
shall mean both West Coast and FNB.
"PBCL" shall mean the Pennsylvania Business Corporation Law.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person.
"Person" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
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43
liability company, trust, business association, group acting
in concert, or any person acting in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by West
Coast to solicit the approval of its shareholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
FNB relating to the issuance of the FNB Common Stock to holders of West
Coast Common Shares.
"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
FNB under the 1933 Act with respect to the shares of FNB Common Stock
to be issued to the shareholders of West Coast in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the SEC, NASD, NASDAQ, and all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries.
"Rights" shall mean all calls, commitments, options, rights to
subscribe to, scrip, understandings, warrants, or other binding
obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital
stock of a Person or by which a Person is or any contracts,
commitments, or other arrangements may be bound to issue additional
shares of its capital stock, or options, warrants, rights to purchase
or acquire any additional shares of the capital stock.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"Shareholders' Meeting" shall mean the meeting of the
shareholders of West Coast to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"Southwest" shall have the meaning set forth in the first
paragraph hereof.
"Stock Option Agreement" shall have the meaning set forth in
the Preamble hereof.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding
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equity securities either directly or through an unbroken chain
of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided,
there shall not be included any such entity acquired through
foreclosure or any such entity the equity securities of which are owned
or controlled in a fiduciary capacity.
"Surviving Corporation" shall mean Southwest as the surviving
corporation resulting from the Merger or in the event the FNB/Southwest
Merger has not be consummated prior to the Effective Time, such other
wholly-owned Subsidiary of FNB substituted in place of Southwest as a
Party to this Agreement.
"Takeover Laws" shall have the meaning set forth in Section
5.18 hereof.
"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposed or required to be withheld by the United States or any state,
local, foreign government or subdivision or agency thereof, including
any interest, penalties or additions thereto.
"Tax Opinion" shall have the meaning set forth in Section
9.1(g) hereof.
"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state,
local, foreign government or subdivision or agency thereof for which a
Tax Return is required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"West Coast" shall have the meaning set forth in the first
paragraph hereof.
"West Coast Benefits Plans" shall have the meaning set forth
in Section 5.12(a) hereof.
"West Coast Common Shares" shall mean the $1.00 par value
common shares of West Coast.
"West Coast Companies" shall mean, collectively, West Coast
and all West Coast Subsidiaries.
"West Coast Contract" shall have the meaning set forth in
Section 5.13.
"West Coast Disclosure Memorandum" shall mean the written
information entitled "West Coast Corporation Disclosure Memorandum"
delivered prior to the date of this Agreement to FNB describing in
reasonable detail the matters contained therein and, with respect to
each disclosure made therein, specifically referencing each Section of
this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
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"West Coast ERISA Plan" shall have the meaning set forth in
Section 5.12(a) hereof.
"West Coast Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of West Coast as of June 30, 1996, and as of December 31, 1995 and
1994, and the related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any)
for the six months ended June 30, 1996, and for each of the three
fiscal years ended December 31, 1995, 1994, and 1993, as filed by West
Coast in SEC Documents, and (ii) the consolidated balance sheets of
West Coast (including related notes and schedules, if any) and related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to June 30,
1996.
"West Coast Options" shall have the meaning set forth in
Section 3.5(a) hereof.
"West Coast Pension Plan" shall have the meaning set forth in
Section 5.12(a) hereof.
"West Coast SEC Reports" shall have the meaning set forth in
Section 5.5(a) hereof.
"West Coast Stock Plans" shall mean the existing stock option
and other stock-based compensation plans and warrant instruments of
West Coast set forth in Section 3.5 of the West Coast Disclosure
Memorandum.
"West Coast Subsidiaries" shall mean the Subsidiaries of West
Coast, which shall include the West Coast Subsidiaries described in
Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of West
Coast in the future and owned by West Coast at the Effective Time.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2, each of FNB and
West Coast shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
filing, registration, and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants, and
counsel, except that each of FNB and West Coast shall bear and pay one-half of
the printing costs incurred in connection with the printing of the Registration
Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. Except for Advest, Inc. as to West Coast and
except for The Robinson-Humphrey Company, Inc. as to FNB, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder in connection with
this
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Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by West Coast or FNB, each of West
Coast and FNB, as the case may be, agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement between the Parties with respect
to the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (except for the
Confidentiality Agreements). Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 8.13 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
shareholder approval of this Agreement has been obtained; provided, that after
any such approval by the holders of West Coast Common Shares, there shall be
made no amendment that reduces or modifies in any material respect the
consideration to be received by holders of West Coast Common Shares without the
further approval of such shareholders.
11.6 Obligations of FNB. Whenever this Agreement requires FNB
(including the Surviving Corporation) to take any action, such requirement shall
be deemed to include an undertaking by FNB to cause the FNB Subsidiaries to take
such action.
11.7 Waivers.
(a) Prior to or at the Effective Time, FNB, acting through its Board of
Directors, chief executive officer, president or other authorized officer, shall
have the right to waive any default in the performance of any term of this
Agreement by West Coast, to waive or extend the time for the compliance or
fulfillment by West Coast of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of FNB under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of FNB.
(b) Prior to or at the Effective Time, West Coast, acting through its
Board of Directors, chief executive officer, president or other authorized
officer, shall have the right to waive any default in the performance of any
term of this Agreement by FNB, to waive or extend the time for the compliance or
fulfillment by FNB of any and all of its obligations under this Agreement, and
to waive any or all of the conditions precedent to the obligations of West Coast
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of West Coast.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
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11.8 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.9 Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
West Coast: 2724 Del Prado Boulevard South
Cape Coral, Florida 33904
Telecopy Number: 941-772-2096
Attention: Michael P. Geml, President
Copy to Counsel: Carlton, Fields, Ward, Emanuel, Smith & Cutler, P.A.
One Harbour Place
777 S. Harbour Island Boulevard
Tampa, Florida 33602-5799
Telecopy Number: 813-229-4133
Attention: Richard A. Denmon
FNB: Hermitage Square
Hermitage, PA 16148
Telecopy Number: 412-983-3515
Attention: Peter Mortensen
Chairman of the Board and
President
copy to: John Waters, Vice President and
Chief Financial Officer
Southwest: 2911 Tamiami Trail North
Naples, Florida 33940
Telecopy Number: 941-435-7658
Attention: Gary L. Tice, Chairman of the Board,
President and Chief Executive Officer
Copy to Counsel: Smith, Gambrell & Russell, LLP
3343 Peachtree Road, NE
Suite 1800
Atlanta, Georgia 30326
Telecopy Number: 404-264-2652
Attention: Robert C. Schwartz
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11.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the Commonwealth of Pennsylvania, without regard
to any applicable conflicts of Laws, except to the extent that the Laws of the
State of Florida relate to the consummation of the Merger.
11.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.12 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
F.N.B. CORPORATION
By: /s/ Peter Mortensen
-----------------------------------------------------
Name: Peter Mortensen
Title: Chairman of the Board and President
SOUTHWEST BANKS, INC.
By: /s/ Gary L. Tice
-----------------------------------------------------
Name: Gary L. Tice
Title: Chairman of the Board, President, and Chief
Executive Officer
WEST COAST BANCORP, INC.
By: /s/ Michael P. Geml
-----------------------------------------------------
Name: Michael P. Geml
Title: President
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EXHIBIT 1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated November 15, 1996, between F.N.B.
Corporation, a Pennsylvania corporation ("FNB") and West Coast Bancorp, Inc., a
Florida corporation ("West Coast").
W I T N E S S E T H :
WHEREAS, FNB and West Coast have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto prior to this Agreement; and
WHEREAS, as a condition and inducement to FNB's pursuit of the
transactions contemplated by the Merger Agreement and in consideration therefor,
West Coast has agreed to grant FNB the Option (as hereinafter defined):
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) West Coast hereby grants to FNB an irrevocable option (the
"Option") to purchase, subject to the terms hereof, up to 426,991 authorized but
unissued fully paid and nonassessable Common Shares, $1.00 par value, of West
Coast ("Common Shares"), at a price per Share equal to $15.00 (as adjusted as
set forth herein, the "Option Price"); provided, that in no event shall the
number of Shares for which this Option is exercisable, when combined with the
West Coast Common Shares beneficially owned at such time by FNB, exceed 19.9% of
the issued and outstanding Common Shares. The number of Common Shares that may
be received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any additional Common Shares are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement), the number of Common Shares subject to the Option
shall be increased so that, after such issuance, it equals 19.9% of the number
of Common Shares then issued and outstanding including Common Shares
beneficially by FNB, but without giving effect to any Shares subject or issued
pursuant to the Option. Nothing contained in this Section 1(b) or elsewhere in
this Agreement shall be deemed to authorize West Coast or FNB to breach any
provision of the Merger Agreement.
2. (a) Subject to compliance with applicable laws and regulations, the
Holder (as hereinafter defined) may exercise the Option, notwithstanding the
provisions of the Confidentiality Agreements (as defined in the Merger
Agreement) in whole or part, if, but only if, both an Initial Triggering Event
(as hereinafter defined) and a Subsequent Triggering Event (as hereinafter
defined) shall have occurred prior to the occurrence of an Exercise Termination
Event (as hereinafter defined). Each of the following shall be an Exercise
Termination Event: (i) the Effective Time (as defined in the Merger Agreement)
of the Merger; (ii) termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the occurrence of an
Initial Triggering Event (other than termination due to (A) the failure of FNB
to satisfy a condition to closing, (B) failure to obtain the requisite approval
of West Coast shareholders following a favorable recommendation by the West
Coast Board, or (C) the withdrawal by the West Coast financial advisor of its
fairness opinion); (iii) the passage of 12 months (or such longer period as
provided in Section 10) after termination of the Merger Agreement if such
termination follows the occurrence of an Initial Triggering Event; or (iv) such
other date as to which the Holder and West Coast agree. The term "Holder" shall
mean the holder or holders of the Option. The rights set forth in Sections 7 and
9 shall terminate when the right to exercise the Option terminates (other than
as a result of a complete exercise of the Option) as set forth herein.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
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(i) West Coast or any of its Subsidiaries (as hereinafter
defined) (each a "West Coast Subsidiary"), without having received
FNB's prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as hereinafter defined) 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
Securities Exchange Act of 1934 (the "1934 Act"), and the rules and
regulations thereunder) other than FNB or any of its Subsidiaries (each
a "FNB Subsidiary") or the Board of Directors of West Coast shall have
recommended that the shareholders of West Coast approve or accept any
Acquisition Transaction other than as contemplated by the Merger
Agreement or this Agreement. For purposes of this Agreement, (a)
"Acquisition Transaction" shall mean (x) a merger or consolidation, or
any similar transaction, involving West Coast or any Significant
Subsidiary (as defined in Rule 1-02 of Regulation S-X promulgated by
the Securities and Exchange Commission (the "SEC")) of West Coast, (y)
a purchase, lease or other acquisition of all or substantially all of
the assets or deposits of West Coast or any Significant Subsidiary of
West Coast, or (z) a purchase or other acquisition (including by way of
merger, consolidation, share exchange or otherwise) of securities
representing 15% or more of the voting power of West Coast or any
Significant Subsidiary of West Coast, and (b) "Subsidiary" shall have
the meaning set forth in Rule 12b-2 under the 1934 Act;
(ii) Any person (excluding the officers and directors of West
Coast) other than FNB, any FNB Subsidiary or any West Coast Subsidiary
acting in a fiduciary capacity shall have acquired beneficial ownership
or the right to acquire beneficial ownership of 15% or more of the
outstanding Common Shares (the term "beneficial ownership" for purposes
of this Agreement having the meaning assigned thereto in Section 13(d)
of the 1934 Act, and the rules and regulations thereunder);
(iii) The shareholders of the West Coast shall not have
approved the transactions contemplated by the Merger Agreement at the
meeting held for that purpose or any adjustment thereof, or such
meeting shall not have been held or shall have been canceled prior to
termination of the Merger Agreement, in either case, after West Coast's
Board of Directors shall have withdrawn or modified (or publicly
announced its intention to withdraw or modify or interest in
withdrawing or modifying) its recommendation that the shareholders of
West Coast approve the transactions contemplated by the Merger
Agreement, or West Coast or any West Coast Subsidiary, without having
received FNB's prior written consent, shall have authorized,
recommended, proposed (or publicly announced its intention to
authorize, recommend or propose or interest in authorizing,
recommending or proposing) an agreement to engage in an Acquisition
Transaction, with any person other than FNB or a FNB Subsidiary;
(iv) Any person other than FNB or any FNB Subsidiary shall
have made a bona fide proposal to West Coast or its shareholders to
engage in an Acquisition Transaction, which proposal has an economic
value equivalent to or in excess of that of FNB.
(v) West Coast shall have willfully and materially breached
any material covenant or obligation contained in the Merger Agreement
in anticipation of engaging in an Acquisition Transaction, and such
breach would entitle FNB to terminate the Merger Agreement; or
(v) Any person other than FNB or any FNB Subsidiary, other
than in connection with a transaction to which FNB has given its prior
written consent, shall have filed an application or notice with the
Federal Reserve Board or other federal or state bank regulatory
authority, which application or notice has been accepted for
processing, for approval to engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person of beneficial ownership of
25% or more of the then outstanding Common Shares; or
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(ii) The occurrence of the Initial Triggering Event described
in clause (i) of subsection (b) of this Section 2, except that the
percentage referred to in clause (z) shall be 25%.
(d) West Coast shall notify FNB promptly in writing of the occurrence
of any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event"), it being understood that the giving of such notice by West
Coast shall not be a condition to the right of the Holder to exercise the
Option.
(e) No shares shall be issued pursuant to the exercise of this Option
if (i) at the time of the Initial Triggering Event and at the time of exercise,
FNB is in material breach under the Merger Agreement, or (ii) a preliminary or
permanent injunction has been issued by a court of proper jurisdiction.
(f) In the event the Holder is entitled to and wishes to exercise the
Option, it shall send to West Coast a written notice prior to an Exercise
Termination Event (the date of which being herein referred to as the "Notice
Date") specifying (i) the total number of shares it will purchase pursuant to
such exercise and (ii) a place and date not earlier than three business days nor
later than 10 business days from the Notice Date for the closing of such
purchase (the "Closing Date"); provided that if prior notification to or
approval of the Federal Reserve Board or any other regulatory agency is required
in connection with such purchase, the Holder shall promptly file the required
notice or application for approval, shall promptly notify the West Coast of such
filing, and shall expeditiously process the same and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which any required notification periods have expired or been terminated or such
approvals have been obtained and any requisite waiting period or periods shall
have passed. Any exercise of the Option shall be deemed to occur on the Notice
Date relating thereto.
(g) At the closing referred to in subsection (e) of this Section 2, the
Holder shall pay to West Coast the aggregate purchase price for the Common
Shares purchased pursuant to the exercise of the Option in immediately available
funds by wire transfer to a bank account designated by West Coast, provided that
failure or refusal of West Coast to designate such a bank account shall not
preclude the Holder from exercising the Option.
(h) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, West Coast
shall deliver to the Holder a certificate or certificates representing the
number of Common Shares purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable thereunder. In addition, the
Holder shall provide to West Coast a letter agreeing that Holder will not offer
to sell or dispose of such shares in violation of applicable law or this
Agreement
(i) Certificates for Common Shares delivered at a closing hereunder may
be endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder
hereof and West Coast and to resale restrictions arising under the
Securities Act of 1933, as amended. A copy of such agreement is on file
at the principal office of West Coast and will be provided to the
holder hereof without charge upon receipt by West Coast of a written
request therefor."
It is understood and agreed that: (1) the reference to the resale restrictions
of the Securities Act of 1933 (the "1933 Act") in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if the
Holder shall have delivered to West Coast a copy of a letter from the staff of
the SEC, or an opinion of counsel, in form and substance satisfactory to West
Coast, to the effect that such legend is not required for purposes of the 1933
Act; (ii) the reference to the provisions of this Agreement in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the shares have been sold or transferred in compliance with the provisions of
this Agreement and under circumstances that do not require
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the retention of such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the proceeding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may be
required by law.
(j) Upon the giving by the Holder to West Coast of the written notice
of exercise of the Option provided for under subsection (e) of this Section 2
and the tender of the applicable purchase price in immediately available funds
the Holder shall be deemed to be the holder of record of the Common Shares
issuable upon such exercise, notwithstanding that the stock transfer books of
West Coast shall then be closed or that certificates representing such Common
Shares shall not then be actually delivered to the Holder. West Coast shall pay
all expenses, and any and all United States federal, state and local taxes and
other charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of the Holder or
its assignee, transferee or designee.
3. West Coast agrees: (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued or treasury shares of
Common Shares so that the Option may be exercised without additional
authorization of Common Shares after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Shares;
(ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
West Coast; (iii) promptly to take all action as may from time to time be
required (including (x) complying with all premerger notification, reporting and
waiting period requirements specified in 15 U.S.C. Section 18a and regulations
promulgated thereunder and (y) in the event, under the Bank Holding Company Act
of 1956, as amended, or any state or other federal banking law, prior approval
of or notice to the Federal Reserve Board or to any state or other federal
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state or other
federal regulatory authority as they may require) in order to permit the Holder
to exercise the Option and West Coast duly and effectively to issue Common
Shares pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution as set forth in Section 5
hereof.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, upon presentation and surrender of
this Agreement at the principal office of West Coast, for other Agreements
providing for Options of different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same conditions as are set forth
herein, in the aggregate the same number of Common Shares purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Agreements and
related Options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by West Coast of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of this Agreement, if mutilated, West Coast
will execute and deliver a new Agreement of like tenor and date.
5. The number of Common Shares purchasable upon the exercise of the
Option shall be subject to adjustment from time to time as provided in this
Section 5.
(a) In the event of any change in Common Shares by reason of
stock dividends, splitups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or the like, the type
and number of Common Shares purchasable upon exercise hereof shall be
appropriately adjusted and proper provision shall be made so that, in
the event that any additional Common Shares are to be issued or
otherwise become outstanding as a result of any such change (other than
pursuant to an exercise of the Option), the number of Common Shares
that remain subject to the Option shall be increased so that, after
such issuance and together with Common Shares previously issued
pursuant to the exercise of the Option (together with the number of
Shares previously issued under this Option and the number of Shares
otherwise beneficially owned by FNB) (as adjusted on account of any of
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the foregoing changes in the Common Shares), it equals 19.9% of the
number of Common Shares then issued and outstanding.
(b) Whenever the number of Common Shares purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option
Price shall be adjusted by multiplying the Option Price by a fraction,
the numerator of which shall be equal to the number of Common Shares
purchasable prior to the adjustment and the denominator of which shall
be equal to the number of Common Shares purchasable after the
adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, West Coast shall, at the request of FNB
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10) (whether on its own behalf or on behalf of any
subsequent holder of this Option (or part thereof) or any of the Common Shares
issued pursuant hereto), promptly prepare, file and keep current a registration
statement under the 1933 Act covering any shares issued and issuable pursuant to
this Option and shall use its best efforts to cause such registration statement
to become effective and remain current in order to permit the sale or other
disposition of any Common Shares issued upon total or partial exercise of this
Option ("Option Shares") in accordance with any plan of disposition requested by
FNB. West Coast will use its best efforts to cause such registration statement
first to become effective and then to remain effective for such period not in
excess of 120 days from the day such registration statement first becomes
effective or such shorter time as may be reasonably necessary to effect such
sales or other dispositions. FNB shall have the right to demand two such
registrations. The first demand registration effected under this Section 6 shall
be at West Coast's expense except for underwriting commissions and the fees and
expenses of FNB's counsel attributable to the registration of the Common Shares.
The second demand registration shall be at FNB's expense. In addition, if at any
time after the occurrence of a Subsequent Triggering Event that occurs prior to
an Exercise Termination Event, West Coast proposes to register any of its equity
securities under the 1933 Act, whether for sale for its own account or for the
account of any other person, on a form and in a manner which would permit
registration of the Common Shares issued pursuant hereto for sale to the public
under the 1933 Act, it will each such time give prompt written notice to FNB of
its intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed registration, and
upon the written request of FNB delivered to the Company within 10 business days
after the giving of any such notice (which request shall specify the Common
Shares intended to be disposed of and the intended method or methods of
disposition thereof), West Coast will use its best efforts to effect the
registration under the 1933 Act of all Common Shares which West Coast has been
so requested to register by FNB, to the extent requisite to permit the
disposition of the Common Shares in accordance with the intended methods thereof
as specified by FNB. West Coast shall be obligated to effect only one such
piggy-back registration pursuant to this Section 6. FNB shall pay such
incremental expenses incurred by West Coast in connection with registering the
Common Shares requested to be registered by FNB pursuant to its piggy-back
registration rights under this Section 6, which expenses are in addition to the
expenses that West Coast would have otherwise incurred in registering equity
securities under the 1933 Act. The foregoing notwithstanding, if, at the time of
any request by FNB for registration of Option Shares as provided above, West
Coast has initiated discussions with investment bankers concerning, or is in
registration with respect to an underwritten public offering of Common Shares,
and if in the good faith judgment of the managing underwriter or managing
underwriters, or, if none, the sole underwriter or underwriters, of such
offering the inclusion of the Option Shares would interfere with the successful
marketing of the Common Shares offered by West Coast, the number of Option
Shares otherwise to be covered in the registration statement contemplated hereby
may be reduced; provided, however, that after any such required reduction the
number of Option Shares to be included in such offering for the account of the
Holder shall constitute at least 25% of the total number of shares to be sold by
the Holder and West Coast in the aggregate; and provided further, however, that
if such reduction occurs, then the West Coast shall file a registration
statement for the balance as promptly as practical thereafter as to which no
reduction pursuant to this Section 6 shall be permitted or occur and the Holder
shall thereafter be entitled to one additional registration. Each such Holder
shall provide all information reasonably requested by West Coast for inclusion
in any registration statement to be filed hereunder. If requested by any such
Holder in connection with such registration, West Coast shall become a party to
any underwriting agreement relating to the sale of such shares,
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but only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included in such
underwriting agreements for West Coast. In any such registration, West Coast and
FNB shall agree to indemnify each other on customary terms with regard to any
information provided by such party. Upon receiving any request under this
Section 6 from any Holder, West Coast agrees to send a copy thereof to any other
person known to West Coast to be entitled to registration rights under this
Section 6, in each case by promptly mailing the same, postage prepaid, to the
address of record of the persons entitled to receive such copies.
7. (a) Upon the occurrence of a Repurchase Event (as hereinafter
defined) that occurs prior to an Exercise Termination Event, (i) at the request
of the Holder, delivered prior to an Exercise Termination Event (or such later
period as provided in Section 10), West Coast shall repurchase the Option from
the Holder at a price (the "Option Repurchase Price") equal to the amount by
which (A) the Market/Offer Price (as defined below) exceeds (B) the Option
Price, multiplied by the number of shares for which this Option may then be
exercised and (ii) at the request of the owner of Option Shares from time to
time (the "Owner"), delivered prior to the occurrence of an Exercise Termination
Event (or such later period as provided in Section 10), West Coast shall
repurchase such number of the Option Shares from the Owner as the Owner shall
designate at a price (the "Option Share Repurchase Price") equal to the
Market/Offer Price multiplied by the number of Option Shares so designated. The
term "Repurchase Event" shall occur if (i) any person other than FNB or any of
its Subsidiaries shall have acquired beneficial ownership, or the right to
acquire beneficial ownership, or any "group" (as such term is defined under the
1934 Act) shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of 50% or more of the then-outstanding Common
Shares, or (ii) any of the transactions described in Section 8(a)(i), 8(a)(ii),
or 8(a)(iii) shall be consummated. The term "Market/Offer Price" shall mean the
highest of (i) the price per share of Common Shares at which a tender or
exchange offer therefor has been made, (ii) the price per share of Common Shares
to be paid by any third party pursuant to an agreement with West Coast, (iii)
the highest closing price for Common Shares within the three-month period
immediately preceding the date the Holder gives notice of the required
repurchase of this Option or the Owner gives notice of the required repurchase
of Option Shares, as the case may be, or (iv) in the event of a sale of all or
substantially all of West Coast's assets or deposits, the sum of the net price
paid in such sale for such assets or deposits, the sum of the net price paid in
such sale for such assets or deposits and the current market value of the
remaining net assets of West Coast as determined by a nationally recognized
investment banking firm selected by the Holder or the Owner, as the case may be,
divided by the number of Common Shares of West Coast outstanding at the time of
such sale. In determining the Market/Offer Price, the value of consideration
other than cash shall be determined by a nationally recognized investment
banking firm selected by the Holder or Owner, as the case may be.
(b) The Holder and the Owner, as the case may be, may exercise its
right to require West Coast to repurchase the Option and any Option Shares
pursuant to this Section 7 by surrendering for such purpose to West Coast, at
its principal office, a copy of this Agreement or certificates for Option
Shares, as applicable, accompanied by a written notice or notices stating that
the Holder or the Owner, as the case may be, elects to require West Coast to
repurchase this Option and/or the Option Shares in accordance with the
provisions of this Section 7. As promptly as practicable, and in any event
within ten business days after the surrender of the Option and/or certificates
representing Option Shares and the receipt of such notice or notices relating
thereto, West Coast shall deliver or cause to be delivered to the Holder the
Option Repurchase Price and/or to the Owner the Option Share Repurchase Price
therefor or the portion thereof that West Coast is not then prohibited under
applicable law and regulation from so delivering.
(c) To the extent that West Coast is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, West Coast shall immediately so notify
the Holder and/or the Owner and thereafter deliver or cause to be delivered,
from time to time, to the Holder and/or the Owner, as appropriate, the portion
of the Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is no longer prohibited from delivering, within ten
business days after the date on which West Coast is no longer so prohibited;
provided, however, that if West Coast at any time after delivery of a notice of
repurchase pursuant to paragraph (b) of this Section 7 is prohibited under
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applicable law or regulation, or as a consequence of administrative policy, from
delivery to the Holder and/or the Owner, as appropriate, the Option Repurchase
Price and the Option Share Repurchase Price, respectively, in full (and West
Coast hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), the Holder or Owner may
revoke its notice of repurchase of the Option or the Option Shares whether in
whole or to the extent of the prohibition, whereupon, in the latter case, West
Coast shall promptly (i) deliver to the Holder and/or the Owner, as appropriate,
that portion of the Option Purchase Price or the Option Share Repurchase Price
that West Coast is not prohibited from delivering, and (ii) deliver, as
appropriate, either (A) to the Holder, a new Agreement evidencing the right of
the Holder to purchase that number of Common Shares obtained by multiplying the
number of Common Shares for which the surrendered Agreement was exercisable at
the time of delivery of the notice of repurchase by a fraction, the numerator of
which is the Option Repurchase Price less the portion thereof theretofore
delivered to the Holder and the denominator of which is the Option Repurchase
Price, or (B) to the Owner, a certificate for the Option Shares it is then so
prohibited from repurchasing.
8. (a) In the event that, prior to an Exercise Termination Event, West
Coast shall enter into an agreement (i) to consolidate with or merge into any
person, other than FNB or a FNB Subsidiary, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than FNB or a FNB Subsidiary, to merge into West Coast and West
Coast shall be the continuing or surviving corporation, but, in connection with
such merger, the then outstanding Common Shares shall be changed into or
exchanged for stock or other securities of any other person or cash or any other
property or the then outstanding Common Shares shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the merged
company, or (iii) to sell or otherwise transfer all or substantially all of its
or any Significant Subsidiary's assets or deposits to any person, other than FNB
or a FNB Subsidiary, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of the Holder, of either (x) the Acquiring Corporation
(as hereinafter defined) or (y) any person that controls the Acquiring
Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or surviving
corporation of a consolidation or merger with West Coast (if other than West
Coast), (ii) West Coast in a merger in which West Coast is the continuing or
surviving person, and (iii) the transferee of all or substantially all of
West Coast's assets or deposits (or the assets or deposits of a Significant
Subsidiary of West Coast).
(ii) "Substitute Common Shares" shall mean the common shares issued by
the issuer of the Substitute Option upon exercise of the Substitute Option.
(iii) "Assigned Value" shall mean the Market/Offer Price, as defined in
Section 7.
(iv) "Average Price" shall mean the average closing price of the
Substitute Common Share for the one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the substitute Common Shares on the day preceding such
consolidation, merger or sale; provided that if West Coast is the issuer of
the Substitute Option, the Average Price shall be computed with respect to
common shares issued by the person merging into West Coast or by any company
which controls or is controlled by such person, as the Holder may elect.
(c) The Substitute Option shall have the same terms as the Option, provided,
that if the terms of the Substitute Option cannot, for legal reasons, be the
same as the Option, such terms shall be as similar as possible and in no event
less advantageous to the Holder. The issuer of the Substitute Option shall also
enter into an agreement with the then Holder or Holders of the Substitute Option
in substantially the same form as this
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Agreement (after giving effect for such purpose to the provisions of Section 9),
which agreement shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of Substitute
Common Shares as is equal to the Assigned Value multiplied by the number of
Common Shares for which the Option is then exercisable, divided by the Average
Price. The exercise price of the Substitute Option per Substitute Common Share
shall then be equal to the Option Price multiplied by a fraction, the numerator
of which shall be the number of Common Shares for which the Option is then
exercisable and the denominator of which shall be the number of Substitute
Common Shares for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for a number of shares which together with
shares of the Acquiring Corporation then beneficially owned by FNB, constitutes
more than 19.9% of the shares of Substitute Common Shares outstanding prior to
exercise of the Substitute Option.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option West Coast") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the Highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied by
the number of Substitute Common Shares for which the Substitute Option may then
be exercised, and at the request of the owner (the "Substitute Share Owner") of
shares of Substitute Common Shares (the "Substitute Shares"), the Substitute
Option West Coast shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the Highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Shares within the three-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective right to require the Substitute Option
West Coast to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
Option West Coast, at its principal office, the agreement for such Substitute
Option (or, in the absence of such an agreement, a copy of this Agreement) and
certificates for Substitute Shares accompanied by a written notice or notices
stating that the Substitute Option Holder or the Substitute Share Owner, as the
case may be, elects to require the Substitute Option West Coast to repurchase
the Substitute Option and/or the Substitute Shares in accordance with the
provisions of this Section 9. As promptly as practicable, and in any event
within ten business days after the surrender of the Substitute Option and/or
certificates representing Substitute Shares and the receipt of such notice or
notices relating thereto, the Substitute Option West Coast shall deliver or
cause to be delivered to the Substitute Option Holder the Substitute Option
Repurchase Price and/or to the Substitute Share Owner the Substitute Share
Repurchase Price therefor or the portion thereof which the Substitute Option
West Coast is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that the Substitute Option West Coast is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Substitute Option and/or the Substitute Shares in
part or in full, the Substitute Option West Coast shall immediately so notify
the Substitute Option Holder and/or the Substitute Share Owner and thereafter
deliver or cause to be delivered, from time to time, to the Substitute Option
Holder and/or the Substitute Share Owner, as appropriate, the portion of the
Substitute Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within ten business days after the date on which the
Substitute Option West Coast is no longer so prohibited; provided, however, that
if the Substitute Option West Coast is at any time after delivery of a notice of
repurchase pursuant to subsection (b) of this Section 9 prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
delivering to the substitute Option Holder and/or the Substitute Share Owner, as
appropriate, the Substitute Option Repurchase Price and the Substitute Share
Repurchase Price, respectively,
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in full (and the Substitute Option West Coast shall use its best efforts to
receive all required regulatory and legal approvals as promptly as practicable
in order to accomplish such repurchase), the Substitute Option Holder or
Substitute Share Owner may revoke its notice of repurchase of the Substitute
Option or the Substitute Shares either in whole or to the extent of the
prohibition, whereupon, in the latter case, the Substitute Option West Coast
shall promptly (i) deliver to the Substitute Option Holder or Substitute Share
Owner, as appropriate, that portion of the Substitute Option Repurchase Price or
the Substitute Share Repurchase Price that the Substitute Option West Coast is
not prohibited from delivering; and (ii) deliver, as appropriate, either (A) to
the Substitute Option Holder, a new Substitute Option evidencing the right of
the Substitute Option Holder to purchase that number of the Substitute Common
Shares obtained by multiplying the number of Substitute Common Shares for which
the surrendered Substitute Option was exercisable at the time of delivery of the
notice of repurchase by a fraction, the numerator of which is the Substitute
Option Repurchase Price less the portion thereof theretofore delivered to the
Substitute Option Holder and the denominator of which is the Substitute Option
Repurchase Price, or (B) to the Substitute Share Owner, a certificate for the
Substitute Option Shares it is then so prohibited from repurchasing.
10. The periods for exercise of certain rights under Sections 2, 6, 7,
9 and 12 shall be extended: (i) to the extent necessary to obtain all regulatory
approvals for the exercise of such rights (for so long as the Holder is using
commercially reasonable efforts to obtain such regulatory approvals), and for
the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the 1934 Act by reason or
such exercise.
11. West Coast hereby represents and warrants to FNB as follows:
(a) West Coast has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of West Coast and no other corporate proceedings on the part
of West Coast are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by West Coast.
(b) West Coast has taken all necessary corporate action to authorize
and reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of Common
Shares equal to the maximum number of Common Shares at any time and from time to
time issuable hereunder, and all such shares, upon issuance pursuant thereto,
will be duly authorized, validly issued, fully paid, nonassessable.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, FNB, subject to the express provisions hereof, may assign in
whole or in part its rights and obligations hereunder following such Subsequent
Triggering Event; provided, however that until the date 30 days following the
date on which the Federal Reserve Board has approved applications by FNB to
acquire the Common Shares subject to the Option, FNB may not assign its rights
under the Option except in (i) a widely dispersed public distribution, (ii) a
private placement in which no one party acquires the right to purchase in excess
of 2% of the voting shares of issuer, (iii) an assignment to a single party
(i.e., a broker or investment banker) for the purpose of conducting a widely
disbursed public distribution on FNB's behalf, or (iv) any other manner approved
by the Federal Reserve Board.
13. Each of FNB and West Coast will use its best efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including without limitation applying to the Federal Reserve
Board under the Bank Holding Company Act for approval to acquire the shares
issuable hereunder, but FNB shall not be
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58
obligated to apply to state banking authorities for approval to acquire the
Common Shares issuable hereunder until such time, if ever, as it deems
appropriate to do so.
14. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief.
15. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or West Coast is not permitted to
repurchase pursuant to Section 7, the full number of Common Shares provided in
Section 1(a) hereof (as adjusted pursuant to Section 5 hereof), it is the
express intention of West Coast to allow the Holder to acquire or to require
West Coast to repurchase such lesser number of shares as may be permissible,
without any amendment or modification hereof.
16. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
18. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
19. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
20. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
21. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
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59
IN WITNESS WHEREOF, each of the parties had caused this Agreement to be
executed on its behalf by their officers thereunto duly authorized, all as the
date first above written.
F.N.B. CORPORATION
By: /s/ Peter Mortensen
--------------------------------------
Name: Peter Mortensen
Title: Chairman of the Board and President
WEST COAST BANCORP, INC.
By: /s/ Michael P. Geml
--------------------------------------
Name: Michael P. Geml
Title: President
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60
EXHIBIT 2
FORM OF AFFILIATE LETTER ADDRESSED TO FNB
FNB Corporation
3320 East State Street
Hermitage Square
Hermitage, Pennsylvania 16148
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of West Coast Bancorp, Inc., a Florida corporation ("West Coast"),
as the term "affiliate" is (i) defined for purposes of paragraphs (c) and (d)
of Rule 145 ("Rule 145") of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in
and for purposes of Accounting Series, Releases 130 and 135, as amended, of the
Commission. I have been further advised that pursuant to the terms of the
Agreement and Plan of Merger dated as of November 15, 1996 (the "Merger
Agreement"), by and among F.N.B. Corporation, a Pennsylvania corporation
("FNB"), Southwest Banks, Inc. ("Southwest"), a Florida corporation which will
be a wholly-owned subsidiary of FNB on or about January 19, 1997 pursuant to
the terms of that certain Agreement and Plan of Merger dated February 2, 1996
among Southwest, FNB and Southwest Affiliation Corporation, a wholly owned
subsidiary of FNB) and West Coast, West Coast will be merged with and into
Southwest (the "Merger"), and that as a result of the Merger, I may receive
shares of FNB Common Stock (as defined in the Merger Agreement), in exchange
for shares of West Coast Common Stock (as defined in the Merger Agreement)
owned by me.
I represent, warrant and covenant to FNB that in the event I receive
any FNB Common Stock as a result of the Merger:
1. I shall not make any sale, transfer or other disposition of
the FNB Common Stock in violation of the Act or the Rules and
Regulations.
2. I have carefully read this letter and the Agreement and
discussed its requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of FNB Common Stock to
the extent I believed necessary, with my counsel or counsel for West
Coast.
3. I have been advised that the issuance of FNB Common Stock
to me pursuant to the Merger has been registered with the Commission
under the Act on a Registration Statement on Form S-4. However, I have
also been advised that, since the time the Merger was submitted for a
vote of the stockholders of West Coast, I may be deemed to have been
61
an affiliate of FNB and the distribution by me of the FNB Common Stock
has not been registered under the Act, and that I may not sell,
transfer or otherwise dispose of FNB Common Stock issued to me in the
Merger unless (i) such sale, transfer or other disposition has been
registered under the Act, (ii) such sale, transfer or other disposition
is made in conformity with the volume and other limitations of Rule 145
promulgated by the Commission under the Act, or (iii) in the opinion of
counsel reasonably acceptable to FNB, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
4. I understand that FNB is under no obligation to register
the sale, transfer or other disposition of the FNB Common Stock by me
or on my behalf under the Act or to take any other action necessary in
order to make compliance with an exemption from such registration
available.
5. I also understand that stop transfer instructions will be
given to FNB's transfer agents with respect to the FNB Common Stock and
that there will be placed on the certificates for the FNB Common Stock
issued to me, or any substitutions therefor, a legend stating in
substance:
The securities represented by this certificate have
been issued in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies and may only be sold
or otherwise transferred in compliance with the requirements
of Rule 145 or pursuant to a registration statement under said
act or an exemption from such registration.
6. I also understand that unless the transfer by me of my FNB
Common Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, FNB reserves the right to
put the following legend on the certificates issued to my transferee:
The shares represented by this certificate have not
been registered under the Securities Act of 1933 and were
acquired from a person who received such shares in a
transaction to which Rule 145 promulgated under the Securities
Act of 1933 applies. The shares have been acquired by the
holder not with a view to, or for resale in connection with,
any distribution thereof within the meaning of Securities Act
of 1933 and may not be sold, pledged or otherwise transferred
except in accordance with an exemption from the registration
requirements of the Securities Act of 1933.
It is understood and agreed that the legends set forth in paragraphs 5
and 6 above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to FNB a copy of a letter from
the staff of the Commission,
62
or an opinion of counsel in form and substance reasonably satisfactory to FNB,
to the effect that such legend is not required for purposes of the Act.
I further represent to and covenant with FNB that from the date that is
30 days prior to the Effective Time (as defined in the Merger Agreement) I will
not sell, transfer or otherwise dispose of shares of West Coast Common Stock
held by me and that I will not sell, transfer or otherwise dispose of any
shares of FNB Common Stock received by me in the Merger or other shares of FNB
Capital Stock (as defined in the Merger Agreement) until after such time as
results covering at least 30 days of combined operations of FNB and West Coast
have been published by FNB, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes the results of at least 30 days of combined
operations; provided, however, that this paragraph shall not prevent me from
selling, transferring or disposing of such number of shares of West Coast
Common Stock or FNB Capital Stock as will not, in the reasonable judgment of
accountants to FNB, interfere with or prevent the Merger being accounted for as
a "pooling of interests", taking into account the nature, extent and timing of
such sale, transfer or disposition and of similar sales, transfers or
dispositions by all other affiliates of West Coast and all affiliates of FNB.
I understand that pursuant to the Merger Agreement, no certificate for
FNB Common Stock shall be delivered to me in exchange for certificates
representing West Coast Common Stock until I have executed and delivered this
agreement.
Very truly yours,
By:
-----------------------------------
Name:
Accepted this ______ day of
, 1996, by
F.N.B. Corporation
By:
- -----------------------------
Name:
Title: