Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ALLIED IRISH BANKS, P.L.C.
("ACQUIROR")
FIRST MARYLAND BANCORP
("ACQUIROR SUB")
AND
DAUPHIN DEPOSIT CORPORATION
("THE COMPANY")
JANUARY 21, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I--THE MERGER................................................... A-5
1.1. Structure of the Merger....................................... A-5
1.2. Conversion of Stock........................................... A-5
1.3. Exchange Procedures........................................... A-8
1.4. Options....................................................... A-9
1.5. Other Rights.................................................. A-10
1.6. Convertible Debentures........................................ A-10
1.7. Closing....................................................... A-10
ARTICLE II--REPRESENTATIONS AND WARRANTIES.............................. A-11
2.1. Organization and Capitalization of Acquiror and Acquiror Sub.. A-11
2.2. Organization and Capitalization of the Company................ A-11
2.3. Rights, etc................................................... A-11
2.4. Capital Stock................................................. A-11
2.5. Authority..................................................... A-12
2.6. Subsidiaries.................................................. A-12
2.7. Authorization and Validity of Agreement....................... A-12
2.8. No Violations................................................. A-12
2.9. Securities Exchange Act Reports............................... A-12
2.10. Absence of Certain Changes or Events.......................... A-13
2.11. Taxes......................................................... A-13
2.12. Absence of Claims............................................. A-13
2.13. Absence of Regulatory Actions................................. A-13
2.14. Labor Matters................................................. A-13
2.15. Employee Benefit Plans........................................ A-14
2.16. Material Contracts............................................ A-14
2.17. Title to Assets............................................... A-15
2.18. Knowledge as to Conditions.................................... A-15
2.19. Compliance With Laws.......................................... A-15
2.20. Acquiror Common Stock......................................... A-15
2.21. Fees.......................................................... A-15
2.22. Registration Statement; Proxy Statement....................... A-15
2.23. Environmental Matters......................................... A-15
2.24. Takeover Laws; Rights Plans................................... A-16
2.25. Vote Required................................................. A-16
ARTICLE III--CONDUCT PRIOR TO CLOSING................................... A-17
3.1. Access to Information; Notice of Changes; Confidentiality..... A-17
3.2. Conduct of the Business of the Company Pending the Closing
Date......................................................... A-17
3.3. Conduct of the Business of Acquiror Pending the Closing Date.. A-18
3.4. Dividends..................................................... A-19
3.5. No Solicitation of Other Offers............................... A-19
3.6. Certain Filings, Consents and Arrangements.................... A-19
3.7. Best Efforts.................................................. A-19
3.8. Publicity..................................................... A-19
3.9. Shareholder Approvals......................................... A-19
3.10. Registration Statement........................................ A-20
3.11. The Company Rights Agreement.................................. A-20
3.12. Securities Act................................................ A-20
3.13. Additional Agreements......................................... A-21
3.14. Listing....................................................... ▇-▇▇
▇-▇
PAGE
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ARTICLE IV--CONDITIONS PRECEDENT TO MERGER................................ A-21
4.1. Conditions Precedent to Obligations of All Parties.............. A-21
4.2. Conditions Precedent to Obligations of Acquiror................. A-22
4.3. Conditions Precedent to Obligation of the Company............... A-23
ARTICLE V--COVENANTS...................................................... A-23
5.1. Tax-Free Reorganization Treatment............................... A-23
5.2. Certain Contracts............................................... A-23
5.3. Employee Benefits............................................... A-23
5.4. Indemnification; Directors' and Officers' Insurance............. A-24
5.5. Certain Director and Officer Positions.......................... A-25
ARTICLE VI--TERMINATION................................................... A-25
6.1. Termination..................................................... A-25
6.2. Effect of Termination........................................... A-26
ARTICLE VII--MISCELLANEOUS................................................ A-26
7.1. Certain Definitions; Interpretation............................. A-26
7.2. Fees and Expenses............................................... A-27
7.3. Survival........................................................ A-27
7.4. Public Announcements............................................ A-27
7.5. Notices......................................................... A-27
7.6. Entire Agreement................................................ A-28
7.7. Binding Effect; Benefit; Assignment............................. A-28
7.8. Waiver.......................................................... A-28
7.9. Further Actions................................................. A-28
7.10. Counterparts.................................................... A-28
7.11. Applicable Law.................................................. A-28
7.12. Severability.................................................... A-28
EXHIBITS*
Exhibit A: Stock Option Agreement
Exhibit B: Employment Agreement and Change in Control Retention Payments
Exhibit C: Additional Benefits Provisions
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* Not included in this Appendix A.
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INDEX TO DEFINITIONS
TERM LOCATION OF DEFINITION
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Acquiror................................................. Preamble
Acquiror ADS............................................. 1.2(a)
Acquiror Meeting......................................... 2.22
Acquiror Ordinary Shares................................. 1.2(a)
Acquiror Sub............................................. Preamble
Acquiror Sub Common Stock................................ 2.1
Acquiror Sub Meeting..................................... 2.22
Acquiror Sub Preferred Stock............................. 2.1
Acquisition Proposal..................................... 3.5
ADR...................................................... 1.3
Affiliate................................................ 3.12(a)
Agreement................................................ Preamble
Bank Regulators.......................................... 2.13
Benefit Plans............................................ 2.15
Blue Sky................................................. 2.8
Business Day............................................. 7.1
Cash Election Shares..................................... 1.2(b)
Cash Out................................................. 1.4(a)
Closing Date............................................. 1.7
Closing Market Price..................................... 1.2(a)
Company.................................................. Preamble
Company Common Stock..................................... 1.2(a)
Company Meeting.......................................... 2.22
Company Right............................................ 1.2(a)
Company Rights Agreement................................. 1.2(a)
Contractual Consents..................................... 2.16
Control.................................................. 7.1
Converted Cash Election Shares........................... 1.2(c)
Costs.................................................... 5.4(a)
Debentures............................................... 1.6
Deposit Agreement........................................ 1.2(a)
Depositary............................................... 1.2(a)
Dissenters' Shares....................................... 1.2(a)
Dollar................................................... 7.1
Effective Date........................................... 1.7
Effective Time........................................... 1.7
Election................................................. 1.2(b)
Election Deadline........................................ 1.2(d)
Election Form............................................ 1.2(b)
Environmental Law........................................ 2.23
ERISA.................................................... 2.15
Exchange Agent........................................... 1.2(b)
Exchange Fund............................................ 1.3(a)
Exchange Option.......................................... 1.4(a)
Exchange Ratio........................................... 1.2(a)
Federal Reserve Board.................................... 4.1(b)
Indemnified Parties...................................... 5.4(a)
IRS...................................................... 2.15
Mailing Date............................................. 1.2(d)
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TERM LOCATION OF DEFINITION
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Market Price............................................. 7.1
Material................................................. 7.1
Material Adverse Effect.................................. 7.1
Maximum Amount........................................... 5.4(c)
Merger................................................... 1.1
MGCL..................................................... 1.1
No-Election Shares....................................... 1.2(b)
Old Certificates......................................... 1.2(d)
Option Plans............................................. 1.4(a)
Outstanding Option....................................... 1.4(a)
Outstanding Rights....................................... 1.5
Outstanding Shares....................................... 1.2(a)
PBCL..................................................... 1.1
Pension Plan............................................. 2.15
Per Share Cash Consideration............................. 1.2(a)
Per Share Stock Consideration............................ 1.2(a)
Person................................................... 7.1
Previously Disclosed..................................... Art. 2
Proxy Statement.......................................... 2.22
Proxy Statement/Prospectus............................... 2.22
Registration Statement................................... 2.22
Reports.................................................. 2.9
Rights................................................... 2.3
SEC...................................................... 2.9
SEC Documents............................................ Art. 2
Securities Exchange Act.................................. Art. 2
Securities Act........................................... Art. 2
Shareholder Meeting...................................... 3.9
Stock Election Shares.................................... 1.2(b)
Stock Number............................................. 1.2(a)
Stock Option Agreement................................... Preamble
Stock-Selected No-Election Shares........................ 1.2(c)
Subsidiary............................................... 7.1
Surviving Institution.................................... 1.1
Takeover Laws............................................ 2.24
Termination Right Determination Date..................... 6.1(f)
$........................................................ 7.1
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made this 21st day of
January, 1997, by and among ALLIED IRISH BANKS, plc, an Irish company
("Acquiror"), FIRST MARYLAND BANCORP, a Maryland corporation and a subsidiary
of Acquiror ("Acquiror Sub"), and DAUPHIN DEPOSIT CORPORATION, a Pennsylvania
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Acquiror, Acquiror Sub and
the Company have approved the acquisition of the Company by Acquiror and
Acquiror Sub, subject to the terms and conditions of this Agreement;
WHEREAS, as a condition and inducement to Acquiror's willingness to enter
into this Agreement, concurrently with the execution and delivery of this
Agreement, the Company has executed and delivered a Stock Option Agreement
with Acquiror (the "Stock Option Agreement") in substantially the form
attached hereto as Exhibit A, pursuant to which the Company is granting to
Acquiror an option to purchase, under certain circumstances, shares of Company
Common Stock.
NOW THEREFORE, in consideration of the foregoing premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties, intending to be legally bound hereby, agree as follows:
ARTICLE I
The Merger
1.1. Structure of the Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.7 hereof), the
Company will merge with and into Acquiror Sub (the "Merger"), with Acquiror
Sub being the surviving institution (the "Surviving Institution") pursuant to
the provisions of, and with the effects provided in, the Pennsylvania Business
Corporation Law ("PBCL") and the Maryland General Corporation Law (the
"MGCL"). At the Effective Time, the separate corporate existence of the
Company shall cease, and Acquiror Sub shall continue as the Surviving
Institution. The Articles of Incorporation of Acquiror Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Institution until thereafter amended as
provided by law.
1.2. Conversion of Stock.
(a)(i) At the Effective Time, each share of common stock of the Company, par
value $5.00 per share (the "Company Common Stock"), including each attached
right (a "Company Right") issued pursuant to the Rights Agreement dated as of
January 22, 1990 between the Company and Dauphin Deposit Bank and Trust
Company as Rights Agent (the "Company Rights Agreement"), then issued and
outstanding (other than (i) shares which have not been voted in favor of the
approval of the Merger and with respect to which dissenter's rights shall have
been perfected in accordance with applicable provisions of the PBCL (the
"Dissenters' Shares") and (ii) shares held directly or indirectly by Acquiror,
excluding shares held in a fiduciary or custodial capacity or in satisfaction
of a debt previously contracted) (the "Outstanding Shares") shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and represent the right to receive, at the election of each
record holder thereof as provided herein, but subject to the election and
allocation procedures set forth herein:
(A) cash in the amount of Forty-Three Dollars ($43) (the "Per Share
Cash Consideration"); or
(B) that number (the "Exchange Ratio") of Acquiror ADSs (as defined
below) having a Closing Market Price (as defined below) as of the
Election Deadline (as defined below) equal to Forty-Three Dollars
($43); provided, however, that (A) if the Closing Market Price of an
Acquiror ADS is less than Thirty-Seven Dollars ($37) per Acquiror ADS
then the Exchange Ratio shall be 1.162, and (B) if the Closing Market
Price of an Acquiror ADS is greater than Forty-Three Dollars ($43) per
Acquiror ADS then the Exchange Ratio shall be 1.0000 (the "Per Share
Stock Consideration");
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provided, that not less than fifty-one percent (51%) of the shares of the
Company Common Stock issued as of the Effective Time (such number, the "Stock
Number") shall be converted into the right to receive the Per Share Stock
Consideration.
(ii) References herein to "Acquiror ADSs" shall mean American Depository
Shares each representing six (6) ordinary shares of Acquiror, IR 25p each
("Acquiror Ordinary Shares") deposited with The Bank of New York, as
Depositary (the "Depositary"), pursuant to the Deposit Agreement dated as
of November 8, 1990 (the "Deposit Agreement"). The "Closing Market Price"
shall mean the Market Price (as defined in Section 7.1 hereof) of an
Acquiror ADS as of the second Business Day immediately preceding the
Election Deadline. Acquiror will promptly calculate and make public
disclosure of the Closing Market Price.
(iii) If the Acquiror effects a stock dividend (which shall not include
the issuance of shares pursuant to a dividend reinvestment plan),
reclassification, recapitalization, split-up, combination, exchange of
shares or similar transaction, after the date hereof and prior to the
Effective Time, the references in clause (B) of Section 1.2(a)(i) to the
figures $37 and $43, and the references in Section 6.1(f) to the figure
$32, shall be appropriately adjusted.
(iv) No fractional Acquiror ADSs will be issued pursuant hereto, and
Acquiror shall pay cash in lieu of any fractional Acquiror ADS which
otherwise would be issuable. Any such cash payments shall be made on the
basis of the Market Price of Acquiror ADSs as of the Effective Time.
(v) As of the Effective Time, each share of the Company Common Stock held
directly or indirectly by Acquiror, excluding shares held in a fiduciary or
custodial capacity or in satisfaction of a debt previously contracted, and
each share held as treasury stock of the Company, shall be canceled,
retired and cease to exist, and no exchange or payment shall be made with
respect thereto. Each issued and outstanding share of common stock of
Acquiror Sub shall continue to be an issued and outstanding share of common
stock of the Surviving Institution.
(vi) Dissenters' Shares shall be paid for in accordance with applicable
provisions of the PBCL and thereupon shall be canceled, retired and cease
to exist.
(vii) The exchange of Company Common Stock and attached Company Rights
for the merger consideration as provided herein shall constitute a
redemption of such Company Rights pursuant to Section 23 of the Rights
Agreement. To the extent that any shares of Company Common Stock are
Dissenters' Shares or are otherwise not so exchanged, then the Company
shall redeem or otherwise extinguish the Company Rights attached to such
unexchanged shares of Company Common Stock as of the Effective Time.
(b) Subject to the allocation procedures set forth in Section 1.2(c), each
record holder of outstanding Shares will be entitled (i) to elect to receive
Acquiror ADSs for all or some of the shares of Company Common Stock ("Stock
Election Shares") held by such record holder, (ii) to elect to receive cash
for all or some of the shares of Company Common Stock ("Cash Election Shares")
held by such record holder or (iii) to indicate that such holder makes no such
election for all or some of the shares of Company Common Stock ("No-Election
Shares") held by such record holder. All such elections (each, an "Election")
shall be made on a form designed for that purpose by Acquiror and reasonably
acceptable to the Company (an "Election Form"). Any Outstanding Shares with
respect to which the record holder thereof shall not, as of the Election
Deadline (as defined in Section 1.2(d)), have properly submitted to the
Exchange Agent (as hereinafter defined) a properly completed Election Form
shall be deemed to be No-Election Shares. A record holder acting in different
capacities shall be entitled to submit an Election Form for each capacity in
which such record holder so acts with respect to each Person for which it so
acts. The exchange agent (the "Exchange Agent") shall be a United States
financial institution selected by Acquiror and reasonably acceptable to the
Company.
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(c) Not later than the Effective Date, Acquiror shall cause the Exchange
Agent to effect the allocation among the holders of Company Common Stock of
rights to receive the Per Share Stock Consideration or the Per Share Cash
Consideration in the Merger as follows:
(i) Number of Stock Elections Less Than Stock Number. If the number of
Stock Election Shares is less than the Stock Number, then
(A) all Stock Election Shares shall be converted into the right to
receive the Per Share Stock Consideration,
(B) the Exchange Agent shall select (by random selection) from among
the No-Election Shares a sufficient number of No-Election Shares such
that the sum of such number and the number of Stock Election Shares
shall equal as closely as practicable but be not less than the Stock
Number, and all such selected shares ("Stock-Selected No-Election
Shares") shall be converted into the right to receive the Per Share
Stock Consideration, provided that if the sum of all No-Election Shares
and Stock Election Shares is less than the Stock Number, all No-
Election Shares shall be converted into the right to receive the Per
Share Stock Consideration, and thereby become Stock-Selected No-
Election Shares,
(C) if the sum of Stock Election Shares and No-Election Shares is
less than the Stock Number, the Exchange Agent shall convert (by random
selection) a sufficient number of Cash Election Shares into Stock
Election Shares ("Converted Cash Election Shares") such that the sum of
Stock Election Shares, No-Election Shares and Converted Cash Election
Shares equals as closely as practicable but be not less than the Stock
Number, and all Converted Cash Election Shares shall be converted into
the right to receive the Per Share Stock Consideration,
(D) any Cash Election Shares that are not Converted Cash Election
Shares shall be converted into the right to receive the Per Share Cash
Consideration, and
(E) if there are No-Election Shares that are not Stock-Selected No-
Election Shares, Acquiror shall instruct the Exchange Agent what number
of such shares shall be converted into the right to receive the Per
Share Cash Consideration and what number of such shares shall be
converted into the right to receive the Per Share Stock Consideration,
and if Acquiror shall instruct the Exchange Agent that certain of such
shares shall be converted into the right to receive the Per Share Cash
Consideration and that the remainder of such shares shall be converted
into the right to receive the Per Share Stock Consideration, the
Exchange Agent shall select among such shares by random selection; or
(ii) Number of Stock Elections Greater Than or Equal to Stock Number. If
the number of Stock Election Shares is greater than or equal to the Stock
Number, then
(A) all Stock Election Shares shall be converted into the right to
receive the Per Share Stock Consideration,
(B) all Cash Election Shares shall be converted into the right to
receive the Per Share Cash Consideration, and
(C) Acquiror shall instruct the Exchange Agent what number of No-
Election Shares shall be converted into the right to receive the Per
Share Cash Consideration and what number of No-Election Shares shall be
converted into the right to receive the Per Share Stock Consideration,
and if Acquiror shall instruct the Exchange Agent that certain of such
shares shall be converted into the right to receive the Per Share Cash
Consideration and that the remainder of such shares shall be converted
into the right to receive the Per Share Stock Consideration, the
Exchange Agent shall select among such shares by random selection.
(iii) Notwithstanding the foregoing, a Person who immediately prior to
the Effective Time owned (for purposes of the Internal Revenue Code) 5% or
more of the outstanding shares of Company Common Stock and who does not
elect to receive Per Share Cash Consideration for all his shares, shall
deliver a written agreement, in a form reasonably acceptable to Acquiror,
containing customary representations to the effect that such holder has no
present intention to sell, exchange or otherwise dispose of such shares of
Acquiror Common Stock to be received in exchange for such shares of Company
Common Stock, and if such holder
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shall not deliver such a written agreement, in a form reasonably acceptable
to Acquiror, at the election of Acquiror such Person shall instead receive
the Per Share Cash Consideration with respect to such shares, regardless of
the election (or lack thereof) made by such Person in its Election Form.
(d) Not later than the 25th Business Day prior to the anticipated Effective
Date or such other date as the parties may agree in writing (the "Mailing
Date"), Acquiror shall mail an Election Form and a letter of transmittal to
each Person that was a holder of record of Company Common Stock immediately
prior to the Mailing Date. To be effective, an Election Form must be properly
completed, signed and actually received by the Exchange Agent not later than
5:00 p.m., Eastern Time, on the second Business Day preceding the Effective
Date (which will be not earlier than the 20th day after the Mailing Date) (the
"Election Deadline") and accompanied by the certificates formerly representing
all of the Outstanding Shares ("Old Certificates") as to which the Election is
being made (or an appropriate guarantee of delivery by an eligible
organization). Acquiror shall have reasonable discretion, which it may
delegate in whole or in part to the Exchange Agent, to determine whether
Election Forms have been properly completed, signed and timely submitted or to
disregard defects in Election Forms; such decisions of Acquiror (or of the
Exchange Agent) shall be conclusive and binding. Neither Acquiror nor the
Exchange Agent shall be under any obligation to notify any Person of any
defect in an Election Form submitted to the Exchange Agent. The Exchange Agent
and Acquiror shall also make all computations contemplated by Section 1.2
hereof. For purposes hereof, all calculations of the Acquiror Market Price and
the Exchange Ratio shall be rounded to the nearest one thousandth.
1.3. Exchange Procedures. Old Certificates previously representing shares of
Company Common Stock shall be exchanged for cash and/or receipts ("ADRs")
representing whole Acquiror ADSs (and cash in lieu of fractional Acquiror
ADSs) issued in consideration therefor in accordance with this Section 1.3.
(a) As of the Effective Time, Acquiror or Acquiror Sub shall deposit, or
shall cause to be deposited, with the Exchange Agent for the benefit of the
holders of shares of Company Common Stock for exchange in accordance with this
Section 1.3, ADRs representing the Acquiror ADSs (and the cash in lieu of
fractional Acquiror ADSs) in the amount of the merger consideration (such
cash, and ADRs, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "Exchange Fund") to be issued
and paid pursuant to Section 1.2 in exchange for Outstanding Shares.
(b) Promptly after the Effective Time, Acquiror shall cause the Exchange
Agent to mail to each holder of record of Company Common Stock who has not
previously delivered such holders Old Certificates pursuant to the election
procedures set forth in Section 1.2: (i) a letter of transmittal specifying
that delivery shall be effected, and risk of loss and title to the Old
Certificates shall pass, only upon delivery of the Old Certificates to the
Exchange Agent, which shall be in a form and contain any other provisions as
Acquiror and Company may reasonably agree; and (ii) instructions for use in
effecting the surrender of the Old Certificates in exchange for the merger
consideration. Upon the proper surrender of an Old Certificate to the Exchange
Agent, together with a properly completed and duly executed letter of
transmittal, the holder of such Old Certificate shall be entitled to receive
in exchange therefor (x) a check in the amount of that amount of cash, (y) an
ADR representing that number of whole Acquiror ADSs, and (z) a check
representing the amount of cash in lieu of any fractional Acquiror ADSs and
unpaid dividends and distributions, if any, which such holder has the right to
receive in respect of the Old Certificate surrendered pursuant to the
provisions of Section 1.2, and the Old Certificate so surrendered shall
forthwith be canceled. No interest will be paid or accrued on the cash payable
pursuant to Section 1.2, or the cash in lieu of fractional Acquiror ADSs and
unpaid dividends and distributions, if any, payable to holders of Old
Certificates. If, after the Effective Time, Old Certificates are presented to
Acquiror or Acquiror Sub, they shall be canceled and exchanged for the cash
Acquiror ADSs and cash in lieu of fractional shares, if any, deliverable in
respect thereof pursuant to this Agreement in accordance with the procedures
set forth in this Section 1.3.
(c) Whenever a dividend or other distribution is declared by Acquiror on the
Acquiror Ordinary Shares, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all Acquiror ADSs issuable pursuant to this Agreement; provided that after
the 90th day
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following the Effective Date no dividend or other distribution declared or
made on the Acquiror Ordinary Shares shall be paid to the holder of any
unsurrendered Old Certificate with respect to the Acquiror ADSs represented
thereby until the holder of such Old Certificate shall have duly surrendered
such Old Certificate in accordance with Section 1.2 or this Section 1.3.
(d) From and after the Effective Time, there shall be no transfers on the
stock transfer records of the Company of any shares of Company Common Stock
that were outstanding immediately prior to the Effective Time. In the event of
a transfer of ownership of any Company Common Stock not registered in the
transfer records of Company, a certificate representing the proper number of
Acquiror ADSs, together with a check for the cash to be paid in lieu of
fractional Acquiror ADSs and the proper amount of Per Share Cash
Consideration, may be issued to the transferee if the Old Certificate
representing such Company Common Stock is presented to the Exchange Agent,
accompanied by documents sufficient (1) to evidence and effect such transfer
and (2) to evidence that all applicable stock transfer taxes have been paid.
(e) Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any Acquiror ADSs) that remains unclaimed by the
shareholders of the Company six months after the Effective Time shall, at the
Acquiror's request, be repaid to Acquiror or to the Depositary, as applicable.
Any shareholders of the Company who have not theretofore surrendered their old
Certificates in accordance with Section 1.2 or this Section 1.3 shall
thereafter look only to Acquiror for payment of the cash, Acquiror ADSs, and
cash in lieu of fractional Acquiror ADSs deliverable in respect thereof, and
any unpaid dividends and distributions on the Acquiror ADSs deliverable in
respect of each share of Company Common Stock such shareholder holds as
determined pursuant to this Agreement, in each case, without any interest
thereon. None of Acquiror, the Exchange Agent or any other Person shall be
liable to any former holder of Company Common Stock for any amount delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(f) In the event any Old Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Old Certificate to be lost, stolen or destroyed and, if required by
Acquiror, the posting by such Person of a bond in such amount as Acquiror may
direct as indemnity against any claim that may be made against it with respect
to such Old Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Old Certificate the cash, Acquiror ADSs and cash in
lieu of fractional shares deliverable (and unpaid dividends and distributions)
in respect thereof pursuant to this Agreement.
(g) Former shareholders of the Company shall be entitled to direct the
voting at any meeting of Acquiror shareholders the number of Acquiror Ordinary
Shares represented by the number of Acquiror ADSs into which their shares of
Company Common Stock are converted in accordance with Section 1.2 (to the
extent provided in and subject to the conditions of the Deposit Agreement),
regardless of whether such holders have exchanged their Old Certificate
representing Company Common Stock for ADRs representing Acquiror ADSs in
accordance with the provisions of this Agreement.
1.4. Options.
(a) Each option to purchase shares of Company Common Stock pursuant to the
Company's 1986 Option Plan, 1995 Stock Incentive Plan, 1996 Non-Officer
Directors' Stock Plan and [AB&C] Option Plan (collectively, the "Option
Plans"), which is outstanding and unexercised immediately prior thereto (each,
an "Outstanding Option"), shall be converted as to each whole share subject to
such Outstanding Option at the holder's election (made at least 5 days prior
to the Closing Date) into:
(i) at the Effective Time, an option (each, an "Exchange Option") to
purchase such number of Acquiror ADSs at such exercise price as is
determined as provided below (and otherwise having the same duration and
other terms as the original option):
(A) the number of Acquiror ADSs to be subject to the Exchange Option
shall be equal to the product of (A) the number of shares of the
Company Common Stock subject to the original option as to which the
holder thereof has elected to receive an Exchange Option, multiplied by
(B) the Exchange
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Ratio (as may be adjusted pursuant to Section 1.2(b) above), the
product being rounded, if necessary, up or down, to the nearest whole
share;
(B) the exercise price per Acquiror ADS under the new option shall be
equal to (I) the aggregate exercise price for the shares of Company
Common Stock subject to the Outstanding Option as to which the holder
has elected to receive an Exchange Option, divided by (II) the number
of Acquiror ADSs for which the Exchange Option is exercisable as
determined pursuant to clause (A) above, the result being rounded, if
necessary, up or down, to the nearest cent.
OR:
(ii) immediately prior to the Effective Time, cash (the "Cash Out") in an
amount equal to the Per Share Cash Consideration multiplied by the number
of shares subject to such Outstanding Options as to which the holder
thereof has elected to receive the Cash Out, less the amount which would
have been required to exercise such Outstanding Options as to such shares.
(b) Holders of Outstanding Options shall have no rights to receive the "Cash
Out", and no other modification of such Outstanding Options hereunder shall be
effective, unless and until the Closing Date occurs. The adjustments provided
herein with respect to any options which are "incentive stock options" (as
defined in Section 422 of the Code) shall be effected in a manner consistent
with Section 424(a) of the Code.
(c) The Exchange Options with respect to Outstanding Options shall be
delivered by Acquiror at the Effective Time, and checks in the amounts of the
respective Cash outs shall be delivered by the Company immediately prior to
the Effective Time with all amount paid to be reimbursed by Acquiror or
Acquiror Sub. As of the Effective Time, Acquiror shall have reserved for
issuance a sufficient number of Acquiror Ordinary Shares to cover the issuance
of the Acquiror ADSs subject to such Exchange Options.
1.5. Other Rights. Rights to receive shares of the Company's Common Stock
pursuant to (i) Performance Share Agreements under the Company's 1995 Stock
Incentive Plan, (ii) a deferral account pursuant to the Company's 1996 Non-
Officer Directors' Stock Plan, and (iii) accrued rights under the Company's
Employee Stock Purchase Plan, which are outstanding as of the Effective Time
(collectively, the "Outstanding Rights") shall be converted into rights to
receive or purchase, as applicable, that number of Acquiror ADSs equal to the
number of shares to which such Outstanding Rights relate multiplied by the
Exchange Ratio.
1.6. Convertible Debentures. The Company's 9% Convertible Subordinated
Debentures Due June 1999 (the "Debentures") outstanding at the Effective Time
shall be assumed by Acquiror or Acquiror Sub and remain outstanding thereafter
as an obligation of the Acquiror or Acquiror Sub, as the case may be, and,
from and after the Effective Time, the holders of the Debentures shall have
the right to convert such Debentures into the Per Share Stock Consideration
receivable upon the Merger by a holder of the number of shares of Company
Common Stock into which such Debentures could have been converted immediately
prior to the Merger. Acquiror or Acquiror Sub, as the case may be, shall enter
into a supplemental indenture with respect to such obligations in accordance
with the terms of the indenture pursuant to which the Debentures were issued.
1.7. Closing. On the first Business Day to occur which is at least three (3)
Business Days after the expiration of all applicable waiting periods in
connection with approvals of governmental authorities occurs and all
conditions to the consummation of this Agreement are satisfied or waived and
which is the last Business Day of a month, or on such earlier or later date as
may be agreed by the parties (the "Closing Date"), articles of merger shall be
executed in accordance with all appropriate legal requirements and shall be
filed as required by law, and the Merger provided for herein shall become
effective upon such filing or on such date and at such time as may be
specified in such articles of merger by agreement of the parties hereto. The
date and time of such filing or such later effective date and time are herein
called the "Effective Time." The date on which the Effective Time occurs is
herein referred to as the "Effective Date."
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ARTICLE II
Representations and Warranties
Acquiror represents and warrants to the Company, and the Company represents
and warrants to Acquiror, to the extent applicable as indicated below, that
except as Previously Disclosed, the following representations and warranties
are true and correct in all Material respects. For purposes of this Agreement,
"Previously Disclosed" means disclosed prior to the execution hereof in (i) an
SEC Document filed with the SEC prior to the date hereof, (ii) this Agreement,
(iii) written materials provided to the other party prior to or as of the date
hereof as specified in a letter dated of even date herewith from the party
making such disclosure and delivered to the other party prior to the execution
hereof (its "Disclosure Letter"). Any information disclosed by one party to
the other for any purpose hereunder shall be deemed to be disclosed for all
purposes hereunder, except for purposes of Section 2.10 hereof. The inclusion
of any matter in information Previously Disclosed shall not be deemed an
admission or otherwise to imply that any such matter is Material for purposes
of this Agreement. "SEC Documents" means all publicly available documents
filed by the Company or its predecessors with the SEC, including all such
documents filed under the Securities Act of 1933, as amended (the "Securities
Act") or the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act").
2.1. Organization and Capitalization of Acquiror and Acquiror Sub. In the
case of Acquiror, it is a corporation duly organized, validly existing and in
good standing under the laws of Ireland and it is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended; and its
authorized capital stock as of the date hereof consists of (a)
IR(Pounds)450,000,000 of authorized capital divided into 1,000,000,000
Acquiror Ordinary Shares (of which 680,172,595 shares were issued and
outstanding as of December 31, 1996) and 250,000,000 non-cumulative preference
shares of IR(Pounds)1 each (of which no shares are issued and outstanding as
of the date hereof), (b) US$400,000,000 of authorized capital divided into
16,000,000 non-cumulative preference shares of US$25 each (of which 7,200,000
shares were issued and outstanding as of December 31, 1996), and (c)
Stg(Pounds)125,000,000 of authorized capital divided into 125,000,000 non-
cumulative preference shares of Stg(Pounds)1 each (of which no shares are
issued and outstanding as of the date hereof). Approximately 10,800,000 of the
issued and outstanding Acquiror Ordinary Shares are represented by outstanding
Acquiror ADSs as of the date hereof. Acquiror Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Maryland; and its authorized capital consists of 600,000,000 shares of
common stock, par value $1/7 per share (the "Acquiror Sub Common Stock"), of
which 594,480,215 shares are issued and outstanding as of the date hereof (all
of which are held by Acquiror), and 9,000,000 shares of preferred stock par
value $5.00 per share (the "Acquiror Sub Preferred Stock"), of which 6,090,000
shares are issued and outstanding as of the date hereof.
2.2. Organization and Capitalization of the Company. In the case of the
Company it is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania; and its
authorized capital stock as of the date hereof consists of 200,000,000
authorized shares of the Company Common Stock, of which 30,666,729 shares were
issued and outstanding as of December 31, 1996, and 10,000,000 authorized
shares of preferred stock, par value $25.00 per share, of which no shares are
issued and outstanding.
2.3. Rights, etc. In the case of Acquiror, as of the date hereof, and in the
case of the Company in each case, except as Previously Disclosed, there are
not any shares of its capital stock reserved for issuance, or any outstanding
or authorized options, warrants, rights, subscriptions, claims of any
character, agreements, obligations, convertible or exchangeable securities, or
other commitments, contingent or otherwise, relating to its capital stock,
pursuant to which it is or may become obligated to issue shares of capital
stock or any securities convertible into, exchangeable for, or evidencing the
issued and outstanding right to subscribe for, any shares of its capital stock
(collectively, "Rights").
2.4. Capital Stock. In the case of Acquiror, all outstanding shares of
capital stock of it and its Significant Subsidiaries (as defined in Rule 1-02
of Regulation S-X) and in the case of the Company, all outstanding shares of
capital stock of it and its Subsidiaries, are duly authorized, validly issued
and outstanding, fully paid and
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nonassessable, and subject to no preemptive rights; and the shares of capital
stock of such Subsidiaries are owned by it (except for director's qualifying
shares) free and clear of all liens, claims, encumbrances and restrictions on
transfer and there are no Rights with respect to such capital stock.
2.5. Authority. In the case of Acquiror, each of it and its Significant
Subsidiaries and in the case of the Company each of it and its Subsidiaries,
has the power and authority, and is duly qualified in all jurisdictions where
such qualification is required, to carry on its business as it is now being
conducted and to own all its Material properties and assets (except for such
qualifications the absence of which, individually or in the aggregate, would
not have a Material Adverse Effect (as defined in Section 7.1)), and it has
all federal, state, local, and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its business
as it is now being conducted, except for such powers and authorizations the
absence of which, either individually or in the aggregate, would not have a
Material Adverse Effect.
2.6. Subsidiaries. In the case of Acquiror, a list of its Significant
Subsidiaries has been Previously Disclosed and in the case of the Company a
list of its Subsidiaries has been Previously Disclosed.
2.7. Authorization and Validity of Agreement. In the case of Acquiror, it
and Acquiror Sub each has, and in the case of the Company, it has, full power
and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
In the case of Acquiror and Acquiror Sub and in the case of the Company,
respectively, subject in each case to the receipt of the required shareholder
approvals referred to in Section 4.1(a), this Agreement has been authorized by
all necessary corporate action of it. In the case of Acquiror and Acquiror Sub
and in the case of the Company, respectively, this Agreement is a valid and
binding agreement of it enforceable against it in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
2.8. No Violations. In the case of Acquiror and Acquiror Sub and in the case
of the Company, respectively, the execution, delivery and performance of this
Agreement by it does not, and the consummation of the transactions
contemplated hereby by it will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument
of it or its Subsidiaries or to which it or its Subsidiaries (or any of their
respective properties) is subject, which breach, violation or default would
have a Material Adverse Effect, or enable any Person to enjoin the Merger or
(ii) a breach or violation of, or a default under, the articles of
incorporation or by-laws (or similar corporate documents) of it or any of its
Subsidiaries; and the consummation of the transactions contemplated hereby
will not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (w) the required approvals, consents and
waivers of governmental authorities referred to in Section 4.1(b), (x) the
approval of the shareholders of the Company referred to in Section 4.1(a), (y)
such approvals, consents or waivers as are required under the federal and
state securities or "Blue Sky" laws in connection with the transactions
contemplated by this Agreement, and (z) any other approvals, consents or
waivers the absence of which, individually or in the aggregate, would not
result in a Material Adverse Effect or enable any Person to enjoin the Merger.
2.9. Securities Exchange Act Reports. In the case of Acquiror and the
Company, respectively, it has filed with the Securities and Exchange
Commission ("SEC") all required forms, reports and documents required under
the Securities Exchange Act. In the case of Acquiror and the Company,
respectively, as of their respective dates, neither its Annual Report on Form
20-F and 10-K, respectively, for the fiscal year ended December 31, 1995, nor
any other document filed subsequent to December 31, 1995 under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act, each in the form (including
exhibits) filed with the SEC (collectively, its "Reports"), contained, as of
the date thereof, any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. In the case of Acquiror and the Company, respectively,
each of the balance sheets contained or incorporated by reference in its
Reports (including any
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related notes and schedules) fairly present the financial position of the
entity or entities to which it relates as of its date and each of the
statements of income, cash flows or equivalent statements contained or
incorporated by reference in its Reports (including any related notes and
schedules) fairly present the cash flows of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments that are not Material
in amount or effect), in each case in accordance with generally accepted
accounting principles applicable to bank holding companies consistently
applied during the periods involved, except as may be noted in the Reports.
2.10. Absence of Certain Changes or Events. Except as Previously Disclosed
in Section 2.10 of its Disclosure Letter, in the case of Acquiror and its
Subsidiaries and the Company and its Subsidiaries, respectively, since
December 31, 1995, it has not incurred any Material liability except in the
ordinary course of its business consistent with past practice, and there has
not been any change in the financial condition, business or results of
operations of it or any of its Subsidiaries which, individually or in the
aggregate, has had a Material Adverse Effect (other than as a result of
changes in banking laws or regulations of general applicability or
interpretations thereof).
2.11. Taxes. In the case of the Company, except as Previously Disclosed, or
as otherwise would not have a Material Adverse Effect, all federal, state,
local and foreign tax returns required to be filed by or on behalf of it or
any of its Subsidiaries have been timely filed or requests for extensions have
been timely filed and any such extensions have been granted and not expired.
In the case of the Company, all taxes shown on returns filed by or on behalf
of it or any of its Subsidiaries have been paid in full or adequate provision
has been made for any such taxes on its balance sheet (in accordance with
generally accepted accounting principles). In the case of the Company, as of
the date of this Agreement, there are no assessments or notices of deficiency
or proposed assessments with respect to any taxes of it or any of its
Subsidiaries that, if resolved in a manner adverse to it, would have a
Material Adverse Effect. In the case of the Company, except as otherwise would
not have a Material Adverse Effect, it has not executed an extension or waiver
of any statute of limitations on the assessment or collection of any tax due
that is currently in effect.
2.12. Absence of Claims. In the case of Acquiror and the Company,
respectively, except as Previously Disclosed no Material litigation,
proceeding or controversy before any court or governmental agency is pending,
and there is no pending claim, action or proceeding against it or any of its
Subsidiaries, which is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect or to materially hinder or delay consummation
of the transactions contemplated hereby.
2.13. Absence of Regulatory Actions. In the case of Acquiror and the
Company, respectively, except for matters arising in the ordinary course of
business, neither it nor any of its Subsidiaries is a party to any cease and
desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of, federal
or state governmental authorities charged with the supervision or regulation
of banks, savings associations, or bank or savings association holding
companies, or engaged in the insurance of bank or savings association deposits
("Bank Regulators"), nor has it been advised by any Bank Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolutions or similar undertaking.
2.14. Labor Matters. In the case of the Company, except as Previously
Disclosed neither it nor any of its Subsidiaries is a party to, or is bound
by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is it or any of
its Subsidiaries the subject of any proceeding asserting that it or any such
Subsidiary has committed an unfair labor practice or seeking to compel it or
such Subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its Subsidiaries pending or threatened.
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2.15. Employee Benefit Plans. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, all "employee benefit plans," as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), that cover any of its or its Subsidiaries'
employees, comply in all Material respects with all applicable requirements of
ERISA, the Code and other applicable laws; neither it nor any of its
Subsidiaries has engaged in a "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) with respect to any such plan which
is likely to result in any Material penalties or taxes under Section 502(i) of
ERISA or Section 4975 of the Code; no Material liability to the Pension
Benefit Guaranty Corporation has been or is expected by it or them to be
incurred with respect to any such plan which is subject to Title IV of ERISA
("Pension Plan"), or with respect to any "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) currently or formerly maintained by it, them or
any entity which is considered one employer with it under Section 4001 of
ERISA or Section 414 of the Code; no Pension Plan had an "accumulated funding
deficiency" (as defined in Section 302 of ERISA (whether or not waived) as of
the last day of the end of the most recent plan year ending prior to the date
hereof; the fair market value of the assets of each Pension Plan exceeds the
present value of the "benefit liabilities" (as defined in Section 4001(a)(16)
of ERISA) under such Pension Plan as of the end of the most recent plan year
with respect to the respective Pension Plan ending prior to the date hereof,
calculated on the basis of the actuarial assumptions used in the most recent
actuarial valuation for such Pension Plan as of the date hereof; no notice of
a "reportable event" (as defined in Section 4043 of ERISA) for which the 30-
day reporting requirement has not been waived has been required to be filed
for any Pension Plan within the 12-month period ending on the date hereof;
neither it nor any of its Subsidiaries has provided, or is required to
provide, security to any Pension Plan pursuant to Section 401(a)(29) of the
Code; it and its Subsidiaries have not contributed to any "multiemployer
plan", as defined in Section 3(37) of ERISA, on or after September 26, 1980.
In the case of the Company, with respect to each benefit plan for employees
that is maintained or contributed to by the Company or any of its
Subsidiaries, including, but not limited to, "employee benefit plans" within
the meaning of Section 3(3) of ERISA (the "Benefit Plans"), it has made
available to Acquiror a true and correct copy of (i) the most recent annual
report on Form 5500 filed with the Internal Revenue Service (the "IRS"), (ii)
such Benefit Plan, (iii) each trust agreement and insurance contract relating
to such Benefit Plan, (iv) the most recent summary plan description for such
Benefit Plan, (v) the most recent actuarial report or valuation if such
Benefit Plan is subject to Title IV of ERISA, (vi) the most recent
determination letter issued by the IRS if such Benefit Plan is intended to be
qualified under Section 401(a) of the Code, and (vii) all outstanding
employment contracts or agreements. With respect to Acquiror and the Company,
a list of its Benefit Plans, and, in the case of the Company, all outstanding
employment contracts or agreements, has been Previously Disclosed.
2.16. Material Contracts. In the case of the Company, all Material contracts
have been Previously Disclosed, including: (i) all Material written employment
or consulting agreements, contracts or commitments with, between or among the
Company or any of its Subsidiaries and any Person; (ii) all Material
agreements of guaranty or indemnification, other than by-laws provisions and
bank items presented for collection in the ordinary course of business,
running from the Company or any Subsidiary to any Person; (iii) all Material
agreements, contracts or commitments relating to the acquisition of assets or
capital stock of any Person other than assets acquired in the ordinary course
of business by the Company; (iv) all Material agreements, except for
employment agreements and other agreements listed pursuant to clause (i)
above, for loans or the provision, purchase or sale of goods, services or
property between the Company or any of its Subsidiaries and any director,
officer, employee, agent or representative of the Company or any Subsidiary,
or any relative or affiliate of any of the foregoing; (v) all Material
agreements, contracts or commitments to which the Company is a party or by
which the Company is bound and which require consent ("Contractual Consents")
by any other Person in connection with the consummation of the transactions
contemplated hereby, either to prevent a breach or to continue the
effectiveness thereof; and (vi) all other Material agreements (other than this
Agreement, agreements to be executed with respect to this Agreement and
agreements with respect to deposits received and loans granted) of the Company
or any of its Subsidiaries. The Company is not in default in any respect
Material to the Company under any of the contracts, agreements or other
instruments described above. No event has occurred which, with notice or lapse
of time or both, would constitute a default by the Company under any of such
contracts, agreements or instruments, and all such contracts, agreements and
instruments are in full force and effect, except for such defaults or failures
to be in full force and effect as would not have a Material Adverse Effect.
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2.17. Title to Assets. In the case of the Company, a list of all Material
real estate owned or leased by the Company or any of its Subsidiaries (other
than OREO) has been Previously Disclosed. In the case of the Company, each of
it and its Subsidiaries has good and marketable title to its properties and
assets (other than (i) property as to which it is lessee and (ii) real estate
owned as a result of foreclosure, transfer in lieu of foreclosure or other
transfer in satisfaction of a debtor's obligation previously contracted),
except for such defects in title which would not, individually or in the
aggregate, have a Material Adverse Effect.
2.18. Knowledge as to Conditions. In the case of Acquiror and the Company,
respectively, it knows of no reason why the approvals, consents and waivers of
governmental authorities referred to in Section 4.1(b) should not be obtained
without the imposition of any condition of the type referred to in the
provisos to such Section.
2.19. Compliance With Laws. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, it and each of its Significant
Subsidiaries has all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and registrations with,
federal, state, local and foreign governmental or regulatory bodies that are
required in order to permit it to carry on its business as it is presently
conducted and the absence of which could, individually or in the aggregate,
have a Material Adverse Effect.
2.20. Acquiror Common Stock. In the case of Acquiror, the Acquiror ADSs and
underlying Acquiror Ordinary Shares to be issued pursuant to this Agreement,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable and subject to no
preemptive rights.
2.21. Fees. In the case of Acquiror and the Company, respectively, other
than financial advisory services performed for Acquiror by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
and for the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. and FMCG Capital Strategies (on
terms disclosed to Acquiror), neither it nor any of its Subsidiaries, nor any
of their respective officers, directors, employees or agents has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or finder has
acted directly or indirectly for it or any of its Subsidiaries, in connection
with this Agreement or the transactions contemplated hereby.
2.22. Registration Statement; Proxy Statement. In the case of Acquiror and
the Company, respectively, the information to be supplied by it for inclusion
in (i) the Registration Statement on Form F-4 and/or such other form(s) as may
be appropriate to be filed under the Securities Act with the SEC by Acquiror
for the purpose of, among other things, registering the Acquiror ADSs and
underlying Acquiror Ordinary Shares to be issued to the shareholders of the
Company in the Merger (the "Registration Statement") will not, at the time
such Registration Statement becomes effective, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading,
or (ii) the proxy statement or proxy statements and other materials (as
amended or supplemented from time to time, collectively the "Proxy Statement,"
and together with the prospectus included in the Registration Statement, as
amended or supplemented from time to time, the "Proxy Statement/Prospectus")
to be filed with the SEC by the Company under the Securities Exchange Act and
distributed in connection with the Company's meeting of its shareholders to
vote upon this Agreement (the "Company Meeting") and to be distributed by
Acquiror Sub in connection with Acquiror Sub's meeting of its Shareholders to
vote upon this Agreement (the "Acquiror Sub Meeting"), and the offering
circular required under the rules and regulation of the London and Irish stock
exchanges (the "Offering Circular") to be distributed by Acquiror in
connection with Acquiror's meeting of the Shareholders to vote upon this
Agreement (the "Acquiror Meeting") will not, at the time the Proxy
Statement/Prospectus and the Offering Circular, respectively, are mailed and
at the time of the Company Meeting, the Acquiror Sub Meeting, or the Acquiror
Meeting, respectively, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
2.23. Environmental Matters. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, except for such matters that, alone or
in the aggregate, are not reasonably likely to have a Material Adverse Effect,
to the best of its knowledge, (i) it and its Subsidiaries have complied with
all applicable
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Environmental Laws (as hereinafter defined) and (ii) neither it nor any of its
Subsidiaries has received any notices, demand letters or requests for
information from any governmental entity or any third party indicating that it
or any of its Subsidiaries may be in violation of, or liable under, any
Environmental Law and none of it, its Subsidiaries or the properties owned or
leased by any of them are subject to any court order, administrative order or
decree arising under any Environmental Law.
"Environmental Law" means any Federal, state, foreign or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, common law, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, relating to (x) the
protection, preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (y) the exposure to, or
the use, storage, recycling, treatment, generation, transformation,
processing, handling, labeling, production, release or disposal of any
substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, including any substance containing any such
substance as a component, in each case as amended and as now in effect.
2.24. Takeover Laws; Rights Plans.
(a) In the case of the Company, it has taken all action required to be taken
by it in order to opt out or exempt this Agreement and the Stock Option
Agreement, and the transactions contemplated hereby and thereby, from, and
this Agreement and the Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
"business combination," "moratorium," "disgorgement," "control share," or
other applicable antitakeover laws and regulations (collectively, "Takeover
Laws") of the Commonwealth of Pennsylvania, including Chapter 25 of the PBCL.
(b) In the case of the Company, it has duly entered into an amendment to the
Company Rights Agreement in form and substance satisfactory to Acquiror and
the Company, and taken all other action necessary or appropriate, so that the
entering into of this Agreement and the Stock Option Agreement and the
completion of the transactions contemplated hereby and thereby (including
without limitation the Merger and the exercise of the option (as defined in
the Stock Option Agreement)) do not and will not result in the ability of any
Person to exercise any rights under the Company Rights Agreement, or enable or
require the Company Rights to separate from the shares of common stock to
which they are attached or to be triggered or become exercisable.
(c) In the case of the Company, no "Distribution Date," "Stock Acquisition
Date," "Section 11(a)(ii) Trigger Date," or "Triggering Event" (as such terms
are defined in the Company Rights Agreement) has occurred.
(d) In the case of the Acquiror, Acquiror has not entered into any agreement
of similar effect as the Company Rights Agreement.
2.25. Vote Required. In the case of the Company, the affirmative vote of the
holders of a majority of the shares of its Common Stock present and voting at
the Company Meeting is the only vote of the holders of any class or series of
its capital stock necessary to approve this Agreement and the transactions
contemplated hereby; in the case of Acquiror, the affirmative vote of holders
of a majority of the outstanding Acquiror Ordinary Shares present and voting
at the Acquiror Meeting is the only vote of the holders of any class or series
of its capital stock necessary to approve this Agreement and the transactions
contemplated hereby; and in the case of Acquiror Sub, the affirmative vote of
holders of a majority of the outstanding voting power of the Acquiror Sub
Common Stock and Acquiror Sub Preferred Stock, voting as a single class, is
the only vote of the holders of any class or series of its capital stock
necessary to approve this Agreement and the transactions contemplated hereby.
The Acquiror Sub Common Stock and Acquiror Sub Preferred Stock each are
entitled to one vote per share with respect to approval of this Agreement and
the transactions contemplated hereby.
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ARTICLE III
Conduct Prior to Closing
3.1. Access to Information; Notice of Changes; Confidentiality.
(a) During the period commencing on the date hereof and ending on the
Closing Date, each of the parties shall (and shall cause each of its
Subsidiaries to) upon reasonable notice, afford the other parties, and their
respective counsel, accountants and other authorized representatives,
reasonable access during normal business hours to the properties, books and
records of such party and its Subsidiaries in order that they may have the
opportunity to make such investigations as they shall desire of the affairs of
such party and its Subsidiaries; such investigation shall not, however, affect
or be deemed to modify the representations and warranties made by such party
in this Agreement.
(b) During the period commencing on the date hereof and ending on the
Closing Date, each party shall promptly notify the other parties hereto in
writing of any and all occurrences which, if they had occurred prior to
execution of this Agreement, would have caused the representations and
warranties of such party contained in Article 2 and the disclosures delivered
in conjunction therewith to be incorrect in any Material respect.
(c) Each party will not, and will cause its representatives not to, use any
information obtained pursuant to this Section 3.1 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement. Subject
to the requirements of law, each party will keep confidential, and will cause
its representatives to keep confidential, all information and documents
obtained pursuant to this Section 3.1 unless such information (i) was already
known to such party, (ii) becomes available to such party from other sources
not known by such party to be bound by a confidentiality obligation, (iii) is
disclosed with the prior written approval of the party to which such
information pertains, or (iv) is or becomes readily ascertainable from
published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
to be returned to the party which furnished the same.
3.2. Conduct of the Business of the Company Pending the Closing Date. The
Company agrees that, except as express permitted by this Agreement or
otherwise consented to or approved in writing by Acquiror, during the period
from the date hereof to the Effective Time:
(a) The Company will and will cause each of its Subsidiaries to conduct
their respective operations only in the ordinary course of business consistent
with past practice (subject, in any event, to the provisions of paragraph (c)
below) and will use its best efforts to preserve intact their respective
business organizations, keep available the services of their officers and
employees and maintain satisfactory relationships with licensors, suppliers,
distributors, customers, clients and others having business relationships with
them.
(b) The Company shall not, and shall not permit any of its Subsidiaries to,
take any action, engage in any transactions or enter into any agreement which
would adversely affect or delay in any Material respect the ability of
Acquiror or the Company to obtain any necessary approvals, consents or waivers
of any governmental authority required for the transactions contemplated
hereby or to perform its covenants and agreements on a timely basis under this
Agreement.
(c) The Company will not and will not permit any of its Subsidiaries to:
(i) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any other Person, or make any loan or advance;
(ii) (A) adjust, split, combine or reclassify any capital stock; (B)
subject to Section 3.4 hereof, make, declare or pay any dividend (other
than (x) regular quarterly cash dividends not exceeding $0.30 per share on
the Company Common Stock and (y) dividends paid by any of the wholly-owned
Subsidiaries of the
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Company to the Company or any of its wholly-owned Subsidiaries), 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, (C) grant any stock appreciation rights or grant any Person any
right to acquire any shares of its capital stock, except for options issued
to employees and directors (not to exceed 315,000 shares) and rights
arising under the Company's Employee Stock Purchase Plan in the ordinary
course of business consistent with past practice; or (D) issue any
additional shares of capital stock except pursuant to (x) Rights
outstanding as of the date hereof, (y) Rights issued or arising after the
date hereof as permitted by clause (C) above (z) the Company's Dividend
Reinvestment Plan;
(iii) other than in the ordinary course of business consistent with past
practice, sell, transfer, mortgage, encumber or otherwise dispose of any of
its Material properties or assets to any Person other than a direct or
indirect wholly-owned Subsidiary of the Company, or cancel, release or
assign any indebtedness of any such Person or any claims held by any such
Person, except in the ordinary course of business consistent with past
practice or pursuant to contracts or agreements in force at the date of
this Agreement as Previously Disclosed;
(iv) other than in the ordinary course of business consistent with past
practice, make any Material investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of
any property or assets of any other individual, corporation or other entity
other than a wholly-owned Subsidiary of the Company;
(v) other than 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, other than
renewals of contracts and leases without Material adverse changes of terms;
(vi) increase in any manner 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 except as
Previously Disclosed become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, in each case
other than in the ordinary course of business consistent with past
practice, or voluntarily accelerate the vesting of any stock options or
other stock-based compensation, provided that extensions of employment
contracts in existence on the date hereof pursuant to the terms thereof
shall be deemed to be made in the ordinary course of business consistent
with past practice; provided, however, that nothing herein shall prevent
the Company from establishing a bonus pool in the aggregate amount of Three
Million Dollars ($3,000,000) to be paid to certain officers and employees
upon Closing. The Chief Executive Officer of the Company will consult with
the senior executives of Acquiror and Acquiror Sub in connection with the
bonus pool.
(vii) other than in the ordinary course of business consistent with past
practice, settle any claim, action or proceeding involving any liability of
the Company or any of its Subsidiaries for Material money damages or
restrictions upon the operations of the Company or any of its Subsidiaries;
(viii) modify in any Material respect the manner in which it and its
Subsidiaries have heretofore conducted or accounted for their business;
(ix) except as contemplated by this Agreement, amend its articles of
incorporation or its by-laws; or
(x) agree to, or make any commitment to, take any of the actions
prohibited by this Section 3.2.
3.3. Conduct of the Business of Acquiror Pending the Closing Date. Acquiror
agrees that, except as expressly permitted by this Agreement or otherwise
consented to or approved in writing by the Company, during the period from the
date of this Agreement to the Effective Time, Acquiror will not (a) subject to
Section 3.4 hereof, declare or pay any extraordinary or special dividend on
the Acquiror Ordinary Shares, or (b) take any action that would adversely
affect or delay in any material respect the ability of the Company or Acquiror
to obtain any necessary approvals, consents or waivers of any governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements on a timely basis under this Agreement.
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3.4. Dividends. Notwithstanding Sections 3.2 and 3.3 hereof, in all events
Acquiror and the Company agree to coordinate (on a mutually agreeable basis)
the declaration of dividends (and the record and payment dates therefor)
payable during the period preceding and including the quarter in which the
Effective Time occurs so that shareholders of the Company and Acquiror will
receive fair dividends and in no event shall shareholders of the Company and
Acquiror fail to receive a fair dividend during any quarter or semi-annual
period up to and including the quarter or semi-annual period, as the case may
be, immediately following the Effective Time.
3.5. No Solicitation of Other Offers. The Company agrees that neither it nor
any of its Subsidiaries nor any of their respective officers and directors
shall, and the Company shall direct and use its best efforts to cause its
employees, agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, take any action to solicit or
initiate any inquiries or the making of any offer or proposal with respect to
a merger, consolidation, business combination, liquidation, reorganization,
sale or other disposition of any significant portion of assets, sale of shares
of capital stock, or similar transactions involving the Company or any
Subsidiary of the Company (any such inquiry, offer or proposal, an
"Acquisition Proposal"), or, except as may be legally required for the
discharge by the board of directors of its fiduciary duties, engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any Person relating to an Acquisition Proposal.
The Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any other parties conducted
heretofore with respect to any of the foregoing. The Company will promptly
notify Acquiror of its receipt of any Acquisition Proposal.
3.6. Certain Filings, Consents and Arrangements. Acquiror and the Company
shall (a) as soon as practicable make any filings and applications required to
be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby (including without limitation all
applications for required approvals as set forth in Section 4.1(b) hereof),
(b) cooperate with one another (i) in promptly determining what filings are
required to be made and what approvals, consents or waivers are required to be
obtained under any relevant federal, state or foreign law or regulation and
(ii) in promptly making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such approvals, consents
or waivers, and (c) deliver to the other copies of the publicly available
portions of all such filings and applications promptly after they are filed.
3.7. Best Efforts. Acquiror and the Company each will (i) use its best
efforts to take all action necessary to render accurate as of the Closing Date
the representations and warranties of it contained herein, and (ii) use its
best efforts to perform or cause to be satisfied each covenant or condition to
be performed or satisfied by it as contemplated by this Agreement.
3.8. Publicity. The initial press release announcing this Agreement shall be
a joint press release and thereafter the Company and Acquiror shall consult
with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any governmental entity or with any national securities
exchange with respect thereto.
3.9. Shareholder Approvals. Each of Acquiror, Acquiror Sub and the Company
shall take, in accordance with applicable law, the rules of any applicable
securities exchange or quotation system, and its respective articles of
incorporation and by-laws (or similar corporate documents), all action
necessary to convene an appropriate meeting of its shareholders to consider
and vote upon the approval of this Agreement (the Company Meeting, Acquiror
Meeting and Acquiror Sub Meeting each referenced to herein as a "Shareholder
Meeting"), as promptly as practicable after the Registration Statement is
declared effective. The Board of Directors of each such party will recommend
approval of such matters, and each such party will take all reasonable lawful
action to solicit such approval by its shareholders, except, in the case of
the Company, as may be legally required for the discharge by the board of
directors of its fiduciary duties. Acquiror will vote all of the shares of the
capital stock of Acquiror Sub held by it in favor of such matters.
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3.10. Registration Statement.
(a) Each of Acquiror and the Company agrees to cooperate in the preparation
of the Registration Statement to be filed by Acquiror with the SEC in
connection with the issuance of Acquiror ADSs and the underlying Acquiror
Ordinary Shares in the Merger, including the Proxy Statement/Prospectus and
the Offering Circular. Each of Acquiror and the Company agrees to use all
reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. Acquiror also agrees to use all reasonable efforts to obtain
all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the transactions contemplated by this Agreement. The
Company and Acquiror each agree to furnish all information concerning
themselves and their Subsidiaries, officers, directors and shareholders as may
be reasonably requested in connection with the foregoing.
(b) Each of Acquiror and the Company agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement and each amendment thereto, if
any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
Proxy Statement/Prospectus and any amendment or supplement thereto, and (iii)
the Offering Circular, will, at the date of mailing to shareholders and at the
times of each of the Shareholder Meetings, contain any statement which, in the
light of the circumstances under which such statement is made, is false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the same meeting. Each of
the Company and Acquiror agrees that the Proxy Statement (except, in the case
of the Company, with respect to portions thereof prepared by Acquiror, and
except, in the case of Acquiror, with respect to portions thereof prepared by
the Company) will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder, and the Registration Statement (except, in the case of the
Company, with respect to portions thereof prepared by Acquiror, and except, in
the case of Acquiror, with respect to portions thereof prepared by the
Company) will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations of the SEC thereunder.
(c) In the case of Acquiror, Acquiror will advise the Company, promptly
after Acquiror receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has been filed,
of the issuance of any stop order or the suspension of the qualification of
the Acquiror ADSs and the underlying Acquiror Ordinary Shares for offering or
sale in any jurisdiction, of the initiation or threat of any proceeding for
any such purpose, or of any request by the SEC for the amendment or supplement
of the Registration Statement or for additional information.
3.11. The Company Rights Agreement. The Board of Directors of the Company
shall take all further action (in addition to that referred to in Section
2.24) reasonably requested in writing by Acquiror (including redeeming the
Company Rights immediately prior to the Effective Time or amending the Company
Rights Agreement) in order to render the Company Rights inapplicable to the
Merger and the other transactions contemplated by this Agreement and the Stock
Option Agreement. Except as provided above with respect to the Merger and the
other transactions contemplated by this Agreement and the Stock Option
Agreement and except as may be legally required for the discharge by the Board
of Directors of the Company of its fiduciary duties, the Board of Directors of
the Company shall not (a) amend the Company Rights Agreement or (b) take any
action with respect to, or make any determination under, the Company Rights
Agreement, including a redemption of the Company Rights or any action to
facilitate an Acquisition Proposal in respect of the Company.
3.12. Securities Act.
(a) Not later than the 15th day prior to mailing of the Proxy
Statement/Prospectus, Acquiror shall deliver to the Company, and the Company
shall deliver to Acquiror, a schedule of each Person that, to the best of its
knowledge, is or is reasonably likely to be, as of the date of the Company
Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as that term
is used in Rule 145 under the Securities Act.
A-20
(b) The Company shall use its reasonable best efforts to cause each Person
who may be deemed to be an Affiliate of the Company to execute and deliver to
the Acquiror prior to the Effective Time an agreement relating to the above-
referenced Rule 145 in form and substance satisfactory to Acquiror.
3.13. Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly,
or cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable,
including using efforts to obtain all necessary actions or non-actions,
extensions, waivers, consents and approvals from all applicable governmental
entities, effecting all necessary registrations, applications and filings
(including, without limitation, filings under any applicable state securities
laws) and obtaining any required contractual consents and regulatory
approvals.
3.14. Listing. Acquiror shall use its best efforts to list on the New York
Stock Exchange upon official notice of issuance the Acquiror ADSs to be issued
in the Merger.
ARTICLE IV
Conditions Precedent to Merger
4.1. Conditions Precedent to Obligations of All Parties. The respective
obligations of Acquiror and the Company to effect the Merger are subject to
the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:
(a) Shareholder Approvals. This Agreement and the transactions contemplated
hereby shall have been approved by the requisite vote of the shareholders of
the Company, Acquiror and Acquiror Sub in accordance with applicable law.
(b) Regulatory Approval. Acquiror shall have procured the required approval,
consent, waiver or other administrative action with respect to this Agreement
and the transactions contemplated hereby (i) by the Pennsylvania Department of
Banking pursuant to Pennsylvania law, and (ii) by the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board") under the Bank
Holding Company Act of 1956, (iii) by the Minister for Employment and
Enterprise for Ireland, and (iv) by the Central Bank of Ireland, and all
applicable statutory waiting periods shall have expired; and the parties shall
have procured all other regulatory approvals, consents, waivers or
administrative actions of governmental authorities or other Person that are
necessary or appropriate to the consummation of the transactions contemplated
by this Agreement; provided, however, that no approval, consent, waiver or
administrative action referred to in this Section 4.1(b) shall be deemed to
have been received if it shall include any condition or requirement (other
than a condition or requirement requiring divestitures or other actions in
order to comply with or avoid challenge under the antitrust laws) that would
so materially and adversely affect the economic or business benefits of the
Merger that the Acquiror would not have entered into this Agreement had such
conditions or requirements been known at the date hereof;
(c) Other Legal Requirements. All other requirements prescribed by law which
are necessary to the consummation of the transactions contemplated by this
Agreement shall have been satisfied.
(d) Injunction. No preliminary or permanent injunction or other order shall
have been issued by any court or by any governmental or regulatory agency,
body or authority which prohibits the consummation of the Merger and the
transactions contemplated by this Agreement and which is in effect at the
Effective Time.
(e) Statutes. No statute, rule, regulation, executive order, decree or order
of any kind shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which prohibits the consummation of the
Merger.
A-21
(f) Registration Statement. The Registration Statement shall have become
effective and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
(g) Tax Opinion. Acquiror and the Company each shall have received the
opinion of counsel to Acquiror acceptable to the Company, substantially to the
effect that, on the basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts existing at the
Effective Time, the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code and that,
accordingly: (i) no gain or loss will be recognized by Acquiror or the Company
as a result of the Merger; (ii) no gain or loss will be recognized by the
shareholders of the Company who exchange their shares of Company Common Stock
solely for Acquiror ADSs pursuant to the Merger (except with respect to cash
received in lieu of fractional Acquiror ADSs); (iii) the tax basis of the
shares of Acquiror ADSs received by shareholders who exchange all of their
shares of the Company Common Stock solely for shares of Acquiror ADSs in the
merger will be the same as the tax basis of the shares of the Company Common
Stock surrendered in exchange therefor (reduced by any amount allocable to a
fractional interest for which cash is received); and (iv) the holding period
of the Acquiror ADSs received in the Merger will include the period during
which the shares of the Company Common Stock surrendered in exchange therefor
were held, provided such shares of the Company Common Stock were held as
capital assets at the Effective Time. In rendering their opinion, such counsel
may require and rely upon representations contained in certificates of
officers of Acquiror, the Company and others.
(h) Rights Agreements. There shall exist no "Acquiring Person" and no "Stock
Acquisition Date" or "Triggering Event" (as each of such terms are defined in
the Company Rights Agreement) shall have occurred.
4.2. Conditions Precedent to Obligations of Acquiror. The obligations of
Acquiror to effect the Merger are also subject to the satisfaction or waiver,
at or prior to the Effective Time, of each of the following conditions unless
waived by Acquiror:
(a) Accuracy of Representations and Warranties. All representations and
warranties of the Company contained herein shall be true and correct in all
Material respects as of the date hereof and at and as of the Closing Date,
with the same force and effect as though made on and as of the Closing Date.
(b) The Company's Performance. The Company shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to the Closing Date.
(c) Officer's Certificate. Acquiror shall have received a certificate signed
by the Chief Executive Officer and the Chief Financial Officer of the Company,
dated the Closing Date, certifying as to the matters set forth in
subparagraphs 4.2(a) and (b).
(d) Opinion of Counsel. Acquiror shall have received an opinion, dated the
Closing Date, of counsel for the Company, in form and substance satisfactory
to Acquiror and its counsel.
(e) Blue Sky. Acquiror shall have received all state securities laws and
"Blue Sky" permits and other authorizations necessary to consummate the
transactions contemplated hereby.
(f) Accountants' Comfort Letters. Acquiror and its directors and officers
who sign the Registration Statement shall have received letters from the
Company's independent certified public accountants, dated (i) the date of the
mailing of the Proxy Statement/Prospectus to the Company's shareholders and
(ii) shortly prior to the Closing Date, with respect to certain financial
information regarding the Company in the form customarily issued by such
accountants at such time in transactions of this type.
A-22
4.3. Conditions Precedent to Obligation of the Company. The obligation of
the Company to effect the Merger is also subject to the satisfaction or
waiver, at or prior to the Effective Time, of each of the following conditions
unless waived by the Company:
(a) Accuracy of Representations and Warranties. All representations and
warranties of Acquiror contained herein shall be true and correct in all
Material respects as of the date hereof and at and as of the Closing, with the
same force and effect as though made on and as of the Closing Date.
(b) Acquiror's Performance. Acquiror shall have performed in all material
respects all obligations and agreements, and complied in all material respects
with all covenants and conditions, contained in this Agreement to be performed
or complied with by it prior to the Closing Date.
(c) Officer's Certificate. The Company shall have received a certificate
signed by the Chief Executive Officer and the Chief Financial Officer of
Acquiror and Acquiror Sub, dated the Closing Date, certifying as to the
matters set forth in subparagraphs 4.3(a) and (b).
(d) Opinion of Counsel. The Company shall have received an opinion, dated
the Closing Date, of counsel for Acquiror and Acquiror Sub, in form and
substance satisfactory to the Company and its counsel.
(e) Stock Listing. The Acquiror ADSs to be issued in the Merger have been
approved for listing on the New York Stock Exchange, subject to official
notice of issuance.
(f) Accountants' Comfort Letters. The Company and its directors shall have
received letters from Acquiror's independent certified public accountants,
dated (i) the date of the mailing of the Proxy Statement/Prospectus to the
Company's shareholders and (ii) shortly prior to the Closing Date, with
respect to certain financial information regarding Acquiror in the form
customarily issued by such accountants at such time in transactions of this
type.
(g) Employment Agreements. Acquiror Sub shall have entered into an agreement
with ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in the form attached hereto as part of Exhibit B
attached hereto, effective as of the Effective Time, and shall have made the
Change of Control Retention Payments specified on Exhibit B.
ARTICLE V
Covenants
5.1. Tax-Free Reorganization Treatment. Neither Acquiror nor the Company
shall take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a "reorganization" within
the meaning of Section 368 of the Code.
5.2. Certain Contracts. Acquiror Sub hereby unconditionally agrees to, and
agrees to cause its Subsidiaries to, honor, without modification, offset or
counterclaim, all Previously Disclosed contracts, agreements and commitments
of the Company or any of its Subsidiaries authorized by the Company or any of
its Subsidiaries prior to the date of this Agreement which apply to any
current or former employee or current or former director of the Company or any
of its Subsidiaries, including without limitation the Change in Control
Agreements and Indemnification Agreements with certain directors, officers and
employees as Previously Disclosed in accordance with Section 2.16 hereof. In
accordance with the terms of such contracts, agreements and commitments,
Acquiror Sub hereby assumes, subject to the consummation of the Merger, all of
the Company's and its Subsidiaries' obligations under such contracts,
agreements and commitments.
5.3. Employee Benefits. Acquiror Sub hereby unconditionally agrees to, and
to cause its Subsidiaries to, provide to officers and employees of the Company
and its Subsidiaries who become or remain regular (full time) employees of
Acquiror Sub or any of its Subsidiaries employee benefits, including, without
limitations pension benefits, health and welfare benefits, life insurance and
vacation, which are no less favorable in the aggregate than those provided
from time to time by the Acquiror Sub and its Subsidiaries to their similarly
situated officers
A-23
and employees. Any employee of the Company or any of its Subsidiaries who
becomes a participant in any employee benefit plan, program, policy, or
arrangement of the Acquiror Sub or any of its Subsidiaries shall be given
credit under such plan, program, policy, or arrangement for all service with
the Company or any of its Subsidiaries prior to becoming such a participant
for purposes of eligibility and vesting. Employees of the Company or any of
its Subsidiaries who are terminated within two years after the Effective Time
shall be entitled to severance benefits equal to the greater of those provided
by the Company on the date hereof or those provided by the Acquiror Sub as of
the Effective Time, and shall be provided outplacement assistance and
counselling by Acquiror Sub. In addition, (i) employees of the Company or its
Subsidiaries who continue as employees of Acquiror Sub or its Subsidiaries
after the Effective Time ("Affected Employees") shall be provided with the
greater of the weeks of annual vacation to which they were entitled on the day
before the Effective Date or the weeks of annual vacation to which similarly
situated employees of Acquiror Sub and its Subsidiaries are then entitled,
(ii) Affected Employees shall be entitled to preserve days of vacation that
have been carried over from 1996 to 1997, and Affected Employees who are not
able to take all the vacation days to which they are entitled for calendar
year 1997 shall be permitted to carry over unused days into calendar 1998;
(ii) Affected Employees shall be entitled to preserve occasional days that
have been carried over from 1996 into 1997 in addition to any occasional days
to which they may otherwise be entitled, and Affected Employees who are not
able to take all the occasional days to which they are entitled for calendar
year 1997 shall be permitted to carry over unused days into calendar 1998; and
(iii) Acquiror Sub shall coordinate any transition of Affected Employees to
benefit plans of Acquiror Sub such that credit is given as to deductibles, co-
payments and other similar items, and the flexible spending accounts
maintained for employees of the Company and its Subsidiaries shall be
maintained through the end of calendar year 1997. Additional provisions
regarding benefits of Affected Employees are set forth on Exhibit C attached
hereto.
5.4. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Acquiror Sub agrees to indemnify and
hold harmless each present and former director and officer of the Company or
its Subsidiaries and each officer or employee of the Company or its
Subsidiaries that is serving or has served as a director or trustee of another
entity expressly at the Company's request or direction (the "Indemnified
Parties"), against any and all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any and all claims,
actions, suits, proceedings or investigations, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
arising out of or in connection with such party's position as, or actions
taken as, a director or officer of the Company or a Subsidiary or director or
trustee of another entity at the request or direction of the Company, at or
prior to the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent permitted by applicable law (and
also advance expenses incurred to the fullest extent permitted by applicable
law); provided, however, that Acquiror Sub shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that the indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. If
such indemnity is determined not to be available as a matter of law with
respect to any Indemnified Party, then the Acquiror Sub and the Indemnified
Party shall contribute to the amount payable in such proportion as is
appropriate to reflect relative faults and benefits and other relevant
equitable considerations.
(b) Any Indemnified Party wishing to claim indemnification under Section
5.4(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Acquiror Sub thereof, but the failure to
so notify shall not relieve Acquiror Sub of any liability it may have to such
Indemnified Party if such failure does not materially prejudice Acquiror. In
the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time): (i) Acquiror Sub shall
have the right to assume the defense thereof and Acquiror Sub shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Acquiror elects not to
assume such defense, or counsel for the Indemnified Parties advises that there
are issues which raise conflicts of interest between Acquiror Sub and the
Indemnified Parties, the
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Indemnified Parties may retain counsel satisfactory to them, and Acquiror Sub
shall pay the reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; (ii) the Indemnified
Parties will cooperate in the defense of any such matter; and (iii) Acquiror
Sub shall not be liable for any settlement effected without its prior written
consent which shall not be unreasonably withheld.
(c) For a period of six years after the Effective Time, Acquiror Sub shall
use all reasonable efforts to cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by the
Company (provided that Acquiror Sub may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions which are
substantially no less advantageous to such directors and officers) with
respect to claims arising from facts or events which occurred before the
Effective Time; provided, however, that in no event shall Acquiror Sub be
obligated to expend, in order to maintain or provide insurance coverage
pursuant to this Subsection 5.4(c), any amount per annum in excess of 200% of
the amount of the annual premiums paid as of the date hereof by the Company
for such insurance (the "Maximum Amount"). If the amount of the annual
premiums necessary to maintain or procure such insurance coverage exceeds the
Maximum Amount, Acquiror shall use all reasonable efforts to maintain the most
advantageous policies of directors' and officers' insurance obtainable for an
annual premium equal to the Maximum Amount.
5.5. Certain Director and Officer Positions.
(a) As of the Effective Date, Acquiror and Acquiror Sub shall fix the size
of the Board of Directors of Acquiror Sub at 21 members and shall cause five
members of the Company's Board of Directors (consisting of ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and four other current directors selected by the Company and willing
to so serve) to be appointed or elected to the Board of Directors of Acquiror
Sub. As of the Effective Time Acquiror and Acquiror Sub agree to cause
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ to be named as Vice Chairman of the Board of Directors
of Acquiror Sub, and Vice Chairman of the Steering Committee of Acquiror Sub.
(b) As of the Effective Time, Acquiror Sub shall enter into the employment
agreements referred to in Section 4.3(g) hereof.
ARTICLE VI
Termination
6.1. Termination. This Agreement may be terminated, and the Merger
abandoned, prior to the Effective Time, either before or after its approval by
the shareholders of the Company:
(a) by the mutual consent of the Acquiror and the Company, if the board of
directors of each so determines by vote of a majority of the members of its
entire board;
(b) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event of the
failure of the shareholders of the Company or Acquiror to approve this
Agreement at its meeting called to consider such approval;
(c) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event of a
Material breach by the other party hereto of any representation, warranty,
covenant or agreement contained herein which is not cured or not curable
within 60 days after written notice of such breach is given to the party
committing such breach by the other party;
(d) by Acquiror or the Company by written notice to the other party if
either (i) any approval, consent or waiver of a governmental authority
required to permit consummation of the transactions contemplated hereby shall
have been denied or (ii) any governmental authority of competent jurisdiction
shall have issued a final, unappealable order enjoining or otherwise
prohibiting consummation of the transactions contemplated by this Agreement;
(e) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event that the
Merger is not consummated by December 31, 1997, unless the failure to so
consummate by such time is due to the breach of any representation, warranty
or covenant contained in this Agreement by the party seeking to terminate; or
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(f) by the Company, if its board of directors so determines by a majority
vote of the members of its entire board, at any time during the ten-day period
commencing with the Termination Right Determination Date (as defined below) if
the Market Price on the Termination Right Determination Date of an Acquiror
ADS is less than Thirty-Two Dollars ($32); subject, however, to the following
three sentences. If the Company elects to exercise its termination right
pursuant to the immediately preceding sentence, it shall give prompt written
notice to Acquiror, provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned ten-day period. During the
five-day period commencing with its receipt of such notice, Acquiror shall
have the option of adjusting the Per Share Stock Consideration to the value
thereof that would have resulted if the Market Price of an Acquiror ADS as of
the Termination Right Determination Date were equal to Thirty-Two Dollars
($32). If Acquiror makes an election contemplated by the preceding sentence,
within such five-day period, it shall give prompt written notice to the
Company of such election and the revised Exchange Ratio and Per Share Stock
Consideration, whereupon no termination shall have occurred pursuant to this
Section 6.1(f) and this Agreement shall remain in effect in accordance with
its terms (except as to the Exchange Ratio and Per Share Stock Consideration),
and any references in this Agreement to the "Exchange Ratio" and "Per Share
Stock Consideration" shall thereinafter be deemed to refer to such numbers as
adjusted pursuant to this Section 6.1(f). The figure $32 appearing in the
foregoing paragraph shall be adjusted as provided in Section 1.2(a)(iii)
hereof, in the circumstances indicated therein.
For purposes of this Section 6.1(f), the "Termination Right Determination
Date" shall mean the sixteenth (16th) day preceding the Closing Date
(determined, upon receipt of approval of the Merger from the Federal Reserve
Board, as provided in Section 1.7 hereof assuming all other conditions to
closing are satisfied or waived and without regard to any possible agreement
of the parties to change such Closing Date).
6.2. Effect of Termination. In the event of the termination of this
Agreement by either Acquiror or the Company, as provided above, except as
otherwise provided in Section 8.3 hereof, this Agreement shall thereafter
become void and there shall be no liability on the part of any party hereto or
their respective officers or directors, except that any such termination shall
be without prejudice to the rights of any party hereto arising out of the
willful breach of any covenant or willful misrepresentation by any other party
under this Agreement.
ARTICLE VII
Miscellaneous
7.1. Certain Definitions; Interpretation. As used in this Agreement, the
following terms shall have the meanings indicated:
"Business Day" shall mean any day on which depository institutions are
generally open for business in the Commonwealth of Pennsylvania and the New
York Stock Exchange is generally open for trading.
"Control" shall have the meaning ascribed thereto in the Bank Holding
Company Act of 1956, as amended.
"Dollar" and "$" shall mean United States Dollars.
"Market Price" as of any date of determination means the average closing
price of one Acquiror ADS on the New York Stock Exchange (as reported by The
Wall Street Journal, or, if not reported thereby, another authoritative
source), for the ten (10) New York Stock Exchange trading days ending on the
Business Day immediately preceding the date of determination.
"Material" means material to Acquiror or the Company (as the case may be)
and its respective Subsidiaries, taken as a whole.
"Material Adverse Effect," with respect to a Person, means any condition,
event, change or occurrence that is reasonably likely to have a material
adverse effect upon (A) the financial condition, business or results of
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operations of such Person and its Subsidiaries, taken as a whole, or (B) the
ability of such Person to perform its obligations under, and to consummate the
transactions contemplated by, this Agreement.
"Person" includes an individual, corporation, partnership, association,
trust, limited liability company, unincorporated organization or other legal
entity.
"Subsidiary," with respect to a Person, means any other Person controlled by
such Person.
When a reference is made in this Agreement to Articles, Sections, or
Schedules, such reference shall be to a Section or Article of, or Schedule to,
this Agreement unless otherwise indicated. The table of contents, tie sheet
and headings contained in this Agreement are for ease of reference only and
shall not affect the meaning or interpretation of this Agreement. Whenever the
words "include," "includes," or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation." Any singular term
in this Agreement shall be deemed to include the plural, and any plural term
the singular.
7.2. Fees and Expenses. All costs and expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby
shall, if incurred by Acquiror, be paid by Acquiror and shall, if incurred by
the Company, be paid by the Company.
7.3. Survival. Only those agreements and covenants of the parties that are
applicable in whole or in part after the Effective Time shall survive the
Effective Time. All other representations, warranties, agreements and
covenants shall be deemed to be conditions of this Agreement and shall not
survive the Effective Time. If this Agreement shall be terminated, the
agreements of the parties in Sections 3.1(c) and 7.2 shall survive such
termination.
7.4. Public Announcements. Unless required by applicable law, the Company
and Acquiror will not issue any press release or otherwise make any public
statement with respect to the transactions contemplated hereby without the
prior written consent of the other party.
7.5. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in Person
or mailed, certified or registered mail with postage prepaid, or sent by
telex, telegram or telecopier, as follows:
(a) if to the Company, to it at:
Dauphin Deposit Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Acquiror, to it at:
Allied Irish Banks, plc
Bankcentre, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Attention: Secretary
Telecopier: 011 35 31 660 3063
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and if to Acquiror Sub, to it at:
First Maryland Bancorp
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chairman of the Board
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
in each case, with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date
of delivery unless if mailed in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.6. Entire Agreement. This Agreement and the Schedules, Exhibits and other
documents referred to herein or delivered pursuant hereto collectively contain
the entire understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior and contemporaneous agreements
and understandings, oral and written, with respect thereto.
7.7. Binding Effect; Benefit; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, heirs and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Nothing
in this Agreement, expressed or implied, is intended to confer on any Person,
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
7.8. Waiver. Prior to the Effective Time, any provision of this Agreement
may be (i) waived by the party benefitted by the provision or by both parties,
by a writing executed by an executive officer or officers, or (ii) amended or
modified at any time (including the structure of the transaction) by an
agreement in writing between the parties hereto approved by their respective
boards of directors, except that, after the vote by the shareholders of the
Company no such amendment or modification may be made which reduces or changes
the form and amount of consideration payable pursuant to this Agreement
without further shareholder approval.
7.9. Further Actions. Each of the parties hereto agrees that, subject to its
legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.10. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, and all of which together
shall be deemed to be one and the same instrument.
7.11. Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to the conflict of laws
rules thereof.
7.12. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ALLIED IRISH BANKS, plc
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Chief Executive
FIRST MARYLAND BANCORP
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:Chairman
DAUPHIN DEPOSIT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name:▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Chief Executive Officer
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