Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during the period from the date of this Agreement to the Effective Time, neither Parent nor Subject Company shall, and neither Parent nor Subject Company shall permit any of their respective Subsidiaries to, without the prior written consent of the other: (a) adjust, split, combine or reclassify any capital stock; make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or issue any additional shares of capital stock except pursuant to (A) the exercise of stock options outstanding as of the date hereof or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof; (b) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other party; (c) except for (i) transactions in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transaction, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof; (d) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any contract or agreement, or make any change in any of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereof; (e) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation; (f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent with respect to any of the foregoing. Each party shall immediately advise the other following the receipt by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrence
Appears in 1 contract
Sources: Merger Agreement (Wells Fargo & Co)
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement to the Effective TimeTime or earlier termination of this Agreement, except as set forth in the Global Payments Disclosure Schedule or the TSYS Disclosure Schedule, as expressly contemplated or permitted by this Agreement or as required by law, neither Parent Global Payments nor Subject Company TSYS shall, and neither Parent Global Payments nor Subject Company TSYS shall permit any of their respective Subsidiaries to, without the prior written consent of the other:other party to this Agreement (such consent not to be unreasonably withheld, conditioned or delayed):
(a) incur, assume, guarantee or become liable for any indebtedness for borrowed money, other than (i) intercompany indebtedness, (ii) borrowings in the ordinary course under any revolving credit facility, settlement facility, commercial paper program or other line of credit existing on the date of this Agreement up to the amount committed thereunder on the date of this Agreement (or any amendment or replacement thereof, in each case, so long as the amount of borrowings under such amended or replaced facility or program is not greater than the committed amount of such facility or program on the date of this Agreement and the amendment or replacement contains customary commercial terms consistent in all material respects with the existing facility), (iii) guarantees by TSYS or any direct or indirect wholly owned Subsidiary of TSYS of indebtedness of TSYS or any other direct or indirect wholly owned Subsidiary of TSYS, (iv) guarantees by Global Payments or any direct or indirect wholly owned Subsidiary of Global Payments of indebtedness of Global Payments or any other direct or indirect wholly owned Subsidiary of Global Payments, (v) any indebtedness incurred to refinance, roll-over, replace or renew any indebtedness described in clause (ii) above, so long as, in each case, (1) the principal amount of such refinancing, roll-over, replacement or renewed indebtedness is not greater than the principal amount of the indebtedness being refinanced, rolled-over, replaced or renewed (plus accrued interest, and a reasonable amount of premium, fees and expenses incurred in connection with such refinancing), and (2) such indebtedness is on customary commercial terms consistent in all material respects with the indebtedness being refinanced, rolled-over, replaced or renewed, (vi) indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the ordinary course, (vii) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging contracts (1) not entered for speculative purposes and (2) entered into in the ordinary course and in compliance with its risk management and hedging policies or practices in effect on the date of this Agreement and (viii) indebtedness incurred under the Commitment Letters (as defined below), and other indebtedness incurred by mutual agreement of TSYS and Global Payments in accordance with Section 6.18;
(b) (i) adjust, split, combine or reclassify any capital stock; make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or issue any additional shares of capital stock except pursuant to (A) the exercise of stock options outstanding as of the date hereof or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof;
(b) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other party;
(c) except for (i) transactions in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transaction, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof;
(d) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any contract or agreement, or make any change in any of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereof;
(e) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent with respect to any of the foregoing. Each party shall immediately advise the other following the receipt by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrence
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement to the Effective Time, except as set forth in the OSB Disclosure Schedules or the FCB Disclosure Schedules, as the case may be, and, except as expressly contemplated or permitted by this Agreement, the Plan of Merger or the Option Agreements, neither Parent FCB nor Subject Company OSB shall, and neither Parent nor Subject Company shall FCB or OSB permit any of their respective the FCB Subsidiaries or OSB Subsidiaries, respectively to, without the prior written consent of the other:
(a) other than in the ordinary course of business consistent with past practice, (i) incur any indebtedness for borrowed money (other than pursuant to existing lines of credit or short-term indebtedness incurred in the ordinary course of business consistent with past practice, indebtedness of OSB to any of the OSB Subsidiaries or of any of the OSB Subsidiaries to OSB, or indebtedness of FCB to any of the FCB Subsidiaries or of any of the FCB Subsidiaries to FCB, it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of Federal funds, sales of certificates of deposit and entering into repurchase agreements), (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity; or (iii) make any loan or advance;
(b) (i) adjust, split, combine or reclassify any capital stock; , (ii) make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stockstock (except (A) in the case of FCB, for regular quarterly cash dividends at a rate not in excess of $0.18 per share of FCB Common Stock, and (B) in the case of OSB, for regular quarterly cash dividends at a rate not in excess of $0.16 per share of OSB Common Stock); (iii) directly or indirectly redeem, purchase or otherwise acquire any shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except (A) in the case of FCB, repurchases of FCB Common Stock in the open market or in privately negotiated transactions, provided that written notice of any such repurchase is given to OSB as soon as is practicable thereafter, and (B) in the case of OSB, repurchases of OSB Common Stock in the open market or in privately negotiated transactions, provided that written notice of any such repurchase is given to FCB as soon as practicable thereafter); (iv) grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock stock, or (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or iv) issue any additional shares of capital stock (except pursuant to (A) the exercise of stock options outstanding as of the date hereof of this Agreement, or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereofAgreements);
(bc) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) practice or pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other partyAgreement;
(cd) except for (i) transactions in the ordinary course of business consistent with past practice, practice or (ii) acquisitions pursuant to contracts or agreements in force at the date of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transactionthis Agreement, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases purchase of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereofthereof or any existing joint venture to which OSB or FCB is a party;
(de) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any material contract or agreement, or make any change in any of its material leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially material adverse changes of terms thereofterms;
(ef) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect manner the compensation or fringe benefits of any of its employees (it being understood and agreed that an increase in any manner the compensation of any employee in the ordinary course of business consistent with past practice shall include, without limitation, an increase in ▇▇. ▇▇▇▇▇▇▇▇▇▇'▇ base salary to an amount not to exceed $125,000 annually), or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-profit- sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, employee; provided, however, that (i) any bonus paid any officer of FCB or the FCB Subsidiaries shall not exceed 115% of such bonus paid to such individual for the immediately preceding fiscal year and (ii) any bonus paid by OSB or the OSB Subsidiaries to (a) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ shall not exceed 30% of his 1996 base salary, (b) any Vice President of OSB or the OSB Subsidiaries shall not exceed 15% of each of Parent and Subject Company mayindividual's 1996 base salary, and (c) all other employees of OSB or the OSB Subsidiaries shall not exceed $30,000 in the aggregate for any fiscal year;
(g) grant, amend or modify in any material respect any stock option, stock awards or other stock based compensation, except that OSB and FCB may authorize modify their respective stock options and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board OSB may modify stock awards previously granted under the OSB MRP which are outstanding as of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with in each case solely to provide full vesting conditioned upon and effective as of the Closing Date.
(h) pay, discharge or satisfy any parties material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than Parent the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice (which includes the payment of final and unappealable judgments) or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of such party included in such party's reports filed with the SEC, or incurred in the ordinary course of business consistent with past practice;
(i) take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; provided, however, that nothing contained herein shall limit the ability of OSB or FCB to exercise its rights under the OSB Option Agreement or the FCB Option Agreement, as the case may be;
(j) amend its articles of incorporation or its bylaws;
(k) other than in prior consultation with the other party to this Agreement, restructure or materially change its investment securities portfolio or its gap position, through purchases, sales, or otherwise, or the manner in which the portfolio is classified or reported;
(l) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the foregoing. Each party shall immediately advise conditions to the other following the receipt by it Merger set forth in Article VII not being satisfied or in a violation of any Takeover Proposal and provision of this Agreement, the details thereofPlan of Merger or the Option Agreements, and advise except, in every case, as may be required by applicable law; or
(m) agree to, or make any commitment to, take any of the other of any developments with respect to such Takeover Proposal immediately upon the occurrenceactions prohibited by this Section 5.2.
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement to the Effective Time, except as set forth in the OSB Disclosure Schedules or the FCB Disclosure Schedules, as the case may be, and, except as expressly contemplated or permitted by this Agreement, the Plan of Merger or the Option Agreements, neither Parent FCB nor Subject Company OSB shall, and neither Parent nor Subject Company shall FCB or OSB permit any of their respective the FCB Subsidiaries or OSB Subsidiaries, respectively to, without the prior written consent of the other:
(a) other than in the ordinary course of business consistent with past practice, (i) incur any indebtedness for borrowed money (other than pursuant to existing lines of credit or short-term indebtedness incurred in the ordinary course of business consistent with past practice, indebtedness of OSB to any of the OSB Subsidiaries or of any of the OSB Subsidiaries to OSB, or indebtedness of FCB to any of the FCB Subsidiaries or of any of the FCB Subsidiaries to FCB, it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of Federal funds, sales of certificates of deposit and entering into repurchase agreements), (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity; or (iii) make any loan or advance;
(b) (i) adjust, split, combine or reclassify any capital stock; , (ii) make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stockstock (except (A) in the case of FCB, for regular quarterly cash dividends at a rate not in excess of $0.18 per share of FCB Common Stock, and (B) in the case of OSB, for regular quarterly cash dividends at a rate not in excess of $0.16 per share of OSB Common Stock); (iii) directly or indirectly redeem, purchase or otherwise acquire any shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except (A) in the case of FCB, repurchases of FCB Common Stock in the open market or in privately negotiated transactions, provided that written notice of any such repurchase is given to OSB as soon as is practicable thereafter, and (B) in the case of OSB, repurchases of OSB Common Stock in the open market or in privately negotiated transactions, provided that written notice of any such repurchase is given to FCB as soon as practicable thereafter); (iv) grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock stock, or (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or iv) issue any additional shares of capital stock (except pursuant to (A) the exercise of stock options outstanding as of the date hereof of this Agreement, or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereofAgreements);
(bc) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) practice or pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other partyAgreement;
(cd) except for (i) transactions in the ordinary course of business consistent with past practice, practice or (ii) acquisitions pursuant to contracts or agreements in force at the date of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transactionthis Agreement, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases purchase of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereofthereof or any existing joint venture to which OSB or FCB is a party;
(de) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any material contract or agreement, or make any change in any of its material leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially material adverse changes of terms thereofterms;
(ef) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect manner the compensation or fringe benefits of any of its employees (it being understood and agreed that an increase in any manner the compensation of any employee in the ordinary course of business consistent with past practice shall include, without limitation, an increase in Mr. Rothenbach's base salary to an amount not to e▇▇▇▇▇ $▇▇▇,▇▇▇ ▇nnually), or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a 49 party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee employee; PROVIDED, HOWEVER, that (i) any bonus paid any officer of FCB or accelerate the vesting FCB Subsidiaries shall not exceed 115% of such bonus paid to such individual for the immediately preceding fiscal year and (ii) any stock options bonus paid by OSB or the OSB Subsidiaries to (a) James J. Rothenbach shall not exceed 30% of his 19▇▇ ▇▇▇▇ ▇▇▇▇▇▇, (▇) any Vice President of OSB or the OSB Subsidiaries shall not exceed 15% of each individual's 1996 base salary, and (c) all other stock-based compensationemployees of OSB or the OSB Subsidiaries shall not exceed $30,000 in the aggregate for any fiscal year;
(fg) authorize grant, amend or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate modify in any discussions material respect any stock option, stock awards or negotiationsother stock based compensation, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, except that each OSB and FCB may modify their respective stock options and OSB may modify stock awards previously granted under the OSB MRP which are outstanding as of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with in each case solely to provide full vesting conditioned upon and effective as of the Closing Date.
(h) pay, discharge or satisfy any parties material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than Parent the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice (which includes the payment of final and unappealable judgments) or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of such party included in such party's reports filed with the SEC, or incurred in the ordinary course of business consistent with past practice;
(i) take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; PROVIDED, HOWEVER, that nothing contained herein shall limit the ability of OSB or FCB to exercise its rights under the OSB Option Agreement or the FCB Option Agreement, as the case may be;
(j) amend its articles of incorporation or its bylaws;
(k) other than in prior consultation with the other party to this Agreement, restructure or materially change its investment securities portfolio or its gap position, through purchases, sales, or otherwise, or the manner in which the portfolio is classified or reported;
(l) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the foregoing. Each party shall immediately advise conditions to the other following the receipt by it Merger set forth in Article VII not being satisfied or in a violation of any Takeover Proposal and provision of this Agreement, the details thereofPlan of Merger or the Option Agreements, and advise except, in every case, as may be required by applicable law; or
(m) agree to, or make any commitment to, take any of the other of any developments with respect to such Takeover Proposal immediately upon the occurrenceactions prohibited by this Section 5.2.
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement to the Effective INSC▇ ▇▇▇ective Time, except as set forth in the Professionals Group Disclosure Schedule or the PPTF Disclosure Schedule, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither Parent Professionals Group nor Subject Company PPTF shall, and neither Parent Professionals Group nor Subject Company PPTF shall permit any of their respective Subsidiaries to, without the prior written consent of the other:
(a) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than (i) indebtedness incurred in connection with the incorporation of, and for the purpose of incorporating, INSC▇, ▇▇d (ii) short-term indebtedness incurred to refinance short-term indebtedness and indebtedness of Professionals Group or any of its Subsidiaries to Professionals Group or any of its Subsidiaries, on the one hand, or of PPTF or the PPTF Subsidiary to PPTF or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advance (it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include entering into repurchase agreements and reverse repurchase agreements);
(b) redeem, repay, discharge or defease any surplus note (including the PPTF Surplus Notes), unless such redemption, repayment, discharge or defeasance is an express condition of any Requisite Regulatory Approval;
(c) (i) adjust, split, combine or reclassify any capital stock; (ii) make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stockstock (except (A) in the case of Professionals Group, a stock dividend not exceeding 10% of the shares of Professionals Group Common Stock outstanding as of the date such stock dividend is declared may be made, declared or paid at any time prior to the INSC▇ ▇▇▇ective Time, and (B) dividends paid by any of the Subsidiaries of each of Professionals Group and PPTF to Professionals Group or PPTF or any of their Subsidiaries, respectively), (iii) grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock (and no such rights or options shall be granted, (A) except for regular quarterly cash dividends on Subject Company that at any time prior to the Closing Date, and pursuant to the terms of the Professionals Group LTIP, Professionals Group may make Awards (defined in this Agreement as in the Professionals Group LTIP) to Participants (defined in this Agreement as in the Professionals Group LTIP) covering up to 150,000 shares of Professionals Group Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectivelyaggregate, and (B) except for the issuance of employee stock options as otherwise agreed in writing by Professionals Group and restricted stock consistent with past practicesPPTF); , or (iv) issue any additional shares of capital stock except pursuant to (A) the exercise of stock options or warrants outstanding as of the date hereof of this Agreement, or issued after the date hereof in a manner consistent with past practice, (B) the award as permitted under clause (ii) or clause (iii) of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereofthis sentence;
(bd) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) practice or pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other partyAgreement;
(c) except for (i) transactions in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transaction, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof;
(de) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any contract or agreementin connection with the incorporation of, or make any change in any of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereof;
(e) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit purpose of any employee incorporating, INSC▇, ▇▇ pursuant to contracts or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate agreements in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to force at the date of this Agreement with Agreement, make any parties other than Parent with respect to any of the foregoing. Each party shall immediately advise the other following the receipt by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrencematerial investment
Appears in 1 contract
Sources: Agreement and Plan of Merger (Professionals Insurance Co Management Group)
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement to the Effective TimeTime or earlier termination of this Agreement, except as set forth in the IBTX Disclosure Schedule or the TCBI Disclosure Schedule, as expressly contemplated or permitted by this Agreement or as required by law, neither Parent IBTX nor Subject Company TCBI shall, and neither Parent IBTX nor Subject Company TCBI shall permit any of their respective Subsidiaries to, without the prior written consent of the other:other party to this Agreement (such consent not to be unreasonably withheld, conditioned or delayed):
(a) other than (i) federal funds borrowings and Federal Home Loan Bank borrowings, in each case with a maturity not in excess of six (6) months, (ii) the creation of deposit liabilities, (iii) issuances of letters of credit, (iv) purchases of federal funds, (v) sales of certificates of deposit and (vi) entry into repurchase agreements, in each case in the ordinary course of business, incur any indebtedness for borrowed money (other than indebtedness of TCBI or any of its wholly-owned Subsidiaries to TCBI or any of its wholly-owned Subsidiaries, on the one hand, or of IBTX or any of its wholly-owned Subsidiaries to IBTX or any of its wholly-owned Subsidiaries, on the other hand), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity;
(b) (%4) adjust, split, combine or reclassify any capital stock; ;
(i) make, declare declare, pay or pay set a record date for any dividend dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity or voting securities or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) or exchangeable into or exchangeable exercisable for any shares of its capital stockstock or other equity or voting securities, including any TCBI Securities or TCBI Subsidiary Securities, in the case of TCBI, or grant any stock appreciation rights IBTX Securities or grant any individualIBTX Subsidiary Securities, corporation or other entity any right to acquire any shares in the case of its capital stock IBTX, except, in each case, (except for A) regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock by IBTX at a rate equal to the rates recently not in excess of $0.25 per share of IBTX Common Stock, (B) dividends paid by any of the Subsidiaries of each of Subject Company IBTX and ParentTCBI to IBTX or TCBI or any of their wholly-owned Subsidiaries, respectively, (C) dividends provided for and paid on any trust preferred securities of IBTX, TCBI or their respective Subsidiaries in accordance with the terms thereof, or, in the case of TCBI, dividends provided for and paid on TCBI Preferred Stock in accordance with the terms of such TCBI Preferred Stock or (D) the acceptance of shares of TCBI Common Stock or IBTX Common Stock, as the case may be, as such rates may be increased by either party payment for the exercise price of stock appreciation rights or stock options or for withholding Taxes incurred in connection with the ordinary course exercise of business consistent stock appreciation rights or stock options or the vesting or settlement of equity compensation awards, in each case, in accordance with past practice andand the terms of the applicable award agreements;
(ii) grant any stock appreciation rights, stock options, restricted stock units, performance units, phantom stock units, restricted shares or other equity-based awards or interests, or grant any person any right to acquire any TCBI Securities or TCBI Subsidiary Securities, in the case of Subject Company Preferred Stock and Parent Preferred StockTCBI, for regular quarterly or semiannual cash dividends thereon at the rates set forth IBTX Securities or IBTX Subsidiary Securities, in the applicable certificate case of incorporation IBTX; or
(iii) issue, sell, transfer, encumber or certificate of designation for such securities and except for dividends paid by otherwise permit to become outstanding any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or issue any additional shares of capital stock or voting securities or equity interests or securities convertible (whether currently convertible or convertible only after the passage of time of the occurrence of certain events) or exchangeable into, or exercisable for, any shares of its capital stock or other equity or voting securities, including any TCBI Securities or TCBI Subsidiary Securities, in the case of TCBI, or IBTX Securities or IBTX Subsidiary Securities, in the case of IBTX, or any options, warrants, or other rights of any kind to acquire any shares of capital stock or other equity or voting securities, including any TCBI Securities or TCBI Subsidiary Securities, in the case of TCBI, or IBTX Securities or IBTX Subsidiary Securities, in the case of IBTX, except pursuant to (A) the exercise of stock options outstanding as of the date hereof appreciation rights or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof;
(b) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other party;
(c) except for (i) transactions in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transaction, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof;
(d) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any contract or agreement, or make any change in any of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereof;
(e) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensationthe settlement of equity compensation awards in accordance with their terms;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent with respect to any of the foregoing. Each party shall immediately advise the other following the receipt by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrence
Appears in 1 contract
Forbearances. Except During the Interim Period, except as set forth in Section 5.2 required by Law, the rules and regulations of the Subject Company Disclosure Schedule NYSE or Section 5.2 of the Parent Disclosure Schedule, as the case may beGAAP, as expressly contemplated or permitted by this Agreement, as specifically set forth in Section 6.02 of the Settlement AgreementDPSG Disclosure Letter or as consented to in writing by Maple Parent (such consent not to be unreasonably withheld, conditioned or the Fee Lettersdelayed), as required by applicable law, rule or regulation, during the period from the date of this Agreement to the Effective Time, neither Parent nor Subject Company shallDPSG will not, and neither Parent nor Subject Company shall will not permit any of their respective the DPSG Subsidiaries to, without the prior written consent of the other:
(a) adjust, split, combine or reclassify incur any capital stock; make, declare or pay any dividend Indebtedness or make any loan or advance or enter into any swap or hedging transaction other distribution onthan any of the following:
(i) Indebtedness incurred (A) under the DPSG Credit Facilities in the ordinary course of business or (B) pursuant to any of the commercial paper facilities set forth on Section 6.02 of the DPSG Disclosure Letter; provided that the aggregate Indebtedness incurred under clauses (A) and (B) shall not exceed $200,000,000 in the aggregate;
(ii) Indebtedness incurred to refinance, prepay, repurchase or directly or indirectly redeem, purchase or otherwise acquire, redeem any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal Indebtedness falling due prior to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party End Date on then-current market terms;
(iii) loans or advances made in the ordinary course of business consistent with past practice and, between DPSG and any of the DPSG Subsidiaries or between DPSG Subsidiaries;
(iv) advances made to directors or officers of DPSG or any DPSG Subsidiary pursuant to and solely to the extent of advancement obligations in the case of Subject Company Preferred Stock and Parent Preferred StockDPSG Charter, for regular quarterly or semiannual cash dividends thereon at DPSG By-laws, the rates set forth in the applicable certificate of incorporation or certificate by-laws of designation any DPSG Subsidiary, this Agreement or any indemnification agreement existing at the time of this Agreement between DPSG or any DPSG Subsidiary, on the one hand, and any directors or officers of DPSG or any DPSG Subsidiary, on the other hand; or
(v) in the ordinary course of business consistent with past practice in accordance with DPSG’s current policy: (A) Contracts entered into for such securities purposes of hedging against changes in commodities prices; and (B) Contracts entered into for purposes of hedging against changes in foreign currency exchange rates in accordance with DPSG’s current policy with respect to foreign currency exchange rate hedging, in each case providing for coverage of no more than forward one year;
(b) adjust, reclassify, split, combine or subdivide, redeem, purchase or otherwise acquire, directly or indirectly any DPSG Capital Stock;
(c) merge or consolidate DPSG or any DPSG Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of DPSG not in violation of any instrument binding on DPSG or any DPSG Subsidiaries and that would not reasonably be expected to result in a net Tax liability in excess of $5,000,000;
(d) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (i) dividends paid by any Subsidiary of the DPSG to DPSG or to any wholly owned Subsidiaries Subsidiary of each DPSG and (ii) the Special Dividend), or enter into any Contract with respect to the voting of Parent and Subject Company its capital stock other than proxies or voting agreements solicited by DPSG in order to Parent obtain the DPSG Stockholder Approval;
(e) issue, deliver, sell, grant, pledge or Subject Company otherwise encumber or subject to any Lien (i) any Equity Interests of DPSG or any DPSG Subsidiary or any DPSG Voting Debt or (ii) any rights that are linked in any way to the price of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or issue any additional shares of capital stock of, or to the value of or of any part of, or to any dividends or distributions paid on any capital stock of, DPSG or any DPSG Subsidiary, except pursuant to (A) pursuant to the exercise of stock options DPSG Stock Options or the settlement of other DPSG Equity Awards, in each case, outstanding as of the date hereof or issued after the date hereof in a manner consistent with past practice, of this Agreement and (B) the award for issuances by a wholly owned DPSG Subsidiary of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant such Subsidiary’s capital stock to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereofDPSG or another wholly owned DPSG Subsidiary;
(bf) sell, transfer, mortgage, encumber (i)(A) increase in any manner the compensation or otherwise dispose benefits of any directors or employees of its properties DPSG or assets to the DPSG Subsidiaries with the title of executive vice president or higher, or (B) increase in any individual, corporation manner the compensation or benefits of any other entity employee of DPSG or the DPSG Subsidiaries other than a direct annual merit, promotion-related or indirect wholly owned Subsidiary, or cancel, release or assign any indebtedness to any such person or any claims held by any such person, market adjustments of base salaries in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) enter into, establish, amend or terminate any DPSG Benefit Plan other than as required pursuant to contracts or agreements the terms of the DPSG Benefit Plans in force at effect on the date of this Agreement or Agreement, (iii) pursuant accelerate the time of payment or vesting of, or the lapsing of restrictions with respect to, or fund or otherwise secure the payment of, any compensation or benefits under any DPSG Benefit Plan, (iv) hire any Person to plans disclosed be employed by DPSG or any of the DPSG Subsidiaries, or terminate the employment of any DPSG or DPSG Subsidiary employee with the title of executive vice president or higher (other than for cause), (v) grant or provide any severance, retention, change in writing prior control or termination payments or benefits to any director, officer or non-officer employee of DPSG or any of the execution DPSG Subsidiaries other than payment of this severance or termination benefits in the ordinary course of business consistent with past practice, or (vi) enter into, modify or amend any Collective Bargaining Agreement to except in the ordinary course of business consistent with past practice other partythan, in each of clauses (i) through (vi), as required by the terms of the applicable DPSG Benefit Plan, DPSG Material Agreement or applicable Law;
(cg) except for with respect to any DPSG Benefit Plan that is subject to Title IV of ERISA, (i) materially change any actuarial or other assumption used to calculate funding obligations or liabilities with respect to any such DPSG Benefit Plan, (ii) modify any policy, rule, structure or regulation applicable to any such DPSG Benefit Plan, (iii) take any other action with respect to any such DPSG Benefit Plan that would increase the liabilities under such plan, other than any actions taken in the ordinary course of business consistent with past practice and that have an immaterial effect (determined by reference to the change in individual participant benefit levels or benefit accruals and not by reference to the plan liabilities taken as a whole) or (iv) change the manner in which contributions to any such DPSG Benefit Plan are made or the basis on which such contributions are determined other than, in each case of clauses (i) through (iv), as required by applicable Law;
(i) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or incur any Lien (other than Permitted Liens) or allow to lapse or otherwise dispose of any of its properties or assets in any transaction or series of transactions to any Person other than DPSG or a DPSG Subsidiary, other than in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity cancel, release or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect assign to any such transaction, make Person any material acquisition Indebtedness or investment either any material claim held by purchase of stock DPSG or securitiesany DPSG Subsidiary, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof;
(d) except for transactions in the ordinary course of business consistent with past practice, ;
(i) enter into any new line of business that is material to DPSG and the DPSG Subsidiaries, taken as a whole;
(j) settle any claim, action or terminate proceeding if such settlement would require any contract payment by DPSG or agreementany of the DPSG Subsidiaries of an amount in excess of $3,000,000 individually or $10,000,000 in the aggregate, or would obligate DPSG or any of the DPSG Subsidiaries to take any material action or impose any material restrictions on the business of DPSG or any of the DPSG Subsidiaries;
(k) directly or indirectly make, or agree to directly or indirectly make, any acquisition or investment either by merger, consolidation, purchase of stock or securities, contributions to capital, property transfers, or by purchase of any property or assets of any other Person, or make any change in any of its leases or contractscapital expenditures, in each case that is material to such party, other than renewals (i) investments in the DPSG Subsidiaries, (ii) acquisitions of, or improvements to, assets used in the operations of contracts DPSG and leases without materially adverse changes the DPSG Subsidiaries in the ordinary course of business, (iii) short-term investments of cash in the ordinary course of business, (iv) capital expenditures in accordance with the capital expenditures plan set forth in Section 6.02(k) of the DPSG Disclosure Letter; (v) acquisitions, investments or purchases of any property or assets with a value or purchase price (including the value of assumed liabilities) not in excess of $10,000,000 in any transaction or related series of transactions or $25,000,000 in the aggregate, or as required by the terms thereofof Contracts as in effect as of the date of this Agreement that are listed in Section 6.02(k) of the DPSG Disclosure Letter;
(el) (i) amend the DPSG Charter or the DPSG By-laws or (ii) amend the similar organizational documents of any material DPSG Subsidiary in any material respect;
(m) amend or modify, in any material respect, or terminate any DPSG Material Contract or material Permit held by DPSG or enter into any Contract that would have been a DPSG Material Contract had it been entered into prior to the execution of this Agreement, in each case other than in the ordinary course of business;
(n) enter into, amend, in any material respect, or terminate (i) any exclusive co-packing Contract, or (ii) any co-packing Contract with annual payments to such co-packer of $20,000,000 or more (provided that, with respect to any co-packing Contract with annual payments to such co-packer of less than $20,000,000, DPSG will, and will cause the DPSG Subsidiaries to, take any of the actions described in this clause (n) only after advance consultation with Maple Parent),
(o) grant, transfer to another party, amend, in any material respect (including any change to a counterparty or counterparties or any provisions relating to territorial restrictions or exclusivity), or terminate any bottling or distribution Contract that involves the distribution or sale of more than 1% of DPSG’s total case sales volume;
(p) implement or adopt any material change in its Tax accounting or financial accounting policies, practices or methods, other than (i) in the ordinary course of business consistent with past practicebusiness, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not as may be required by any existing plan applicable Law, GAAP or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensationregulatory guidelines;
(fq) authorize implement or permit adopt any material change to its policies, practices and methods in respect of its officersrevenue recognition, directorscash management, employees payment (or agents to directly acceleration or indirectly solicitdeferral thereof) of accounts payable, initiate accrual of expenses, and collection (or encourage acceleration or deferral thereof) of accounts receivable or other receivables, other than as may be required by applicable Law, GAAP or regulatory guidelines;
(r) take any inquiries relating action that would, or would be reasonably likely to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the making of any proposal which constitutesother Transactions; or
(s) agree, a Takeover Proposal (as defined below)commit, or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating resolve to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent with respect to take any of the foregoing. Each party shall immediately advise the other following the receipt actions prohibited by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrencethis Section 6.02.
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, neither Parent nor Subject Company shallexcept as expressly permitted by this Agreement or as required by applicable Law, Elmira shall not, and neither Parent nor Subject Company shall not permit any of their respective its Subsidiaries to, without the prior written consent of the other:Community (such consent not to be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its Organizational Documents or any resolution or agreement concerning indemnification of its directors or officers;
(b) (i) adjust, split, combine combine, subdivide or reclassify any capital stock; , (ii) make, declare declare, set aside or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, other than (A) the acceptance of shares of Elmira Common Stock as payment for the exercise of Elmira Stock Options or grant for withholding taxes incurred in connection with the exercise of Elmira Stock Options or the vesting or settlement of Elmira Restricted Shares, in each case in the ordinary course of business and in accordance with the terms of the applicable award agreements in effect on the date hereof, (B) dividends paid by any stock appreciation rights of the Subsidiaries of Elmira to Elmira or grant any individualof its wholly-owned Subsidiaries, corporation and (C) regular quarterly cash dividends by Elmira at a rate not in excess of $0.15 per share of Elmira Common Stock with record and payment dates consistent with the comparable quarters in the prior year, except that with the consent of Community, not to be unreasonably withheld, conditioned or other entity any right delayed, Elmira may adjust the declaration, record and/or payable dates with regard to acquire Elmira’s last dividend prior to the Effective Time so that the amount of the final dividend prior to the Effective Time on Elmira Common Stock shall be adjusted to reflect the normal dividend rate of $0.15 per share multiplied by the number of days that have elapsed in that calendar quarter prior to Closing, divided by ninety (90), (iii) issue or otherwise permit to become outstanding, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock (or Rights, except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal pursuant to the rates recently paid by exercise of Elmira Stock Options or the vesting or settlement of Elmira Restricted Shares, in each case, granted under the Elmira Benefit Plans prior to the date of Subject Company and Parentthis Agreement, or except as set forth in Section 4.2(b)(iii) of the case may beElmira Disclosure Letter, as such rates may be increased by either party or (iv) make any material change in any instrument or Contract governing the terms of any of its securities;
(c) other than in the ordinary course of business consistent with past practice and(including by way of foreclosure or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith), make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets) in any other Person other than a wholly-owned Subsidiary of Elmira;
(d) except as described in Section 4.2(d) of the Elmira Disclosure Letter, charge off (except as may otherwise be required by Law or by Regulatory Authorities or by GAAP) or sell (except in the case ordinary course of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock business consistent with past practices); ) any of its portfolio of Loans;
(e) terminate or issue allow to be terminated any additional shares of capital stock except pursuant to (A) the exercise of stock options outstanding as of the date hereof policies of insurance it maintains on its business or issued after property, cancel any material indebtedness owing to it or any claims that it may have possessed, or waive any right of substantial value or discharge or satisfy any material noncurrent Liability;
(f) enter into any material new line of business;
(g) except in the date hereof in a manner ordinary course of business consistent with past practice, : (Bi) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof;
(b) sell, transfer, mortgage, encumber lend any money or otherwise dispose of pledge any of its properties credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or assets otherwise; (ii) mortgage or otherwise subject to any individualLien, corporation encumbrance or other entity Liability any of its assets; (iii) except for property held as other than a direct real estate owned, sell, assign or indirect wholly owned Subsidiarytransfer any of its assets in excess of $25,000 in the aggregate for Elmira and its Subsidiaries; or (iv) incur any material Liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute or contingent), or cancel, release or assign any indebtedness to of any such person Person or any claims held by against any such person, in each case that is material to such partyPerson, except pursuant to Contracts in force as of the date of this Agreement and disclosed in Section 3.2(l) of the Elmira Disclosure Letter or transfer, agree to transfer or grant, or agree to grant, a license to, any of its material Intellectual Property;
(ih) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (ii) pursuant other than short-term indebtedness incurred to contracts or agreements in force at the date refinance short-term indebtedness (it being understood that for purposes of this Agreement Section 4.2(h), “short-term” shall mean maturities of six (6) months or (iii) pursuant to plans disclosed in writing prior to less)); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the execution obligations of this Agreement to the other partyany Person;
(c) except for (i) transactions other than purchases of investment securities in the ordinary course of business consistent with past practice, materially restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) except in the ordinary course of business, terminate, materially amend or modify or waive any material provision of, any material Contract other than any contract that terminates by its terms or normal renewals of Contracts without material adverse changes of terms, or enter into any material Contract;
(k) other than as required under applicable Law or by Elmira Benefit Plans as in effect at the date of this Agreement or as otherwise listed in Section 3.2(k)(i) of the Elmira Disclosure Letter, (i) adopt, enter into, establish, terminate, renew or amend any Benefit Plan (or communicate any intention to take any such action), (ii) change the compensation or benefits of any director, officer or other Service Provider other than in the ordinary course of business consistent with past practice, provided that no increase in compensation or benefits of any director, officer or other Service Providers in the aggregate shall exceed 3.5%, (iii) adopt, enter into or amend any collective bargaining agreement or any other similar agreement with any labor organization, group or association, (iv) adopt, enter into, establish, amend or grant any employment, severance, change in control, termination, deferred compensation, pension or retirement arrangement, (v) grant or pay any equity awards or other incentive compensation, or pay any bonus or incentive compensation under a pre-existing Elmira Benefit Plan in excess of the amount earned based on actual performance, (vi) accelerate any rights or benefits under any Elmira Benefit Plan, including accelerating the vesting of, or the lapsing of restrictions with respect to, any Elmira Restricted Shares or otherwise amend the terms of any outstanding Elmira Stock Options, equity awards or equity-based awards, (vii) pay any severance in excess of what is legally required, (viii) take any action to fund or secure the payment of any amounts under any Elmira Benefit Plan, or change any assumptions used to calculate funding or contribution obligations under any Elmira Benefit Plan, other than as required by GAAP, or (ix) hire or terminate (other than for cause) any director, officer, or any other Service Provider with annual base salary or wages that is reasonably anticipated to exceed $80,000;
(l) commence, settle or agree to settle any Litigation, except in the ordinary course of business consistent with past practice that (i) involves only the payment of money damages not in excess of $25,000 individually or $50,000 in the aggregate, (ii) does not involve the imposition of any equitable relief on, or the admission of wrongdoing by, Elmira or the applicable Subsidiary thereof and (iii) would not create precedent for claims that are reasonably likely to be material to Elmira or any of its Subsidiaries, or, after the Closing, Community or any of its Subsidiaries;
(m) materially revalue any of its assets or change any method of accounting or accounting practice used by it, other than changes required by GAAP or any Regulatory Authority;
(i) file any Tax Return except in the ordinary course of business consistent with past practice or amend any Tax Return; (ii) settle or compromise any Tax Liability; (iii) make (except in the ordinary course of business consistent with past practice), change or revoke any Tax election or change any method of Tax accounting, except as required by applicable Law; (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law); (v) surrender any claim for a refund of Taxes; or (vi) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes;
(o) change its fiscal or Tax year;
(p) knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the First Step Merger set forth in Article 5 not being satisfied; provided, that nothing in this Section 4.2(p) shall preclude Elmira from exercising its rights under Section 4.5 or Section 4.11;
(q) merge or consolidate itself or its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or dissolve (or adopt or enter into a plan to effect any of the foregoing) itself or any of its Subsidiaries (other than mergers or consolidations solely involving its Subsidiaries);
(r) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $25,000;
(s) enter into any Contract that would have been required to be disclosed in Section 3.2(l) of the Elmira Disclosure Letter had it been entered into prior to the execution of this Agreement;
(t) make any material changes in the mix, rates, terms or maturities of Elmira’s deposits or other Liabilities, except in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; except as set forth in Section 4.2(t) of the Elmira Disclosure Letter, open any new branch or deposit taking facility; or close, relocate or materially renovate any existing branch or facility;
(u) make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service, Loans or (ii) acquisitions of an entity investment, risk and asset liability management or business having assets not exceeding 10% of the consolidated assets of Subject Company hedging practices and policies, in each case except as may be required by such policies and practices or Parentby any applicable laws, as applicableregulations, on a pro forma basis giving effect to such transaction, make guidelines or policies imposed by any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereofGovernmental Authority;
(dv) except for Loans or commitments for Loans (or renewals or extensions thereof) that have previously been approved by Elmira prior to the date hereof, make or acquire or issue a commitment for (or renew or extend), (i) any Loans that vary in any material respect from Elmira’s written Loan policies, (ii) any commercial real estate loan in an original principal amount in excess of $1,000,000, (iii) any residential loan originated for retention in the loan portfolio in an original principal amount in excess of $500,000 or with loan to value ratios in excess of Elmira’s internal polices as in effect on the date hereof or (iv) any commercial and industrial loan in an original principal amount in excess of $1,000,000; provided that for the purpose of this paragraph, the consent of Community shall be deemed received unless Community objects in writing by the close of business on the second Business Day after receipt of written notice from Elmira, including the loan package and any other information reasonably requested by Community;
(w) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of Elmira or any of its Subsidiaries or, after the Effective Time, Community or any of its Subsidiaries;
(x) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which Elmira or any of its Subsidiaries is a party;
(y) engage in (or modify in a manner adverse to Elmira or its Subsidiaries) any transactions (except for any ordinary course banking relationships permitted under applicable Law) with any Affiliate or any director or officer thereof (or any Affiliate or immediate family member of any such Person or any Affiliate of such Person’s immediate family members);
(z) except in the ordinary course of business consistent with past practice, enter into any new lease of real property or terminate amend the terms of any contract or agreement, or make any change in any existing lease of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereofreal property;
(eaa) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend incur or commit itself to incur any material pension, retirement, profit-sharing capital expenditure or welfare benefit plan authorization or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent commitment with respect to them that, in the aggregate is in excess of $50,000, except as disclosed in the annual business plan or budget previously disclosed to Community; or
(bb) agree or commit to take any of the foregoing. Each party shall immediately advise the other following the receipt actions prohibited by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrencethis Section 4.2.
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during During the period from the date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, neither Parent nor Subject Company shallexcept as expressly permitted by this Agreement or as required by applicable Law, Kinderhook shall not, and neither Parent nor Subject Company shall not permit any of their respective its Subsidiaries to, without the prior written consent of the other:Community (such consent not to be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its Organizational Documents or any resolution or agreement concerning indemnification of its directors or officers;
(b) (i) adjust, split, combine combine, subdivide or reclassify any capital stock; , (ii) make, declare declare, set aside or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, other than (A) dividends paid by any of the Subsidiaries of Kinderhook to Kinderhook or any of its wholly-owned Subsidiaries, (B) regular quarterly cash dividends by Kinderhook at a rate not in excess of $0.25 per share of Kinderhook Common Stock with record and payment dates consistent with the comparable quarters in the prior year, except that with the consent of Community, not to be unreasonably withheld, conditioned or delayed, Kinderhook may adjust the declaration, record and/or payable dates with regard to Kinderhook’s last dividend prior to the Effective Time so that the amount of the final dividend prior to the Effective Time on Kinderhook Common Stock shall be adjusted to reflect the normal dividend rate of $0.25 per share multiplied by the number of days that have elapsed in that calendar quarter prior to Closing, divided by ninety (90), (C) dividends payable on the Kinderhook Preferred Stock in accordance with the terms of the Kinderhook Charter, and (D) dividends payable on the trust preferred securities issued by Kinderhook and listed on Section 4.16 of the Kinderhook Disclosure Letter in accordance with the terms of the applicable governing documents, (iii) grant or issue any stock appreciation rights Rights, (iv) issue or grant any individualotherwise permit to become outstanding, corporation sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or other entity any right to acquire authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock (except for regular quarterly cash dividends on Subject Company or Rights, other than issuances of Kinderhook Common Stock and upon the exercise of Kinderhook Warrants in existence on Parent Common the date hereof pursuant to their terms or upon the conversion of shares of Kinderhook Preferred Stock at a rate equal to outstanding on the rates recently paid by each date hereof in accordance with the terms of Subject Company and Parentthe Kinderhook Charter, as or (v) make any material change in any instrument or Contract governing the case may be, as such rates may be increased by either party terms of any of its securities;
(c) other than in the ordinary course of business consistent with past practice and(including by way of foreclosure or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith), make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets) in any other Person other than a wholly-owned Subsidiary of Kinderhook;
(d) charge off (except as may otherwise be required by Law or by Regulatory Authorities or by GAAP) or sell (except in the case ordinary course of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock business consistent with past practices); ) any of its portfolio of Loans;
(e) terminate or issue allow to be terminated any additional shares of capital stock except pursuant to (A) the exercise of stock options outstanding as of the date hereof policies of insurance it maintains on its business or issued after property, cancel any material indebtedness owing to it or any claims that it may have possessed, or waive any right of substantial value or discharge or satisfy any material noncurrent Liability;
(f) enter into any material new line of business;
(g) except in the date hereof in a manner ordinary course of business consistent with past practice, : (Bi) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof;
(b) sell, transfer, mortgage, encumber lend any money or otherwise dispose of pledge any of its properties credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or assets otherwise; (ii) mortgage or otherwise subject to any individualLien, corporation encumbrance or other entity Liability any of its assets; (iii) except for property held as other than a direct real estate owned, sell, assign or indirect wholly owned Subsidiarytransfer any of its assets in excess of $25,000 in the aggregate for Kinderhook and its Subsidiaries; or (iv) incur any material Liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute or contingent), or cancel, release or assign any indebtedness to of any such person Person or any claims held by against any such person, in each case that is material to such partyPerson, except pursuant to Contracts in force as of the date of this Agreement and disclosed in Section 3.2(k) of the Kinderhook Disclosure Letter or transfer, agree to transfer or grant, or agree to grant, a license to, any of its material Intellectual Property;
(ih) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (ii) pursuant other than short-term indebtedness incurred to contracts or agreements in force at the date refinance short-term indebtedness (it being understood that for purposes of this Agreement Section 4.2(h), “short-term” shall mean maturities of six (6) months or (iii) pursuant to plans disclosed in writing prior to less)); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the execution obligations of this Agreement to the other partyany Person;
(c) except for (i) transactions other than purchases of investment securities in the ordinary course of business consistent with past practice, materially restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) except in the ordinary course of business, terminate, materially amend or modify or waive any material provision of, any material Contract other than any contract that terminates by its terms or normal renewals of Contracts without material adverse changes of terms, or enter into any material Contract;
(k) other than as required under applicable Law or by Kinderhook Benefit Plans as in effect at the date of this Agreement or as otherwise listed in Section 3.2(j)(i) of the Kinderhook Disclosure Letter, (i) adopt, enter into, establish, terminate, renew or amend any Benefit Plan (or communicate any intention to take any such action), (ii) change the compensation or benefits of any director, officer or other Service Provider with an annual base salary or wages that is reasonably anticipated to exceed $100,000 or, other than in the ordinary course of business consistent with past practice, of any other Service Provider, (iii) adopt, enter into or amend any collective bargaining agreement or any other similar agreement with any labor organization, group or association, (iv) adopt, enter into, establish, amend or grant any employment, severance, change in control, termination, deferred compensation, pension or retirement arrangement, (v) grant or pay any equity awards or other incentive compensation, or pay any bonus or incentive compensation under a pre-existing Kinderhook Benefit Plan in excess of the amount earned based on actual performance, (vi) accelerate any rights or benefits under any Kinderhook Benefit Plan, including accelerating the vesting of, or the lapsing of restrictions with respect to, any Kinderhook Restricted Shares or otherwise amend the terms of any outstanding SAR Rights, equity awards or equity-based awards, (vii) pay any severance in excess of what is legally required, (viii) take any action to fund or secure the payment of any amounts under any Kinderhook Benefit Plan, or change any assumptions used to calculate funding or contribution obligations under any Kinderhook Benefit Plan, other than as required by GAAP, or (ix) hire or terminate (other than for cause) any director, officer, or any other Service Provider with annual base salary or wages that is reasonably anticipated to exceed $100,000;
(l) commence, settle or agree to settle any Litigation, except in the ordinary course of business consistent with past practice that (i) involves only the payment of money damages not in excess of $25,000 individually or $50,000 in the aggregate, (ii) does not involve the imposition of any equitable relief on, or the admission of wrongdoing by, Kinderhook or the applicable Subsidiary thereof and (iii) would not create precedent for claims that are reasonably likely to be material to Kinderhook or any of its Subsidiaries, or, after the Closing, Community or any of its Subsidiaries;
(m) materially revalue any of its assets or change any method of accounting or accounting practice used by it, other than changes required by GAAP or any Regulatory Authority;
(i) file any Tax Return except in the ordinary course of business consistent with past practice or amend any Tax Return; (ii) settle or compromise any Tax Liability; (iii) make, change or revoke any Tax election or change any method of Tax accounting, except as required by applicable Law; (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law); (v) surrender any claim for a refund of Taxes; or (vi) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes;
(o) change its fiscal or Tax year;
(p) knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article 5 not being satisfied; provided, that nothing in this Section 4.2(p) shall preclude Kinderhook from exercising its rights under Section 4.5 or 4.11;
(q) merge or consolidate itself or its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or dissolve (or adopt or enter into a plan to effect any of the foregoing) itself or any of its Subsidiaries (other than mergers or consolidations solely involving its Subsidiaries);
(r) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $25,000;
(s) enter into any Contract that would have been required to be disclosed in Section 3.2(k) of the Kinderhook Disclosure Letter had it been entered into prior to the execution of this Agreement;
(t) make any material changes in the mix, rates, terms or maturities of Kinderhook Bank’s deposits or other Liabilities, except in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; open any new branch or deposit taking facility; or close, relocate or materially renovate any existing branch or facility;
(u) make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service, Loans or (ii) acquisitions of an entity investment, risk and asset liability management or business having assets not exceeding 10% of the consolidated assets of Subject Company hedging practices and policies, in each case except as may be required by such policies and practices or Parentby any applicable laws, as applicableregulations, on a pro forma basis giving effect to such transaction, make guidelines or policies imposed by any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereofGovernmental Authority;
(dv) make any Loans, or enter into any commitments to make Loans, which vary other than in immaterial respects from its written Loan policies, a true and correct copy of which policies has been provided to Community; provided, that this covenant shall not prohibit Kinderhook Bank from extending or renewing Loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of Loans currently in its Loan portfolio;
(w) renew or enter into any non compete, exclusivity, non solicitation or similar agreement that would restrict or limit, in any material respect, the operations of Kinderhook or any of its Subsidiaries or, after the Effective Time, Community or any of its Subsidiaries;
(x) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which Kinderhook or any of its Subsidiaries is a party;
(y) engage in (or modify in a manner adverse to Kinderhook or its Subsidiaries) any transactions (except for any ordinary course banking relationships permitted under applicable Law) with any Affiliate or any director or officer thereof (or any Affiliate or immediate family member of any such Person or any Affiliate of such Person’s immediate family members);
(z) except for transactions in the ordinary course of business consistent with past practice, enter into any new lease of real property or terminate amend the terms of any contract or agreement, or make any change in any existing lease of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereofreal property;
(eaa) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend incur or commit itself to incur any material pension, retirement, profit-sharing capital expenditure or welfare benefit plan authorization or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent commitment with respect to them that, in the aggregate is in excess of $50,000, except as disclosed in the annual business plan or budget previously disclosed to Community; or
(bb) agree or commit to take any of the foregoing. Each party shall immediately advise the other following the receipt actions prohibited by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrencethis Section 4.2.
Appears in 1 contract
Forbearances. Except as set forth in Section 5.2 of the Subject Company Disclosure Schedule or Section 5.2 of the Parent Disclosure Schedule, as the case may be, as expressly contemplated or permitted by this Agreement, the Settlement Agreement, or the Fee Letters, as required by applicable law, rule or regulation, during the period from the date of this Agreement to the Effective Time, neither Parent nor Subject Company shall, and neither Parent nor Subject Company shall permit any of their respective Subsidiaries to, without the prior written consent of the other:
(a) adjust, split, combine or reclassify any capital stock; make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or grant any stock appreciation rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock (except for regular quarterly cash dividends on Subject Company Common Stock and on Parent Common Stock at a rate equal to the rates recently paid by each of Subject Company and Parent, as the case may be, as such rates may be increased by either party in the ordinary course of business consistent with past practice and, in the case of Subject Company Preferred Stock and Parent Preferred Stock, for regular quarterly or semiannual cash dividends thereon at the rates set forth in the applicable certificate of incorporation or certificate of designation for such securities and except for dividends paid by any of the wholly owned Subsidiaries of each of Parent and Subject Company to Parent or Subject Company or any of their wholly owned Subsidiaries, respectively, and except for the issuance of employee stock options and restricted stock consistent with past practices); or issue any additional shares of capital stock except pursuant to (A) the exercise of stock options outstanding as of the date hereof or issued after the date hereof in a manner consistent with past practice, (B) the award of restricted shares of Subject Company Common Stock in a manner consistent with past practice, (C) the vesting of Performance Units outstanding as of the date hereof pursuant to Subject Company Stock Option Plans, (D) the Subject Company Rights Agreement, and (E) acquisitions and investments permitted by paragraph (c) hereof;
(b) 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, in each case that is material to such party, except (i) in the ordinary course of business consistent with past practice, (ii) pursuant to contracts or agreements in force at the date of this Agreement or (iii) pursuant to plans disclosed in writing prior to the execution of this Agreement to the other party;
(c) except for (i) transactions in the ordinary course of business consistent with past practice, or (ii) acquisitions of an entity or business having assets not exceeding 10% of the consolidated assets of Subject Company or Parent, as applicable, on a pro forma basis giving effect to such transaction, make any material acquisition or investment either by purchase of stock or securities, merger or consolidation, contributions to capital, property transfers, or purchases of any property or assets of any other individual, corporation or other entity other than a wholly owned Subsidiary thereof;
(d) except for transactions in the ordinary course of business consistent with past practice, enter into or terminate any contract or agreement, or make any change in any of its leases or contracts, in each case that is material to such party, other than renewals of contracts and leases without materially adverse changes of terms thereof;
(e) other than (i) in the ordinary course of business consistent with past practice, or (ii) in an aggregate amount not exceeding $10 million, increase in any material respect the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any material pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or accelerate the vesting of any stock options or other stock-based compensation;
(f) authorize or permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate or encourage any inquiries relating to, or the making of any proposal which constitutes, a Takeover Proposal (as defined below), or recommend or endorse any Takeover Proposal, or participate in any discussions or negotiations, or provide third parties with any nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make or implement a Takeover Proposal, provided, however, that each of Parent and Subject Company may, and may authorize and permit its officers, directors, employees or agents to, provide third parties with nonpublic information, otherwise facilitate any effort or attempt by any third party to make or implement a Takeover Proposal, recommend or endorse any Takeover Proposal with or by any third party, and participate in discussions and negotiations with any third party relating to any Takeover Proposal, if such party's Board of Directors, after having consulted with and considered the advice of outside counsel, has reasonably determined in good faith that the failure to do so would cause the members of such Board of Directors to breach their fiduciary duties under applicable law. Subject Company will immediately cease and cause to be terminated any activities, discussions or negotiations conducted prior to the date of this Agreement with any parties other than Parent with respect to any of the foregoing. Each party shall immediately advise the other following the receipt by it of any Takeover Proposal and the details thereof, and advise the other of any developments with respect to such Takeover Proposal immediately upon the occurrenceoccurrence thereof. As used in this Agreement, "Takeover Proposal" shall mean, with respect to any person, any tender or exchange offer, proposal for a merger, consolidation or other business combination involving Subject Company or Parent or any of their respective Subsidiaries or any proposal or offer to acquire in any manner a substantial equity interest in, or a substantial portion of the assets of, Subject Company or Parent or any of their respective Subsidiaries other than the transactions contemplated or permitted by this Agreement;
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