AGREEMENT AND PLAN OF MERGER
by and among
TRUSTCO BANK CORP NY,
a New York corporation,
LANDMARK ACQUISITION CO.,
a Delaware corporation,
and
LANDMARK FINANCIAL CORP.,
a Delaware corporation
Dated as of February 21, 2000
TABLE OF CONTENTS
Page
1. Terms of Merger and Closing...........................................1
1.1. Merger................................................................1
1.2. Merging Corporation...................................................1
1.3. Surviving Corporation.................................................1
1.4. Effect of Merger......................................................1
1.5. Conversion of Landmark Common.........................................2
1.6. Stock Options and Restricted Stock....................................2
1.7. Closing...............................................................3
1.8. Exchange Procedures; Surrender of Certificates........................3
1.9. Closing Date..........................................................4
1.10. Closing Deliveries....................................................4
1.11. Disclosure Schedule; Standard.........................................6
1.12. Right to Revise Transaction...........................................7
2. Representations and Warranties of Landmark............................7
2.1. Organization and Capital Stock........................................7
2.2. Authorization; No Defaults............................................8
2.3. Subsidiaries..........................................................8
2.4. Financial Information.................................................9
2.5. Absence of Changes....................................................9
2.6. Regulatory Enforcement Matters........................................9
2.7. Tax Matters..........................................................10
2.8. Litigation and Related Matters.......................................11
2.9. Employment Agreements................................................11
2.10. Reports..............................................................11
i
2.11. Employee Matters and ERISA...........................................11
2.12. Title to Properties; Insurance.......................................13
2.13. Environmental Matters................................................14
2.14. Compliance with Law..................................................14
2.15. Brokerage............................................................15
2.16. Trust Administration.................................................15
2.17. Material Contracts and Agreements....................................15
2.18. No Undisclosed Liabilities...........................................15
2.19. Statements True and Correct..........................................15
2.20. State Takeover Laws..................................................16
2.21. Fair Lending; Community Reinvestment Act.............................16
2.22. Loan Portfolio.......................................................16
2.23. Investment Portfolio.................................................16
2.24. Interest Rate Risk Management Instruments............................16
2.25. Year 2000 Compliance.................................................17
2.26. Interim Events.......................................................17
3. Representations and Warranties of Trustco and AcquisitionCo..........17
3.1. Organization and Capital Stock.......................................17
3.2. Authorization........................................................17
3.3. Subsidiaries.........................................................18
3.4. Litigation...........................................................18
3.5. Statements True and Correct..........................................18
3.6. Funds Available......................................................18
4. Agreements of Landmark...............................................18
4.1. Business in Ordinary Course..........................................18
4.2. Breaches.............................................................21
ii
4.3. Submission to Shareholders...........................................21
4.4. Consents to Contracts and Leases.....................................22
4.5. Consummation of Agreement............................................22
4.6. Environmental Reports................................................22
4.7. Access to Information................................................22
4.8. Subsidiary Bank Name Change..........................................23
4.9. Plan of Merger.......................................................23
5. Agreements of Trustco and AcquisitionCo..............................23
5.1. Regulatory Approvals and Registration Statement; Other Agreements....23
5.2. Breaches.............................................................23
5.3. Consummation of Agreement............................................24
5.4. Directors' and Officers' Liability Insurance and Indemnification.....24
5.5. Employee Benefits....................................................24
5.6. Advisory Board Composition...........................................25
5.7. Access to Information................................................25
6. Conditions Precedent to Merger.......................................26
6.1. Conditions to TrustCo's and AcquisitionCo's Obligations..............26
6.2. Conditions to Landmark's Obligations.................................27
7. Termination or Abandonment...........................................28
7.1. Mutual Agreement.....................................................28
7.2. Breach of Agreements.................................................28
7.3. Environmental Reports................................................28
7.4. Failure of Conditions................................................28
7.5. Regulatory Approval Denial; Burdensome Condition.....................28
7.6. Shareholder Approval Denial; Withdrawal/Modification
of Board Recommendation..............................................29
7.7. Regulatory Enforcement Matters.......................................29
iii
7.8. Fall-Apart Date......................................................29
8. General..............................................................29
8.1. Confidential Information.............................................29
8.2. Publicity............................................................30
8.3. Return of Documents..................................................30
8.4. Notices..............................................................30
8.5. Liabilities and Expenses.............................................31
8.6. Nonsurvival of Representations, Warranties and Agreements............31
8.7. Entire Agreement.....................................................31
8.8. Headings and Captions................................................31
8.9. Waiver, Amendment or Modification....................................31
8.10. Rules of Construction................................................32
8.11. Counterparts.........................................................32
8.12. Successors and Assigns...............................................32
8.13. Severability.........................................................32
8.14. Governing Law; Assignment............................................32
8.15. Enforcement of Agreement.............................................33
8.16. Legal Fees, Costs....................................................33
EXHIBIT 1.01 - Form of Landmark Option Agreement
EXHIBIT 1.10(a) - Landmark's Legal Opinion Matters
EXHIBIT 1.10(b) - TrustCo's Legal Opinion Matters
iv
AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of February
___, 2000, by and among TRUSTCO BANK CORP NY, a New York corporation
("TrustCo"), LANDMARK ACQUISITION CO., a Delaware corporation ("AcquisitionCo")
and LANDMARK FINANCIAL CORP., a Delaware corporation ("Landmark").
RECITALS
--------
The Boards of Directors of TrustCo, AcquisitionCo (a wholly-owned subsidiary of
TrustCo) and Landmark have approved and deem it advisable and in the best
interests of their respective shareholders to consummate the business
combination transaction provided for herein in which AcquisitionCo shall,
subject to the terms and conditions set forth herein, merge with and into
Landmark (the "Merger").
A. The Boards of Directors of TrustCo, AcquisitionCo and Landmark have each
determined that the Merger and the other transactions contemplated by this
Agreement are consistent with, and in furtherance of, their respective
business strategies and goals.
B. Concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to TrustCo's willingness to enter into this
Agreement, TrustCo and Landmark have executed a Stock Option Agreement (the
"Landmark Option Agreement"), dated as of the date hereof and in the form
attached hereto as Exhibit 1.01, pursuant to which Landmark has granted
TrustCo an option exercisable upon the occurrence of certain events.
C. TrustCo, AcquisitionCo and Landmark desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe certain conditions to the Merger.
D. In consideration of the foregoing and the respective representations,
warranties, covenants, and agreements set forth herein and in the Landmark
Option Agreement, TrustCo, AcquisitionCo and Landmark hereby agree as
follows:
1. Terms of Merger and Closing.
1.1. Merger. Pursuant to the terms and provisions set forth herein and the
Delaware General Corporation Law (the "DGCL"), AcquisitionCo shall merge with
and into Landmark.
1.2. Merging Corporation. AcquisitionCo shall be the merging corporation in
the Merger and its corporate identity and existence, separate and apart from
Landmark, shall cease upon consummation of the Merger.
1.3. Surviving Corporation. Landmark shall be the surviving corporation in
the Merger. No changes in the Certificate of Incorporation of Landmark shall be
effected by the Merger.
1.4. Effect of Merger. The Merger shall have all of the effects provided
for herein and under the DGCL.
1.5. Conversion of Landmark Common.
1.5.1. At the Effective Time (as defined in Section 1.9 hereof), by
virtue of the Merger and without any action on the part of TrustCo,
AcquisitionCo, Landmark or their respective shareholders, each share of
common stock, par value $0.10 per share, of Landmark (the "Landmark
Common") issued
and outstanding immediately prior to the Effective Time (other than shares
of Landmark Common held in the treasury of Landmark or by any direct or
indirect subsidiary of Landmark and the shares held by holders duly
exercising dissenting rights pursuant to Section 262 of the DGCL) shall be
converted into the right to receive cash in the amount of Twenty-One
Dollars ($21.00) (the "Merger Consideration").
1.5.2. At the Effective Time, all of the shares of Landmark Common, by
virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of any certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Landmark Common (the "Certificates") shall thereafter
cease to have any rights with respect to such shares, except the right of
such holders to receive, without interest, the Merger Consideration upon
the surrender of such Certificate or Certificates in accordance with
Section 1.8 hereof or the dissenter's rights described in Section 1.5.5
below, if applicable.
1.5.3. At the Effective Time, each share of Landmark Common, if any,
held in the treasury of Landmark or by any direct or indirect subsidiary of
Landmark (other than shares held in trust accounts for the benefit of
others or in other fiduciary, nominee or similar capacities and shares held
by Landmark or any of its subsidiaries in respect to a debt previously
contracted) immediately prior to the Effective Time shall be canceled.
1.5.4. Each share of common stock, par value $1.00 per share, of
AcquisitionCo outstanding immediately prior to the Effective Time shall be
converted into and become one share of Landmark Common.
1.5.5. If holders of Landmark Common are entitled to dissent from the
Agreement and Merger and demand payment of fair market value of their
shares under the DGCL, any issued and outstanding shares of Landmark Common
held by a dissenting holder shall not be converted as described in this
Section 1.5 but from and after the Effective Time shall represent only the
right to receive such consideration as may be determined to be due to such
dissenting holder pursuant to the DGCL; provided, however, that each share
of Landmark Common outstanding immediately prior to the Effective Time and
held by a dissenting holder who shall, after the Effective Time, withdraw
his demand for appraisal with consent of TrustCo or lose his right of
appraisal shall have only the right to receive the Merger Consideration for
such shares in accordance with Section 1.5.1 of this Agreement.
1.6. Stock Options and Restricted Stock.
1.6.1. At the Effective Time, each option to purchase shares of
Landmark Common (each, a "Landmark Stock Option") issued and outstanding
pursuant to the Landmark Financial Corp. 1998 Stock Option Plan (the "Stock
Option Plan"), whether or not such Landmark Stock Option is vested at the
Effective Time, shall, by reason of the Merger, cease to be outstanding and
shall be converted into the right to receive in cash an amount equal to (i)
the difference (if a positive number) between (A) the Merger Consideration
and (B) the exercise price of each such Landmark Stock Option multiplied by
(ii) the number of shares of Landmark Common subject to the Landmark Stock
Option.
1.6.2. At the Effective Time, each share of Landmark Common granted
under the Landmark 1998 Recognition and Retention Plan, whether or not
vested or subject to other restrictions at the Effective Time, shall cease
to be outstanding, shall cease to exist and shall be converted into the
right to receive the Merger Consideration.
1.7. Closing. The closing of the Merger (the "Closing") shall take place at
a location mutually agreeable to the parties at 10:00 a.m., Eastern Time, on the
Closing Date described in Section 1.9 hereof.
1.8. Exchange Procedures; Surrender of Certificates.
1.8.1. Trustco Bank, National Association shall act as Exchange Agent
in the Merger (the "Exchange Agent").
1.8.2. As soon as reasonably practicable after the Effective Time, but
in no event later than five (5) business days after the Closing Date, the
Exchange Agent shall mail to each record holder of any Certificate or
Certificates whose shares were converted into the right to receive the
Merger Consideration, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as TrustCo
may reasonably specify) (each such letter, the "Merger Letter of
Transmittal") and instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender to
the Exchange Agent of a Certificate, together with a Merger Letter of
Transmittal duly executed and any other required documents, the holder of
such Certificate shall be entitled to receive in exchange therefor solely
the Merger Consideration. No interest on the Merger Consideration issuable
upon the surrender of the Certificates shall be paid or accrued for the
benefit of holders of Certificates. If the Merger Consideration is to be
issued to a person other than a person in whose name a surrendered
Certificate is registered, it shall be a condition of issuance that the
surrendered Certificate shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such issuance shall pay to
the Exchange Agent any required transfer taxes or other taxes or establish
to the satisfaction of the Exchange Agent that such tax has been paid or is
not applicable. At the Effective Time, TrustCo shall deposit the Merger
Consideration into a specially segregated account for the benefit of the
holders of Landmark Common.
1.8.3. In the event that any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required
by TrustCo in its sole discretion, the posting by such person of a bond in
such amount as TrustCo may determine is reasonably necessary as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in
respect thereof pursuant hereto.
1.8.4. At or after the Effective Time there shall be no transfers on
the stock transfer books of Landmark of any shares of Landmark Common. If,
after the Effective Time, Certificates are presented for transfer, they
shall be cancelled and exchanged for the Merger Consideration as provided
in, and subject to the provisions of, this Section 1.8.
1.9. Closing Date. At TrustCo's election, the Closing shall take place no
later than the fifteenth day after the receipt of all regulatory approvals and
the expiration of any applicable waiting periods or on such other date as
Landmark and TrustCo may agree (the "Closing Date"). The Merger shall be
effective upon the filing of a Certificate of Merger with the Secretary of State
of Delaware (the "Effective Time"), which the parties shall use their best
efforts to cause to occur on the Closing Date.
1.10. Closing Deliveries.
1.10.1. At the Closing, Landmark shall deliver to TrustCo and
AcquisitionCo:
1.10.1.1. a certified copy of the Certificate of Incorporation
and Bylaws (or their equivalent) of Landmark, the Subsidiary Bank (as
defined in Section 2.3 hereof) and any direct or indirect subsidiary
of Landmark or the Subsidiary Bank; and
1.10.1.2. a Certificate signed by an appropriate officer of
Landmark stating that, to the best knowledge and belief of such
officer, (A) each of the representations and warranties contained in
Article Two hereof (subject to the standard in Section 1.11 hereof) is
true and correct at the time of the Closing with the same force and
effect as if such representations and warranties had been made at
Closing, and (B) all of the conditions set forth in Section 6.1.2
hereof have been satisfied or waived as provided therein; and
1.10.1.3. a certified copy of the resolutions of Landmark's Board
of Directors and shareholders as required for valid approval of the
execution of this Agreement and the consummation of the Merger and the
other transactions provided for by this Agreement; and
1.10.1.4. Certificate of the Secretary of the State of Delaware,
dated a recent date, stating that Landmark is in good standing; and
1.10.1.5. Certificates of Merger prepared by TrustCo and executed
by Landmark, reflecting the terms and provisions hereof and in proper
form for filing with the Secretary of State of the State of Delaware,
in order to cause the Merger to become effective pursuant to the DGCL;
and
1.10.1.6. a legal opinion from counsel for Landmark, in form
reasonably acceptable to TrustCo's counsel, opining with respect to
the matters listed on Exhibit 1.10(a) hereto; and
1.10.1.7. the resignation of any directors of Landmark, the
Subsidiary Bank and any of their respective subsidiaries requested by
TrustCo in a notice given to Landmark no less than 5 days prior to the
Closing Date, which such resignations shall be effective as of the
Effective Time.
1.10.2. At the Closing, TrustCo shall deliver to Landmark:
1.10.2.1. a Certificate signed by an appropriate officer of
TrustCo and AcquisitionCo stating that, to the best knowledge and
belief of such officer, (A) each of the representations and warranties
contained in Article Three hereof (subject to the standard in Section
1.11 hereof) is true and correct at the time of the Closing with the
same force and effect as if such representations and warranties had
been made at Closing, and (B) all of the conditions set forth in
Section 6.2.2 and Section 6.2.4 hereof (but excluding the approval of
Landmark's shareholders) have been satisfied or waived as provided
therein; and
1.10.2.2. a certified copy of the resolutions of TrustCo's Board
of Directors and of AcquisitionCo's Board of Directors and
shareholder, as required for valid
approval of the execution of this Agreement and the consummation of
the transactions provided for by this Agreement; and
1.10.2.3. a legal opinion from counsel for TrustCo and
AcquisitionCo, in form reasonably acceptable to Landmark's counsel,
opining with respect to the matters listed on Exhibit 1.10(b) hereto;
and
1.10.2.4. a certified copy of the Amended and Restated
Certificate of Incorporation and Bylaws of TrustCo and the Certificate
of Incorporation and Bylaws of AcquisitionCo; and
1.10.2.5. Certificate of the Secretary of State of the State of
New York, dated a recent date, stating that TrustCo is in good
standing and Certificate of the Secretary of State of the State of
Delaware, dated a recent date, stating that AcquisitionCo is in good
standing; and
1.10.2.6. Certificates of Merger executed by AcquisitionCo,
reflecting the terms and provisions hereof and in proper form for
filing with the Secretary of State of the State of Delaware in order
to cause the Merger to become effective pursuant to the DGCL.
1.11. Disclosure Schedule; Standard.
1.11.1. Landmark has delivered to TrustCo and AcquisitionCo a
confidential schedule (the "Disclosure Schedule"), executed by Landmark
concurrently with the delivery and execution hereof, setting forth, among
other things, items the disclosure of which shall be necessary or
appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in Article Two hereof; provided,
that (a) no such item shall be required to be set forth in the Disclosure
Schedule as an exception to a representation or warranty if its absence
would not be reasonably likely to result in the related representation or
warranty being deemed untrue or incorrect under the standard established by
Section 1.11.2 hereof, and (b) the mere inclusion of an item in the
Disclosure Schedule as an exception to a representation or warranty shall
not be deemed an admission by Landmark that such item represents a material
exception or fact, event or circumstance or that such item is reasonably
likely to result in a Material Adverse Effect (as defined in Section 1.11.2
hereof.)
1.11.2. No representation or warranty of Landmark contained in Article
Two hereof nor of TrustCo and AcquisitionCo contained in Article Three
hereof shall be deemed untrue or incorrect, and Landmark, TrustCo and
AcquisitionCo, as the case may be, shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
event or circumstance unless such fact, events or circumstance,
individually or taken together with all other facts, event or circumstances
inconsistent with any representation or warranty contained in Article Two
hereof, in the case of Landmark, or Article Three hereof, in the case of
TrustCo and AcquisitionCo, has had or is reasonably likely to have a
Material Adverse Effect on the party making such representation or
warranty. As used herein, the term "Material Adverse Effect" means, with
respect to Landmark or TrustCo and AcquisitionCo, any effect that (i) is,
or is reasonably expected to be, material and adverse to the financial
condition, results of operations or business of Landmark and its
subsidiaries taken as a whole, or TrustCo and its subsidiaries taken as a
whole, respectively, or (ii) would materially impair the ability of either
Landmark or TrustCo and AcquisitionCo to perform its obligations under this
Agreement or otherwise materially threaten or materially impede the
consummation of the Merger and the other transactions contemplated by this
Agreement; provided, however, that Material Adverse Effect shall not be
deemed to
include the impact of (a) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in generally accepted accounting principles or
regulatory accounting requirements applicable to banks and their holding
companies generally, (c) any modifications or changes to valuation or
reserve policies and practices in connection with or in anticipation of the
Merger or restructuring charges taken in connection with the Merger, in
each case in accordance with generally accepted accounting principles, and
(d) reasonable costs associated with completing the transactions
contemplated by this Agreement.
1.11.3. Landmark shall be permitted to update and supplement the
Disclosure Schedule so as to disclose exceptions to one or more
representations or warranties contained in Article Two hereof which shall
have arisen between the date hereof and the Closing Date; provided,
however, that, anything herein to the contrary notwithstanding, the
exceptions and other information set forth on any such updated or
supplemented Disclosure Schedule shall not be taken into consideration in
determining, for purposes of this Agreement, whether the condition set
forth in Section 6.1 hereof shall have been satisfied.
1.12. Right to Revise Transaction. TrustCo may, at any time, change the
method of effecting the Merger (including, without limitation, the provisions of
this Article One), if and to the extent TrustCo deems such change to be
desirable, including, without limitation, to provide for the direct merger of
Landmark and TrustCo; provided, however, that no such change shall (A) alter or
change the amount or kind of the Merger Consideration to be received by the
shareholders of Landmark in the Merger, or (B) materially impede or delay
receipt of any approvals referred to in Section 6.1.4 hereof or the consummation
of the transactions contemplated by this Agreement.
2. Representations and Warranties of Landmark.
Subject to Section 1.11 hereof and except as disclosed in a Section of the
Disclosure Schedule corresponding to the relevant Section in this Article Two,
Landmark hereby makes the following representations and warranties:
2.1. Organization and Capital Stock.
2.1.1. Landmark is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the
corporate power to own all of its property and assets, to incur all of its
liabilities and to carry on its business as now being conducted. Landmark
is a unitary savings and loan holding company registered with the Office of
Thrift Supervision (the "O.T.S.") under the Home Owners' Loan Act of 1934,
as amended (the "H.O.L.A."). True, complete and correct copies of the
Certificate of Incorporation and Bylaws of Landmark as in effect on the
date of this Agreement are included as exhibits to the Disclosure Schedule.
2.1.2. The authorized capital stock of Landmark consists only of
400,000 shares of Landmark Common, of which, as of the date hereof, 154,508
shares are issued and outstanding and 100,000 shares of Landmark preferred
stock, of which, as of the date hereof, no shares are issued and
outstanding. All of the issued and outstanding shares of Landmark Common
are duly and validly issued and outstanding and are fully paid and
non-assessable and free of preemptive rights. None of the outstanding
shares of Landmark Common has been issued in violation of any preemptive
rights of the current or past shareholders of Landmark. As of the date
hereof, Landmark had outstanding stock options representing the right to
acquire not more than 8,460 shares of Landmark Common pursuant to the Stock
Option Plan.
2.1.3. Except as set forth in Section 2.1.2 above, Section 2.1.3 of
the Disclosure Schedule and the Landmark Option Agreement, (i) there are no
shares of capital stock or other equity
securities of Landmark outstanding and no outstanding options, warrants,
rights to subscribe for, calls, or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of Landmark Common or other capital stock of Landmark or contracts,
commitments, understandings or arrangements by which Landmark is or may be
obligated to issue additional shares of its capital stock or options,
warrants or rights to purchase or acquire any additional shares of its
capital stock, and (ii) there are no outstanding stock appreciation,
phantom stock or similar rights.
2.1.4. The minute books of Landmark accurately reflect all corporate
actions held or taken by its shareholders and Board of Directors (including
committees of the Board of Directors) since June 1, 1997 and since January
1, 1995 with respect to the Subsidiary Bank. True, complete and correct
copies of the minute books have been made available to TrustCo by Landmark.
2.2. Authorization; No Defaults. Landmark's Board of Directors has, by all
appropriate action, approved this Agreement, the Landmark Option Agreement and
the Merger and authorized the execution hereof and thereof on its behalf by its
duly authorized officers and the performance by Landmark of its obligations
hereunder. Landmark's Board of Directors has directed that the agreement of
merger (within the meaning of the DGCL) contained in this Agreement and the
transactions provided for by this Agreement, including the Merger, be submitted
to the shareholders of Landmark for approval at the Landmark Shareholders'
Meeting (as defined in Section 4.3 hereof), and, except for the adoption and
approval of this Agreement by the affirmative vote of the holders of a majority
of the outstanding shares of Landmark Common, no other corporate proceedings on
the part of Landmark are necessary to approve this Agreement, the Landmark
Option Agreement and to consummate the transactions contemplated by this
Agreement, including the Merger, and by the Landmark Option Agreement. Nothing
in the Certificate of Incorporation or Bylaws of Landmark, as amended, or any
other agreement, instrument, decree, proceeding, law or regulation (except as
specifically referred to in or contemplated by this Agreement) by or to which it
or any of its subsidiaries are bound or subject would prohibit or inhibit
Landmark from consummating this Agreement and the Merger on the terms and
conditions herein contained. This Agreement and the Landmark Option Agreement
have been duly and validly executed and delivered by Landmark and constitute a
legal, valid and binding obligation of Landmark, enforceable against Landmark in
accordance with their respective terms. Landmark and its subsidiaries are
neither in default under nor in violation of any provision of their Articles or
Certificate of Incorporation or Association, as the case may be, Bylaws, or any
promissory note, indenture or any evidence of indebtedness or security therefor,
lease, contract, insurance policy, purchase or other commitment or any other
agreement or arrangement (however evidenced), whether written or oral, and there
has not occurred any event that, with the lapse of time or giving of notice or
both, would constitute such a default or violation.
2.3. Subsidiaries. Landmark's banking subsidiary; Landmark Community Bank
(the "Subsidiary Bank"), and its other direct or indirect subsidiaries
(collectively, the "subsidiaries") the name and jurisdiction of incorporation
and principal business or purpose of which is disclosed in Section 2.3 of the
Disclosure Schedule, are duly organized, validly existing and in good standing
under the laws of the jurisdiction of their respective incorporation and has the
corporate power to own their respective properties and assets, to incur their
respective liabilities and to carry on their respective business as now being
conducted. The Subsidiary Bank is an insured institution (within the meaning of
the Federal Deposit Insurance Act) and its deposits are insured by the Federal
Deposit Insurance Corporation (the "F.D.I.C.") in accordance with the Federal
Deposit Insurance Act, as amended, up to applicable limits. The number of issued
and outstanding shares of capital stock of each subsidiary is disclosed in
Section 2.3 of the Disclosure Schedule, all of which shares are owned by
Landmark or Landmark's subsidiaries, as the case may be, free and clear of all
liens, encumbrances, rights of first refusal, options or other restrictions of
any nature whatsoever. There are no options, warrants or rights outstanding to
acquire any
capital stock of any of Landmark's subsidiaries and no person or entity has any
other right to purchase or acquire any unissued shares of stock of any of
Landmark's subsidiaries, nor does any such subsidiary have any obligation of any
nature with respect to its unissued shares of stock. Neither Landmark nor any of
its subsidiaries is a party to any partnership or joint venture or owns an
equity interest in any other business or enterprise. True, complete and current
copies of the Articles or Certificates of Incorporation or Association and
Bylaws of each direct and indirect subsidiary of Landmark as in effect on the
date of this Agreement and included as exhibits to the Disclosure Schedule.
2.4. Financial Information. The (i) audited consolidated balance sheets of
Landmark and its subsidiaries as of March 31, 1998 and 1999, and related
consolidated income statements and statements of changes in shareholders' equity
and of cash flows for the three (3) years ended March 31, 1998, together with
the notes thereto, included in Landmark's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1999, as currently on file with the S.E.C., and the
unaudited consolidated balance sheets of Landmark and its subsidiaries as of
December 31, 1999, and the related unaudited consolidated income statements and
statements of changes in shareholders equity and cashflows for the nine months
then ended together with in Landmark's Quarterly Reports on Form 10-QSB for the
quarters June 30, 1999, September 30, 1999 and December 31, 1999 as currently on
file with the Securities and Exchange Commission ("S.E.C."), and (ii) the
year-end and quarterly Thrift Financial Reports of Landmark Community Bank (the
"Subsidiary Bank") for 1998 and for the quarters ended March 31, 1999, June 30,
1999, September 30, 1999, and December 31, 1999, as currently on file with the
F.D.I.C. (together, the "Landmark Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be disclosed therein and except for regulatory reporting
differences required by the Subsidiary Bank's reports) and fairly present in all
material respects the financial position and the results of operations and
changes in shareholders' equity of Landmark and its subsidiaries as of the dates
and for the periods indicated (subject, in the case of interim financial
statements, to normal recurring year-end adjustments, none of which shall be
material). The books and records of Landmark and its subsidiaries have been, and
are being, maintained in accordance with generally accepted accounting
principles and any other applicable legal and accounting requirements and
reflect only actual transactions.
2.5. Absence of Changes. Since March 31, 1999, there has not been any
change in the financial condition, the results of operations or the business of
Landmark and its subsidiaries taken as a whole which would have a Material
Adverse Effect on Landmark, except as disclosed by Landmark since March 31, 1999
in its periodic reports filed with the S.E.C. under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Since the date of its most recent
regulatory examination report, there has been no change in the financial
condition, the results of operations or the business of the Subsidiary Bank
which would have a Material Adverse Effect on the Subsidiary Bank, except as
disclosed by Subsidiary Bank since the date of such most recent regulatory
examination report in its Thrift Financial Quarterly Reports filed with the
F.D.I.C. and the O.T.S.
2.6. Regulatory Enforcement Matters. Neither Landmark, the Subsidiary Bank
nor any other subsidiary is subject or is party to, or has received any notice
or advice that it may become subject or party to, any investigation with respect
to, any cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar undertaking to, or is
subject to any directive by, or has been a recipient of any supervisory letter
from, or has adopted any board resolutions at the request of, any Regulatory
Agency (as defined below in this Section 2.6) that currently restricts the
conduct of its business or that affect its capital adequacy, its credit
policies, its management or its business (each, a "Regulatory Agreement"), nor
has Landmark, the Subsidiary Bank or any other subsidiary been advised by any
Regulatory Agency that it is considering issuing or requesting any such
Regulatory Agreement. There is no unresolved violation, criticism or exception
by any Regulatory Agency with respect to
any report or statement relating to any examinations of Landmark, the Subsidiary
Bank or any other subsidiaries. As used herein, the term "Regulatory Agency"
means any federal or state agency charged with the supervision or regulation of
thrifts, banks or holding companies thereof, or engaged in the insurance of bank
deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to Landmark or any of its subsidiaries.
2.7. Tax Matters.
2.7.1. Each of Landmark and its subsidiaries has filed with the
appropriate governmental agencies all foreign, federal, state and local Tax
(as defined below in this Section 2.7) returns, declarations, estimates,
information returns, statements and reports (collectively, "Tax Returns")
required to be filed by it. Neither Landmark nor its subsidiaries are (a)
delinquent in the payment of any Taxes shown on such Tax Returns or on any
assessments received by it for such Taxes, (b) subject to any agreement
extending the period for assessment or collection of any Tax, or (c) a
party to any action or proceeding with, nor has any claim been asserted or
threatened against any of them by, any governmental authority for
assessment or collection of Taxes or for the refund of Taxes previously
paid. The income Tax Returns of Landmark and its subsidiaries have not been
audited by the Internal Revenue Service (the "I.R.S.") and comparable state
agencies at any time during the past 15 years. To our best knowledge, the
reserve for Taxes in the financial statements of Landmark for the fiscal
year ended March 31, 1999 and the quarter ended December 31, 1999, is
adequate to cover all of the liabilities for Taxes of Landmark and its
subsidiaries that may become payable in future years with respect to any
transactions consummated prior to December 31, 1999. As used herein, the
term "Taxes" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any
interest, penalty or addition thereto, whether disputed or undisputed.
2.7.2. Any amount that could be received (whether in cash or property
or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of
Landmark or any of its affiliates who is a "Disqualified Individual" (as
such term is defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement, other
compensation arrangement or Landmark Employee Plan (as defined in Section
2.11.3 hereof) currently in effect would not be characterized as an "excess
parachute payment" (as such term is defined in Section 280G(b)(1) of the
Code).
2.7.3. Landmark has not been subject to any disallowance of a
deduction under Section 162(m) of the Code nor does Landmark reasonably
believe that such a disallowance is reasonably likely to be applicable for
any tax year of Landmark ended on or before the Closing Date.
2.8. Litigation and Related Matters. Section 2.8 of the Disclosure Schedule
describes all litigation, claims or other proceedings or investigations of any
nature pending or, to the knowledge of Landmark, threatened, against Landmark or
any of its subsidiaries, or of which the property of Landmark or any of its
subsidiaries is or would be subject. There is no injunction, order, judgment,
decree or regulatory restriction imposed upon Landmark, or any of its
subsidiaries or the assets of Landmark or any of its subsidiaries. Since January
1, 1995, Landmark, the Subsidiary Bank and/or its subsidiaries (as applicable)
have continuously maintained fidelity bonds insuring them against acts of
dishonesty in such amounts as are customary, usual and prudent for organizations
of their size and business. There are no facts which would form the basis of a
claim or claims under such bonds. Neither Landmark nor any of its subsidiaries
has reason to believe that its respective fidelity coverage would not be renewed
by the carrier
on substantially the same terms as the existing coverage, except for possible
premium increases unrelated to Landmark's and its subsidiaries' past claim
experience.
2.9. Employment Agreements. Section 2.9 of the Disclosure Schedule lists
each agreement, arrangement, commitment or contract (whether written or oral)
for the employment, election, retention or engagement, or with respect to the
severance, of any present or former officer, employee, agent, consultant or
other person or entity to which Landmark or any of its subsidiaries is a party
or bound by and which, by its terms, is not terminable by Landmark or such
subsidiary on thirty (30) days written notice or less without the payment of any
amount by reason of such termination. Copies of each written (and summaries of
each oral) agreement, arrangement, commitment or contract listed in Section 2.9
of the Disclosure Schedule have been previously made available to TrustCo by
Landmark.
2.10. Reports. Other than as is set forth in Section 2.10 of the Disclosure
Schedule, since January 1, 1995, Landmark, the Subsidiary Bank and/or each of
their subsidiaries has filed all reports and statements, together with any
amendments required to be made with respect thereto, if any, that it was
required to file with (i) the O.T.S., (ii) the F.D.I.C., (iii) the S.E.C., (iv)
any state securities authorities, and (v) any other Regulatory Agency with
jurisdiction over Landmark or any of its subsidiaries, and have paid all fees
and assessments due and payable in connection therewith. As of their respective
dates, each of such reports and documents, as amended, including any financial
statements, exhibits and schedules thereto, complied with the relevant statutes,
rules and regulations enforced or promulgated by the regulatory authority with
which they were filed, and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
2.11. Employee Matters and ERISA.
2.11.1. Neither Landmark nor any of its subsidiaries has entered into
any collective bargaining agreement with any labor organization with
respect to any group of employees of Landmark or any of its subsidiaries
and, to the knowledge of Landmark, there is no present effort nor existing
proposal to attempt to unionize any group of employees of Landmark or any
of its subsidiaries.
2.11.2. (i) Landmark and its subsidiaries are and have been in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment
discrimination and occupational safety and health requirements, and neither
Landmark nor any of its subsidiaries is engaged in any unfair labor
practice, (ii) there is no unfair labor practice complaint against Landmark
or any subsidiary pending or, to the knowledge of Landmark, threatened
before the National Labor Relations Board, (iii) there is no labor dispute,
strike, slowdown or stoppage actually pending or, to the knowledge of
Landmark, threatened against or directly affecting Landmark or any
subsidiary, and (iv) neither Landmark nor any subsidiary has experienced
any work stoppage or other labor difficulty during the past five (5) years.
2.11.3. Section 2.11.3 of the Disclosure Schedule describes each
employee benefit plan, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and each
nonqualified employee benefit plan, deferred compensation, bonus, stock and
incentive plan, and each other employee benefit and fringe benefit program
for the benefit of former or current employees of Landmark or any
subsidiary (the "Landmark Employee Plans") which Landmark and its
subsidiaries maintain, contribute to or participate in or have any
liability under. No present or former employee of Landmark or any
subsidiary has been charged with breaching, or, to the knowledge of
Landmark, has breached, a fiduciary duty under any of the Landmark Employee
Plans. Neither Landmark nor any of its subsidiaries participates in, nor
has it in the past five (5) years participated in, nor has it any present
or future obligation or liability under, any multiemployer plan (as defined
at Section 3(37) of ERISA). Section 2.11.3 of the Disclosure Schedule
describes all plans that provide health, major medical, disability or life
insurance benefits to former employees of Landmark or any subsidiary that
Landmark and any subsidiary maintain, contribute to, or participate in.
2.11.4. Neither Landmark nor any of its subsidiaries maintain, nor
have any of them maintained for the past ten years, any Landmark Employee
Plans subject to Title IV of ERISA or Section 412 of the Code. No
reportable event (as defined in Section 4043 of ERISA) has occurred with
respect to any Landmark Employee Plans as to which a notice would be
required to be filed with the Pension Benefit Guaranty Corporation. No
claim is pending, and Landmark has not received notice of any threatened or
imminent claim with respect to any Landmark Employee Plan (other than a
routine claim for benefits for which plan administrative review procedures
have not been exhausted) for which Landmark or any of its subsidiaries
would be liable after December 31, 1999, except as reflected on the
Landmark Financial Statements. All liabilities of the Landmark Employee
Plans have been funded on the basis of consistent methods in accordance
with sound actuarial assumptions and practices, and no Landmark Employee
Plan, at the end of any plan year, or at December 31, 1999, had or has had
an accumulated funding deficiency. No actuarial assumptions have been
changed since the last written report of actuaries on such Landmark
Employee Plans. All insurance premiums (including premiums to the Pension
Benefit Guaranty Corporation) have been paid in full, subject only to
normal retrospective adjustments in the ordinary course. Landmark and its
subsidiaries have no contingent or actual liabilities under Title IV of
ERISA. No accumulated funding deficiency (within the meaning of Section 302
of ERISA or Section 412 of the Code) has been incurred with respect to any
of the Landmark Employee Plans, whether or not waived. No reportable event
(as defined in Section 4043 of ERISA) has occurred with respect to any of
the Landmark Employee Plans as to which a notice would be required to be
filed with the Pension Benefit Guaranty Corporation. After December 31,
1999, Landmark and its subsidiaries do not have any liabilities for excise
taxes under Sections 4971, 4975, 4976, 4977, 4979 or 4980B of the Code or
for a fine under Section 502 of ERISA with respect to any Landmark Employee
Plan. All Landmark Employee Plans have been operated, administered and
maintained in accordance with the terms thereof and in compliance with the
requirements of all applicable laws, including, without limitation, ERISA
and the Code.
2.11.5. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement (either
alone or upon the occurrence of any additional acts or events) would,
except as set forth in Section 2.11.5 of the Disclosure Schedule, (i)
result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to
any director, officer or employee of Landmark or any of its affiliates from
Landmark or any of its affiliates under any Landmark Employee Plan or
otherwise, (ii) increase any benefits otherwise payable under any Landmark
Employee Plan, or (iii) result in any acceleration of the time of payment
or vesting of any such benefits.
2.11.6. Copies of each Landmark Employee Plan described in Section
2.11.3 of the Disclosure Schedule, and all amendments or supplements
thereto, have been previously made available to TrustCo by Landmark.
Section 2.11.6 of the Disclosure Schedule lists, for each Landmark Employee
Plan, all of the following with respect thereto: (i) summary plan
descriptions, (ii) lists of all current participants and all participants
with benefit entitlements, (iii) contracts relating to plan documents, (iv)
actuarial valuations for any defined benefit plan, (v) valuations for any
plan as of the most recent date, (vi) determination letters from the
I.R.S., (vii) the most recent annual report filed with the I.R.S., (viii)
registration statements and prospectuses, and (ix) trust agreements. Copies
of each of the documents described in the preceding sentence have been
previously made available to TrustCo by Landmark.
2.12. Title to Properties; Insurance. (i) Landmark and its subsidiaries
have marketable title, insurable at standard rates, free and clear of all liens,
charges and encumbrances (except Taxes which are a lien but not yet payable and
liens, charges or encumbrances reflected in the Landmark Financial Statements
and easements, rights-of-way, and other restrictions and imperfections not
material in nature, and further excepting in the case of Other Real Estate Owned
(as such real estate is internally classified on the books of Landmark or its
subsidiaries) rights of redemption under applicable law) to all of their owned
real properties, (ii) all leasehold interests for real property and personal
property used by Landmark and its subsidiaries in their businesses are held
pursuant to lease agreements which are valid and enforceable in accordance with
their terms, (iii) all such properties comply with all applicable private
agreements, zoning requirements and other governmental laws and regulations
relating thereto and there are no condemnation proceedings pending or, to the
knowledge of Landmark, threatened with respect to such properties, (iv) Landmark
and its subsidiaries have valid title or other ownership rights under licenses
to all intangible personal or intellectual property necessary to conduct the
business and operations of Landmark and its subsidiaries as presently conducted,
free and clear of any claim, defense or right of any other person or entity,
subject only to rights of the licensors pursuant to applicable license
agreements, which rights do not adversely interfere with the use of such
property, (v) all insurable properties owned or held by Landmark and its
subsidiaries are adequately insured by financially sound and reputable insurers
in such amounts and against fire and other risks insured against by extended
coverage and public liability insurance, as is customary with bank holding
companies of similar size, and there are presently no claims pending under such
policies of insurance and no notices have been given by Landmark or any of its
subsidiaries under such policies, and (vi) all tangible properties used in the
businesses of Landmark and its subsidiaries are in good condition, reasonable
wear and tear excepted, and are useable in the ordinary course of business
consistent with past practices. Section 2.12 of the Disclosure Schedule sets
forth, for each policy of insurance maintained by Landmark and its subsidiaries,
the amount and type of insurance, the name of the insurer and the amount of the
annual premium.
2.13. Environmental Matters.
2.13.1. As used herein, the term "Environmental Laws" shall mean all
local, state and federal environmental, health and safety laws and
regulations and common law standards in all jurisdictions in which Landmark
and its subsidiaries have done business or owned, leased or operated
property, including, without limitation, the Federal Resource Conservation
and Recovery Act, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Clean Water Act, the Federal
Clean Air Act, and the Federal Occupational Safety and Health Act.
2.13.2. To their best knowledge, neither the conduct nor operation of
Landmark or its subsidiaries nor any condition of any property presently or
previously owned, leased or operated by any of them violates or violated
or, to the knowledge of Landmark, may violate, Environmental Laws in a
manner or to any extent exposing Landmark or its subsidiaries to liability
or potential liability and no condition has existed or event has occurred
with respect to any of them or any such property that, with notice or the
passage of time, or both, would constitute or, to the knowledge of
Landmark, may constitute, a violation of Environmental Laws in a manner or
to any extent that would obligate (or potentially obligate) Landmark or its
subsidiaries to remedy, stabilize, neutralize or otherwise alter the
environmental condition of any such property. Neither Landmark nor any of
its subsidiaries has received any notice from any person or entity that
Landmark or its subsidiaries or the operation or condition of any property
ever owned, leased or operated by any of them are or were in violation of
any Environmental Laws in a manner or to any extent exposing Landmark or
its subsidiaries to liability or potential liability or that any of them
are responsible (or potentially responsible) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on or beneath any such property and, to the
knowledge of Landmark, Landmark and its subsidiaries and the operation and
condition of any property ever owned, leased or operated by any of them are
not and were not in violation of any
Environmental Laws in a manner or to any extent exposing Landmark or its
subsidiaries to liability or potential liability and none of them are
responsible (or potentially responsible) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on or beneath any such property. Section 2.13.2
of the Disclosure Schedule lists each property presently owned, leased or
operated by Landmark or any of its subsidiaries which, to the knowledge of
Landmark, contains any pollutants, contaminants, or hazardous or toxic
wastes, substances or materials at, on or beneath any such property or
which otherwise violates or may violate any Environmental Laws.
2.14. Compliance with Law. Landmark and its subsidiaries have all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable them to conduct their respective businesses and are in
compliance with all applicable laws and regulations.
2.15. Brokerage. There are no existing claims or agreements for brokerage
commissions, finders' fees, or similar compensation in connection with the
transactions contemplated by this Agreement payable by Landmark or its
subsidiaries, other than agreements with R.P. Financial, L.C., which copies of
such agreements are attached as exhibits to the Disclosure Schedule.
2.16. Trust Administration. During the applicable statute of limitations
period, (i) the Subsidiary Bank has properly administered all Individual
Retirement Accounts for which it acts as a trustee or custodian, in accordance
with the terms of the governing documents and applicable law, and (ii) neither
the Subsidiary Bank nor any director, officer or employee of the Subsidiary Bank
has committed any breach of trust with respect to any such account.
2.17. Material Contracts and Agreements. Neither Landmark nor any of its
subsidiaries is a party to, or is bound by, any material contract (as defined in
Item 601(b)(10) of Regulation S-K of the S.E.C.) (other than loans or loan
commitments and funding transactions in the ordinary course of business of
Landmark's subsidiaries) that has not been filed or incorporated by reference in
periodic reports filed by Landmark with the S.E.C. under the Exchange Act and
listed in Section 2.17 of the Disclosure Schedule. Section 2.17 of the
Disclosure Schedule also lists (i) each agreement restricting the nature or
geographic scope of any line of business or activity of Landmark or its
subsidiaries, (ii) each agreement, indenture or other instrument relating to the
borrowing of money by Landmark or any of its subsidiaries or the guarantee by
Landmark or any of its subsidiaries of any such obligation, other than
instruments relating to transactions entered into in the ordinary course of
business, and (iii) each agreement, indenture or other instrument which has been
filed or incorporated by reference in the periodic reports referred to above.
Copies of each of the contracts and agreements listed in Section 2.17 of the
Disclosure Schedule have been previously furnished to TrustCo by Landmark.
2.18. No Undisclosed Liabilities. Landmark and its subsidiaries do not have
any liability, whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any liability for
Taxes (and there is no past or present fact, situation, circumstance, condition
or other basis for any present or future action, suit or proceeding, hearing,
charge, complaint, claim or demand against Landmark or its subsidiaries giving
rise to any such liability), except (i) for liabilities set forth in the
Landmark Financial Statements, and (ii) normal fluctuation in the amount of the
liabilities referred to in clause (i) above occurring in the ordinary course of
business of Landmark and its subsidiaries since the date of the December 31
balance sheet included in the Landmark Financial Statements.
2.19. Statements True and Correct. None of the information supplied or to
be supplied by Landmark or its subsidiaries for inclusion in (i) the Proxy
Statement (as defined in Section 4.3 hereof), and (ii) any other documents to be
filed with the S.E.C., Nasdaq or any other Regulatory Agency in connection with
the transactions contemplated by this Agreement shall, at the respective times
such
documents are filed, and, with respect to the Proxy Statement, when first mailed
to the shareholders of Landmark and at the time of its Shareholders' Meeting,
contain any untrue statement of a material fact, or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading. All documents that
Landmark shall be responsible for filing with the S.E.C., Nasdaq or any other
Regulatory Agency in connection with the transactions contemplated by this
Agreement shall comply as to form in all material respects with the provisions
of applicable law and the applicable rules and regulations thereunder.
2.20. State Takeover Laws. The transactions contemplated by this Agreement
are not subject to any applicable state takeover law.
2.21. Fair Lending; Community Reinvestment Act. With the exception of
routine investigation of consumer complaints, neither Landmark nor any of its
subsidiaries has been advised by any Regulatory Agency that it is or may be in
violation of the Equal Credit Opportunity Act or the Fair Housing Act or any
similar federal or state statute. Each of Landmark's depository institution
subsidiaries received a Community Reinvestment Act ("CRA") rating of
"Outstanding" or "Satisfactory" in its most recent CRA examination.
2.22. Loan Portfolio. (i) All loans and discounts shown on the Landmark
Financial Statements or which were entered into after the date of the most
recent balance sheet included in the Landmark Financial Statements were and
shall be made for good, valuable and adequate consideration in the ordinary
course of the business of Landmark and its subsidiaries, in accordance with
sound banking practices, and are not subject to any known defenses, set-offs or
counter-claims, including without limitation any such as are afforded by usury
or truth in lending laws, except as may be provided by bankruptcy, and solvency
or similar laws or by general principles of equity, (ii) the notes or other
evidence of indebtedness evidencing such loans in all forms of pledges,
mortgages and other collateral documents and security agreement are and shall be
in force, valid, true and genuine and what they purport to be, and (iii)
Landmark and its subsidiaries have complied with and shall prior to the
effective date comply with, all laws and regulations relating to such loans.
2.23. Investment Portfolio. All investment securities held by Landmark or
its subsidiaries, as reflected in the consolidated balance sheets of Landmark
included in the Landmark financial statements, are carried in accordance with
generally accepted accounting principles, specifically, including but not
limited to, FAS 115.
2.24. Interest Rate Risk Management Instruments. Section 2.24 of the
Disclosure Schedule describes all interest rate swaps, caps, floors, option
agreements or other interest rate risk management arrangements or agreements,
whether entered into for the account of Landmark or its subsidiaries or for the
account of a customer of Landmark or one of its subsidiaries. All such
arrangements and agreements disclosed in Section 2.24 of the Disclosure Schedule
were entered into in the ordinary course of business and in accordance with
prudent banking practice and applicable rules, regulations and policies and with
counter parties believed to be financially responsible at the time and are
legal, valid and binding obligations of Landmark or one of its subsidiaries in
force in accordance with their terms (subject to the provisions of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforceability of creditors rights generally and equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion), and are in full force and effect.
Landmark and each of its subsidiaries have duly performed all of their
obligations thereunder to the extent that such obligations to perform have
accrued; and, to Landmark's knowledge, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.
2.25. Year 2000 Compliance. Landmark and the Subsidiary Bank are Year 2000
Compliant. The term "Year 2000 Compliant" as used herein, means that computer
applications, imbedded microchips and other systems are able to perform Date
Sensitive Functions prior to and after December 31, 1999. The term "Date
Sensitive Functions" as used herein, includes all functions of computer
applications, imbedded microchips, and other systems which involve the
generation of random numbers based on dates, the implementation of another
function as a consequence of a date, or the processing or generation of any
other information in which dates are significant.
2.26. Interim Events. Since September 30, 1999, neither Landmark nor its
subsidiaries have paid or declared any dividend or made any other distribution
to shareholders or taken any action which if taken after the date hereof would
have required the prior written consent of TrustCo pursuant to Section 4.1.2
hereof.
3. Representations and Warranties of Trustco and AcquisitionCo.
Subject to Section 1.11 hereof, TrustCo and AcquisitionCo hereby make the
following representations and warranties:
3.1. Organization and Capital Stock. TrustCo is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has the corporate power to own all of its property and assets, to
incur all of its liabilities and to carry on its business as now being
conducted.
TrustCo is a bank holding company registered with the Federal Reserve Board
under the B.H.C.A. AcquisitionCo is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to own all of its property and assets, to incur all of its
liabilities and to carry on its business as now being conducted.
3.2. Authorization. The Board of Directors of TrustCo and the Board of
Directors and shareholder of AcquisitionCo have, by all appropriate action,
approved this Agreement and the Merger and authorized the execution hereof on
its behalf by its duly authorized officers and the performance by TrustCo and
AcquisitionCo of their respective obligations hereunder. Nothing in the Amended
and Restated Certificate of Incorporation or Bylaws of TrustCo, the Certificate
of Incorporation or Bylaws of AcquisitionCo or any other agreement, instrument,
decree, proceeding, law or regulation (except as specifically referred to in or
contemplated by this Agreement) by or to which TrustCo or any of its
subsidiaries are bound or subject would prohibit or inhibit TrustCo or
AcquisitionCo from entering into and consummating this Agreement and the Merger
on the terms and conditions herein contained. This Agreement has been duly and
validly executed and delivered by TrustCo and AcquisitionCo and constitutes a
legal, valid and binding obligation of TrustCo and AcquisitionCo, enforceable
against TrustCo and AcquisitionCo in accordance with its terms and, no other
corporate acts or proceedings are required to be taken by TrustCo or
AcquisitionCo to authorize the execution, delivery and performance of this
Agreement. Except for the requisite approval of the Federal Reserve Board, no
notice to, filing with, authorization by, or consent or approval of, any federal
or state bank regulatory authority is necessary for the execution and delivery
of this Agreement or consummation of the Merger by TrustCo and AcquisitionCo.
3.3. Subsidiaries. Each of TrustCo's significant subsidiaries (as such term
is defined in Rule 1-02 of Regulation S-X promulgated by the S.E.C.) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power to own its
respective properties and assets, to incur its respective liabilities and to
carry on its respective business as now being conducted.
3.4. Litigation. There is no litigation, claim or other proceeding pending
or, to the knowledge of TrustCo, threatened, against TrustCo or any of its
subsidiaries, or of which the property of TrustCo or any of its subsidiaries is
or would be subject, and there is no injunction, order, judgment, decree or
regulatory restriction imposed upon TrustCo, or any of its subsidiaries or the
assets of TrustCo or any of its subsidiaries, which would have a Material
Adverse Effect on TrustCo.
3.5. Statements True and Correct. None of the information supplied or to be
supplied by TrustCo for inclusion in (i) the Proxy Statement, and (ii) any other
documents to be filed with the S.E.C., Nasdaq, or any other Regulatory Agency in
connection with the transactions contemplated by this Agreement shall, at the
respective times such documents are filed, and, with respect to the Proxy
Statement, when first mailed to the shareholders of Landmark at the time of the
Landmark Shareholders' Meeting, contain any untrue statement of a material fact,
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not
misleading. All documents that TrustCo shall be responsible for filing with the
S.E.C., Nasdaq or any other Regulatory Agency in connection with the
transactions contemplated by this Agreement shall comply as to form in all
material respects with the provisions of applicable law and the applicable rules
and regulations thereunder.
3.6. Funds Available. TrustCo has, and at the Effective Time shall have,
sufficient funds to pay the Merger Consideration and satisfy its other
obligations under the Agreement.
4. Agreements of Landmark.
4.1. Business in Ordinary Course.
4.1.1. Landmark shall not declare or pay any dividend or make any
other distribution to shareholders, whether in cash, stock or other
property, after the date hereof, except with the prior written consent of
TrustCo.
4.1.2. Landmark shall, and shall cause each of its subsidiaries to,
(1) continue to carry on after the date hereof its respective business and
the discharge or incurrence of obligations and liabilities, only in the
usual, regular and ordinary course of business, as heretofore conducted,
(2) use reasonable best efforts to maintain and preserve intact its
respective business organization, employees and advantageous business
relationships and retain the services of its officers and key employees,
and (3) by way of amplification and not limitation, Landmark and each of
its subsidiaries shall not, without the prior written consent of TrustCo
(which shall not be unreasonably withheld):
4.1.2.1. issue any Landmark Common, preferred stock or other
capital stock or any options, warrants, or other rights to subscribe
for or purchase Landmark Common or any other capital stock or any
securities convertible into or exchangeable for any capital stock of
Landmark or any of its subsidiaries (except for (i) the issuance of
Landmark Common pursuant to the valid exercise of Landmark Stock
Options which are outstanding on the date hereof, and (ii) the
issuance of Landmark Common pursuant to the Landmark Option
Agreement); or
4.1.2.2. directly or indirectly redeem, purchase or otherwise
acquire any Landmark Common or any other capital stock of Landmark or
effect a reclassification, recapitalization, split-up, exchange of
shares, readjustment or other similar change in or to any capital
stock or otherwise reorganize or recapitalize Landmark; or
4.1.2.3. directly or indirectly redeem, purchase or otherwise
acquire any capital stock of subsidiaries of Landmark or effect a
reclassification, recapitalization, split-up, exchange of shares,
readjustment or other similar change in or to any capital stock or
otherwise reorganize or
recapitalize any subsidiary of Landmark (other than any of the
foregoing all of the parties to which shall consist exclusively of
Landmark and the wholly-owned subsidiaries of Landmark); or
4.1.2.4. change its Certificate or Articles of Incorporation or
Association, as the case may be, or Bylaws; or
4.1.2.5. grant any increase, other than ordinary and normal
increases consistent with past practices, in the compensation payable
or to become payable to officers or salaried employees, grant any
stock options or, except as required by law or as required by existing
contractual obligations which shall have been described in Section
2.11 of the Disclosure Schedule, adopt or make any material change in
any bonus, insurance, pension, or other Landmark Employee Plan,
agreement, payment or arrangement made to, for or with any of such
officers or employees; or
4.1.2.6. borrow or agree to borrow any amount of funds in excess
of $500,000, or directly or indirectly guarantee or agree to guarantee
any obligations of others, except letters of credit issued in the
ordinary course of business pursuant to Section 4.1.2.7 and the
renewal or refinancing of any existing advances from or other
indebtedness owed to the Federal Home Loan Bank of New York; or
4.1.2.7. make or commit to make any new loan or letter of credit
or any new or additional discretionary advance under any existing line
of credit in principal amounts in excess of $100,000 or that would
increase the aggregate credit outstanding to any one borrower (or
group of affiliated borrowers) to more than $250,000, other than as
set forth in Section 4.1.2.7 of the Disclosure Schedule (excluding for
this purpose any accrued interest or overdrafts), without the prior
written consent of TrustCo, acting through its Senior Vice President
and Chief Financial Officer or such other designee as TrustCo may give
notice of to Landmark; or
4.1.2.8. purchase or otherwise acquire any investment security
for its own account, except in a manner and pursuant to policies
consistent with past practice; or
4.1.2.9. materially increase or decrease the rate of interest
paid on time deposits, or on certificates of deposit, except in a
manner and pursuant to policies consistent with past practices; or
4.1.2.10. enter into any agreement, contract or commitment of a
material nature out of the ordinary course of business having a term
in excess of three (3) months or obligation in excess of $10,000; or
expend or commit to expend more than $135,000 for legal fees and
reasonable expenses of counsel not to exceed $5,000 in connection with
the transaction contemplated herein; or
4.1.2.11. except in the ordinary course of business, place on any
of its assets or properties any mortgage, pledge, lien, charge, or
other encumbrance of any kind; or
4.1.2.12. except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Landmark or its
subsidiaries or any claims which Landmark or its subsidiaries may
possess or waive any material rights with respect thereto; or
4.1.2.13. sell or otherwise dispose of any real property or any
amount of any tangible or intangible personal property other than in
the ordinary course of business and other than properties acquired in
foreclosure or otherwise in the ordinary collection of indebtedness to
Landmark and its subsidiaries; or
4.1.2.14. foreclose upon or otherwise take title to or possession
or control of any real property without first obtaining a phase one
environmental report thereon which indicates that
the property is free of pollutants, contaminants or hazardous or toxic
waste materials; provided, however, that Landmark and its subsidiaries
shall not be required to obtain such a report with respect to single
family, non-agricultural residential property of one acre or less to
be foreclosed upon unless it has reason to believe that such property
might contain any such waste materials or otherwise might be
contaminated; or
4.1.2.15. commit any act or fail to do any act which would cause
a breach of any agreement, contract or commitment and which would have
a Material Adverse Effect on Landmark; or
4.1.2.16. purchase any real or personal property or make any
other capital expenditure; or
4.1.2.17. take any action which would adversely effect or delay
the ability of either TrustCo or Landmark to obtain any necessary
approvals of any Regulatory Agency or other governmental authority
required for the transactions contemplated by this Agreement or to
perform its covenants and agreements under this Agreement or the
Landmark Option Agreement.
4.1.3. Landmark and its subsidiaries shall not, without the prior
written consent of TrustCo, engage in any transaction or take any action
that would render untrue (under the standard of Section 1.11 hereof) any of
the representations and warranties of Landmark contained in Article Two
hereof, if such representations and warranties were given as of the date of
such transaction or action.
4.1.4. Landmark shall promptly notify TrustCo in writing of the
occurrence of any matter or event known to and directly involving Landmark,
other than any changes in conditions that affect the banking industry
generally, that would have, either individually or in the aggregate, a
Material Adverse Effect on Landmark.
4.1.5. Landmark and its subsidiaries shall not, and shall not
authorize or permit any of their respective officers, directors, employees
or agents to, on or before the earlier of the Closing Date or the date of
termination of this Agreement, directly or indirectly solicit, initiate or
encourage or (subject to the fiduciary duties of its directors as advised
by counsel) hold discussions or negotiations with or provide any
information to any person in connection with any proposal from any person
for the acquisition of all or any substantial portion of the business,
assets, shares of Landmark Common or other securities of Landmark or its
subsidiaries. Landmark shall promptly (which for this purpose shall mean
within twenty-four (24) hours) advise TrustCo of its receipt of any such
proposal or inquiry concerning any such proposal, the substance of such
proposal or inquiry, and the identity of such person.
4.2. Breaches. Landmark shall, in the event it has knowledge of the
occurrence, or impending or threatened occurrence, of any event or condition
which would cause or constitute a breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to TrustCo and use its best efforts to prevent or
promptly remedy the same.
4.3. Submission to Shareholders. Landmark shall cause to be duly called and
held, on a date selected by Landmark in consultation with TrustCo, a special
meeting of its shareholders (the "Landmark Shareholders' Meeting") for
submission of this Agreement and the Merger for approval of such Landmark
shareholders as required by the DGCL. In connection with the Landmark
Shareholders' Meeting, (i) Landmark shall prepare and file a Proxy Statement
(the "Proxy Statement") with the S.E.C. and Landmark shall mail it to its
shareholders, (ii) TrustCo shall furnish Landmark all information concerning
itself that Landmark may reasonably request in connection with such Proxy
Statement, and
(iii) the Board of Directors of Landmark (subject to compliance with its
fiduciary duties as advised by counsel) shall recommend to its shareholders the
approval of this Agreement and the Merger contemplated by this Agreement and use
its best efforts to obtain such shareholder approval. Landmark shall deliver
drafts of the Proxy Statement to TrustCo for its review and comment.
4.4. Consents to Contracts and Leases. Landmark shall use its best efforts
to obtain all necessary consents with respect to all interests of Landmark and
its subsidiaries in any material leases, licenses, contracts, instruments and
rights which require the consent of another person for their transfer or
assumption pursuant to the Merger, if any.
4.5. Consummation of Agreement. Landmark shall use its best efforts to
perform and fulfill all conditions and obligations on its part to be performed
or fulfilled under this Agreement and to effect the Merger and the other
transactions contemplated hereby in accordance with the terms and provisions
hereof and to effect the transition and integration of the business and
operations of Landmark and its subsidiaries with the business and operations of
TrustCo and its subsidiaries. Landmark shall furnish to TrustCo in a timely
manner all information, data and documents in the possession of Landmark
requested by TrustCo as may be required to obtain any necessary regulatory or
other approvals of the Merger and shall otherwise cooperate fully with TrustCo
to carry out the purpose and intent of this Agreement.
4.6. Environmental Reports. Landmark shall provide to TrustCo, as soon as
reasonably practical, but not later than forty-five (45) days after the date
hereof, a report of a phase one environmental investigation on the real property
identified on Section 2.13.2 of the Disclosure Schedule, if any, and within ten
(10) days after the acquisition or lease of any real property acquired or leased
by Landmark or its subsidiaries after the date hereof (but excluding space in
office or retail and similar establishments leased by Landmark or its
subsidiaries for automatic teller machines or bank branch facilities or other
office uses where the leased space comprises less than 20% of the total space
leased to all tenants of such property), except as otherwise provided in Section
4.1.2.14 hereof. If required by the phase one investigation in TrustCo's
reasonable opinion, Landmark shall provide to TrustCo, within sixty (60) days of
the receipt by Landmark of the request of TrustCo therefor, a report of a phase
two investigation on properties requiring such additional study. TrustCo shall
have fifteen (15) business days from the receipt of any such phase two
investigation report to notify Landmark of any dissatisfaction with the contents
of such report. Should the cost of taking all remedial or other corrective
actions and measures (i) required by applicable law or reasonably likely to be
required by applicable law, or (ii) recommended or suggested by such report or
reports or prudent in light of serious life, health or safety concerns, in the
aggregate, exceed the sum of $100,000 as reasonably estimated by an
environmental expert retained for such purpose by TrustCo and reasonably
acceptable to Landmark, or if the cost of such actions and measures cannot be so
reasonably estimated by such expert to be such amount or less with any
reasonable degree of certainty, then TrustCo shall have the right pursuant to
Section 7.3 hereof, for a period of fifteen (15) business days following receipt
of such estimate or indication that the cost of such actions and measures can
not be so reasonably estimated, to terminate this Agreement, which shall be
TrustCo's sole remedy in such event.
4.7. Access to Information. Landmark shall permit TrustCo reasonable access
in a manner which shall avoid undue disruption or interference with Landmark's
normal operations to its properties and shall disclose and make available to
TrustCo all books, documents, papers, records and computer systems documentation
and files relating to its assets, stock ownership, properties, operations,
obligations and liabilities, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of directors' and
shareholders' meetings, organizational documents, material contracts and
agreements, loan files, filings with any regulatory authority, accountants'
workpapers (if available and subject to the respective independent accountants'
consent), litigation files (but only to the extent that such review would not
result in a material waiver of the attorney-client or attorney work
product privileges under the rules of evidence), Employee Benefit Plans, and any
other business activities or prospects in which TrustCo may have a reasonable
and legitimate interest in furtherance of the transactions contemplated by this
Agreement. TrustCo shall hold any such information which is nonpublic in
confidence in accordance with the provisions of Section 8.1 hereof.
4.8. Subsidiary Bank Name Change. Upon the request of TrustCo, Landmark
shall cause the Subsidiary Bank to execute such amendments to its charter to
change its name to Trustco Savings Bank (or such substantially similar name as
Trustco may determine) subject to the conditions of this Agreement with Trustco
Bank, N.A. and take all other actions and cooperate with TrustCo and
AcquisitionCo in causing such name change to be effective no earlier than the
Effective Time.
4.9. Plan of Merger. At the request of TrustCo, Landmark shall enter into a
separate Certificate of Merger reflecting the terms hereof for purposes of any
filing requirement of the DGCL.
5. Agreements of Trustco and AcquisitionCo.
5.1. Regulatory Approvals and Registration Statement; Other Agreements.
5.1.1. TrustCo and AcquisitionCo shall file all regulatory
applications required in order to consummate the Merger, including but not
limited to the necessary applications for the prior approval of the Federal
Reserve Board and any other federal and state regulatory authorities as
applicable. TrustCo shall keep Landmark reasonably informed as to the
status of such applications and make available to Landmark from time to
time copies of such applications and any supplementally filed materials.
5.1.2. Neither TrustCo nor AcquisitionCo shall (i) between the date
hereof and the Effective Time, commit any act or fail to do any act which
would cause a breach of any agreement, contract or commitment and which
would have a Material Adverse Effect on TrustCo, (ii) without the prior
written consent of Landmark, engage in any transaction or take any action
that would render untrue (under the standard of Section 1.11 hereof) any of
the representations and warranties of TrustCo and AcquisitionCo contained
in Article Three hereof (except for any such representations and warranties
made only as of a specified date), if such representations and warranties
were given as of the date of such transaction or action. TrustCo and
AcquisitionCo shall promptly notify Landmark in writing of the occurrence
of any matter or event known to and directly involving TrustCo or
AcquisitionCo, which would not include any changes in conditions that
affect the banking industry generally, that would have, either individually
or in the aggregate, a Material Adverse Effect on TrustCo.
5.2. Breaches. TrustCo and AcquisitionCo shall, in the event either has
knowledge of the occurrence, or impending or threatened occurrence, of any event
or condition which would cause or constitute a breach (or would have caused or
constituted a breach had such event occurred or been known prior to the date
hereof) of any of their respective representations or agreements contained or
referred to herein, give prompt written notice thereof to Landmark and use its
best efforts to prevent or promptly remedy the same.
5.3. Consummation of Agreement. TrustCo and AcquisitionCo shall use their
respective best efforts to perform and fulfill all conditions and obligations on
their respective parts to be performed or fulfilled under this Agreement and to
effect the Merger in accordance with the terms and conditions of this Agreement.
5.4. Directors' and Officers' Liability Insurance and Indemnification.
5.4.1. For a period of three (3) years after the Effective Time,
TrustCo shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Landmark
(provided that TrustCo may substitute therefor policies of comparable
coverage with respect to claims arising from facts or events which occurred
before the Effective Time); provided, however, that in no event shall
TrustCo be obligated to expend, in order to maintain or provide insurance
coverage pursuant to this Section 5.4.1, any amount per annum in excess of
150% of the amount of the annual premiums paid as of the date hereof by
Landmark 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, TrustCo 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.
Notwithstanding the foregoing, prior to the Effective Time, TrustCo may
request Landmark to, and Landmark shall, purchase insurance coverage, on
such terms and conditions as shall be acceptable to TrustCo, extending for
a period of three (3) years Landmark's directors' and officers' liability
insurance coverage in effect as of the date hereof (covering past or future
claims with respect to periods before the Effective Time) and such coverage
shall satisfy TrustCo's obligations under this Section 5.4.1.
5.4.2. For the applicable statute of limitations period, TrustCo shall
indemnify, defend and hold harmless the present and former officers,
directors, employees and agents of Landmark and its subsidiaries (each, an
"Indemnified Party") against all losses, expenses, claims, damages or
liabilities arising out of actions (not including, however, such
intentional or willful acts of an Indemnified Party) or omissions occurring
on or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement and the Landmark Option
Agreement) to the full extent then permitted under the DGCL and by
Landmark's Certificates of Incorporation as in effect on the date hereof
(and, with respect to predecessors of Landmark, the applicable laws,
articles of incorporation and bylaws pertaining thereto), including
provisions relating to advances of expenses incurred in the defense of any
action or suit.
5.5. Employee Benefits.
5.5.1. TrustCo shall, with respect to each employee of Landmark or its
subsidiaries at the Effective Time who shall continue in employment with
TrustCo or its subsidiaries (each a "Continued Employee"), provide the
benefits described in this Section 5.5. Each Continued Employee shall be
entitled, as a new employee of a subsidiary of TrustCo, to participate in
such employee benefit plans, as defined in Section 3(3) of ERISA, or any
non-qualified employee benefit plans or deferred compensation, stock
option, bonus or incentive plans, or other employee benefit or fringe
benefit programs that may be in effect generally for employees of all of
TrustCo's subsidiaries (the "TrustCo Employee Plans"), if such Continued
Employee shall otherwise be eligible or, if required, selected for
participation therein under the terms thereof and otherwise shall not be
participating in a similar plan maintained by Landmark after the Effective
Time. Landmark employees shall be eligible to participate in TrustCo
Employee Plans on the same basis as similarly situated employees of other
TrustCo subsidiaries. All such participation shall be subject to such terms
of such TrustCo Employee Plans as may be in effect from time to time. This
Section 5.5 is not intended to give Continued Employees any rights or
privileges superior to those of other employees of TrustCo's subsidiaries
(except as provided in the following sentence with respect to credit for
past service). TrustCo may terminate or modify all Landmark Employee Plans
except insofar as benefits thereunder shall have vested at the Effective
Time and cannot be modified and TrustCo's obligation under this Section 5.5
shall not be deemed or construed so as to provide duplication of similar
benefits but, subject to that qualification, TrustCo shall, for purposes of
vesting and any age or period of service requirements for commencement of
participation with respect to any TrustCo Employee Plans in which Continued
Employees may participate (but not for benefit accruals under any defined
benefit plan),
credit each Continued Employee with his or her term of service with
Landmark and its subsidiaries and its and their predecessors.
5.5.2. Notwithstanding anything to the contrary, TrustCo shall
acknowledge and assume, upon consummation of the Merger, the obligations of
Landmark under its severance agreements, supplemental retirement plans and
arrangements, deferred compensation plans and arrangements, and related
trusts including, without limitation, all of the same maintained or
provided by any subsidiary of Landmark, as such obligations are described
in Section 2.11.3 of the Disclosure Schedule.
5.5.3. Trustco shall cause the Subsidiary Bank to enter into an
employment agreement with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to serve in the capacity of
President and Chief Executive Officer of the Subsidiary Bank. The
employment agreement will have a term of 3 years and provide for annual
compensation of $125,000 per year and the use of a car.
5.6. Advisory Board Composition. Immediately following the Effective Time,
TrustCo shall cause the Subsidiary Bank to establish an advisory board of
directors and shall offer not more than eight (8) of the directors of Landmark
as of the Effective Time the opportunity to serve as advisory directors of the
Subsidiary Bank for the three (3) year period following the Effective Time. The
Chairman of the advisory board shall receive fees of $600/month of service; the
vice chairman shall receive fees of $300/month of service; other members of the
advisory board shall receive fees of $200/month of service.
5.7. Access to Information. TrustCo shall permit Landmark reasonable access
in a manner which shall avoid undue disruption or interference with TrustCo's
normal operations to its properties and shall disclose and make available to
Landmark all books, documents, papers and records relating to its assets, stock
ownership, properties, operations, obligations and liabilities, including, but
not limited to, all books of account (including the general ledger), tax
records, minute books of directors' and shareholders' meetings, organizational
documents, material contracts and agreements, loan files, filings with any
regulatory authority, accountants' workpapers (if available and subject to the
respective independent accountants' consent), litigation files (but only to the
extent that such review would not result in a material waiver of the
attorney-client or attorney work product privileges under the rules of
evidence), plans affecting employees, and any other business activities or
prospects in which Landmark may have a reasonable and legitimate interest in
furtherance of the transactions contemplated by this Agreement. Landmark shall
hold any such information which is nonpublic in confidence in accordance with
the provisions of Section 8.1 hereof.
6. Conditions Precedent to Merger.
6.1. Conditions to TrustCo's and AcquisitionCo's Obligations. The
obligations of TrustCo and AcquisitionCo to effect the Merger shall be subject
to the satisfaction (or waiver by TrustCo and AcquisitionCo) prior to or on the
Closing Date of the following conditions:
6.1.1. The representations and warranties made by Landmark in this
Agreement shall be true and correct (subject to the standard in Section
1.11 hereof) on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as of the
Closing Date (except for any such representations and warranties made only
as of a specified date which shall be true and correct (subject to the
standard in Section 1.11 hereof) as of such date); and
6.1.2. Landmark shall have performed and complied in all material
respects with all of its obligations and agreements required to be
performed on or prior to the Closing Date under this Agreement; and
6.1.3. No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect, nor shall any proceeding by
any Regulatory Agency or other person seeking any of the foregoing be
pending. There shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger which makes the consummation of the Merger illegal; and
6.1.4. All necessary regulatory approvals, consents, authorizations
and other approvals, including the requisite approval of this Agreement and
the Merger by the shareholders of Landmark, required by law for
consummation of the Merger shall have been obtained and all waiting periods
required by law shall have expired, and no regulatory approval shall have
imposed any condition, requirement or restriction which the Board of
Directors of TrustCo and AcquisitionCo reasonably determine in good faith
would so materially adversely impact the economic or business benefits of
the transactions contemplated by this Agreement to TrustCo and its
shareholders as to render inadvisable the consummation of the Merger (any
such condition, requirement or restriction, a "Burdensome Condition"); and
6.1.5. TrustCo and AcquisitionCo shall have received all documents
required to be received from Landmark on or prior to the Closing Date, all
in form and substance reasonably satisfactory to TrustCo and AcquisitionCo;
and
6.1.6. Landmark's Board of Directors shall have passed a resolution
(i) to terminate Landmark's employee stock ownership plan (the "Landmark
ESOP") as of the close of business on the date immediately preceding the
Closing Date (the "Termination Date"), (ii) to amend the Landmark ESOP to
provide that no additional contributions will be made and no additional
employees will become participants after the Termination Date, and (iii) to
apply for a determination letter from the Internal Revenue Service with
respect to the termination of the Landmark ESOP.
6.2. Conditions to Landmark's Obligations. The obligations of Landmark to
effect the Merger shall be subject to the satisfaction (or waiver by Landmark)
prior to or on the Closing Date of the following conditions:
6.2.1. The representations and warranties made by TrustCo and
AcquisitionCo in this Agreement shall be true and correct (subject to the
standard in Section 1.11 hereof) on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any such representations
and warranties made only as of a specified date which shall be true and
correct (subject to the standard in Section 1.11 hereof) as of such date);
and
6.2.2. TrustCo and AcquisitionCo shall have performed and complied in
all material respects with all of their respective obligations and
agreements hereunder required to be performed on or prior to the Closing
Date under this Agreement; and
6.2.3. No Injunction preventing the consummation of the Merger shall
be in effect, nor shall any proceeding by any Regulatory Agency or any
other person seeking any of the foregoing be pending. There shall not be
any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Merger which makes the
consummation of the Merger illegal; and
6.2.4. All necessary regulatory approvals, consents, authorizations
and other approvals, including the requisite approval of this Agreement and
the Merger by the shareholders of
Landmark and AcquisitionCo, required by law for consummation of the Merger
shall have been obtained and all waiting periods required by law shall have
expired; and
6.2.5. Landmark shall have received all documents required to be
received from TrustCo and AcquisitionCo on or prior to the Closing Date,
all in form and substance reasonably satisfactory to Landmark; and
6.2.6. Landmark's financial advisors shall not have withdrawn its
opinion, to the effect that the terms of the Merger are fair to the
shareholders of Landmark from a financial point of view, on or before the
date of the Shareholder's Meeting.
7. Termination or Abandonment.
7.1. Mutual Agreement. This Agreement may be terminated by the mutual
written agreement of TrustCo, AcquisitionCo and Landmark at any time prior to
the Closing Date, regardless of whether approval of this Agreement and the
Merger by the shareholders of Landmark and AcquisitionCo shall have been
previously obtained.
7.2. Breach of Agreements. In the event that there is a breach in any of
the representations and warranties (subject to the standard in Section 1.11
hereof) or a material breach of any of the agreements of TrustCo, AcquisitionCo
or Landmark, which breach is not cured within thirty (30) days after written
notice to cure such breach is given to the breaching party by the non-breaching
party, then the non-breaching party, regardless of whether Landmark shareholder
approval of this Agreement and the Merger shall have been previously obtained,
may terminate and cancel this Agreement by providing written notice of such
action to the other party hereto.
7.3. Environmental Reports. TrustCo may terminate this Agreement to the
extent provided by Section 4.6 hereof and this Section 7.3 by giving timely
written notice thereof to Landmark.
7.4. Failure of Conditions. In the event any of the conditions to the
obligations of either party are not satisfied or waived on or prior to the
Closing Date, and if any applicable cure period provided in Section 7.2 hereof
has lapsed, then such party may, regardless of whether approval of this
Agreement and the Merger by the shareholders of Landmark and AcquisitionCo has
been previously obtained, terminate and cancel this Agreement by delivery of
written notice of such action to the other party on such date.
7.5. Regulatory Approval Denial; Burdensome Condition. If any regulatory
application filed pursuant to Section 5.1.1 hereof should be finally denied or
disapproved by the respective regulatory authority, then this Agreement
thereupon shall be deemed terminated and canceled; provided, however, that a
request for additional information or undertaking by TrustCo, as a condition for
approval, shall not be deemed to be a denial or disapproval so long as TrustCo
diligently provides the requested information or undertaking. In the event that
an application is denied pending an appeal, petition for review, or similar such
act on the part of TrustCo (hereinafter referred to as the "appeal") then the
application shall be deemed denied unless TrustCo prepares and timely files such
appeal and continues the appellate process for purposes of obtaining the
necessary approval. TrustCo may terminate this Agreement if its Board of
Directors shall have reasonably determined in good faith that any of the
requisite regulatory approvals imposes a Burdensome Condition, and TrustCo shall
deliver written notice of such determination to Landmark not later than thirty
(30) days after receipt by TrustCo of notice of the imposition of such
Burdensome Condition from the applicable Regulatory Agency (unless an appeal of
such determination is being pursued by TrustCo, in which event the foregoing
notice shall be given within
thirty (30) days of the termination of any such appeal by TrustCo or the denial
of such appeal by the appropriate Regulatory Agency).
7.6. Shareholder Approval Denial; Withdrawal/Modification of Board
Recommendation. If this Agreement and the relevant transactions contemplated by
this Agreement, including the Merger, are not approved by the requisite vote of
the shareholders of Landmark at the Landmark Shareholders' Meeting, then either
party may terminate this Agreement. TrustCo may terminate this Agreement if
Landmark's Board of Directors shall have failed to approve or recommend this
Agreement or the Merger, or shall have withdrawn or modified in any manner
adverse to TrustCo its approval or recommendation of this Agreement or the
Merger, or shall have resolved or publicly announced an intention to do either
of the foregoing.
7.7. Regulatory Enforcement Matters. In the event that Landmark or any of
its subsidiaries shall, after the date hereof, become a party or be subject to
any new or amended written agreement, memorandum of understanding, cease and
desist order, imposition of civil money penalties or other regulatory
enforcement action or proceeding with a Regulatory Agency, which would have a
Material Adverse Effect on Landmark, then TrustCo may terminate this Agreement.
7.8. Fall-Apart Date. If the Closing Date does not occur on or prior to
October 31, 2000, then this Agreement may be terminated by either party by
giving written notice thereof to the other, unless the failure of the Closing to
occur by such date shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe the covenants and agreements of such party
set forth in this Agreement.
8. General.
8.1. Confidential Information. The parties acknowledge the confidential and
proprietary nature of the "Information" (as described below in this Section 8.1)
which has heretofore been exchanged and which shall be received from each other
hereunder and agree to hold and keep the same confidential. Such Information
shall include any and all financial, technical, commercial, marketing, customer
or other information concerning the business, operations and affairs of a party
that may be provided to the other, irrespective of the form of the
communications, by such party's employees or agents. Such Information shall not
include information which is or becomes generally available to the public other
than as a result of a disclosure by a party or its representatives in violation
of this Agreement. The parties agree that the Information shall be used solely
for the purposes contemplated by this Agreement and that such Information shall
not be disclosed to any person other than employees and agents of a party who
are directly involved in evaluating the transaction. The Information shall not
be used in any way detrimental to a party, including use directly or indirectly
in the conduct of the other party's business or any business or enterprise in
which such party may have an interest, now or in the future, and whether or not
now in competition with such other party.
8.2. Publicity. TrustCo and Landmark shall cooperate with each other in the
development and distribution of all news releases and other public disclosures
concerning this Agreement and the Merger and shall not issue any news release or
make any other public disclosure without the prior consent of the other party,
unless it reasonably believes such is required by law upon the advice of counsel
or is in response to published newspaper or other mass media reports regarding
the transactions contemplated by this Agreement, in which such latter event the
parties shall give reasonable notice, and to the extent practicable, consult
with each other regarding such responsive public disclosure.
8.3. Return of Documents. Upon termination of this Agreement without the
Merger becoming effective, each party (i) shall deliver to the other originals
and all copies of all Information
made available to such party, (ii) shall not retain any copies, extracts or
other reproductions in whole or in part of such Information, and (iii) shall
destroy all memoranda, notes and other writings prepared by any party based on
the Information.
8.4. Notices. Any notice or other communication shall be in writing and
shall be deemed to have been given or made on the date of delivery, in the case
of hand delivery, or three (3) business days after deposit in the United States
Registered Mail, postage prepaid, or upon receipt if transmitted by facsimile
telecopy or any other means, addressed (in any case) as follows:
8.4.1. if to TrustCo and AcquisitionCo:
TrustCo Bank Corp NY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and
Chief Executive Officer
Facsimile: 518/381-3668
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: 314/444-7788
and
(a) if to Landmark:
Landmark Financial Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
Facsimile: 518/673-2081
with a copy to:
Luse, Lehman, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.; ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: 202/362-2902
or to such other address as any party may from time to time designate by notice
to the others.
8.5. Liabilities and Expenses. Except as provided in the Landmark Option
Agreement, in the event that this Agreement is terminated pursuant to the
provisions of Article Seven hereof, no party hereto shall have any liability to
any other party for costs, expenses, damages or otherwise; provided, however,
that, notwithstanding the foregoing, in the event that this Agreement is
terminated pursuant to Article Seven hereof on account of a willful breach of
any of the representations and warranties set forth herein or any willful breach
of any of the agreements set forth herein, then the non-breaching party shall
be entitled to recover appropriate damages from the breaching party, including,
without limitation, reimbursement to the non-breaching party of its costs, fees
and expenses (including attorneys', accountants' and advisors' fees and
expenses) incident to the negotiation, preparation, execution and performance of
this Agreement and related documentation; provided, however, that nothing in
this proviso shall be deemed to constitute liquidated damages for the willful
breach by a party of the terms of this Agreement or otherwise limit the rights
of the non-breaching party.
8.6. Nonsurvival of Representations, Warranties and Agreements. Except for,
and as provided in, this Section 8.6 and the Landmark Option Agreement, no
representation, warranty or agreement contained herein shall survive the
Effective Time or the earlier termination of this Agreement; provided, however,
that no such representation, warranty or covenant shall be deemed to be
terminated or extinguished so as to deprive TrustCo or Landmark (or any
director, officer or controlling person thereof) of any defense in law or equity
which otherwise would be available against the claims of any person, including,
without limitation, any shareholder or former shareholder of either TrustCo or
Landmark, the aforesaid representations, warranties and covenants being material
inducements to the consummation by TrustCo and Landmark of the transactions
contemplated herein. The agreements set forth in Section 5.4, Section 5.5, and
Section 5.6 hereof shall survive the Effective Time and the agreements set forth
in Section 8.1, Section 8.2, Section 8.3, Section 8.5 and Section 8.16 hereof
and this Section 8.6 shall survive the Effective Time or the earlier termination
of this Agreement.
8.7. Entire Agreement. This Agreement and the Landmark Option Agreement
constitute the entire agreement between the parties and supersede and cancel any
and all prior discussions, negotiations, undertakings, agreements in principle
or other agreements between the parties relating to the subject matter hereof.
8.8. Headings and Captions. The captions of Articles and Sections hereof
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
8.9. Waiver, Amendment or Modification. The conditions of this Agreement
which may be waived may only be waived by notice to the other party waiving such
condition. The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect the right at a later time to
enforce the same. This Agreement may be amended or modified by the parties
hereto, at any time before or after shareholder approval of this Agreement;
provided, however, that after any such approval no such amendment or
modification shall alter the amount or change the form of the Merger
Consideration contemplated by this Agreement to be received by shareholders of
Landmark. This Agreement not be amended or modified except by a written document
duly executed by the parties hereto.
8.10. Rules of Construction. Unless the context otherwise requires: (i) a
term has the meaning assigned to it, (ii) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles, (iii) "or" is not exclusive, (iv) words in the singular
may include the plural and in the plural include the singular, and (v)
"knowledge" of a party means the actual or constructive knowledge of any
director or executive officer of such party or any of its subsidiaries.
8.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument. For purposes of executing this Agreement,
a document (or signature page thereto) signed and transmitted by facsimile
machine or telecopier is to be treated as an original document. The signature of
any party thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the
request of any party, any facsimile or telecopy document shall be re-executed in
original form by the parties who executed the facsimile or telecopy document. No
party may raise the use of a facsimile machine or telecopier or the fact that
any signature was transmitted through the use of a facsimile or telecopier
machine as a defense to the enforcement of this Agreement or any amendment or
other document executed in compliance with this Section 8.11.
8.12. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. There shall be no third party beneficiaries hereof.
8.13. Severability. In the event that any provisions of this Agreement or
any portion thereof shall be finally determined to be unlawful or unenforceable,
such provision or portion thereof shall be deemed to be severed from this
Agreement, and every other provision, and any portion of a provision, that is
not invalidated by such determination, shall remain in full force and effect. To
the extent that a provision is deemed unenforceable by virtue of its scope but
may be made enforceable by limitation thereof, such provision shall be
enforceable to the fullest extent permitted under the laws and public policies
of the State whose laws are deemed to govern enforceability. It is declared to
be the intention of the parties that they would have executed the remaining
provisions without including any that may be declared unenforceable.
8.14. Governing Law; Assignment. This Agreement shall be governed by the
laws of the State of New York, except to the extent that the DGCL must govern
the Merger procedures, and applicable federal laws and regulations. This
Agreement may not be assigned by either of the parties hereto.
8.15. Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties hereto shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction and such right shall be in addition to
any other remedy to which they shall be entitled at law or in equity.
8.16. Legal Fees, Costs. Except as otherwise provided herein, all legal and
other costs and expenses incurred by Landmark in connection with this Agreement
and the transactions contemplated hereby are to be paid by Landmark, and all
legal and other costs and expenses incurred by TrustCo in connection with this
Agreement and the transactions contemplated hereby are to be paid by TrustCo.
Notwithstanding the foregoing, however, TrustCo shall reimburse Landmark for the
reasonable fees and expenses of its financial advisor in connection with the
fairness opinion to be obtained from such advisor up to a maximum amount of
$20,000.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
LANDMARK FINANCIAL CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
TRUSTCO BANK CORP NY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
LANDMARK ACQUISITION CO.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
EXHIBIT 1.01
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (this "Agreement"), is made as of the 21 day of
February, 2000, between TRUSTCO BANK CORP NY, a New York corporation
("Grantee"), and LANDMARK FINANCIAL CORP., a Delaware corporation ("Issuer").
RECITALS
Grantee, Landmark Acquisition Co. and Issuer are entering into an Agreement
and Plan of Merger, dated as of the date hereof (the "Plan"), which is being
executed by the parties hereto simultaneously with the execution of this
Agreement.
As a condition and inducement to Grantee's entering into the Plan and in
consideration therefor, Issuer has agreed to grant Grantee the Option (as
defined below).
In consideration of the foregoing and the mutual covenants and agreements
set forth herein and in the Plan, the parties hereto agree as follows:
Section 1 . Grant of Option.
(a) Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase, subject to the terms hereof, up to 19.9% fully paid
and nonassessable shares of Common Stock, par value $0.10 per share (the "Common
Stock"), of Issuer at a price per share equal to $14 per share (the "Initial
Price"); provided, however, that in the event Issuer issues or agrees to issue
(other than pursuant to options and warrants to issue Common Stock or shares of
convertible stock convertible into shares of Common Stock in effect or
outstanding as of the date hereof) any shares of Common Stock at a price less
than the Initial Price (as adjusted pursuant to Section 5(b) hereof), such price
shall be equal to such lesser price (such price, as adjusted as hereinafter
provided, the "Option Price"). The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and the Plan and other than pursuant to an event
described in Section 5(a) hereof), the number of shares of Common Stock subject
to the Option shall be increased so that, after such issuance, such number
together with any shares of Common Stock previously issued pursuant hereto,
represents the same proportion of the number of shares of Common Stock then
issued and outstanding as such proportion before the event referred to above
(without giving effect to any shares subject or issued pursuant to the Option).
Nothing contained in this Section 1(b) or elsewhere in this Agreement shall be
deemed to authorize Issuer to issue shares in breach of any provision of the
Plan.
Section 2 . Exercise of Option.
(a) Timing of Exercise, Termination. Grantee may exercise the Option, in
whole or part, at any time and from time to time following the occurrence of a
Purchase Event (as defined below); provided that the Option shall terminate and
be of no further force and effect upon the earliest to occur of (i) the time
immediately prior to the Effective Time, (ii) 12 months after the first
occurrence of a Purchase Event, (iii) 18 months after the termination of the
Plan following the occurrence of a Preliminary Purchase Event (as defined
below), (iv) termination of the Plan in accordance with the terms thereof prior
to the occurrence of a Purchase Event or a Preliminary Purchase Event (other
than a termination of the Plan by Grantee pursuant to Section 7.2 thereof due to
a willful breach by Issuer of any representation, warranty or agreement
contained therein or by Grantee and Issuer pursuant to Section 7.1 thereof if
Grantee shall at that time have been entitled to terminate the Plan pursuant to
Section 7.2 thereof due to a willful breach by Issuer of any representation,
warranty or agreement contained therein) or (v) 18 months after the termination
of the Plan by Grantee pursuant to Section 7.2 thereof due to a willful breach
by Issuer of any representation, warranty or agreement contained therein or by
Grantee and Issuer pursuant to Section 7.1 thereof if Grantee shall at that time
have been entitled to terminate the Plan pursuant to Section 7.2 thereof due to
a willful breach by Issuer of any representation, warranty or agreement
contained therein. The events described in clauses (i) - (v) in the preceding
sentence are hereinafter collectively referred to as an "Exercise Termination
Event."
(b) Preliminary Purchase Event. The term "Preliminary Purchase Event" shall
mean any of the following events or transactions occurring after the date
hereof:
(i) Issuer or any of its subsidiaries (each, an "Issuer
Subsidiary"), without having received Grantee's prior written consent,
shall have entered into an agreement to engage in an Acquisition
Transaction (as defined below) with any Person (the term "Person" for
purposes of this Agreement having the meaning assigned thereto in
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations
thereunder) other than Grantee or any of its subsidiaries (each a
"Grantee Subsidiary") or the Board of Directors of Issuer shall have
recommended that the shareholders of Issuer approve or accept any
Acquisition Transaction with any Person other than Grantee or any
Grantee Subsidiary. For purposes of this Agreement, "Acquisition
Transaction" shall mean (x) a merger or consolidation, or any similar
transaction, involving Issuer or any Issuer Subsidiary that is a
significant subsidiary as defined in Rule 1-02 of Regulation S-X by the
Securities and Exchange Commission (and the term "significant
subsidiary" shall include, wherever used in this Agreement, any bank or
other financial institution subsidiary of Issuer), (y) a purchase,
lease or other acquisition of all or substantially all of the assets of
or assumption of all or substantially all the deposits of Issuer or any
Issuer Subsidiary that is a significant subsidiary, or (z) a purchase
or other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or more of the
voting power of Issuer or any Issuer Subsidiary that is a significant
subsidiary, provided that the term "Acquisition Transaction" does not
include any internal merger or consolidation, transfer or lease of
assets or voting securities involving only Issuer and/or Issuer
Subsidiaries;
(ii) Any Person (other than Grantee or any Grantee Subsidiary,
or any Issuer Subsidiary acting in a fiduciary capacity in the ordinary
course of business) shall have acquired Beneficial Ownership (the term
"Beneficial Ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the Exchange Act and the
rules and regulation thereunder) or the right to acquire Beneficial
Ownership, of shares of Common Stock such that, upon the consummation
of such acquisition, such Person would have Beneficial Ownership, in
the aggregate, of 15% or more of the then outstanding shares of Common
Stock;
(iii) Any Person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its shareholders, by
public announcement or written communication that is or becomes the
subject of public disclosure, to engage in an Acquisition Transaction
(including, without limitation, any situation in which any Person other
than Grantee or any Grantee Subsidiary shall have commenced (as such
term is defined in Rule 14d-2 under the Exchange Act) or shall have
filed a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to, a tender offer or
exchange offer to purchase any shares of
Common Stock such that, upon consummation of such offer, such Person
would own or control 15% or more of the then outstanding shares of
Common Stock (such an offer being referred to herein as a "Tender
Offer" or an "Exchange Offer", respectively));
(iv) After a proposal is made by a third party to Issuer or
its shareholders to engage in an Acquisition Transaction, or such third
party states its intention to make such a proposal if the Plan
terminates and/or the Option expires, Issuer shall have willfully
breached any covenant or obligation contained in the Plan and such
willful breach would entitle Grantee to terminate the Plan (without
regard to the cure period provided for therein unless such cure is
promptly effected without jeopardizing consummation of the Merger
pursuant to the terms of the Plan);
(v) The holders of Common Stock shall not have approved the
Plan by the requisite vote at the meeting of such stockholders held for
the purpose of voting on the Plan, or such meeting shall not have been
held or shall have been canceled prior to termination of the Plan, in
each case after it shall have been publicly announced that any Person
(other than Grantee or any Grantee Subsidiary) shall have (A) made, or
disclosed an intention to make, a proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a registration
statement under the Securities Act with respect to an Exchange Offer,
or (C) filed an application (or given a notice) with, whether in draft
or final form, the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") or any other governmental authority or
regulatory or administrative agency or commission (each, a
"Governmental Authority"), for approval to engage in an Acquisition
Transaction;
(vi) Any Person (other than Grantee or any Grantee
Subsidiary), other than in connection with a transaction to which
Grantee has given its prior written consent, shall have filed an
application or notice with the Federal Reserve Board or other
Governmental Authority for approval to engage in an Acquisition
Transaction; or
(vii) Issuer's Board of Directors shall have withdrawn or
modified (or publicly announced its intention to withdraw or modify) in
any manner adverse in any respect to Grantee its recommendation that
the stockholders of Issuer approve the transactions contemplated by the
Plan, or Issuer or any significant Issuer Subsidiary shall have
authorized, recommended, proposed (or publicly announced its intention
to authorize, recommend or propose) an agreement to engage in an
Acquisition Transaction between the Issuer or any significant Issuer
Subsidiary with any person other than Grantee or a Grantee Subsidiary.
(c) Purchase Event. The term "Purchase Event" shall mean either of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any Person (other than Grantee or any
Grantee Subsidiary or any Issuer Subsidiary acting in a fiduciary
capacity in the ordinary course of business (provided that the
foregoing exception shall not apply to any Person for whom or which
such Issuer Subsidiary is acting in such fiduciary capacity)) of
Beneficial Ownership of shares of Common Stock, such that, upon the
consummation of such acquisition, such Person would have Beneficial
Ownership, in the aggregate, of 20% or more of the then outstanding
shares of Common Stock; or
(ii) The occurrence of a Preliminary Purchase Event described
in Section 2(b)(i) hereof except that the percentage referred to in
clause (z) shall be 20%.
(d) Notice by Issuer. Issuer shall notify Grantee promptly in writing of
the occurrence of any Preliminary Purchase Event or Purchase Event; provided,
however, that the giving of such notice by Issuer shall not be a condition to
the right of Grantee to exercise the Option.
(e) Notice of Exercise. In the event that Grantee is entitled to and wishes
to exercise the Option, it shall send to Issuer a written notice (the "Option
Notice" and the date of which being hereinafter referred to as the "Notice
Date") specifying (i) the total number of shares of Common Stock it will
purchase pursuant to such exercise, (ii) the aggregate purchase price as
provided herein, and (iii) a period of time (that shall not be less than three
business days nor more than thirty business days) running from the Notice Date
(the "Closing Date") and a place at which the closing of such purchase shall
take place; provided, that, if prior notification to or approval of the Federal
Reserve Board or any other Governmental Authority is required in connection with
such purchase (each, a "Notification" or an "Approval," as the case may be), (a)
Grantee shall promptly file, or cause to be filed, the required notice or
application for approval ("Notice/Application"), (b) Grantee shall expeditiously
process, or cause to be expeditiously processed, the Notice/Application, and (c)
for the purpose of determining the Closing Date pursuant to clause (iii) of this
sentence, the period of time that otherwise would run from the Notice Date shall
instead run from the later of (x) in connection with any Notification, the date
on which any required notification periods have expired or been terminated, and
(y) in connection with any Approval, the date on which such approval has been
obtained and any requisite waiting period or periods shall have expired. For
purposes of Section 2(a) hereof, any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto. On or prior to the Closing Date,
Grantee shall have the right to revoke its exercise of the Option in the event
that the transaction constituting a Purchase Event that gives rise to such right
to exercise shall not have been consummated.
(f) Payments. At the closing referred to in Section 2(e) hereof, Grantee
shall pay to Issuer the aggregate Option Price for the shares of Common Stock
specified in the Option Notice in immediately available funds by wire transfer
to a bank account designated by Issuer; provided, however, that failure or
refusal of Issuer to designate such a bank account shall not preclude Grantee
from exercising the Option.
(g) Delivery of Common Stock. At such closing, subject to any requisite
Notification and/or Approval having been made or given and being in full force
and effect, and only following payment as set forth in Section 2(e) hereof,
Issuer shall deliver to Grantee a certificate or certificates representing the
number of shares of Common Stock specified in the Option Notice and, if the
Option should be exercised in part only, a new Option evidencing the rights of
Grantee thereof to purchase the balance of the shares of Common Stock
purchasable hereunder.
(h) Common Stock Certificates. Certificates for Common Stock delivered at a
closing hereunder shall be endorsed with a restrictive legend substantially as
follows:
The transfer of the shares represented by this certificate is subject
to resale restrictions arising under the Securities Act of 1933, as
amended, and to certain provisions of an agreement between TrustCo Bank
Corp NY and Landmark Financial Corp. ("Issuer") dated as of the ____
day of February, 2000. A copy of such agreement is on file at the
principal office of Issuer and will be provided to the holder hereof
without charge upon receipt by Issuer of a written request therefor.
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the Securities and Exchange
Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the Securities Act; (ii) the reference to the provisions of this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(i) Holder of Record. Upon the giving by Grantee to Issuer of an Option
Notice and the tender of the applicable purchase price in immediately available
funds on the Closing Date, subject to any requisite Notification and/or Approval
having been made or given and being in full force and effect, Grantee shall be
deemed to be the holder of record of the number of shares of Common Stock
specified in the Option Notice, notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such shares of
Common Stock shall not then actually be delivered to Grantee. Issuer shall pay
all expenses and any and all United States federal, state and local taxes and
other charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of Grantee.
Section 3 . Issuer's Covenants.
(a) Available Shares. Issuer agrees that it shall at all times until the
termination of this Agreement have reserved for issuance upon the exercise of
the Option that number of authorized and reserved shares of Common Stock equal
to the maximum number of shares of Common Stock at any time and from time to
time issuable hereunder, all of which shares shall, upon issuance pursuant
hereto, be duly authorized, validly issued, fully paid, nonassessable, and
delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
(b) Compliance. Issuer agrees that it shall not, by amendment of its
articles of incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by Issuer.
(c) Certain Actions, Applications and Arrangements. Issuer shall promptly
take all action as may from time to time be required (including (i) complying
with all premerger notification, reporting and waiting period requirements
specified in 15 U.S.C. ss. 18a and regulations promulgated thereunder, and (ii)
in the event, under the Bank Holding Company Act of 1956, as amended (the
"B.H.C. Act"), or the Change in Bank Control Act of 1978, as amended, or any
state banking law, prior approval of or notice to the Federal Reserve Board or
to any other Governmental Authority is necessary before the Option may be
exercised, cooperating with Grantee in preparing such applications or notices
and providing such information to each such Governmental Authority as it may
require) in order to permit Grantee to exercise the Option and Issuer duly and
effectively to issue shares of Common Stock pursuant hereto, and to protect the
rights of Grantee against dilution.
Section 4 . Exchange of Option. This Agreement and the Option granted
hereby are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal office of Issuer,
for other agreements providing for Options of different denominations entitling
the holder thereof to purchase, on the same terms and subject to the same
conditions as are set forth herein, in the aggregate the same number of shares
of Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used in this Section 4 include any agreements and related options for which this
Agreement and the Option granted hereby may be exchanged. Upon receipt by Issuer
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Agreement, if mutilated, Issuer shall execute
and deliver a new Agreement of like tenor and date. Any such new Agreement
executed and delivered shall constitute an additional contractual obligation on
the part of Issuer, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
Section 5 . Adjustments. The number of shares of Common Stock purchasable
upon the exercise of the Option shall be subject to adjustment from time to time
as follows:
(a) In the event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares or the like, the type and number of shares of
Common Stock purchasable upon exercise hereof shall be appropriately adjusted
and proper provision shall be made so that, in the event that any additional
shares of Common Stock are to be issued or otherwise to become outstanding as a
result of any such change (other than pursuant to an exercise of the Option),
the number of shares of Common Stock that remain subject to the Option shall be
increased so that, after such issuance and together with shares of Common Stock
previously issued pursuant to the exercise of the Option (as adjusted on account
of any of the foregoing changes in the Common Stock), it represents the same
proportion of the number of shares of Common Stock then issued and outstanding
as such proportion before the applicable event described in this Section 5(a).
(b) Whenever the number of shares of Common Stock purchasable upon exercise
hereof is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of which
shall be equal to the number of shares of Common Stock purchasable prior to the
adjustment and the denominator of which shall be equal to the number of shares
of Common Stock purchasable after the adjustment.
Section 6 . Registration Rights.
(a) Upon the occurrence of a Purchase Event that occurs prior to an
Exercise Termination Event, Issuer shall, at the request of Grantee (whether on
its own behalf or on behalf of any subsequent holder of the Option (or part
thereof) or any holder of the shares of Common Stock issued pursuant hereto),
promptly prepare, file and keep current a registration statement under the
Securities Act covering any shares issued and issuable pursuant to the Option
and shall use its best efforts to cause such registration statement to become
effective and remain current in order to permit the sale or other disposition of
any shares of Common Stock issued upon total or partial exercise of the Option
(the "Option Shares") in accordance with any plan of disposition requested by
Grantee. Issuer shall use its best efforts to cause such registration statement
first to become effective and then to remain effective for such period not in
excess of 180 days from the day such registration statement first becomes
effective. Grantee shall have the right to demand two such registrations at
Issuer's expense. The foregoing notwithstanding, if, at the time of any request
by Grantee for registration of Option Shares as provided above, Issuer is in the
process of registration with respect to an underwritten public offering of
shares of Common Stock, and if in the good faith judgment of the managing
underwriter or managing underwriters, or, if none, the sole underwriter or
underwriters, of such offering, the offering or inclusion of the Option Shares
would interfere materially with the successful marketing of the shares of Common
Stock offered by Issuer, the number of Option Shares otherwise to be covered in
the registration statement contemplated hereby may be reduced; provided,
however, that after any such required reduction, the number of Option Shares to
be included in such offering for the account of Grantee shall constitute at
least 25% of the total number of shares of Common Stock held by Grantee and
Issuer covered in such registration statement; provided further, however, that
if such reduction occurs, then Issuer shall file a registration statement for
the balance as promptly as practicable thereafter as to which no reduction shall
thereafter occur. In addition, if Issuer proposes to register its Common Stock
or any other securities on a form that would permit the registration of the
Option Shares for public sale under the Securities Act (whether proposed to
be offered for sale by Issuer or any other Person) it shall give prompt written
notice to Grantee of its intention to do so, specifying the relevant terms of
such proposal, including the proposed maximum offering price thereof. Upon the
written notice of Grantee (whether on its own behalf or on behalf of any
subsequent holder of the Option (or part thereof) or any holder of the shares of
Common Stock issued pursuant hereto) delivered to Issuer within 20 business days
after the giving of any such notice, which request shall specify the number of
Option Shares desired to be disposed by Grantee, Issuer shall use its best
efforts to effect, in connection with its proposed registration, the
registration under the Securities Act of the Option Shares set forth in such
request. Grantee shall provide all information reasonably requested by Issuer
for inclusion in any registration statement to be filed hereunder. In connection
with any such registration, Issuer and Grantee shall provide each other with
representations, warranties, indemnities and other agreements customarily given
in connection with such registrations. If requested by Grantee in connection
with such registration, Issuer and Grantee shall become a party to any
underwriting agreement relating to the sale of such shares, but only to the
extent of obligating themselves in respect of representations, warranties,
indemnities and other agreements customarily included in such underwriting
agreements.
(b) In the event that Grantee requests Issuer to file a registration
statement following the failure to obtain any approval required to exercise the
Option as described in Section 9 hereof, the closing of the sale or other
disposition of the Common Stock or other securities pursuant to such
registration statement shall occur substantially simultaneously with the
exercise of the Option.
(c) Except where applicable state law prohibits such payments, Issuer shall
pay all expenses (including without limitation registration fees, qualification
fees, blue sky fees and expenses (including the fees and expenses of counsel),
legal expenses, including the reasonable fees and expenses of one counsel to the
holders whose Option Shares are being registered, printing expenses and the
costs of special audits or "cold comfort" letters, expenses of underwriters,
excluding discounts and commissions but including liability insurance if Issuer
so desires or the underwriters so require, and the reasonable fees and expenses
of any necessary special experts) in connection with each registration pursuant
to this Section 6 (including the related offerings and sales by holders of
Option Shares) and all other qualifications, notification or exemptions pursuant
to this Section 6.
(d) In connection with any registration under this Section 6, Issuer hereby
indemnifies Grantee, and each officer, director and controlling person of
Grantee, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement contained in any registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Grantee, or by such underwriter, as the case may be, for all
such expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such holder or such underwriter,
as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section 6(d) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 6(d), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 6(d). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party either agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel reasonably satisfactory
to the indemnified party, or (iii) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the indemnifying
party that may be contrary to the interests of the indemnified party. No
indemnifying party shall be liable for the fees and expenses of more than one
separate counsel for all indemnified parties or for any settlement entered into
without its consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this Section 6(d) is unavailable to
a party otherwise entitled to be indemnified in respect of any expenses, losses,
claims, damages or liabilities referred to herein, then the indemnifying party,
in lieu of indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be indemnified as a
result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of Issuer, Grantee
and the underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall Grantee be
responsible, in the aggregate, for any amount in excess of the net offering
proceeds attributable to its Option Shares included in the offering. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any obligation by any Grantee
to indemnify shall be several and not joint with other holders of Option Shares.
Section 7 . Option Repurchase.
(a) Upon the occurrence of a Purchase Event that occurs prior to an
Exercise Termination Event, (i) at the request (the date of such request being
the "Request Date") of Grantee, delivered within 30 days of the Purchase Event
(or such later period as may be provided pursuant to Section 9 hereof), Issuer
shall repurchase the Option from Grantee at a price (the "Option Repurchase
Price") equal to the amount by which (A) the market/offer price (as defined
below) exceeds (B) the Option Price, multiplied by the number of shares for
which the Option may then be exercised, and (ii) at the request (the date of
such request being the "Request Date") of the owner of Option Shares from time
to time (the "Owner"), delivered within 30 days of a Purchase Event (or such
later period as may be provided pursuant to Section 9 hereof), Issuer shall
repurchase such number of the Option Shares from the Owner as the Owner shall
designate at a price (the "Option Share Repurchase Price") equal to the
market/offer price multiplied by the number of Option Shares so designated. The
term "market/offer price" shall mean the highest of (i) the price per share of
Common Stock at which a tender offer or exchange offer therefor has been made
after the date hereof and on or prior to the Request Date, (ii) the price per
share of Common Stock paid or to be paid by any third party pursuant to an
agreement with Issuer (whether by way of a merger,
consolidation or otherwise), (iii) the highest closing price for shares of
Common Stock within the 90-day period ending on the Request Date as reported on
The Nasdaq Stock Market's National Market (as reported in The Wall Street
Journal or, if not reported therein, in another mutually agreed upon
authoritative source), or (iv) in the event of a sale of all or substantially
all of Issuer's assets, the sum of the price paid in such sale for such assets
and the current market value of the remaining assets of Issuer as determined by
a nationally-recognized independent investment banking firm mutually selected by
Grantee or the Owner, as the case may be, on the one hand, and Issuer, on the
other hand, divided by the number of shares of Common Stock of Issuer
outstanding at the time of such sale. In determining the market/offer price, the
value of consideration other than cash shall be determined by a
nationally-recognized independent investment banking firm mutually selected by
Grantee or Owner, as the case may be, on the one hand, and Issuer, on the other
hand, whose determination shall be conclusive and binding on all parties.
(b) Grantee or the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and/or any Option Shares pursuant to
this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that Grantee or
the Owner, as the case may be, elects to require Issuer to repurchase the Option
and/or the Option Shares in accordance with the provisions of this Section 7. As
immediately as practicable, and in any event within five business days after the
surrender of the Option and/or certificates representing Option Shares and the
receipt of such notice or notices relating thereto, Issuer shall deliver or
cause to be delivered to Grantee the Option Repurchase Price or to the Owner the
Option Share Repurchase Price or the portion thereof that Issuer is not then
prohibited from so delivering under applicable law and regulation or as a
consequence of administrative policy.
(c) Issuer hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly as
practicable in order to accomplish any repurchase contemplated by this Section
7. Nonetheless, to the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall immediately so notify
Grantee and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to Grantee and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; provided, however, that if
Issuer at any time after delivery of a notice of repurchase pursuant to Section
7(b) is prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to Grantee and/or the Owner, as
appropriate, the Option Repurchase Price and the Option Share Repurchase Price,
respectively, in full Grantee or Owner may revoke its notice of repurchase of
the Option or the Option Shares either in whole or in part whereupon, in the
case of a revocation in part, Issuer shall promptly (i) deliver to Grantee
and/or the Owner, as appropriate, that portion of the Option Purchase Price or
the Option Share Repurchase Price that Issuer is not prohibited from delivering
after taking into account any such revocation, and (ii) deliver, as appropriate,
either (A) to Grantee, a new Agreement evidencing the right of Grantee to
purchase that number of shares of Common Stock equal to the number of shares of
Common Stock purchasable immediately prior to the delivery of the notice of
repurchase less the number of shares of Common Stock covered by the portion of
the Option repurchased, or (B) to the Owner, a certificate for the number of
Option Shares covered by the revocation.
(d) Issuer shall not enter into any agreement with any party (other than
Grantee or a Grantee Subsidiary) for an Acquisition Transaction unless the other
party thereto assumes all the obligations of Issuer pursuant to this Section 7
in the event that a Grantee or Owner elects, in its sole discretion, to require
such other party to perform such obligations.
Section 8 . Substitute Option.
(a) Grant of Substitute Option. In the event that prior to an Exercise
Termination Event, Issuer shall enter into an agreement (i) to consolidate or
merge with any Person, other than Grantee or a Grantee Subsidiary, and shall not
be the continuing or surviving corporation of such consolidation or merger, (ii)
to permit any Person, other than Grantee or a Grantee Subsidiary, to merge into
Issuer and Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Common Stock shall
be changed into or exchanged for stock or other securities of any other Person
or cash or any other property or the then outstanding shares of Common Stock
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company, or (iii) to sell or otherwise transfer
all or substantially all of its or any significant Issuer Subsidiary's assets to
any Person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of such transaction and upon the
terms and conditions set forth herein, be converted into, or exchanged for, an
option (the "Substitute Option"), at the election of Grantee, of either (x) the
Acquiring Corporation (as defined below), or (y) any Person that controls the
Acquiring Corporation (the Acquiring Corporation and any such controlling Person
being hereinafter referred to as the "Substitute Option Issuer").
(b) Exercise of Substitute Option. The Substitute Option shall be
exercisable for such number of shares of the Substitute Common Stock (as is
hereinafter defined) as is equal to the market/offer price (as defined in
Section 7 hereof), multiplied by the number of shares of the Common Stock for
which the Option was theretofore exercisable, divided by the Average Price (as
is hereinafter defined). The exercise price of the Substitute Option per share
of the Substitute Common Stock (the "Substitute Purchase Price") shall then be
equal to the product of the Option Price multiplied by a fraction in which the
numerator is the number of shares of Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares for which
the Substitute Option is exercisable.
(c) Terms of Substitute Option. The Substitute Option shall otherwise have
the same terms as the Option, provided, however, that if the terms of the
Substitute Option cannot, for legal reasons, be the same as the Option, such
terms shall be as similar as possible and in no event less advantageous to
Grantee.
(d) Substitute Option Definitions. The following terms have the meanings
indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving Person, and (iii) the transferee of all or any
substantial part of Issuer's assets (or the assets of any significant
Issuer Subsidiary);
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the Substitute
Option; and
(iii) "Average Price" shall mean the average closing price of
a share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no
event higher than the closing price of the shares of the Substitute
Common Stock on the day preceding such consolidation, merger or sale;
provided, however, that if such closing price is not ascertainable due
to an absence of a public market for the Substitute Common Stock,
"Average Price" shall mean the higher of (i) the price per share of
Substitute Common Stock paid or to be paid by any third party pursuant
to an agreement with the issuer of the Substitute Common Stock and (ii)
the book value per share, calculated in accordance with
generally accepted accounting principles, of the Substitute Common
Stock immediately prior to exercise of the Substitute Option;
provided, further, that if Issuer is the issuer of the Substitute
Option, the Average Price shall be computed with respect to a share of
common stock issued by Issuer, the Person merging into Issuer or by
any company which controls or is controlled by such merging Person, as
Grantee may elect.
(e) Cap on Substitute Option. In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than that
proportion of the outstanding Substitute Common Stock equal to the proportion of
the outstanding Common Stock of Issuer which Grantee had the right to acquire
immediately prior to the issuance of the Substitute Option. In the event that
the Substitute Option would be exercisable for more than the proportion of the
outstanding Substitute Common Stock referred to in the immediately preceding
paragraph but for this clause (e), the Substitute Option Issuer shall make a
cash payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in this clause (e) over (ii) the
value of the Substitute Option after giving effect to the limitation in this
clause (e). This difference in value shall be determined by a nationally
recognized investment banking firm mutually selected by Grantee, on the one
hand, and Issuer, on the other hand.
Section 9 . Extension of Exercise Right. Notwithstanding Section 2, Section
6, Section 7 and Section 11 hereof, if Grantee has given the notice referred to
in one or more of such Sections, the exercise of the rights specified in any
such Section shall be extended (a) if the exercise of such rights requires
obtaining regulatory approvals (including any required waiting periods) to the
extent necessary to obtain all regulatory approvals for the exercise of such
rights, and (b) to the extent necessary to avoid liability under Section 16(b)
of the Exchange Act by reason of such exercise; provided, however, that in no
event shall any closing date occur more than 6 months after the related Notice
Date, and, if the closing date shall not have occurred within such period due to
the failure to obtain any required approval by the Federal Reserve Board or any
other Governmental Authority despite the best efforts of Issuer or the
Substitute Option Issuer, as the case may be, to obtain such approvals, the
exercise of the Option shall be deemed to have been rescinded as of the related
Notice Date. In the event (a) Grantee receives official notice that an approval
of the Federal Reserve Board or any other Governmental Authority required for
the purchase and sale of the Option Shares shall not be issued or granted, or
(b) a closing date has not occurred within 6 months after the related Notice
Date due to the failure to obtain any such required approval, Grantee shall be
entitled to exercise the Option in connection with the resale of the Option
Shares pursuant to a registration statement as provided in Section 6.
Section 10 . Issuer's Representations and Warranties. Issuer hereby
represents and warrants to Grantee as follows:
(a) Corporate Authority. Issuer has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Issuer and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Issuer.
(b) Availability of Shares. Issuer has taken all necessary corporate action
to authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with its
terms shall have reserved for issuance upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of shares of Common
Stock at any time and from time to time issuable hereunder, and all such shares,
upon issuance pursuant hereto,
shall be duly authorized, validly issued, fully paid, non-assessable, and shall
be delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
(c) No Violations. The execution, delivery and performance of this
Agreement does not or shall not, and the consummation by Issuer of any of the
transactions contemplated hereby shall not, constitute or result in (A) a breach
or violation of, or a default under, its articles of incorporation or by-laws,
or the comparable governing instruments of any of the Issuer Subsidiaries, or
(B) a breach or violation of, or a default under, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation of it or
any of the Issuer Subsidiaries (with or without the giving of notice, the lapse
of time or both) or under any law, rule, ordinance or regulation or judgment,
decree, order, award or governmental or non-governmental permit or license to
which it or any of the Issuer Subsidiaries is subject, that would, in any case
give any other person the ability to prevent or enjoin Issuer's performance
under this Agreement in any material respect.
Section 11. Assignment. Neither of the parties hereto may assign any of its
rights or delegate any of its obligations under this Agreement or the Option
created hereunder to any other Person without the express written consent of the
other party, except that Grantee may assign this Agreement to a wholly owned
subsidiary of Grantee and Grantee may assign its rights hereunder in whole or in
part after the occurrence of a Preliminary Purchase Event; provided, however,
that until the date at which the Federal Reserve Board has approved an
application by Grantee under the B.H.C. Act to acquire the shares of Common
Stock subject to the Option, other than to a wholly owned subsidiary of Grantee,
Grantee may not assign its rights under the Option except in (i) a widely
dispersed public distribution, (ii) a private placement in which no one party
acquires the right to purchase in excess of 2% of the voting shares of Issuer,
(iii) an assignment to a single party (e.g., a broker or investment banker) for
the purpose of conducting a widely dispersed public distribution on Grantee's
behalf, or (iv) any other manner approved by the Federal Reserve Board. The term
"Grantee," as used in this Agreement, shall also be deemed to refer to Grantee's
permitted assigns. Any attempted assignment prohibited by this Section 11 is
void and without effect.
Section 12. Filings and Consents. Each of Grantee and Issuer shall use its
reasonable efforts to make all filings with, and to obtain consents of, all
third parties and Governmental Authorities necessary to the consummation of the
transactions contemplated by this Agreement, including, without limitation,
making application if necessary, for listing of the shares of Common Stock
issuable hereunder on any exchange or quotation system and applying to the
Federal Reserve Board under the B.H.C. Act and to state banking authorities for
approval to acquire the shares issuable hereunder.
Section 13 . Remedies. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement by either party
hereto and that the obligations of the parties shall hereto be enforceable by
either party hereto through injunctive or other equitable relief. Both parties
further agree to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties hereto may
have for any failure to perform this Agreement.
Section 14 . Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated.
Section 15. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in Person, by cable, telegram,
telecopy or telex, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Plan.
Section 16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement and shall be effective at the time
of execution.
Section 17. Expenses. Except as otherwise expressly provided herein, each
of the parties hereto shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
Section 18. Entire Agreement. Except as otherwise expressly provided herein
or in the Plan, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.
Section 19. Definitions. Capitalized terms used in this Agreement and not
defined herein but defined in the Plan shall have the meanings assigned thereto
in the Plan.
Section 20. Effect on Plan. Nothing contained in this Agreement shall be
deemed to authorize Issuer or Grantee to breach any provision of the Plan.
Section 21. Selections. In the event that any selection or determination is
to be made by Grantee hereunder and at the time of such selection or
determination there is more than one Grantee, such selection shall be made by a
majority in interest of such Grantees.
Section 22. Further Assurances. In the event of any exercise of the option
by Grantee, Issuer and such Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
Section 23. Voting. Except to the extent Grantee exercises the Option,
Grantee shall have no rights to vote or receive dividends or have any other
rights as a shareholder with respect to shares of Common Stock covered hereby.
Section 24. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties has caused this Stock Option
Agreement to be executed on its behalf by their officers thereunto duly
authorized, all as of the date first above written.
LANDMARK FINANCIAL CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
TRUSTCO BANK CORP NY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
EXHIBIT 1.10(a)
LANDMARK'S LEGAL OPINION MATTERS
1. The due incorporation, valid existence and good standing of Landmark
under the laws of the State of Delaware, its power and authority to own and
operate its properties and to carry on its business as now conducted, and its
power and authority to enter into the Agreement, to merge with TrustCo in
accordance with the terms of the Agreement and to consummate the transactions
contemplated by the Agreement.
2. The due incorporation or organization, valid existence and good standing
of the Subsidiary Bank and its power and authority to own and operate its
properties.
3. The due and proper performance of all corporate acts and other
proceedings necessary or required to be taken by Landmark to authorize the
execution, delivery and performance of the Agreement, the due execution and
delivery of the Agreement by Landmark, and the Agreement as a valid and binding
obligation of Landmark, enforceable against Landmark in accordance with its
terms (subject to the provisions of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally from time to time in effect, and
equitable principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion).
4. The execution of the Agreement by Landmark, and the consummation of the
Merger and the other transactions contemplated therein, does not violate or
cause a default under Landmark's Certificate of Incorporation or Bylaws, or any
statute, regulation or rule or, to their knowledge, any judgment, order or
decree against Landmark or its subsidiaries, or any material agreement binding
upon Landmark or its subsidiaries.
5. The receipt of all required consents, approvals (including the requisite
approval of the shareholders of Landmark), orders or authorizations of, or
registrations, declarations or filings with or notices to, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, or any other person or entity required to
be obtained or made by Landmark or its subsidiaries in connection with the
execution and delivery of the Agreement or the consummation of the transactions
contemplated therein.
6. To the best knowledge of such counsel, the nonexistence of any material
actions, suits, proceedings, orders, investigations or claims pending against
Landmark or the Subsidiary Bank which, if adversely determined, would have a
material adverse effect upon their respective properties or assets or the
transactions contemplated by the Agreement.
EXHIBIT 1.10(b)
TRUSTCO'S LEGAL OPINION MATTERS
1. The due incorporation, valid existence and good standing of TrustCo
under the laws of the State of New York, its power and authority to own and
operate its properties and to carry on its business as presently conducted and
its power and authority to enter into the Agreement and to consummate the
transactions contemplated thereby. The due incorporation, valid existence and
good standing of AcquisitionCo under the laws of the State of Delaware, its
power and authority to own and operate its properties and to carry on its
business as presently conducted and its power and authority to enter into the
Agreement to merge with Landmark in accordance with the terms of the Agreement
and to consummate the transactions contemplated thereby.
2. The due and proper performance of all corporate acts and other
proceedings required to be taken by TrustCo and AcquisitionCo to authorize the
execution, delivery and performance of the Agreement, their respective due
execution and delivery of the Agreement, and the Agreement as a valid and
binding obligation of each of TrustCo and AcquisitionCo enforceable against
TrustCo and AcquisitionCo in accordance with its terms (subject to the
provisions of bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally from time to time in
effect, and equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial discretion).
3. The execution and delivery of the Agreement by TrustCo and AcquisitionCo
and the consummation of the transactions contemplated therein, as neither
conflicting with, in breach of or in default under, resulting in the
acceleration of, creating in any party the right to accelerate, terminate,
modify or cancel, or violate, any provision of the Certificates of Incorporation
or Bylaws, as amended, of either or TrustCo or AcquisitionCo, or any statute,
regulation, rule, judgment, order or decree binding upon TrustCo or
AcquisitionCo which would be materially adverse to the business of TrustCo and
its subsidiaries taken as a whole.
4. To the best knowledge of such counsel, the receipt of all required
consents, approvals, orders or authorizations of, or registrations, declarations
or filings with or without notices to, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any other person or entity required to be obtained or made by or
with respect to TrustCo and AcquisitionCo in connection with the execution and
delivery of the Agreement or the consummation of the transactions contemplated
by the Agreement.
5. To the best knowledge of such counsel, the nonexistence of any material
actions, suits, proceedings, orders, investigations or claims pending against
TrustCo, AcquisitionCo or any of their respective subsidiaries which, if
adversely determined, would have a material adverse effect upon their respective
properties or assets or the transactions contemplated by the Agreement.