ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT is entered into as of February 9, 1998,
between BANKATLANTIC BANCORP, INC., a Florida corporation ("Bancorp"), ▇▇▇▇,
▇▇▇▇ & CO., INC., a New Jersey corporation (the "Company"), and BCP ACQUISITION
CORPORATION, a New Jersey corporation which is wholly-owned by Bancorp
("Acquisition").
Preliminary Statements
WHEREAS, Bancorp and the Company believe that the mutual best interests
of Bancorp and the Company and of their respective stockholders will be served
by the acquisition provided for herein in which the Company will, subject to the
terms and conditions set forth herein, be acquired by Bancorp through the merger
of the Company with and into Acquisition.
WHEREAS, Bancorp recognizes the value of maintaining and intends to
maintain the operations of the Company in an autonomous subsidiary after the
acquisition contemplated hereby; and
WHEREAS, Bancorp is a savings bank holding company with over $3 billion
of assets and has the resources and capital to enable the Company to grow and
pursue its business plan; and
WHEREAS, simultaneously with or prior to the execution of this
Agreement, the members of the Board of Directors of the Company executed and
delivered to Bancorp a voting agreement in the form attached hereto as Exhibit
A; and
WHEREAS, Bancorp and the Company have agreed, in connection with the
transactions contemplated hereby, to establish a retention program as described
in Section 5.17 hereto for the purpose of retaining the services of certain
employees of the Company following consummation of the transactions contemplated
hereby; and
WHEREAS, concurrently with the execution of this Agreement and as a
material inducement to Bancorp to enter into this Agreement, the Company and
Bancorp have entered into a Stock Option Agreement (the "Company Stock Option
Agreement") pursuant to which the Company has granted to Bancorp an option to
purchase from the Company shares of Company Common Stock, upon the terms and
subject to the conditions set forth therein;
Agreement
In consideration of the preliminary statements and the respective
covenants, representations and warranties contained in this Agreement, and
intending to be legally bound, the parties agree as set forth below.
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Acquisition Common Stock" means the common stock of Acquisition, par
value $.01 per share.
"Affiliate" has the meaning specified in Rule 144 promulgated by the
SEC under the Securities Act.
"Agreement" means this Acquisition Agreement together with all exhibits
and schedules referred to herein.
"Average Price" means the average of the closing sale prices per share
of Class A Common Stock on the NYSE for the period of 10 consecutive trading
days ending with (and including) the second trading day prior to the Closing
Date.
"Class A Common Stock" means the Class A Common Stock of Bancorp, par
value $0.01 per share.
"Class B Common Stock" means the Class B Common Stock of Bancorp, par
value $0.01 per share.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Common Stock" means the common stock of the Company, par value
$0.10 per share.
"Company Preferred Stock" means the preferred stock of the Company, par
value $0.10 per share.
"Company Subsidiary" means a Subsidiary of the Company.
"Cumberland Transaction" means the acquisition of Cumberland Advisors,
a New Jersey general partnership, substantially on the terms set forth in the
merger agreement relating to such acquisition as described in the disclosure
schedules to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Florida BCA" means the Business Corporation Act of the State of
Florida.
"Guaranty" means, as to any Person, any contract, agreement or
understanding of such Person pursuant to which such Person guarantees the
indebtedness, liabilities or obligations of others, directly or indirectly, in
any manner, including agreements to purchase such indebtedness, liabilities or
obligations, or to supply funds to or in any manner invest in others, or to
otherwise assure the holder of such indebtedness, liabilities or obligations
against loss.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Knowledge" or "known", whether or not capitalized, means, with respect
to any representation or warranty or other statement in this Agreement qualified
by the knowledge of any party, that such party has made a reasonable
investigation as to the matters that are the subject of such representation,
warranty or other statement. Where reference is made to the knowledge of Bancorp
or the Company, such reference shall be deemed to include the officers and
managerial employees of Bancorp or the Company, respectively, all of whom shall
be deemed to have conducted the investigation required by this definition.
"Lien" means any lien, encumbrance, charge, security interest,
restriction (including any restriction on voting rights or disposition),
default, equity, claim or third party right of any nature whatsoever.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on the business, operations, financial condition, results of
operations or business prospects of such Person and its Subsidiaries, considered
as one enterprise.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the National Market Segment of the NASDAQ Stock Market.
"New Jersey BCA" means the Business Corporation Act of the State of New
Jersey.
"NYSE" means the New York Stock Exchange, Inc.
"Person" means any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, limited liability
company, joint venture, trust or government, or any agency or political
subdivision of any government, or any other entity.
"Regulatory Agency" means any federal, state or foreign governmental or
regulatory agency or authority or any Self-Regulatory Body.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Self-Regulatory Body" means any non-governmental self-regulatory
agency, commission or authority.
"Stockholder Voting Agreements" mean those certain agreements, in the
form attached hereto as Exhibit A, between certain stockholders of the Company
and Bancorp, dated as of the date hereof, pursuant to which, among other things,
each of such stockholders has agreed to vote his shares of Company Common Stock
in favor of the Merger.
"Subsidiary" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.
ARTICLE I
THE MERGER
1.1 Merger: Closing Date, Closing and Effective Time. Unless a
different date, time and/or place are agreed to by the parties hereto, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m., at such
place and on a date determined by Bancorp on at least five business days notice
(the "Closing Notice") given to the Company, which date (the "Closing Date")
shall be as soon as practicable following the receipt of all necessary approvals
and consents of all Regulatory Agencies and the expiration of all statutory
waiting periods in respect thereof and the satisfaction or waiver of all of the
conditions to the consummation of the Merger specified in Article VI hereof
(other than the delivery of certificates, opinions and other instruments and
documents to be delivered at the Closing). Simultaneous with or immediately
following the Closing, Bancorp and the Company shall cause to be filed a
certificate of merger in accordance with Section 10.7 of the New Jersey BCA, in
form and substance satisfactory to Bancorp and the Company, with the Secretary
of State of the State of New Jersey (the "Certificate of Merger"). The
Certificate of Merger shall specify as the "Effective Time" of the Merger a date
and time following the Closing agreed to by Bancorp and the Company (which date
and time the parties currently anticipate will be the close of business on the
Closing Date). In the event the parties fail to specify the date and time in the
Certificate of Merger, the Merger shall become effective upon (and the
"Effective Time" shall be) the filing of the Certificate of Merger. (As used
herein, the "Effective Date" of the Merger shall be the date of the Effective
Time.) The separate corporate existence of the Company shall thereupon cease and
Acquisition shall be the surviving corporation (the "Surviving Corporation") and
the separate corporate existence of Acquisition shall continue unaffected and
unimpaired by the Merger.
1.2 Certificate of Incorporation of Surviving Corporation. From and
after the Effective Time, and until further amended in accordance with the New
Jersey BCA, the Certificate of Incorporation of Acquisition shall be the
Certificate of Incorporation of the Surviving Corporation, except that after the
Effective Date of the Merger, the name of Acquisition shall be "▇▇▇▇, ▇▇▇▇ &
Co., Inc.".
1.3 Bylaws of Surviving Corporation. The Bylaws of Acquisition, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until duly amended in accordance with such Bylaws and
applicable law.
1.4 Officers and Directors of Surviving Corporation. As of the
Effective Date, the officers and directors of the Surviving Corporation shall be
as mutually agreed to by the parties prior to the Effective Time, who shall
serve in each case until their respective successors are duly appointed or
elected and qualified, or until their earlier death, resignation or removal.
1.5 Articles of Incorporation of Bancorp. The Articles of Incorporation
of Bancorp shall not be affected by the Merger.
ARTICLE II
CONSIDERATION; SHARE EXCHANGE; OPTIONS
2.1 Conversion of Company Common Stock. At the Effective Time, each
share of Company Common Stock which is issued and outstanding immediately prior
to the Effective Time shall be converted without any action on the part of the
holder thereof into and be exchangeable for 0.609 shares of Class A Common Stock
(the "Conversion Ratio") (rounded to the nearest thousandth of a share), subject
to adjustment as provided in Section 7.1(m) hereof and subject to the payment of
cash in lieu of fractional shares in accordance with Section 2.6 hereof.
In the event Bancorp effects a stock split, stock dividend,
recapitalization or similar transaction with respect to Bancorp's outstanding
Class A Common Stock prior to the Effective Time, the Conversion Ratio set forth
in this Section 2.1 and the Average Price "collar" of $13.60 set forth in
Section 7.1(m) shall be proportionately adjusted as appropriate. For example,
with respect to the previously announced 25% stock dividend payable on February
18, 1998 to holders of record of Class A Common Stock on February 4, 1998, the
Conversion Ratio will be adjusted to .761 and the Average Price "collar" of
$13.60 set forth in Section 7.1(m) will be adjusted to $10.88.
2.2 Impact on Stock Options. At the Effective Time, each unexpired and
unexercised option to purchase shares of Company Common Stock (other than under
the Company Stock Option Agreement), whether or not then exercisable (a Company
Option"), shall be assumed by Bancorp, and each Company Option shall be
converted automatically into an option to purchase a number of shares of the
Class A Common Stock (a "Substitute Option") equal to the number of shares of
Company Common Stock that could have been purchased under the Company Option
multiplied by the Conversion Ratio as determined in Section 2.1 (except that
upon exercise any options to purchase fractional shares resulting from any such
adjustment shall be eliminated unless the terms of the option award provides
otherwise), at a price per share of Company Common Stock equal to the option
exercise price under the Company Option, divided by the Conversion Ratio as
determined in Section 2.1 (with the resulting exercise price rounded to the
nearest whole cent), provided that in the case of any Company Option intended to
qualify as an incentive stock option under Section 422 of the Code, the option
price, the number of shares purchasable pursuant to such option and the terms
and conditions of exercise of such option shall be determined in compliance with
Section 424(a) of the Code. The duration, vesting and other terms of the
Substitute Options shall be the same as the original Company Options, except
that references to the Company shall be deemed to be references to Bancorp.
2.3 Conversion of Acquisition Common Stock. At the Effective Time,
each share of Acquisition Common Stock that is issued and outstanding
immediately prior to the Effective Time shall thereafter represent one validly
issued, fully paid and nonassessable share of common stock of the Surviving
Corporation.
2.4 Exchange of and Payment for Company Common Stock.
(a) Bancorp will cause the exchange agent selected by Bancorp
(which shall be an exchange agent reasonably acceptable to the Company) (the
"Exchange Agent") to send to each record holder of shares of Company Common
Stock which shall have been converted into shares of Class A Common Stock in the
Merger an appropriate letter of transmittal for purposes of such stockholder's
obtaining certificates representing such shares of Class A Common Stock, which
letter of transmittal shall be mailed to such stockholder's address of record
provided by the Company. As soon as practicable after the Effective Time and
after surrender to the Exchange Agent of a properly executed letter of
transmittal and any certificates which immediately prior to the Effective Time
shall have represented any then issued and outstanding shares of Company Common
Stock, Bancorp shall, subject to the provisions of Section 2.4(c) hereof, cause
to be distributed to the person in whose name such Company Common Stock shall
have been registered, certificates registered in the name of such person
representing the shares of Class A Common Stock into which such shares of
Company Common Stock shall have been converted at the Effective Time and a check
payable to such person representing the payment of cash in lieu of fractional
shares determined in accordance with Section 2.6 hereof. Until surrendered as
contemplated by the preceding sentence, each certificate which immediately prior
to the Effective Time shall have represented any then issued and outstanding
shares of Company Common Stock shall be deemed at and after the Effective Time
to represent only the right to receive, upon such surrender, the certificates
and payment contemplated by the preceding sentence.
(b) No dividends or other distributions declared after the
Effective Time with respect to shares of Class A Common Stock and payable to the
holders of record thereof after the Effective Time shall be paid with respect to
Company Common Stock converted into Class A Common Stock in the Merger until
such properly executed letter of transmittal and any unsurrendered certificates
representing such shares of Company Common Stock are surrendered as provided
herein. Upon the surrender of such letter of transmittal and any such
outstanding certificates, however, there shall be paid to the record holder of
the certificates of Class A Common Stock issued in exchange for the shares of
Company Common Stock, the aggregate amount of dividends and distributions, if
any, which theretofore became payable in respect of the shares of Class A Common
Stock into which such Company Common Stock is converted, subject in any case to
any applicable escheat laws and unclaimed property laws. No interest shall be
payable on or in respect of the payment of such dividends or cash in lieu of
fractional shares on surrender of outstanding certificates.
(c) If any cash or certificate representing shares of Class A
Common Stock is to be paid to or issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it shall be a
condition of the payment or issuance thereof that the certificate so surrendered
shall be properly endorsed and otherwise in proper form for transfer and that
the person requesting such exchange shall pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of a certificate representing
shares of Class A Common Stock in any name other than that of the registered
holder of the certificate surrendered.
(d) Any portion of the Class A Common Stock or cash in lieu of
fractional shares payable hereunder that remains unclaimed by the stockholders
of the Company for 12 months after the Effective Time shall, if on deposit with
the Exchange Agent, be paid to the Company. Any stockholders of the Company who
have not theretofore complied with this Article II shall thereafter look only to
the Company for payment of the shares of Class A Common Stock or cash in lieu of
any fractional shares and any unpaid dividends and distributions on the Class A
Common Stock deliverable in respect of each share of Company Common Stock such
stockholder holds as determined pursuant to this Agreement without any interest
thereon. Notwithstanding the foregoing, none of the Company, Bancorp, the
Exchange Agent or any other person shall be liable to any former holder of
shares of Company Common Stock for any amount delivered in good faith to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(e) In the event any certificate which, immediately prior to
the Effective Time, represented Company Common Stock 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 the posting by
such person of a bond in such amount as Bancorp or the Exchange Agent may
determine is reasonably necessary as indemnity against any claim that may be
made against it with respect to such certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed certificate the shares of Class A
Common Stock and any cash in lieu of fractional shares deliverable in respect
thereof pursuant to this Agreement.
2.5 No Further Transfers of Company Common Stock. After the Effective
Time, there shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates representing such outstanding shares are presented
to the Surviving Corporation, they shall be canceled and exchanged for
certificates representing the shares of Class A Common Stock or cash in lieu of
fractional shares into which they were converted, or both, as provided in this
Article II.
2.6 Cash in Lieu of Fractional Shares. Notwithstanding any other
provision of this Agreement, no certificates or scrip representing fractional
shares of Class A Common Stock shall be issued upon the conversion of shares
which prior to the Effective Time shall have represented any then outstanding
shares of Company Common Stock, no dividend or distribution of Bancorp shall
relate to any fractional share otherwise issuable pursuant to the terms hereof
and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a shareholder of Bancorp. In lieu of any fractional shares,
there shall be paid to each holder of shares of Company Common Stock who
otherwise would be entitled to receive a fractional share of Class A Common
Stock, an amount of dollars in cash (without interest) determined by multiplying
such fraction by the Average Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Bancorp as follows:
3.1 Organization, Standing and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey. The Company is duly qualified to do business and is
in good standing in each jurisdiction (whether federal, state, local or foreign)
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified, except where the failure to be duly qualified is
not reasonably likely to have a Material Adverse Effect on the Company. The
Company and each of the Company Subsidiaries has in effect all federal, state,
local, and foreign governmental authorizations necessary for it to own or lease
its properties and assets and to carry on its business as it is now conducted.
The Company and each of the Company Subsidiaries has the corporate power and
authority to carry on its business as it is now being conducted and to own or
lease all its properties and assets.
3.2 Capitalization. The authorized capital stock of the Company
consists of 30,000,000 shares of Company Common Stock, of which, as of the date
hereof, 3,594,933 shares were issued and outstanding and 88,000 were held in
treasury, and 2,000,000 shares of Company Preferred Stock, none of which, as of
the date hereof, were issued and outstanding and none of which were held in
treasury. All of the issued and outstanding shares of Company Common Stock have
been duly authorized and validly issued and are fully paid, non-assessable and
free of common law, statutory or contractual preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of this Agreement,
except as set forth on Schedule 3.2 and except for the Company Stock Option
Agreement, the Company does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, stock appreciation rights, commitments
or agreements of any character calling for the purchase or issuance of any
shares of Company Common Stock or any other equity securities of the Company or
any securities representing the right to purchase or otherwise receive any
shares of Company Common Stock. Schedule 3.2 sets forth, as of the date hereof,
the number of shares of Company Common Stock that were reserved for issuance
upon the exercise of Company Options and the number of shares of Company Common
Stock purchasable under such options. Except as set forth in Schedule 3.2 and
except for shares reserved in connection with the Company Stock Option
Agreement, no other shares of Company Common Stock were reserved for issuance.
The Company has previously provided Bancorp with a list, as of the date hereof,
of the holders of Company Options, the date of each grant of a Company Option,
the number of shares subject to each such Company Option, the expiration date of
each such Company Option, the vesting schedule of each such Company Option and
the price at which each such Company Option may be exercised. Except as set
forth on Schedule 3.2 and except for the Company Stock Option Agreement, there
are no outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire, or to register for sale,
any shares of capital stock of the Company. Except as set forth on Schedule 3.2,
there are no outstanding contractual obligations of the Company or any Company
Subsidiary to vote or to dispose of any shares of the capital stock of any
Company Subsidiary.
3.3 Company Subsidiaries. Schedule 3.3 sets forth a list of all the
Company Subsidiaries, including the jurisdictions (whether federal, state, local
or foreign) in which such Company Subsidiaries are organized or qualified to do
business as a foreign corporation, a brief description of such Company
Subsidiary's principal activities and, if any of such Company Subsidiaries is
not wholly-owned by the Company or a Company Subsidiary, the percentage owned by
the Company or any Company Subsidiary and the names, addresses and percentage
ownership of any Person having an ownership interest in such Company Subsidiary.
No equity securities of any of the Company Subsidiaries are or may become
required to be issued (other than to the Company or a wholly-owned Company
Subsidiary), and there are no contracts, commitments, understandings or
arrangements by which any of the Company Subsidiaries is or may be bound to sell
or otherwise issue any shares of its capital stock, and there are no contracts,
commitments, understandings or arrangements relating to the rights of the
Company to vote or to dispose of such shares. All of the shares of capital stock
of each Company Subsidiary are fully paid and nonassessable and subject to no
common law, statutory or contractual preemptive rights and, except as set forth
on Schedule 3.3, are owned by the Company or a Company Subsidiary free and clear
of any Liens. Each Company Subsidiary is in good standing under the laws of the
jurisdiction in which it is incorporated or organized, and is duly qualified to
do business and in good standing in each jurisdiction (whether federal, state,
local or foreign) where its ownership or leasing of property or the conduct of
its business requires it to be so qualified, except where the failure to be duly
qualified would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on the Company. Except as set forth on Schedule
3.3, the Company does not own beneficially, directly or indirectly, any equity
securities or similar interests of any Person. Schedule 3.3 sets forth a list of
all equity securities the Company holds, directly or indirectly, and involving,
in the aggregate, ownership or control of 5% or more of any class of the
issuer's voting securities or 25% or more of the issuer's equity (treating
subordinated debt as equity); provided, that the Company is not required to list
on Schedule 3.3 any (i) securities held by it in its capacity as a broker-dealer
for the benefit of others, (ii) securities with a value of less than $250,000
held by it in its capacity as a market maker, and (iii) securities held by it
for less than thirty (30) days in its capacity as a market-maker. Schedule 3.3
lists or describes in reasonable detail all partnership, joint ventures or
similar entities, in which the Company owns or controls an interest, directly or
indirectly.
3.4 Corporate Authority. The Company has full corporate power and
authority to execute this Agreement and the Company Stock Option Agreement and
to consummate the transactions contemplated hereby and thereby. Subject to the
approval by its stockholders of this Agreement and the transactions contemplated
hereby, this Agreement and the Company Stock Option Agreement have been
authorized by all necessary corporate action of the Company and each is a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms.
3.5 No Violation. Except as set forth on Schedule 3.5, the execution,
delivery and performance of this Agreement and the Company Stock Option
Agreement and the consummation by the Company of the transactions contemplated
hereby and thereby, does not and will not (i) violate or conflict with the
Certificate of Incorporation or by-laws or other organizational documents of the
Company or of any Company Subsidiary and (ii) assuming that the consents and
approvals referred to in Section 3.6 are duly obtained (a) violate, conflict
with, or result in a breach of any of the provisions of, or constitute a default
(or an event which, with notice of lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration, or the
creation of any Lien upon any of the properties or assets of the Company or any
Company Subsidiary under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary may be bound, or to
which the Company or any Company Subsidiary or any of their respective
properties or assets may be subject, or (b) violate any judgment, ruling, order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any Company Subsidiary or any of their respective properties or assets other
than violations, conflicts, breaches, defaults, terminations, accelerations, or
Lien creations which would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on the Company or prevent the
consummation of the transactions contemplated by this Agreement or the Company
Stock Option Agreement.
3.6 Consent and Approvals. Other than in connection with (a) the HSR
Act, (b) the Securities Act, (c) the Exchange Act, (d) the securities laws of
any federal, state, local or foreign jurisdiction, and except as set forth on
Schedule 3.6, no consent, approval or authorization of, or registration,
qualification or filing with any federal, state, local or foreign Regulatory
Agency or other Person is required to be made by the Company in connection with
the execution, delivery or performance by the Company of this Agreement or the
Company Stock Option Agreement or the consummation by the Company of the
transactions contemplated hereby or thereby, other than consents, approvals,
authorizations, registrations, qualifications or filings, the failure of which
to obtain or make would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Company or prevent the consummation
of the transactions contemplated by this Agreement or the Company Stock Option
Agreement.
3.7 Company Reports. Except as set forth on Schedule 3.7, the Company
and each Company Subsidiary has in all material respects timely filed all
reports, registrations, statements, and other filings, together with any
amendments required to be made with respect thereto, that were required to be
filed since December 31, 1994 with any Regulatory Agency, including, without
limitation, the SEC or the NASD (all such reports and statements, including the
financial statements, exhibits and schedules thereto, being collectively
referred to herein as the "Company Reports"), including, without limitation, all
reports, registrations, statements and filings required under the Securities
Act, the Exchange Act or any applicable state securities or "blue sky" laws, and
has paid all fees and assessments payable in connection therewith. As of their
respective dates, except as and to the extent amended or modified on a
subsequent date prior to the date of this Agreement, each of the Company Reports
complied in all material respects with the statutes, rules, regulations and
orders enforced or promulgated by the Regulatory Agency (including the SEC or
the NASD) 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 to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
3.8 Financial Statements. The Company has previously made available
to Bancorp copies of (a) the consolidated balance sheets of the Company and the
Company Subsidiaries as of December 31 for the fiscal years 1995 and 1996, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for the fiscal years then ended, as reported in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"Company 1996 Form 10-K") filed with the SEC under the Exchange Act, in each
case accompanied by the audit report of Deloitte & Touche, LLP, independent
public accountants with respect to the Company and (b) the unaudited
consolidated balance sheet of the Company and the Company Subsidiaries as of
September 30, 1997 and related consolidated statements of income, changes in
stockholders' equity and cash flows for the nine months then ended as reported
in the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1997 (collectively, the "Company Financial Statements"). The December 31,
1996 and the September 30, 1997 consolidated balance sheets of the Company
(including the related notes, where applicable) fairly present in all material
respects (subject, in the case of the unaudited statements, to recurring audit
adjustments normal in nature and amount) the consolidated financial position of
the Company and the Company Subsidiaries as of the respective dates thereof, and
the other Company Financial Statements referred to in this Section 3.8, and any
Company Financial Statements filed by the Company with the SEC under the
Exchange Act after the date of this Agreement (including the related notes,
where applicable) will fairly present in all material respects (subject, in the
case of the unaudited statements, to recurring audit adjustments normal in
nature and amount) the results of the consolidated operations and changes in
stockholders' equity and consolidated financial position of the Company and the
Company Subsidiaries for the respective fiscal periods or as of the respective
dates therein set forth. Each of such Company Financial Statements (including
the related notes, where applicable) complies in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, and each of the Company Financial Statements
(including the related notes, where applicable) has been prepared in accordance
with generally accepted accounting principles consistently applied ("GAAP")
during the periods involved except, in each case, as indicated in such Company
Financial Statements or in the notes thereto. The books and records of the
Company and the Company Subsidiaries have been, and are being, maintained in
accordance with GAAP and any other applicable legal and accounting requirements.
3.9 Absence of Undisclosed Liabilities. Except as disclosed in the
Company Financial Statements, or as set forth on Schedule 3.9, neither the
Company nor any of the Company Subsidiaries has any obligation or liability
(contingent or otherwise), including liabilities under Environmental Laws (as
hereinafter defined), that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect on the Company.
3.10 Absence of Certain Changes. The business of the Company and the
Company Subsidiaries has been conducted in the ordinary and usual course,
consistent with past practice, and there has not been: (1) since December 31,
1996, any event, occurrence, development or state of circumstances or facts
which has had or could reasonably be expected to constitute or result in a
Material Adverse Effect on the Company; or (2) since September 30, 1997, except
as set forth on Schedule 3.10 or in the Company Reports, any event, occurrence,
development or state of circumstances or facts which would result in a violation
of the covenants set forth in Section 5.1 of this Agreement had such events,
occurrences, developments or state of circumstances or facts occurred after the
date hereof.
3.11 Properties; Securities. Except as specifically reserved against
or otherwise disclosed in the Company Financial Statements (including the
related notes and schedules thereto) and except for those properties and assets
that have been sold or otherwise disposed of in the ordinary course of business,
and except as set forth on Schedule 3.11, the Company and the Company
Subsidiaries have good and marketable title, free and clear of all Liens to all
of the properties and assets, tangible or intangible, reflected in the Company
Financial Statements as being owned by the Company or the Company Subsidiaries
as of the dates thereof, other than those Liens that, individually or in the
aggregate, are not reasonably like to have a Material Adverse Effect on the
Company. The Company and the Company Subsidiaries do not, directly or
indirectly, control any real property not used in the ordinary course of their
business, except as set forth on Schedule 3.11. All buildings and all fixtures,
equipment and other property and assets which are held under leases or subleases
by any of the Company or the Company Subsidiaries are held under valid leases or
subleases enforceable in accordance with their respective terms. The properties
and assets now owned, leased or used by the Company and the Company Subsidiaries
are sufficient and adequate to carry on their businesses as presently conducted.
Except as set forth on Schedule 3.11 or reflected on the Company Financial
Statements, each of the Company and the Company Subsidiaries has good and
marketable title to all securities held by it (except securities sold under
repurchase agreements or held in any fiduciary or agency capacity), free and
clear of any Lien. Such securities are valued on the books of the Company or the
Company Subsidiaries in accordance with GAAP.
3.12 Litigation; Regulatory Action.
(a) Except as set forth on Schedule 3.12(a) or in the Company
Reports, (1) no litigation, proceeding or controversy ("Litigation") before any
court, arbitrator, mediator or Regulatory Agency is pending against the Company
or any of the Company Subsidiaries and, to the Company's knowledge, no such
Litigation has been threatened; (2) neither the Company nor any of the Company
Subsidiaries nor any of their respective properties is a party to or is subject
to any order, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, any
Regulatory Agency charged with the supervision or regulation of broker-dealers,
securities underwriting or trading, stock exchanges, commodities exchanges, or
insurance agents and brokers (including, without limitation, the SEC, the NYSE,
the NASD, or any other Self-Regulatory Body) or the supervision or regulation of
the Company or any of the Company Subsidiaries; and (3) neither the Company nor
any of the Company Subsidiaries has received any notice (whether or not in
writing) from any Regulatory Agency (i) that the Company or any Company
Subsidiary has or may have violated any of the statutes, rules, regulations, or
ordinances which such Regulatory Agency enforces, or has otherwise engaged in
any unlawful business practice, (ii) threatening to revoke any license,
franchise, permit, seat on any stock or commodities exchange, or governmental
authorization, (iii) requiring any of them (including any of the Company's or
the Company Subsidiary's, directors or controlling persons) to enter into a
cease and desist order, agreement, or memorandum of understanding (or requiring
the board of directors thereof to adopt any resolution or policy), (iv)
restricting or disqualifying the activities of the Company or any of the Company
Subsidiaries (except for restrictions generally imposed by rule, regulation or
administrative policy on broker-dealers generally) or (v) in any manner relating
to its capital adequacy, its management or its business. Set forth on Schedule
3.12(a) is a true and complete list, as of the date hereof, of all Litigation
affecting the Company, its assets or its officers or directors (to the extent
the Company might be obligated to provide indemnification with respect thereto)
pending or threatened arising out of any state of facts relating to the sale of
securities or investment products by the Company, the Company Subsidiaries or
any employees thereof (including, without limitation, equity or debt securities,
mutual funds, insurance contracts, annuities, partnership and limited
partnership interests, interests in real estate, investment banking services,
securities underwritings in which the Company or any Company Subsidiaries was a
manager, co-manager, syndicate member or distributor, Derivatives Contracts (as
hereinafter defined) or structured notes).
(b) Except as disclosed in Schedule 3.12(b), and except for
normal examinations conducted by a Regulatory Agency in the regular course of
the business of the Company and the Company Subsidiaries, no Regulatory Agency
has initiated any proceeding or, to the knowledge of the Company, investigation
into the business or operations of the Company or any Company Subsidiary since
December 31, 1994. Except as set forth on Schedule 3.12(b), there is no material
unresolved violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any Company Subsidiary.
3.13 Compliance with Laws. Except as set forth on Schedule 3.13, the
Company and each of the Company Subsidiaries and their respective officers and
employees: (a) in the conduct of its business (including, without limitation,
its municipal securities and NASDAQ market-making activities) is in compliance
in all material respects with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto or to the employees conducting such businesses, and the rules
of all Self-Regulatory Bodies applicable thereto; (b) has all permits, licenses,
authorizations, orders and approvals of, and has made all filings, applications
and registrations with, all Regulatory Agencies that are required in order to
permit them to own and operate their businesses as presently conducted; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect and, to the Company's knowledge, no suspension or cancellation
of any of them is threatened or reasonably likely; and all such filings,
applications and registrations are current; and (c) is not aware of any pending
or threatened investigation, review or disciplinary proceedings by any
Regulatory Agency against the Company, any Company Subsidiary or any officer,
director or employee thereof.
3.14 Registrations. Except as set forth on Schedule 3.14, neither the
Company, nor any of the Company Subsidiaries or Affiliates of the Company, is
subject to regulation under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or the Investment Advisors Act of 1940, as amended
(the "Investment Advisors Act"). The Company and the Company Subsidiaries and
each of their employees which are or who are required to be registered as a
broker/dealer, a registered representative, an insurance agent or a sales person
with the SEC, the securities commission of any state or foreign jurisdiction or
any Self-Regulatory Body are duly registered as such and in good standing and
such registrations are in full force and effect. All federal, state and foreign
registration requirements have been complied with and such registrations as
currently filed, and all periodic reports required to be filed with respect
thereto, are accurate and complete in all material respects.
3.15 Material Contracts.
(a) Except as set forth on Schedule 3.15(a), neither the
Company nor any Company Subsidiary is a party to or bound by any contract,
arrangement, commitment or understanding (each a "Contract") (i) with respect to
the employment of any directors, executive officers, key employees or material
consultants, (ii) which is a "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K promulgated by the SEC under the Securities
Act) that has not been filed or incorporated by reference in the Company
Reports, (iii) which contains any material non-competition or exclusivity
provisions with respect to any business or geographic area in which business is
conducted with respect to the Company or any Company Subsidiary or which
restricts the conduct of any business by the Company or any Company Subsidiary
or any geographic area in which the Company or any Company Subsidiary may
conduct business or requires exclusive referrals of any business, (iv) with or
to a labor union or guild (including any collective bargaining agreement), (v)
under which any of the benefits of any other party thereto will be increased, or
the vesting of the benefits of any other party thereto will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement, or the
value of any of the benefits of any other party thereto will be calculated on
the basis of any of the transactions contemplated by this Agreement or (vi)
which would prohibit or materially delay the consummation of the Merger or any
of the transactions contemplated by this Agreement. The Company has previously
made available to Bancorp true and correct copies of all employment, severance
and deferred compensation agreements with executive officers, key employees or
material consultants to which the Company or any Company Subsidiary is a party,
all of which are listed on Schedule 3.15(a). Each Contract of the type described
in this Section 3.15(a), whether or not set forth on Schedule 3.15(a), is
referred to herein as a "Company Contract", and neither the Company nor any
Company Subsidiary knows of, or has received notice of, any violation of any
Company Contract by any of the other parties thereto. Except as set forth on
Schedule 3.15(a), neither the Company nor any of the Company Subsidiaries is in
material default under any Company Contract to which it is a party, by which its
respective assets, business, or operations may be bound or affected, or under
which it or its respective assets, business, or operations receives benefits and
there has not occurred any event that with the lapse of time or the giving of
notice or both, would constitute such a material default. Except as set forth on
Schedule 3.15(a), there are no Contracts between any Affiliate of the Company,
on the one hand, and the Company or any Company Subsidiary, on the other hand.
(b) The Company and each of the Company Subsidiaries is in
compliance in all material respects with the terms of each Contract with any
Person to whom the Company or any Company Subsidiary provides services (a
"Client"), and each such Contract is in full force and effect with respect to
the applicable Client. Each extension of credit by the Company or any of the
Company Subsidiaries to any Client (i) is in full compliance with Regulation T
of the Federal Reserve Board or any substantially similar regulation of any
Regulatory Agency, (ii) is fully secured, and (iii) the Company or a Company
Subsidiary, as the case may be, has a first priority perfected security interest
in the collateral securing such extension.
3.16 No Brokers. Neither the Company nor any Company Subsidiary nor
any of their respective officers or directors has employed any broker or finder
or incurred any liability for any broker's fees, commissions or finder's fees in
connection with the Merger or the transactions contemplated by this Agreement.
It shall not be deemed a breach of this Section 3.16 for the Company to employ
an investment banking firm to provide a fairness opinion in connection with the
transactions contemplated by this Agreement.
3.17 Employee Benefit Plans.
(a) Set forth on Schedule 3.17(a) is a complete list of all
bonus, deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted stock
and stock option plans, all employment or severance contracts, all medical,
dental, health and life insurance plans, all other employee benefit plans,
contracts or arrangements and any applicable "change of control" or similar
provisions in any plan, contract or arrangement maintained or contributed to by
the Company or any of the Company Subsidiaries for the benefit of employees,
former employees, directors or former directors of the Company or any of the
Company Subsidiaries or their beneficiaries (the "Compensation and Benefit
Plans"). True and complete copies of all Compensation and Benefit Plans,
including, but not limited to, any trust instruments and/or insurance contracts,
if any, forming a part thereof, and all amendments thereto have been supplied to
Bancorp.
(b) All "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), other than "multiemployer plans" within the meaning of Section 3(37)
of ERISA ("Multiemployer Plans"), covering employees or former employees of the
Company and the Company Subsidiaries (the "ERISA Plans"), to the extent subject
to ERISA, comply, in all material respects, with ERISA. Except as set forth on
Schedule 3.17(b), each ERISA Plan which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA ("Pension Plan") and which is
intended to be qualified, under Section 401(a) of the Code, has received,
pursuant to a request that accurately described such Pension Plan, a
determination letter to that effect from the Internal Revenue Service with
respect to all applicable statutes as enacted through 1994, and the Company is
not aware of any circumstances reasonably likely to result in the revocation of
any such favorable determination letter or that otherwise would adversely affect
the Pension Plan's qualified status under Code Section 401(a). There are no
pending, threatened or anticipated material claims (other than routine claims
for benefits) by, or on behalf of, or against any of the ERISA Plans. Neither
the Company nor any of the Company Subsidiaries has engaged in a transaction
with respect to any ERISA Plan that would subject the Company or any of the
Company Subsidiaries to a tax or penalty imposed by either Section 4975 of the
Code or Section 502(i) of ERISA in an amount which would be material to the
Company. With respect to each ERISA Plan, the transaction contemplated by this
Agreement is in compliance with ERISA and does not constitute a prohibited
transaction, within the meaning of the Code and ERISA, or an exemption from such
prohibition is available under the Code and ERISA.
(c) No liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by the Company or any of the Company
Subsidiaries with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is
considered one employer with the Company or any Company Subsidiary under Section
4001(a)(15) of ERISA or Section 414 of the Code (an "ERISA Affiliate"). Neither
the Company nor any of the Company Subsidiaries presently contributes to a
Multiemployer Plan, nor have they contributed to such a plan within the past
five calendar years. No notice of a "reportable event", within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any Pension Plan or by any ERISA
Affiliate within the past 12 months.
(d) All contributions required to be made under the terms of
any ERISA Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the
Code or Section 302 of ERISA. Neither the Company nor any of the Company
Subsidiaries has provided, or is required to provide, security to any Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(e) Under each Pension Plan which is a single-employer plan,
as of the last day of the most recent plan year, the actuarially determined
present value of all "benefit liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the actuarial assumptions
contained in the plan's most recent actuarial valuation) did not exceed the then
current value of the assets of such Plan, and there has been no material change
in the financial condition of such plan since the last day of the most recent
plan year.
(f) Neither the Company nor any of the Company Subsidiaries
has any obligations for retiree health and life benefits under any plan, except
as set forth on Schedule 3.17(f). There are no restrictions on the rights of the
Company or any of the Company Subsidiaries to amend or terminate any such Plan
without incurring any liability thereunder.
(g) Except as set forth on Schedule 3.17(g), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of the Company or any of
the Company Subsidiaries under any Compensation and Benefit Plan or otherwise
from the Company or any of the Company Subsidiaries, (ii) increase any benefits
otherwise payable under any Compensation and Benefit Plan, (iii) result in any
acceleration of the time of payment or vesting of any such benefit, or (iv)
result in the imposition to the recipient of any excise tax pursuant to Section
4999 of the Code.
3.18 No Knowledge. The Company knows of no reason why the regulatory
approvals referred to in Section 6.1(b) should not be obtained without the
imposition of any condition of the type referred to in such Section 6.1(b).
3.19 Labor Relations. Each of the Company and the Company
Subsidiaries is in compliance with all currently applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, including, without limitation, the Immigration Reform and
Control Act, the Worker Adjustment and Retraining Notification Act, any such
laws respecting employment discrimination, disability rights or benefits, equal
opportunity, plant closure issues, affirmative action, workers' compensation,
employee benefits, severance payments, labor relations, employee leave issues,
wage and hour standards, occupational safety and health requirements and
unemployment insurance and related matters. Neither the Company nor any of the
Company Subsidiaries is engaged in any unfair labor practice and there is no
unfair labor practice complaint pending or threatened against the Company or any
of the Company Subsidiaries before the National Labor Relations Board. Neither
the Company nor any of the Company Subsidiaries is a party to, or is bound by,
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is the Company or
any of the Company Subsidiaries the subject of a proceeding asserting that it or
any such Company Subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel the Company or
such Company Subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving the Company or any of the Company Subsidiaries pending or, to the
Company's knowledge, threatened, nor is the Company aware of any activity
involving its or any of the Company Subsidiaries' employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
3.20 Insurance. The Company and the Company Subsidiaries are insured
with reputable insurers against such risks and in such amounts as the management
of the Company reasonably has determined to be prudent in accordance with
industry practices. All of the insurance policies, binders, or bonds maintained
by the Company or the Company Subsidiaries are in full force and effect; the
Company and the Company Subsidiaries are not in default thereunder; and all
claims thereunder have been filed in due and timely fashion. Set forth on
Schedule 3.20 is a list of all insurance policies maintained by or for the
benefit of the Company or the Company Subsidiaries or their directors, officers,
employees or agents.
3.21 Affiliates. Except as set forth on Schedule 3.21, there is no
person who, as of the date of this Agreement, may be deemed to be an Affiliate
of the Company.
3.22 State Takeover Laws; Certificate of Incorporation. The Company
has taken all necessary action to exempt the Merger, this Agreement, the Company
Stock Option Agreement and the transactions contemplated hereby and thereby
from, and the Merger, this Agreement, the Company Stock Option Agreement and the
transactions contemplated hereby and thereby are exempt from (a) any applicable
state takeover laws, including, without limitation, the provisions of Sections
14A:10A-1 through 14A:10A-6 of the New Jersey BCA, (b) any applicable takeover
provisions in the Company's Certificate of Incorporation or By-laws, and (c) any
takeover provisions set forth in any Contract to which the Company is a party or
may be bound.
3.23 Environmental Matters. The Company and the Company Subsidiaries
have obtained and maintained in effect all material licenses, permits and other
authorizations required under all applicable laws, regulations and other
requirements of governmental or regulatory authorities relating to pollution or
to the protection of the environment ("Environmental Laws") and is in compliance
in all material respects with all Environmental Laws and with all such licenses,
permits and authorizations. There are no legal, administrative, arbitral or
other proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that could reasonably result in the imposition, on
the Company or any Company Subsidiary, of any material liability or obligation
arising under common law or under any local, state or federal Environmental Law
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), pending or
threatened against the Company or any Company Subsidiary. To the knowledge of
the Company, there is no reasonable basis for any such proceeding, claim, action
or governmental investigation.
3.24 Taxes. Except as set forth on Schedule 3.24, (a) all federal,
state, local or foreign income, gross receipts, windfall profits, severance,
property, production, sales, use, license, excise, franchise, employment,
premium, recording, documentary, documentary stamp, real estate transfer,
transfer, back-up withholding or similar taxes, together with any interest,
additions, or penalties with respect thereto (collectively "Taxes"), imposed on
the income, properties or operations of the Company or the Company Subsidiaries
have been paid in full or have been adequately reserved against on the books of
the Company or the Company Subsidiaries, (b) all reports and returns with
respect to Taxes and tax related information reporting requirements that are
required to be filed by or with respect to the Company or the Company
Subsidiaries, including without limitation consolidated federal income tax
returns of the Company and the Company Subsidiaries (collectively, the "Company
Tax Returns"), have been duly filed or requests for extensions have been filed
and have not expired, and such Company Tax Returns were true, complete and
accurate in all material respects, (c) the Company Tax Returns have been
examined by the Internal Revenue Service or the appropriate state, local or
foreign taxing authority or the period for assessment of the Taxes in respect of
which such Company Tax Returns were required to be filed has expired, (d) all
Taxes due with respect to completed and settled examinations have been paid in
full, (e) no issues have been raised by the relevant taxing authority in
connection with the examination of any of the Company Tax Returns, except as
reserved against in the Company Financial Statements prior to the date of this
Agreement, (f) no waivers of statutes of limitations have been given by or
requested with respect to any Taxes of the Company or the Company Subsidiaries
and (g) neither the Company, the Company Subsidiaries, Bancorp nor any direct or
indirect Subsidiary of Bancorp, as a consequence of the Company's actions prior
to the Effective Time, will be obligated to make a payment to an individual that
would be a "parachute payment" as such term is defined in Section 280G of the
Code without regard to whether such payment is to be performed in the future.
3.25 Derivatives. All currently outstanding exchange-traded or
over-the-counter swap, forward future, option, cap, floor or collar financial
contracts or any other similar arrangements, when (a) entered into for the
Company's account or for the account of one or more of the Company Subsidiaries
were entered into (i) in accordance with prudent business practices and all
applicable laws, rules, regulations and regulatory policies and (ii) with
counterparties believed to be financially responsible at the time; and each of
them constitutes the valid and legally binding obligation of the Company or
Company Subsidiary, enforceable in accordance with its terms, and each of them
is in full force and effect, and (b) when entered into on behalf of the
Company's Clients, were entered into in a manner consistent with the directions
of such Clients. Neither the Company nor any Company Subsidiary nor, to the
Company's knowledge, any other party thereto, is in breach of any of its
obligations under any such agreement or arrangement. The Company Financial
Statements disclose the value of such agreements and arrangements entered into
for the Company's account on a ▇▇▇▇-to-market basis in accordance with GAAP and,
since December 31, 1996, there has not been a change in such value that,
individually or in the aggregate, has resulted in a Material Adverse Effect on
the Company.
3.26 Accounting Controls. Each of the Company and the Company
Subsidiaries maintains systems of internal accounting controls sufficient to
provide reasonable assurances in the judgment of the Board of Directors of the
Company, that (a) all material transactions are executed in accordance with
management's general or specific authorization, (b) all material transactions
are recorded as necessary to permit the preparation of financial statements in
conformity with GAAP, (c) access to the material property and assets of the
Company and the Company Subsidiaries is permitted only in accordance with
management's general or specific authorization, and (d) the recorded
accountability for items is compared with the actual levels at reasonable
intervals and appropriate action is taken with respect to any differences.
3.27 Proprietary Rights. The Company and the Company Subsidiaries
have the right to use the names, service-marks, trademarks and other
intellectual property, including computer software applications, material to the
conduct of their business, all of which are listed on Schedule 3.27 and in the
case of such names, service-marks and trademarks, in each state of the United
States, such right of use is free and clear of any Liens, and no other person
has the right to use such names, service-marks or trademarks in any such state.
3.28 Reorganization. As of the date hereof, the Company is aware of
no reason why the Merger will fail to qualify as a reorganization under Section
368(a) of the Code.
3.29 Investment Advisory Activities. Except as set forth on Schedule
3.29, neither the Company nor any Company Subsidiary is or has been during the
past five years an "investment advisor" within the meaning of the Investment
Advisers Act, required to be registered, licensed or qualified as an investment
advisor under the Investment Advisers Act or subject to any liability or
disability by reason of any failure to be so registered, licensed or qualified.
Neither the Company nor any Company Subsidiary is or has been during the past
five years an "investment company" within the meaning of the Investment Company
Act.
3.30 Dissenters' Rights. No stockholder of the Company is entitled to
exercise or assert dissenters' or appraisal rights as a result of the Merger,
this Agreement or the transactions contemplated by this Agreement under the New
Jersey BCA or any other applicable law.
3.31 Opinion of Financial Advisor. Duff & ▇▇▇▇▇▇, LLC ("Duff &
▇▇▇▇▇▇") has delivered to the board of directors of the Company its written
opinion (the "Fairness Opinion") to the effect that, as of February 9, 1998, the
Conversion Ratio to be offered to the stockholders of the Company is fair to
such stockholders from a financial point of view. The Company shall use its best
efforts to deliver or cause to be delivered to Bancorp a signed copy of the
Fairness Opinion.
3.32 Year 2000 Compliance. The Company has taken all reasonable steps
necessary to address the software, accounting and record keeping issues raised
by the Year 2000 and the Company does not expect the cost of addressing such
issues to have a Material Adverse Effect on the Company.
3.33 Accuracy of Information. No representation or warranty of the
Company contained in this Agreement, and none of the statements or information
concerning the Company or the Company Subsidiaries contained in this Agreement
or the exhibits and the schedules hereto, contains or will contain any untrue
statement of a material fact nor will such representations, warranties,
covenants or statements taken as a whole omit a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BANCORP AND ACQUISITION
Bancorp hereby represents and warrants to the Company as follows:
4.1 Organization, Standing and Authority. Each of Bancorp and
Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida. Bancorp is duly qualified to do
business and is in good standing in each jurisdiction (whether federal, state,
local or foreign) where its ownership or leasing of property or the conduct of
its business requires it to be so qualified, except where the failure to be duly
qualified is not reasonably likely to have a Material Adverse Effect on Bancorp.
Bancorp and each of its Subsidiaries has in effect all federal, state, local,
and foreign governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as it is now conducted,
except for such authorizations, the absence of which is not reasonably likely to
have a Material Adverse Effect on Bancorp. Bancorp and each of its Subsidiaries
has the corporate power and authority to carry on its business as it is now
being conducted and to own or lease all its properties and assets.
4.2 Capitalization. The authorized capital stock of Bancorp consists
of (i) 80,000,000 shares of Class A Common Stock, of which, as of the date
hereof, 15,078,072 shares were issued and outstanding and none of which were
held in treasury, (ii) 45,000,000 shares of Class B Common Stock, of which, as
of the date hereof, 10,724,265 shares were issued and outstanding and none of
which were held in treasury and (iii) 10,000,000 shares of preferred stock, par
value $.01 per share, none of which, as of the date hereof, were issued and
outstanding and none of which were held in treasury. All of the issued and
outstanding shares of Class A Common Stock and Class B Common Stock have been
duly authorized and validly issued and are fully paid, non-assessable and free
of common law, statutory or contractual preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of this Agreement,
except as set forth on Schedule 4.2, Bancorp does not have and is not bound by
any outstanding subscriptions, options, warrants, calls, stock appreciation
rights, commitments or agreements of any character calling for the purchase or
issuance of any shares of Class A Common Stock, Class B Common Stock or any
other equity securities of Bancorp or any securities representing the right to
purchase or otherwise receive any shares of Class A Common Stock or Class B
Common Stock. Except as set forth on Schedule 4.2, there are no outstanding
contractual obligations of Bancorp or any of its Subsidiaries to repurchase,
redeem or otherwise acquire, or to register for sale, any shares of capital
stock of Bancorp. Except as set forth on Schedule 4.2, there are no outstanding
contractual obligations of Bancorp or any Subsidiary to vote or to dispose of
any shares of the capital stock of any of its Subsidiaries.
4.3 Corporate Authority. Each of Bancorp and Acquisition has full
corporate power and authority to execute this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been authorized by all
necessary corporate action of Bancorp and Acquisition and is a valid and binding
agreement of each of Bancorp and Acquisition enforceable in accordance with its
terms.
4.4 No Violation . The execution, delivery and performance of this
Agreement and the consummation by Bancorp and Acquisition of the transactions
contemplated hereby, does not and will not (i) violate or conflict with the
Articles of Incorporation or by-laws or other organizational documents of
Bancorp or any of its Subsidiaries and (ii) assuming that the consents and
approvals referred to in Section 4.5 are duly obtained (a) violate, conflict
with, or result in a breach of any of the provisions of, or constitute a default
(or an event which, with notice of lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration, or the
creation of any Lien upon any of the properties or assets of Bancorp or any of
its Subsidiaries under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Bancorp or any of its Subsidiaries is a party
or by which Bancorp or any of its Subsidiaries may be bound, or to which Bancorp
or any of its Subsidiaries or any of their respective properties or assets may
be subject, or (b) violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to Bancorp or any Subsidiary
thereof or any of their respective properties or assets.
4.5 Consent and Approvals. Other than in connection with (a) the HSR
Act, (b) the Securities Act, (c) the Exchange Act, (d) the securities laws of
any federal, state, local or foreign jurisdiction, and except as set forth on
Schedule 4.5, no consent, approval or authorization of, or registration,
qualification or filing with any federal, state, local or foreign Regulatory
Agency or other Person is required to be made by Bancorp or Acquisition in
connection with the execution, delivery or performance by Bancorp and
Acquisition of this Agreement or the consummation by Bancorp and Acquisition of
the transactions contemplated hereby, other than consents, approvals,
authorizations, registrations, qualifications or filings, the failure of which
to obtain or make would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Bancorp or prevent the consummation of
the transactions contemplated by this Agreement.
4.6 Bancorp Reports. Bancorp and each Subsidiary of Bancorp has in all
material respects timely filed all reports, registrations, statements, and other
filings, together with any amendments required to be made with respect thereto,
that were required to be filed since December 31, 1994 with any Regulatory
Agency, including, without limitation, the SEC (all such reports and statements,
including the financial statements, exhibits and schedules thereto, being
collectively referred to herein as the "Bancorp Reports"), including, without
limitation, all reports, registrations, statements and filings required under
the Securities Act, the Exchange Act or any applicable state securities or "blue
sky" laws, and has paid all fees and assessments payable in connection
therewith. As of their respective dates, except as and to the extent amended or
modified on a subsequent date prior to the date of this Agreement, each of the
Bancorp Reports complied in all material respects with the statutes, rules,
regulations and orders enforced or promulgated by the Regulatory Agency 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 to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
4.7 Financial Statements. Bancorp has previously made available to the
Company copies of (a) the consolidated statements of financial condition of
Bancorp and its Subsidiaries as of December 31 for the fiscal years 1995 and
1996, and the related consolidated statements of operations, stockholders'
equity and cash flows for the fiscal years then ended, as reported in Bancorp's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"Bancorp 1996 Form 10-K") filed with the SEC under the Exchange Act, in each
case accompanied by the audit report of KPMG Pear Marwick LLP, independent
public accountants with respect to Bancorp and (b) the unaudited consolidated
statement of financial condition of Bancorp and its Subsidiaries as of September
30, 1997 and related consolidated statements of operations, stockholders' equity
and cash flows for the nine months then ended as reported in Bancorp's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997 (collectively, the
"Bancorp Financial Statements"). The December 31, 1996 and the September 30,
1997 consolidated statements of financial condition of Bancorp and its
Subsidiaries (including the related notes, where applicable) fairly present in
all material respects (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount) the consolidated
financial position of Bancorp and its Subsidiaries as of the respective dates
thereof, and the other Bancorp Financial Statements referred to in this Section
4.7, and any Bancorp Financial Statements filed by Bancorp with the SEC under
the Exchange Act after the date of this Agreement will fairly present in all
material respects (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount) the results of the
consolidated operations and changes in stockholders' equity and consolidated
financial position of Bancorp and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth. Each of such Bancorp
Financial Statements (including the related notes, where applicable) complies in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, and each of the
Bancorp Financial Statements (including the related notes, where applicable) has
been prepared in accordance with GAAP during the periods involved except, in
each case, as indicated in such Bancorp Financial Statements or in the notes
thereto.
4.8 Absence of Certain Changes. Since December 31, 1996, the business
of Bancorp and its Subsidiaries has been conducted in the ordinary and usual
course, consistent with past practice, and there has not been any event,
occurrence, development or state of circumstances or facts which has had or
could reasonably be expected to constitute or result in a Material Adverse
Effect on Bancorp.
4.9 Litigation; Regulatory Action.
(a) Except as disclosed in the Bancorp Reports, neither
Bancorp nor any of its Subsidiaries is a party to any Litigation before any
court, arbitrator, mediator or Regulatory Agency which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect on Bancorp
and, to Bancorp's knowledge, no such Litigation has been threatened; and neither
it nor any of its Subsidiaries or any of its or their material properties or
their officers, directors or controlling persons is a party to or is the subject
of any order, decree, agreement, memorandum or understanding or similar
arrangement with, or a commitment letter or similar submission to, any
Regulatory Agencies, which is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on Bancorp and neither it nor any
of its Subsidiaries has been advised by any Regulatory Agencies that any such
authority is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum or understanding, commitment letter or similar submission.
(b) Except for normal examinations conducted by a Regulatory
Agency in the regular course of the business of Bancorp and its Subsidiaries, no
Regulatory Agency has initiated any proceeding or, to the knowledge of Bancorp,
investigation into the business or operations of Bancorp or any of Bancorp's
Subsidiaries since December 31, 1994. There is no material unresolved violation,
criticism, or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of Bancorp or any of its Subsidiaries.
4.10 Compliance with Laws. Bancorp and each of its Subsidiaries and
their respective officers and employees (a) is in compliance in all material
respects with all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable thereto
or to the employees conducting such businesses and (b) has all permits,
licenses, authorizations, orders and approvals of, and have made all filings,
applications and registrations with, all Regulatory Agencies that are required
in order to permit them to own and operate their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to Bancorp's knowledge, no
suspension or cancellation of any of them is threatened or reasonably likely;
and all such filings, applications and registrations are current.
4.11 No Brokers. Neither Bancorp nor any of its Subsidiaries nor any
of their respective officers or directors has employed any broker or finder or
incurred any liability for any broker's fees, commissions or finder's fees in
connection with the Merger or the transactions contemplated by this Agreement.
4.12 Shares Authorized. The shares of Class A Common Stock to be
issued in exchange for shares of Company Common Stock upon consummation of the
Merger in accordance with Article II of this Agreement, have been duly
authorized and, when issued in accordance with the terms of this Agreement and
in the case of shares issued upon the exercise of Company Options, the related
stock option plan, will be validly issued, fully paid and nonassessable and
subject to no preemptive rights.
4.13 Absence of Undisclosed Liabilities. Except as disclosed in the
Bancorp Financial Statements, neither Bancorp nor any of its Subsidiaries has
any obligation or liability (contingent or otherwise), including liabilities
under Environmental Laws, that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect on Bancorp.
4.14 Taxes. All Taxes imposed on the income, properties or operations
of Bancorp or its Subsidiaries have been paid in full or have been adequately
reserved against on the books of Bancorp or its Subsidiaries. All reports and
returns with respect to Taxes and tax related information reporting requirements
that are required to be filed by or with respect to Bancorp or its Subsidiaries,
including without limitation consolidated federal income tax returns of Bancorp
and its Subsidiaries (collectively, the "Bancorp Tax Returns"), have been duly
filed or requests for extensions have been filed and have not expired, and such
Bancorp Tax Returns were true, complete and accurate in all material respects.
The Bancorp Tax Returns have been examined by the Internal Revenue Service or
the appropriate state, local or foreign taxing authority or the period for
assessment of the Taxes in respect of which such Bancorp Tax Returns were
required to be filed has expired. All Taxes due with respect to completed and
settled examinations have been paid in full. No issues have been raised by the
relevant taxing authority in connection with the examination of any of Bancorp
Tax Returns, except as reserved against in the Bancorp Financial Statements
prior to the date of this Agreement. No waivers of statutes of limitations have
been given by or requested with respect to any Taxes of Bancorp or its
Subsidiaries.
4.15 Reserves. As of September 30, 1997, each of the allowance for
loan losses and the reserve for OREO properties in the Bancorp Financial
Statements was adequate pursuant to GAAP, and the methodology used to compute
each of the loan loss reserve and the reserve for OREO properties complies in
all material respects with GAAP and all applicable policies of the applicable
Regulatory Agencies.
4.16 Agreements with Regulators. Except as disclosed in writing to the
Company by Bancorp prior to the date of this Agreement, neither Bancorp nor any
Bancorp Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Regulatory Agency which restricts materially the conduct of its business, or
in any manner relates negatively to its capital adequacy, its credit or reserve
policies or its management, nor has Bancorp been advised by any Regulatory
Agency that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission. Neither Bancorp nor any Bancorp Subsidiary is required by
Section 32 of the Federal Deposit Insurance Act to give prior notice to a
Federal banking agency of the proposed addition to an individual to its board of
directors or the employment of an individual as a senior executive officer.
4.17 No Knowledge. Bancorp knows of no reason why the regulatory
approvals referred to in Section 6.1(b) should not be obtained without the
imposition of any condition of the type referred to in such Section 6.1(b).
4.18 Acquisition. Acquisition has no material liabilities or other
obligations other than those incurred or entered into in connection with this
Agreement or the transactions contemplated hereby. The authorized capital stock
of Acquisition consists of 2,500 shares of common stock, no par value, and all
issued and outstanding shares are owned solely Bancorp, free and clear of any
Liens.
4.19 Year 2000 Compliance. Bancorp has taken all reasonable steps
necessary to address the software, accounting and record keeping issues raised
by the Year 2000 and Bancorp does not expect the cost of addressing such issues
to have a Material Adverse Effect on Bancorp.
4.20 Accuracy of Information. No representation or warranty of Bancorp
contained in this Agreement, and none of the statements or information
concerning Bancorp and its Subsidiaries contained in this Agreement or the
exhibits and the schedules hereto, contains or will contain any untrue statement
of a material fact nor will such representations, warranties, covenants or
statements taken as a whole omit a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE V
COVENANTS
The Company hereby covenants to Bancorp, and Bancorp hereby covenants
to the Company, as applicable, that:
5.1 Forbearances of the Company. During the period from the date hereof
until the Effective Time, except as expressly contemplated by this Agreement,
the Company Stock Option Agreement or as set forth in Schedule 5.1, without the
prior written consent of Bancorp, the Company will not, and will cause each of
the Company Subsidiaries not to:
(a) conduct the business of the Company and the Company
Subsidiaries other than in the ordinary and usual course or fail to use its best
efforts to preserve intact their business organizations and assets and maintain
their rights, franchises and existing relations with clients, customers,
suppliers, employees and business associates, or take any action reasonably
likely to have an adverse affect upon the Company's ability to perform any of
its material obligations under this Agreement;
(b) (i) adjust, split, combine or reclassify any capital
stock; (ii) make, declare or pay any dividend (except for regular cash dividends
at a rate not in excess of $.04 per share per annum on the Company Common Stock)
or make any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock; (iii) grant any stock appreciation rights or grant any Person any right
to acquire any shares of its capital stock; (iv) issue any additional shares of
capital stock, other than with respect to exercise of currently outstanding
Company Options or any security or obligation convertible into or exchangeable
for any shares of its capital stock; or (v) enter into any agreement,
understanding or arrangement with respect to the sale or voting of its capital
stock;
(c) enter into, amend, modify or renew any employment,
consulting, severance or similar agreements or arrangements with any director,
officer or employee of the Company or any Company Subsidiary, pay any bonus, or
grant any salary or wage increase or increase any employee benefit (including
incentive or bonus payments), except (i) for normal individual increases in
compensation to employees in the ordinary course of business consistent with
past practice, (ii) for changes that are required by applicable law, (iii) for
bonuses paid in the ordinary course of business consistent with past practice,
(iv) for employment arrangements for, or grants of awards to newly hired
employees in the ordinary course of business consistent with past practice, or
(v) for the termination of employment contracts disclosed in the disclosure
schedules to this Agreement without the need to accrue more than $50,000 per
contract pursuant to such termination;
(d) enter into, establish, adopt or amend (except as may be
required by applicable law) any pension, retirement, stock option, stock
purchase, savings, profit sharing, deferred compensation, consulting, bonus,
group insurance or other employee benefit, incentive or welfare contract, plan
or arrangement, or any trust agreement (or similar arrangement) related thereto,
in respect of any director, officer or employee of the Company or any of the
Company Subsidiaries, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder;
(e) except for sales of securities or other investments or
assets in the ordinary course of business consistent with past practice, sell,
transfer, mortgage, encumber or otherwise dispose of or discontinue any of its
assets, business or properties;
(f) except for the purchase of securities or other investments
or assets in the ordinary course of business consistent with past practice, make
any material investment either by purchase of stock or securities, contributions
to capital, property transfers, or purchase of any property or assets of any
other Person other than a wholly owned Subsidiary of the Company;
(g) amend the Company's Certificate of Incorporation, by-laws
or the certificate or articles of incorporation or by-laws (or similar governing
documents) of any of the Company Subsidiaries;
(h) implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by GAAP,
provided such GAAP required changes are agreed to by the Company's independent
public accountants;
(i) except for transactions in the ordinary course of business
consistent with past practice, enter into or terminate any material lease,
contract or agreement, or make any change in any of its material leases,
contracts or agreements, other than renewals of leases, contracts or agreements
without material changes of terms;
(j) settle any claim, action or proceeding, except for any
claim, action or proceeding involving solely money damages in an amount,
individually and in the aggregate for all such settlements, not more than
$50,000 and which is not reasonably likely to establish an adverse precedent or
basis for subsequent settlements;
(k) (i) take any action reasonably likely to prevent or impede
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code; or (ii) take any action that is intended or is reasonably
likely to result in (A) any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (B) any of the conditions to the Merger set
forth in Article VI not being satisfied or (C) a violation of any provision of
this Agreement except, in each case, as may be required by applicable law or
regulation;
(l) other than in the ordinary course of business consistent
with past practice, incur (i) any indebtedness for borrowed money (other than
short-term indebtedness incurred to refinance existing short-term indebtedness,
and indebtedness under existing lines of credit), assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other Person, or make any loan or advance or (ii) any capital expenditures,
obligations or liabilities; and
(m) agree, commit to or enter into any agreement to take any
of the actions prohibited by this Section 5.1.
5.2 Forbearances of Bancorp. During the period from the date hereof
until the Effective Time, except as expressly contemplated by this Agreement,
without the prior written consent of the Company, Bancorp will not, and will
cause each of its Subsidiaries not to:
(a) make, declare, pay or set aside for payment any
extraordinary dividend; provided, however, the foregoing shall not apply to
increases in the quarterly dividend rate payable on the Class A Common Stock and
Class B Common Stock in the ordinary course of business consistent with past
practices or the payment of any stock dividends on such shares; and
(b) (i) take any action while knowing that such action would,
or is reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code; or (ii) take
any action that is intended or is reasonably likely to result in (A) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(B) any of the conditions to the Merger set forth in Article VI not being
satisfied or (C) a violation of any provision of this Agreement except, in each
case, as may be required by applicable law or regulation.
5.3 Efforts. Subject to the terms and conditions of this Agreement,
each party hereto shall shall use its reasonable best efforts in good faith to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or desirable, or advisable under applicable laws, so as
to permit consummation of the Merger on the Effective Date and to otherwise
enable consummation of the transactions contemplated hereby and shall cooperate
fully with the other parties hereto to that end (it being understood that any
amendments to the Registration Statement (as hereinafter defined) or a
resolicitation of proxies as a consequence of an acquisition agreement by
Bancorp or any of its Subsidiaries shall not violate this covenant).
5.4 Registration Statement; Proxy Statement. The Company and Bancorp
shall prepare a proxy statement/prospectus (the "Proxy Statement") to be mailed
to the holders of Company Common Stock in connection with the transactions
contemplated hereby and to be filed by Bancorp in a registration statement (the
"Registration Statement") with the SEC. When the Registration Statement or any
post-effective amendment or supplement thereto shall become effective, and at
all times subsequent to such effectiveness, up to and including the date of the
Meeting (as hereinafter defined), such Registration Statement and all amendments
or supplements thereto, with respect to all information set forth therein
furnished or to be furnished by or on behalf of the Company relating to the
Company or the Company Subsidiaries and by or on behalf of Bancorp relating to
Bancorp or its Subsidiaries (A) will comply in all material respects with the
provisions of the Securities Act and the Exchange Act and any other applicable
statutory or regulatory requirements, and (B) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading; provided, however, in no event shall any party hereto be liable for
any untrue statement of a material fact or omission to state a material fact in
the Registration Statement made in reliance upon, and in conformity with,
written information concerning another party furnished by or on behalf of such
other party specifically for use in the Registration Statement.
5.5 Registration Statement Effectiveness. Bancorp will advise the
Company, promptly after Bancorp receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed (after providing drafts in advance to the Company and its counsel for
review and comment), of the issuance of any stop order or the suspension of the
qualification of the Class A Common Stock for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
5.6 Company Stockholder Approval. The Company shall take all such
action as may be necessary to call, notice and convene as promptly as
practicable a meeting of its stockholders (the "Meeting") to consider and vote
upon the Merger, this Agreement and the transactions contemplated hereby. The
Board of Directors of the Company has determined that the Merger is advisable
and in the best interests of the Company and its stockholders and shall
recommend in the Proxy Statement and otherwise that the Company's stockholders
approve the Merger, this Agreement, and the transactions contemplated hereby,
and otherwise use its best efforts to obtain stockholder approval of the Merger,
this Agreement, and the transactions contemplated hereby; provided that said
Board of Directors shall not be obligated to make such recommendation if the
Company shall have received an offer for a Competing Transaction that the Board
of Directors, after consultation with its outside legal counsel and financial
advisors, determines in good faith is more favorable to the stockholders of the
Company from a financial point of view than the transaction contemplated by this
Agreement.
5.7 Press Releases. The parties agree to reasonably cooperate in
issuing any press release or other public announcement (including any filings
made with the SEC) concerning this Agreement or the transactions contemplated
hereby. Nothing contained herein shall prevent any party from at any time
furnishing any information to any governmental authority which it is by law or
otherwise so obligated to disclose or from making any disclosure which its
counsel deems necessary or advisable in order to fulfill such party's disclosure
obligations under applicable law or the rules of the NYSE or NASDAQ; provided,
such party uses good faith efforts to notify the other party about such pending
disclosure and gives the other party a reasonable opportunity to cooperate in
preparing such disclosure.
5.8 Access; Information. Upon reasonable notice, the Company and
Bancorp shall each afford the other and its officers, employees, counsel,
accountants and other authorized representatives access, during normal business
hours throughout the period prior to the Effective Date, to all of its
properties, books, contracts, data processing system files, commitments and
records and, during such period, shall furnish promptly to the other (A) a copy
of each material report, schedule and other document filed by it and its
Subsidiaries with any Regulatory Agency, and (B) other than confidential client
or customer information which a party is prohibited from disclosing, all other
information concerning its business, properties and personnel as the other may
reasonably request, provided that no investigation pursuant to this Section 5.8
shall affect or be deemed to modify or waive any representation or warranty made
hereunder or the conditions to the obligations of either party to consummate the
transactions contemplated by this Agreement. Neither party will use any
information obtained pursuant to this Section 5.8 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement and, if this
Agreement is terminated, each party will hold all information and documents
obtained pursuant to this paragraph in confidence unless and until such time as
such information or documents become publicly available other than by reason of
any action or failure to act by such party or as it is advised by counsel in
writing that any such information or document is required by law or applicable
published stock exchange rule to be disclosed, and in the event of the
termination of this Agreement, such party will, upon request by the other,
deliver to the other all documents so obtained by it or destroy such documents.
5.9 Acquisition Proposals. The Company shall not, directly or
indirectly, and shall instruct its officers, directors, employees, Subsidiaries,
agents or advisors or other representatives (including, without limitation, any
investment banker, attorney or accountant retained by it), not to, directly or
indirectly, solicit, initiate or knowingly encourage (including by way of
furnishing nonpublic information), or take any other action knowingly to
facilitate, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders) that constitutes,
or may reasonably be expected to lead to, any Competing Transaction (as defined
below), or enter into or maintain or continue discussions or negotiate with any
person in furtherance of such inquiries or to obtain a Competing Transaction, or
agree to or endorse any Competing Transaction, or authorize or permit any of the
officers, directors or employees of the Company or any of the Company
Subsidiaries, or any investment banker, financial advisor, attorney, accountant
or other representative retained by the Company or any of the Company
Subsidiaries, to take any such action; provided, however, that nothing contained
in this Section 5.9 shall prohibit the Board of Directors of the Company from
furnishing information to, or entering into discussions or negotiations with,
any person in connection with an unsolicited proposal by such person to acquire
the Company pursuant to a merger, consolidation, share exchange, tender offer,
exchange offer, business combination or other similar transaction or to acquire
all or substantially all of the assets of the Company or any of the Company
Subsidiaries, if, and only to the extent that, (i) such Board of Directors,
after consultation with outside legal counsel, determines in good faith that
such action is required for such Board of Directors to comply with its duties to
its stockholders imposed by applicable law and (ii) prior to furnishing such
information to, or entering into discussions or negotiations with, such person,
such party uses all reasonable efforts to obtain from such person an executed
confidentiality agreement. The Company shall notify Bancorp promptly if any
proposal or offer, or any inquiry or contact with any person with respect
thereto, regarding a Competing Transaction is made. For purposes of this
Agreement, "Competing Transaction" shall mean any of the following involving the
Company or any of the Company Subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transaction (other than the
transactions contemplated by this Agreement and the Cumberland Transaction);
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
outside the ordinary course of business of 15% or more of the assets of the
Company and the Company Subsidiaries, taken as a whole, in a single transaction
or series of transactions; (iii) any tender offer or exchange offer for 15% or
more of the outstanding shares of capital stock of the Company or the filing of
a registration statement under the Securities Act in connection therewith; (iv)
any Person shall have acquired beneficial ownership or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder)
shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of, 40% or more of the then outstanding shares of capital
stock of the Company; (v) any public announcement of a proposal, plan or
intention to do any of the foregoing; provided, however, that for purposes of
this Agreement and the Company Stock Option Agreement, none of the foregoing
transactions or actions shall be deemed to constitute a Competing Transaction
unless such transaction or action was initiated, or initial discussions or
communications with respect thereto were initiated, prior to the termination of
this Agreement.
5.10 Blue-Sky Filings. Bancorp shall use its reasonable efforts to
obtain all necessary state securities laws or "blue sky" permits and approvals,
provided that Bancorp shall not be required by virtue thereof to submit to
general jurisdiction in any state.
5.11 State Takeover Laws; Certificate of Incorporation. The Company
shall not take any action that would cause the transactions contemplated by this
Agreement to be subject to any applicable state takeover statute and the Company
shall take all necessary steps to exempt (or ensure the continued exemption of)
the transactions contemplated by this Agreement from (A) any applicable state
takeover law, as now or hereafter in effect, including, without limitation,
Sections 14A:10A-1 through 14A:10A-6 of the New Jersey BCA, (B) any applicable
takeover provisions in the Company's Certificate of Incorporation or By-laws,
and (C) any takeover provisions set forth in any agreement to which the Company
is a party or may be bound.
5.12 Affiliate Agreements. The Company will cause each person who may
be deemed by the Company to be an Affiliate of the Company (for purposes of Rule
145 under the Securities Act) to execute and deliver to Bancorp, as soon as
practicable after the date of this Agreement, and before the mailing of the
Proxy Statement for the Meeting, an agreement in the form attached hereto as
Exhibit B restricting the disposition of the shares of Class A Common Stock to
be received by such Affiliate in exchange for such Affiliate's shares of Company
Common Stock except in compliance with the applicable provisions of the
Securities Act and the rules and regulations thereunder. The Company represents
and warrants that Schedule 5.12 sets forth a list of all persons who, as of the
date of this Agreement, are Affiliates of the Company.
5.13 Shares Listed. Bancorp shall use its reasonable best efforts to
list, prior to the Effective Date, on the NYSE, upon official notice of
issuance, the shares of Class A Common Stock to be issued to the holders of
Company Common Stock pursuant to this Agreement.
5.14 Regulatory Applications. The parties hereto shall cooperate with
each other and use their reasonable best efforts to promptly prepare and file
all necessary documentation, to effect all applications, notices, petitions and
filings, to obtain as promptly as practicable all permits, consents, approvals
and authorizations of all third parties and Regulatory Agencies which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the Merger), and to comply fully with
the terms and conditions of all such permits, consents, approvals and
authorizations of all Regulatory Agencies. The parties hereto shall have the
right to review in advance, and, to the extent practicable, each will consult
the other on, in each case subject to applicable laws relating to the exchange
of information, all the information relating to the Company or Bancorp, as the
case may be, and any of their respective Subsidiaries, which appear in any
filing made with, or written materials submitted to, any third party or any
Regulatory Agency in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto shall
act reasonably and as promptly as practicable. The parties hereto agree that
they will consult with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third parties and Regulatory
Agencies necessary or advisable to consummate the transactions contemplated by
this Agreement and each party will keep the other apprised of the status of
matters relating to completion of the transactions contemplated herein.
5.15 Current Information.
(ai During the period from the date of this Agreement to the
Effective Date, each of the Company and Bancorp shall, and shall cause its
representatives to, confer on a regular and frequent basis with representatives
of the other.
(bi The Company shall promptly notify Bancorp of (1) any
material change in the business or operations of the Company or any Company
Subsidiary, (2) any material complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any Regulatory
Agency relating to the Company or any Company Subsidiary, (3) the institution or
the threat of material Litigation involving or relating to the Company or any
Company Subsidiary, or (4) any event or condition that might be reasonably
expected to cause any of the Company's representations or warranties set forth
herein not be true and correct as of the Effective Time or prevent the Company
from fulfilling its obligations hereunder; and in each case shall keep Bancorp
informed with respect thereto.
(ci Bancorp shall (1) promptly notify the Company of any event
or condition that might reasonably be expected to cause any of Bancorp's
representations or warranties set forth herein not to be true and correct as of
the Effective Time or prevent Bancorp from fulfilling its obligations hereunder
and (2) notify the Company immediately of any denial of any application filed by
Bancorp with any Regulatory Agency with respect to this Agreement, and in each
case shall keep the Company informed with respect thereto.
5.16 ESOP Termination. The Company shall take all steps necessary to
terminate the Company's Employee Stock Ownership Program (the "ESOP") effective
at or prior to the Effective Time. The termination of the ESOP shall be in
accordance with all applicable laws, statutes and regulations, including,
without limitation, ERISA, and shall not subject the Company or Bancorp to any
material obligation or liability.
5.17 Incentive Plan.
(a) Retention Pool. At the Effective Time, Bancorp will
establish a retention pool (the "Retention Pool") consisting of restricted
shares of Class A Common Stock to be used to retain key employees of the
Company. The value of the shares which will be dedicated to the Retention Pool
shall be equal to 20% of the aggregate of the value of the shares of Class A
Common Stock issued in the Merger (excluding options issued in the Merger in
exchange for other options and excluding shares of Class A Common Stock issued
in the Merger in exchange for shares of Company Common Stock which were issued
by the Company after the date of this Agreement) and the value of the shares
dedicated to the Retention Pool. As used in the previous sentence, the "value"
of the number of shares of Class A Common Stock shall be equal to the Average
Price multiplied by the number of shares. The individuals eligible for inclusion
in the Retention Pool and the respective allocations will be determined by the
management of the Company, in consultation with and subject to the approval of
Bancorp, prior to the Effective Time.
(b) Vesting. The shares of Class A Common Stock in the
Retention Pool shall vest on the fourth anniversary of the Effective Date
subject to the conditions and upon the terms and as set forth in Exhibit C
hereto.
(c) Eligibility. Eligibility to participate in the Retention
Pool shall require an individual to be employed by the Company as of the vesting
date and subject to the terms and conditions set forth in Exhibit C hereto.
(d) Adjustment. If an employee of the Company who has been
selected to participate in the Retention Pool shall forfeit the right to receive
shares of Class A Common Stock thereunder, as set forth in Exhibit C, the shares
allocated to that individual shall be cancelled and the number of shares of
Class A Common Stock in the Retention Pool shall be adjusted accordingly.
5.18 Indemnification/Liability Coverage.
(a) For six years after the Effective Date, or for such longer
period as contemplated by any applicable statute of limitations, Bancorp shall,
and shall cause the Surviving Corporation to, indemnify, defend and hold
harmless the present and former directors and executive officers of the Company
and the Company Subsidiaries (each, an "Indemnified Party"), against all
liabilities and expenses (including, without limitation, professional fees and
disbursements, investigation and other costs, settlements and judgments) arising
out of, or asserted or incurred in connection with any claim, action, suit,
investigation or proceeding (including any proceeding by or in the right of the
Company, or the Surviving Corporation as statutory successor to the Company)
alleging, (i) actions or omissions occurring at or prior to the Effective Date
(including, without limitation, actions or omissions in connection with the
transactions contemplated by this Agreement) and (ii) actions or omissions
occurring after the Effective Date in connection with the transactions
contemplated by this Agreement in either case (whether (i) or (ii)) to the
fullest extent that the Indemnified Parties would be entitled to indemnification
under the New Jersey BCA and the Company's Certificate of Incorporation and
Bylaws as in effect on the date hereof. In furtherance and not in limitation of
the foregoing, as of the Effective Date, Bancorp shall, and shall cause the
Surviving Corporation to, assume and reaffirm each of the existing
Indemnification Agreements (the "Indemnification Agreement") between the Company
and its present and former directors and certain executive officers (each of
which is listed on Schedule 5.18 and copies of which have been previously
delivered to Bancorp). Notwithstanding anything herein to the contrary,
Bancorp's and the Surviving Corporation's aggregate obligation pursuant to this
indemnity (including amounts paid under available insurance coverage) shall not
exceed $35,000,000.
(b) Bancorp shall use its reasonable best efforts to maintain
the Company's existing directors' and officers' liability insurance policy (or a
policy, including Bancorp's existing policy, providing comparable coverage
amount on terms no less favorable) covering persons who are currently covered by
such insurance for a period of three years after the Effective Date; provided,
that Bancorp shall not be obligated to make an annual premium payment in respect
to such policy (or replacement policy) which exceeds, for the portion related to
the Company's directors and officers, 150% of the annual premium payment on the
Company' current policy in effect as of the date of this Agreement; provided,
further, that if such coverage can only be obtained upon the payment of an
annual premium in excess of 150% of the annual premium payment of the Company's
current policy, Bancorp shall obtain such coverage as can reasonably be obtained
by paying a premium of 150% of the annual premium payment of the Company's
current policy in effect as of the date of this Agreement.
(c) Any Indemnified Party wishing to claim indemnification
under Section 5.18(a), upon learning of such claim, action, suit, proceeding or
investigation, shall promptly notify Bancorp thereof; provided, that the failure
so to notify shall not affect the obligations of Bancorp and the Surviving
Corporation under Section 5.18(a), unless such failure materially increases
Bancorp and the Surviving Corporation's liability under such Section. In the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Date and subject to the terms of the
relevant Indemnification Agreement), (1) Bancorp or the Surviving Corporation
shall have the right to assume the defense thereof, if it so elects, and the
Surviving Corporation shall pay all reasonable fees and expenses of counsel for
the Indemnified Parties promptly as statements therefor are received; provided,
however, that if Bancorp or the Surviving Corporation does not elect to assume
the defense thereof, the Indemnified Parties shall have the right to employ its
or their own counsel and Bancorp or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel; provided further, however, that
Bancorp and the Surviving Corporation shall be obligated pursuant to this
subsection (c) to pay for only one firm of counsel for all Indemnified Parties
in any jurisdiction for any single action, suits or proceedings arising out of
or related to a common body of facts, (2) the Indemnified Parties will cooperate
in the defense of any such matter, and (3) Bancorp and the Surviving Corporation
shall not be liable for any settlement effected without the prior written
consent of Bancorp. The provisions of this Section 5.18(c) shall not alter,
impair or be in derogation of the rights of the Company's present and former
directors and executive officers who were a party to an Indemnification
Agreement under their existing Indemnification Agreements with the Company, all
of which shall remain in effect and be assumed or affirmed, as the case may be,
by the Surviving Corporation and Bancorp as of the Effective Date in accordance
with and subject to Section 5.18(a).
5.19 SEC Filings. Each of the Company and Bancorp shall timely file all
reports on Form 10-K, Form 10-Q and Form 8-K and other documents required to be
filed by it with the SEC under the Exchange Act from the date of this Agreement
to the Effective Date.
5.20 Form S-8 Registration. Bancorp shall use all reasonable efforts to
file with the SEC within 30 days after the Effective Time a Registration
Statement on Form S-8 (or any successor form thereto) under the Securities Act
relating to shares of Class A Common Stock issuable (i) out of the Retention
Pool and (ii) upon exercise of a Company Option that was converted into a
Substitute Option pursuant to Section 2.2 hereof and upon exercise of any other
options which may be granted after the Effective Date under any stock option
plan of the Company in effect on the date of this Agreement.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligation of each of Bancorp and the Company to consummate the
transactions contemplated hereby is subject to the satisfaction or written
waiver by Bancorp and the Company prior to the Effective Time of each of the
following conditions:
(a) Stockholder Approvals. This Agreement and the Merger shall
have been duly adopted by the requisite affirmative vote of the stockholders of
the Company.
(b) Regulatory Approval. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which Bancorp reasonably determines
would (i) following the Effective Time, have a Material Adverse Effect on
Bancorp or the Surviving Corporation or (ii) reduce the benefits of the
transactions contemplated hereby to such a degree that Bancorp would not have
entered into this Agreement had such conditions, restrictions or requirements
been known at the date hereof.
(c) No Injunction. No court or Regulatory Agency of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statue, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits or
otherwise makes illegal consummation of the transactions contemplated by this
Agreement.
(d) Registration Statement. The Registration Statement shall
have been declared effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) Blue Sky Approvals. All permits and other authorizations
under state securities laws necessary to consummate the transactions
contemplated hereby and to issue the shares of Class A Common Stock to be issued
in the Merger shall have been received and be in full force and effect.
(f) Listing. The shares of Class A Common Stock to be issued
in the Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(g) Employment Agreement. The Company shall have entered into
an employment agreement with ▇▇▇ ▇▇▇▇▇▇▇ substantially in the form of Exhibit D
hereto.
(h) Officers and Directors of the Surviving Corporation. The
officers and directors of the Surviving Corporation shall be mutually agreed
upon by the parties.
6.2 Conditions to Obligation of the Company. The obligation of the
Company to consummate the transactions contemplated by this Agreement is also
subject to the satisfaction or written waiver by the Company prior to the
Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Bancorp set forth in this Agreement shall be true and correct in
all material respects (except for representations and warranties qualified by
materiality or Material Adverse Effect which shall be true and correct in all
respects) as of the date of this Agreement and as of the Effective Time as
though made on and as of the Effective Date (except that representations and
warranties that by their terms speak as of the date of this Agreement or some
other date shall be true and correct as of such date); and the Company shall
have received a certificate, dated the Effective Date, signed on behalf of
Bancorp by an executive officer of Bancorp to such effect.
(b) Performance of Obligations of Bancorp. Bancorp shall have
performed in all material respects all agreements, covenants and obligations
required to be performed by it under this Agreement at or prior to the Effective
Time, including, without limitation, the establishment of the Retention Pool,
and the Company shall have received a certificate, dated the Effective Date,
signed on behalf of Bancorp by an executive officer of Bancorp to such effect.
(c) Opinion of the Company's Counsel. The Company shall have
received an opinion of Pitney, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, special counsel to the
Company, dated the Effective Date, to the effect that on the basis of facts,
representations and assumptions set forth in such opinion, (i) the Merger
constitutes a "reorganization" within the meaning of Section 368(a) of the Code
and (ii) no gain or loss will be recognized by stockholders of the Company who
receive shares of Class A Common Stock in exchange for shares of Company Common
Stock, except with respect to cash received in lieu of fractional share
interests.
(d) Agreement with respect to Future Operations. The parties
will have entered into an agreement substantially in the form of Exhibit E
hereto, with respect to the future operations and management of the Company
after consummation of the transactions contemplated herein.
(e) Board Seat. ▇▇▇ ▇▇▇▇▇▇▇ shall be elected as a member of
the Board of Directors of Bancorp on or prior to the Effective Date.
6.3 Conditions to Obligation of Bancorp. The obligation of Bancorp to
consummate the transactions contemplated by this Agreement is also subject to
the satisfaction or written waiver by Bancorp prior to the Effective Time of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects (except for representations and warranties qualified by
materiality or Material Adverse Effect which shall be true and correct in all
respects) as of the date of this Agreement and as of the Effective Time as
though made on and as of the Effective Time (except that representations and
warranties that by their terms speak as of the date of this Agreement or some
other date shall be true and correct as of such date); and Bancorp shall have
received a certificate, dated the Effective Date, signed on behalf of the
Company by an executive officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all agreements, covenants and
obligations required to be performed by it under this Agreement at or prior to
the Effective Time; and Bancorp shall have received a certificate, dated the
Effective Date, signed on behalf of the Company by an executive officer of the
Company to such effect.
(c) Consents. The Company shall have obtained all consents and
approvals of third parties required to effectuate the transactions contemplated
by this Agreement, each of which shall have been obtained without the imposition
of any materially adverse terms or conditions.
(d) Opinion of Bancorp's Counsel. Bancorp shall have received
an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.A., counsel
to Bancorp, dated the Effective Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the Merger
constitutes a reorganization under Section 368(a) of the Code.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger may
be abandoned at any time after the occurrence of any of the following events,
but prior to the Effective Date (notwithstanding any approval of this Agreement
by the stockholders of the Company):
(a) by mutual written consent of Bancorp and the Company;
(b) by either Bancorp or the Company, if any court or
Regulatory Agency shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
Merger, and such order, decree, ruling or other action shall have become final
and nonappealable;
(c) by either Bancorp or the Company, if the Merger has not
been consummated by August 31, 1998 (other than due to the failure of the party
seeking to terminate this Agreement to perform its obligations under this
Agreement required to be performed at or prior to the Effective Date);
(d) by either Bancorp or the Company, if the Meeting shall
have been held, and the stockholders of the Company shall have failed to approve
and adopt the Merger, this Agreement and the transactions contemplated hereby at
such meeting;
(e) by either Bancorp or the Company in the event that written
notice is received which states that any required regulatory approval
contemplated by Section 6.1(b) will not be approved or has been denied or shall
be approved only upon or subject to conditions that would cause the condition
set forth in Section 6.1(b) not to be satisfied;
(f) by Bancorp, if a tender offer or exchange offer for more
than 15% of the outstanding shares of capital stock of the Company is commenced,
and the Board of Directors of the Company, within ten business days after such
tender offer or exchange offer is so commenced, fails to recommend against
acceptance of such tender offer or exchange offer by its stockholders or takes
no position with respect to such offer;
(g) by Bancorp, if any Person or group (as that term is
defined under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder), shall have acquired beneficial ownership or the right
to acquire beneficial ownership of more than 40% of the then combined voting
power of all classes of the capital stock of the Company;
(h) by Bancorp, if the Board of Directors of the Company does
not recommend to its stockholders the approval of the Merger, this Agreement and
the transactions contemplated hereby, or withdraws, or modifies or changes in a
manner adverse to Bancorp, its recommendation to approve the Merger, this
Agreement and the transactions contemplated hereby, or shall have resolved to do
any of the foregoing;
(i) by Bancorp or the Company, if the Company or its
stockholders received an offer for a Competing Transaction that the Board of
Directors of the Company, after consultation with its outside legal counsel and
financial advisors, determines in good faith is more favorable to the
stockholders of the Company from a financial point of view than the transactions
contemplated by this Agreement, and the Board of Directors of the Company
accepts, recommends or resolves to accept or recommend to the Company's
stockholders such a Competing Transaction; provided that prior to such
termination by the Company, the Company shall provide Bancorp written notice of
its intention to terminate this Agreement pursuant to this Section 7.1(i) at
least three business days prior to such termination, which notice shall also
identify the Competing Transaction and accurately describe all material terms
thereof;
(j) by Bancorp, if there has been any breach of any
representation or warranty in this Agreement by the Company, which breach cannot
be or has not been cured within 30 days after the giving of written notice to
the Company (provided that Bancorp may terminate this Agreement pursuant to this
Section 7.1(j) only with respect to a breach or breaches that would permit
Bancorp not to consummate the Merger under the standards set forth in Section
6.3(a)), or if the Company breaches in any material respect any material
covenant of the Company contained in this Agreement and such breach cannot be or
has not been cured within 30 days of the giving of written notice to the
Company;
(k) by the Company, if there has been any breach of any
representation or warranty in this Agreement by Bancorp, which breach cannot be
or has not been cured within 30 days after the giving of written notice to
Bancorp (provided that the Company may terminate this Agreement pursuant to this
Section 7.1(k) only with respect to a breach or breaches that would permit the
Company not to consummate the Merger under the standards set forth in Section
6.2(a)), or if Bancorp breaches in any material respect any material covenant of
Bancorp contained in this Agreement and such breach cannot be or has not been
cured within 30 days of the giving of written notice to Bancorp; and
(l) by the Company, if Duff & ▇▇▇▇▇▇ shall have withdrawn its
Fairness Opinion prior to the date that the Proxy Statement is first mailed to
the holders of Company Common Stock; provided that the right of the Company to
terminate the Agreement pursuant to this Section 7.1(l) shall terminate on the
date that the Proxy Statement is first mailed to the holders of the Company
Common Stock.
(m) by the Company, if the Average Price is less than $13.60
and the Company notifies Bancorp in writing of its intention to terminate this
Agreement pursuant to this Section 7.1(m) and Bancorp does not within five
business days of receipt of such notice (i) agree to increase the Conversion
Ratio to an amount equal to the quotient of $8.28 divided by the Average Price
and (ii) agree to establish the Closing Date within ten business days of receipt
of the Company's notice under this Section 7.1(m).
7.2 Effect of Termination. In the event this Agreement is terminated
pursuant to this Article VII, the Merger shall be abandoned and this Agreement
shall become void and of no force and effect, without further action by any of
the parties to this Agreement, except for the agreements contained in the last
sentence of Section 5.8, and in Sections 8.8, 8.11, 8.12 and 8.13; provided
that, in addition to the amounts payable pursuant to Section 8.8, any
termination of this Agreement pursuant to this Article VII shall not relieve any
party from any liability for the breach of any material representation, warranty
or covenant contained in this Agreement or be deemed to constitute a waiver of
any remedy available for such breach. Subject to Section 5.8(B) hereof, upon
termination of this Agreement, each party shall return all documents and other
materials of any other party relating to the transactions contemplated by this
Agreement, whether so obtained before or after the execution of this Agreement,
to the party furnishing the same.
ARTICLE VIII
MISCELLANEOUS
8.1 Closing. Subject to the terms and conditions of this Agreement,
the consummation of the transactions contemplated hereby (the "Closing") will
take place at 10:00 a.m. on a date and at a place to be specified by Bancorp,
which shall be as soon as practicable after the satisfaction or waiver of the
latest to occur of the conditions set forth in Article VI hereof, unless
extended by mutual agreement of the parties.
8.2 Notices. Any notice or other communication under this Agreement
shall be in writing and shall be delivered personally or sent by registered
mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses set forth below (or at such
other addresses as shall be specified by the parties by like notice).
If to Bancorp: BankAtlantic Bancorp, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
If to the Company: ▇▇▇▇, ▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Copy to: Pitney, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Such notices, demands, claims and other communications shall be deemed given
when actually received or (a) in the case of delivery by overnight service with
guaranteed next day delivery, the next day or the day designated for delivery,
(b) in the case of registered U.S. mail, five days after deposit in the U.S.
mail, or (c) in the case of facsimile, the date upon which the transmitting
party received confirmation of receipt by facsimile, telephone or otherwise.
8.3 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto contain every obligation and understanding between the parties relating
to the subject matter hereof and merge all prior discussions, negotiations and
agreements, if any, between them, and none of the parties shall be bound by any
representations, warranties, covenants, or other understandings, other than as
expressly provided or referred to herein.
8.4 Assignment. This Agreement may not be assigned by any party
without the written consent of the other party; provided that Bancorp may assign
this Agreement to one of its Subsidiaries, whether such Subsidiary currently
exists or is formed in the future, without such written consent; and provided
further that Bancorp shall remain primarily liable for all of its obligations
under this Agreement. Subject to the preceding sentence, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives, legal representatives, and
permitted assigns.
8.5 Waiver and Amendment. Any representation, warranty, covenant,
term or condition of this Agreement which may legally be waived, may be waived,
or the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed on behalf of
the appropriate party by a person who has been authorized by its Board of
Directors to execute waivers, extensions or amendments on its behalf. No waiver
by any party hereto, whether express or implied, of its rights under any
provision of this Agreement shall constitute a waiver of such party's rights
under such provisions at any other time or a waiver of such party's rights under
any other provision of this Agreement. No failure by any party hereto to take
any action against any breach of this Agreement or default by another party
shall constitute a waiver of the former party's right to enforce any provision
of this Agreement or to take action against such breach or default or any
subsequent breach or default by such other party.
8.6 No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
(including, without limitation, any stockholders or employees of the Company)
other than the parties hereto and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement, except
that the present and former directors and executive officers of the Company and
the Company Subsidiaries are intended beneficiaries of Section 5.18.
8.7 Severability. In the event that any one or more of the
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall remain in
full force and effect, and such invalid, void or unenforceable provision shall
be interpreted as closely as possible to the manner in which it was written.
8.8 Fees and Expenses.
(a) Except as provided below, all fees and expenses incurred
in connection with the Merger, this Agreement, the Company Stock Option
Agreement and the transactions contemplated by this Agreement and the Company
Stock Option Agreement shall be paid by the party incurring such fees or
expenses, except that the expenses payable in connection with printing and
mailing the Proxy Statement shall be shared equally between the Company and
Bancorp. In no event shall the aggregate fees and expenses incurred by or on
behalf of the Company in connection with the Merger, this Agreement and the
transactions contemplated hereby exceed $500,000 in the aggregate.
(b) If this Agreement shall be terminated pursuant to Section
7.1(d) and there has been a material breach of any Stockholder Voting Agreement
or if this Agreement shall be terminated pursuant to Sections 7.1(f), (g), (h),
(i) or (j), then the Company shall pay Bancorp an amount equal to all reasonable
expenses (including reasonable attorneys' and advisors' fees) incurred by
Bancorp and Acquisition in connection with this Agreement, the Stock Option
Agreement and the transactions contemplated by this Agreement and the Stock
Option Agreement up to $500,000 (the "Expense Reimbursement").
(c) If this Agreement shall be terminated pursuant to Sections
7.1(d) and on the date of the Meeting a Competing Transaction had been proposed
or publicly announced, or if this Agreement shall be terminated pursuant to
Sections 7.1(f), (g), (h), (i) or (j), and within eighteen (18) months
thereafter, the Company shall enter into a definitive agreement with respect to
any Competing Transaction or any Competing Transaction shall be consummated
(other than a tender offer or exchange offer for less than 50% of the
outstanding shares of capital stock of the Company or the acquisition by any
Person or group of less than 50% of the then outstanding shares of capital stock
of the Company), then the Company shall pay Bancorp an amount equal to
$2,000,000 (less any portion of the Expense Reimbursement theretofore paid) (the
"Termination Fee") and if all or any portion of the Expense Reimbursement has
not yet been paid, such portion of the Expense Reimbursement shall no longer be
payable upon payment of the Termination Fee.
(d) If this Agreement shall be terminated pursuant to Section
7.1(k), then Bancorp shall pay the Company an amount equal to all reasonable
expenses (including reasonable attorneys' fees and advisors' fees) incurred by
the Company in connection with this Agreement, the Stock Option Agreement and
the transactions contemplated hereby and thereby up to $500,000.
(e) Each party agrees that the actual damages accruing to
Bancorp from termination of this Agreement pursuant to those termination
provisions and circumstances referenced in Section 8.8(c) are incapable of
precise estimation and would be difficult to prove, and that the damages
stipulated herein bear a reasonable relationship to the potential injury likely
to be sustained in the event of termination pursuant to such occurrences. The
payments stipulated in Section 8.8(c) are intended by the parties to provide
just compensation in the event of termination pursuant to those termination
provisions referenced in Section 8.8(c), and is not intended to compel
performance or to constitute a penalty for nonperformance.
(f) Any payment required to be made pursuant to Sections
8.8(b), (c) or (d) shall be made to Bancorp or the Company, as applicable, not
later than five business days after the occurrence of the event for which such
party is entitled to payment and delivery by the party entitled to such payment
to the other of a notice of demand for payment, provided that the payment of
expenses pursuant to Sections 8.8(b) or (d) shall be within five business days
after delivery of an itemization setting forth in reasonable detail all expenses
of Bancorp, Acquisition or the Company, as applicable, for which such party is
entitled to reimbursement hereunder (which itemization may be supplemented and
updated from time to time until the 30th day after the party entitled to payment
delivers such notice of demand for payment). All payments required to be made
pursuant to this Section 8.8 shall be made by wire transfer of immediately
available funds to an account designated by the party entitled to payment in the
notice of demand for payment delivered pursuant to this Section 8.8(f).
(g) In the event Bancorp exercises the option granted under
the Company Stock Option Agreement, Bancorp shall, simultaneously with the
closing under the Company Stock Option Agreement, refund to the Company an
amount equal to any Termination Fee paid to Bancorp prior to such exercise less
an amount equal to the expenses incurred by Bancorp and Acquisition in
connection with the Merger, this Agreement, the Company Stock Option Agreement
and the transactions contemplated by this Agreement and the Company Stock Option
Agreement. In the event that after Bancorp has exercised the option granted
under the Company Stock Option Agreement, Bancorp becomes entitled to receive
the Termination Fee hereunder, the Termination Fee due to Bancorp from the
Company shall be an amount equal to (i) the Termination Fee less (ii) the
aggregate net profit realized by Bancorp pursuant to all exercises of the option
under the Company Stock Option Agreement.
8.9 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.11 Litigation; Prevailing Party. In the event of any litigation
with regard to this Agreement, the prevailing party shall be entitled to receive
from the non-prevailing party and the non-prevailing party shall pay upon demand
all reasonable fees and expenses of counsel for the prevailing party.
8.12 Injunctive Relief. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.
8.13 Governing Law. This Agreement has been entered into and shall
be construed and enforced in accordance with the laws of the State of Florida
without reference to the choice of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the
date and year first above written.
BANKATLANTIC BANCORP, INC.
By:-----------------------------------
Name:
Title:
BCP ACQUISITION CORPORATION
By:----------------------------------
Name:
Title:
▇▇▇▇, ▇▇▇▇ & CO., INC.
By:----------------------------------
Name:
Title:
Exhibit A
VOTING AGREEMENT
This Voting Agreement is entered into as of February __, 1998 between
BankAtlantic Bancorp, Inc., a Florida corporation ("Bancorp") and
________________________ ("Stockholder")
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, Bancorp,
▇▇▇▇, ▇▇▇▇ & Co., Inc., a New Jersey corporation (the "Company"), and BCP
Acquisition Corporation, a New Jersey corporation ("Acquisition"), have entered
into an Acquisition Agreement, dated as of the date hereof (the "Acquisition
Agreement"), pursuant to which Bancorp will acquire the Company through the
merger of the Company with and into Acquisition (the "Merger"); and
WHEREAS, in connection with the Merger, Stockholder will receive shares
of Bancorp's Class A Common Stock, par value $.01 per share, in exchange for
Stockholder's entire equity interest in the Company; and
WHEREAS, as a material inducement to Bancorp and Acquisition to enter
into the Acquisition Agreement and agree to acquire the Company, Stockholder,
who is also a member of the Board of Directors of the Company, has agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, representations and warranties contained in this Agreement, the
parties agree as follows:
1. Representations and Warranties of Stockholder. Stockholder
represents and warrants to Bancorp as follows:
(a) Title to Shares. Stockholder is now, and at all times
through the Effective Time of the Merger (the "Effective Time") will be,
directly or indirectly, the record holder or beneficial owner of _________
shares of the Company's issued and outstanding common stock, par value $.01 per
share (collectively, the "Stockholder Stock").
(b) Authority; Binding Agreement. Stockholder has full legal
capacity, right, power and authority to enter into this Agreement. This
Agreement has been duly executed and delivered by Stockholder, and constitutes
the legal, valid and binding obligation of Stockholder, enforceable in
accordance with its terms, except to the extent that its enforcement may be
limited by bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(c) The execution, delivery and performance of this Agreement
by the Stockholder, and the consummation of the transactions contemplated
hereby, do not and will not constitute a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of the Stockholder or
to which the Stockholder is subject or bound, or require consent or approval
under such law, rule, regulation, judgment, decree, order, governmental permit
or license or the consent or approval of any other party to any such agreement,
indenture or instrument.
2. Covenants of Stockholder.
(a) Vote of Stockholder Stock in Favor of Merger. Unless and
until the Merger Agreement shall have been validly terminated in accordance with
its terms (an "Event of Termination"), Stockholder agrees to vote, or cause all
of the Stockholder Stock to be voted, (i) in favor of the Merger,(ii) against
any merger, consolidation, share exchange, business combination, asset sale or
other extraordinary corporate transaction involving the Company, other than the
Merger, or any other action or agreement that would result in any of the
conditions to the Company's obligations under the Acquisition Agreement not
being fulfilled, or (iii) in favor of any other matter relating to consummation
of the transactions contemplated by the Acquisition Agreement. Stockholder also
agrees, unless and until an Event of Termination has occurred, to act in all
other respects to use his best efforts to cause the consummation of the Merger
and the transactions contemplated by the Acquisition Agreement.
(b) Sale of Stockholder Stock. Unless and until the occurrence
of an Event of Termination, Stockholder will not, directly or indirectly, (i)
tender or permit the tender into any tender or exchange offer of any shares of
Stockholder Stock, (ii) sell, transfer or otherwise dispose of or encumber or
permit the sale, transfer or other disposition or encumbrance of any shares of
Stockholder Stock or (iii) deposit any shares of Stockholder Stock into a voting
trust or enter into a voting agreement or arrangement with respect to such
Stockholder Stock or grant any proxy with respect thereto, except in each case
pursuant to the Acquisition Agreement.
3. Additional Shares. All references in this Agreement to Stockholder
Stock shall be deemed to include any shares of capital stock of the Company
subsequently acquired by Stockholder.
4. Miscellaneous.
(a) Notices. Any notice or other communication under this
Agreement shall be in writing and shall be delivered personally, by facsimile
transmission or by registered mail, return receipt requested, postage prepaid,
to the parties. Such notices, demands, claims and other communications shall be
deemed given when actually received or in the case of registered U.S. mail, on
the date the postal service first attempts delivery.
(b) Waiver and Amendment. This Agreement may only be amended
by an instrument in writing executed by the parties hereto. No failure by any
party hereto to take any action against any breach of this Agreement or default
by another party shall constitute a waiver of the former party's right to
enforce any provision of this Agreement or to take action against such breach or
default or any subsequent breach or default by such other party.
(c) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(d) Expenses. Except as otherwise provided herein or in the
Acquisition Agreement, all expenses incurred in connection with this Agreement
shall be paid by the party incurring such expenses.
(e) Prevailing Party. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable fees and expenses of counsel for the prevailing party.
(f) Severability. In the event that any one or more of the
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall remain in
full force and effect, and such invalid, void or unenforceable provision shall
be interpreted as closely as possible to the manner in which it was written.
(g) Injunctive Relief. It is likely that remedies at law may
be inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.
(h) Governing Law. This Agreement has been entered into and
shall be construed and enforced in accordance with the laws of the State of
Florida.
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
BANKATLANTIC BANCORP, INC.
By:----------------------------
Name:
Title:
STOCKHOLDER
Name:--------------------------
Exhibit B
Form of Affiliate Letter
BankAtlantic Bancorp, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of ▇▇▇▇, ▇▇▇▇ & Co., Inc., a New Jersey corporation (the "Company"),
as the term "affiliate" is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act'). I have been further advised that pursuant to
the terms of the Acquisition Agreement dated as of February , 1998 (the
"Acquisition Agreement") among BankAtlantic Bancorp, Inc., a Florida corporation
("Bancorp"), the Company and BCP Acquisition Corporation, a wholly owned
subsidiary of Bancorp ("Acquisition"), the Company will be merged with and into
Acquisition (the "Merger") and that as a result of the Merger, I may receive
shares of Bancorp's Class A Common Stock (as defined in the Acquisition
Agreement) in exchange for shares of Company Common Stock (as defined in the
Acquisition Agreement) owned by me.
I represent, warrant and covenant to Bancorp that in the event I
receive any Class A Common Stock as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Class A Common Stock in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Acquisition
Agreement and discussed its requirements and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of
Class A Common Stock to the extent I believed necessary with my counsel
or counsel for the Company.
C. I have been advised that the issuance of Class A Common
Stock to me pursuant to the Merger will be registered with the
Commission under the Act on a Registration Statement on Form S-4.
However, I have also been advised that, since at the time the Merger
will be submitted for a vote of the stockholders of the Company I may
be deemed to have been an affiliate of the Company and the distribution
by me of the Class A Common Stock has not been registered under the
Act, that I may not sell, transfer or otherwise dispose of Class A
Common Stock issued to me in the Merger unless (i) such sale, transfer
or other disposition has been registered under the Act, (ii) such sale,
transfer or other disposition is made in conformity with the volume and
other limitations of Rule 145 promulgated by the Commission under the
Act, or (iii) in the opinion of counsel reasonably acceptable to
Bancorp, such sale, transfer or other disposition is otherwise exempt
from registration under the Act.
D. I understand that Bancorp is under no obligation to
register the sale, transfer or other disposition of the Class A Common
Stock by me or on my behalf under the Act or to take any other action
necessary in order to make compliance with an exemption from such
registration available.
E. I also understand that stop transfer instructions will be
given to Bancorp's transfer agent with respect to the Class A Common
Stock and that there will be placed on the certificates for the Class A
Common Stock issued to me, or any substitutions therefor, a legend
stating in substance:
"The securities represented by this certificate have
been issued in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies and may only be sold
or otherwise transferred in compliance with the requirements
of Rule 145 or pursuant to a registration statement under said
act or an exemption from such registration."
F. I also understand that unless the transfer by me of my
Class A Common Stock has been registered under the Act or is a sale
made in conformity with the provisions of Rule 145, Bancorp reserves
the right to put the following legend on the certificates issued to my
transferee:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 and were
acquired from a person who received such shares in a
transaction to which Rule 145 promulgated under the Securities
Act of 1933 applies. The shares have been acquired by the
holder not with a view to, or for resale in connection with,
any distribution thereof within the meaning of the Securities
Act of 1933 and may not be sold, pledged or otherwise
transferred except in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
It is understood and agreed that the legends set forth in paragraphs E
and F above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to Bancorp a copy of a letter
from the staff of the Commission, or an opinion of counsel in form and substance
reasonably satisfactory to Bancorp, to the effect that such legend is not
required for purposes of the Act.
I understand that pursuant to the Acquisition Agreement, no certificate
for Class A Common Stock shall be delivered to me in exchange for certificates
representing Company Common Stock until I have executed and delivered this
agreement.
Very truly yours,
By:-----------------------------------
Name:
Accepted this day of
February, 1998 by
BANKATLANTIC BANCORP, INC.
By:---------------------------------
Name:
Title:
Exhibit C
SUMMARY OF TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD
Grant: Restricted Shares of Class A Common
Stock ("Restricted Shares").
Vesting: On the fourth anniversary date of the
Merger (the "Vesting Date").
Condition for Vesting: Participant has remained an
active full-time employee from the date
of the Merger through the Vesting Date.
Accelerated Vesting: If during the four year period
following the Merger, the Company should
terminate participant's employment for
any reason other than Cause (as defined
below), Restricted Shares shall vest
immediately upon termination.
In the event employment is terminated
due to death or disability, remaining
Restricted Shares shall vest immediately
upon such termination. (In the event of
death, participant's Restricted Shares
shall be provided to his designated
beneficiary, or to his estate if no
beneficiary is named).
Cause: "Cause" shall mean:
(i) continued failure to perform
substantially participant's duties with
the Company or one of its affiliates
(other than any such failure resulting
from incapacity due to disability or
death) or
(ii) engaging in illegal conduct or
gross misconduct which is materially
injurious to the Company.
Limitation on Vesting: If during the four year
period the Company terminates
participant's employment for Cause, no
Restricted Shares shall vest following
such termination, and such Restricted
Shares shall be forfeited.
If during the four year period
employment is terminated by participant
for any reason other than death or
disability, no Restricted Shares shall
vest.
Other: This summary is not an employment
agreement between any participant and
the Company.
Participant shall provide to the Company
any Federal, state, local or foreign
taxes as shall be required to be
withheld pursuant to any applicable law
or regulation, and may request the
Company to withhold sufficient
Restricted Shares to satisfy such
withholding requirement.
The Restricted Stock Plan will be
administered by the Company's
Compensation Committee.
The foregoing is qualified in its entirety to the plan.
Exhibit D
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
_________, 1998, by and ▇▇▇ ▇. ▇▇▇▇▇▇▇, whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Executive"), and ▇▇▇▇, ▇▇▇▇ & Co., Inc., a New
Jersey corporation (the "Company"), a wholly-owned subsidiary of BankAtlantic
Bancorp, a Florida corporation ("Bancorp").
1. Pursuant to an Amended and Restated Employment Agreement dated
_________ (as amended through the date hereof, the "Prior Agreement"), between
Executive and the Company, Executive is currently employed by the Company as its
President and Chief Executive Officer.
2. The Company and Bancorp have entered into an Acquisition Agreement,
dated February 9, 1998 (such agreement, as the same may be amended from time to
time, is referred to as the "Acquisition Agreement"), pursuant to which Bancorp
will acquire the Company by merger of the Company into a wholly-owned subsidiary
of Bancorp (the "Merger"). At the Effective Date of the Merger, the Company and
Bancorp will execute an agreement governing the operation of the Company
independent from Bancorp (the "Independence Agreement").
3. The Company, Bancorp and the Executive desire that commencing with
the effective date of the Merger (the "Effective Date"), (i) the Executive be
employed as Chairman, President and Chief Executive Officer of the Company upon
the terms and conditions set forth in this Agreement, (ii) the Company's
obligations to the Executive under the Prior Agreement be terminated in exchange
for a lump sum payment to Executive of $780,000 (the "Buyout Sum") and the prior
Agreement be terminated; and (ii) the Prior Agreement be replaced and superseded
by this Agreement.
Accordingly, the parties agree as follows:
1. Employment, Title, Duties and Term.
1.1 Employment; Title; Duties. Subject to the terms and conditions of
this Agreement, the Company agrees to employ Executive during the term of
employment set forth in Section 1.2 below. Executive shall serve as President
and Chief Executive Officer of the Company and Chairman of the Company's Board
of Directors, shall be responsible for the day-to-day management and operations
of the Company and shall have such powers and perform such duties, consistent
with such executive capacity, as may be assigned or delegated to him from time
to time by the Board of Directors of the Company (the "Board of Directors").
Executive shall have the authority to hire employees of the Company, set their
salary and make purchases within the parameters of the Company's annual
operating and capital budget, which budget shall be subject to review and
approval by the Board of Directors and by Bancorp. All other officers of the
Company shall report directly to Executive, except as the Executive shall
otherwise determine, and except that the chief compliance officer and/or
internal auditor shall report directly to the Board of Directors. Executive's
primary office shall be located in Livingston, New Jersey unless Executive, the
Company and Bancorp mutually agree to change such location. Bancorp shall cause
Executive to be nominated for election by Bancorp's shareholders to serve as a
director of Bancorp during the Employment Period. If elected, Executive shall
serve as a director of Bancorp. Bancorp will use its best efforts to accomplish
such election. Executive shall not be entitled to receive any fees or other cash
compensation in addition to the compensation specifically set forth herein for
serving as a director, board committee member or officer of the Company, Bancorp
or any of their respective subsidiaries or affiliates. Executive accepts such
employment and agrees to perform all such services faithfully and diligently,
and to discharge the responsibilities thereof to the best of his ability.
Executive shall devote his full business time and attention and energies to the
duties of his employment.
1.2 Term and Payment.
(a) Except in the case of earlier termination, as hereinafter
specifically provided, the initial term of this Agreement shall be for two years
commencing on the Effective Date, with one year being added at the end of such
two year term and at each anniversary thereafter, provided that the Executive is
actively employed by the Company on such date.
(b) The Prior Agreement shall be terminated upon receipt by the
Executive of the Buyout Sum, which shall be paid to the Executive, subject to
federal and state tax withholding, on the date hereof.
2. Base Salary. Subject to the provisions herein regarding resignation,
termination with or without cause, death, and disability, the Company shall pay
the Executive a salary in connection with his services hereunder in the amount
of $260,000 per annum, subject to increase in the discretion of the Board of
Directors, but in any event not less than Executive's salary of the previous
year. The Executive's salary shall not be decreased without the Executive's
prior written approval. The salary under this Section 2 shall be payable to the
Executive not less frequently than monthly.
3. Bonus, Benefits and Expenses.
3.1 Bonuses and Other Benefits. The Company shall also cause the
Executive to receive, in addition to his salary, all other employee benefits
(including a bonus or bonuses if declared by the Board of Directors in its
discretion, and contributions to any profit sharing plan) in effect or hereafter
to be offered by the Company. During the first year of this Agreement, the bonus
paid to Executive shall not be less than $_________.
3.2 Reasonable Business Expenses. Executive is expected and is
authorized to incur reasonable expenses in the performance of his duties
hereunder, including such expenses for the promotion of the business of the
Company and Bancorp as entertainment, travel, and similar business expenses
incurred in the performance of his duties as allowed in the Company's expense
policy. The Company shall reimburse the Executive for all such expenses promptly
upon periodic presentation by Executive of an itemized account with
documentation of such expenses.
3.3 Vacation. Executive shall be entitled to annual vacation (without
deduction of salary or other compensation) in accordance with Bancorp's vacation
policy for employees in effect from time to time, but in no event less than four
weeks, such vacation to be taken at such time or times during such year as
determined by Executive.
3.4 Bancorp Directors' and Officers' Insurance. Executive shall be
entitled in connection with his service as a director of Bancorp to coverage
under any directors' and officers' insurance policy which Bancorp provides for
Bancorp's directors and officers.
3.5 Bancorp Option Plan. Executive shall be eligible to receive options
to acquire Bancorp Common Stock as determined by the Bancorp Stock Option
Committee pursuant to any plan maintained by Bancorp from time to time under
which stock options may be granted to executives of Bancorp and its
subsidiaries.
3.6 Continuation of Deferred Trust. During the term hereof the Company
shall use all reasonable efforts to continue in its current form the Company's
deferred trust compensation plan and the rabbi trust thereunder.
3.7 Automobile. The Company shall provide Executive with the use of an
appropriate Company-leased automobile and reimbursement for automobile related
expenses consistent with the Company's policy.
4. Death of the Executive.
(a) In the event of the Executive's death during the term of
this Agreement, the Company shall pay to the Executive's designated beneficiary,
or if no beneficiary has been designated then to the Executive's estate, in
addition to the salary earned by the Executive but unpaid as of the date of
death, the amount of the Executive's then current annual base salary. Said
amount shall be paid in a lump sum, within thirty (30) days after the date of
death.
(b) If, but only if, a bonus or bonuses are declared for the
salaried officers of the Company for such calendar year, the Company shall also
pay to the Executive's designated beneficiary or estate a cash bonus reflecting
Executive's performance for the partial calendar year in which his death occurs,
in an amount equal to the average of the bonus accrued by the Company for the
three previous fiscal years, multiplied by a fraction, the numerator of which is
the number of days of the calendar year in which Executive was actively employed
and the denominator of which is 365; then subtracting from the product so
calculated any cash bonus or bonuses previously paid to Executive relating to
(not necessarily paid during) such calendar year. Such bonus, if any, shall be
payable at such time as the Company next pays bonuses generally to other
executives.
(c) In the event of the death of the Executive, the
Executive's personal representative, executor or administrator, as the case may
be, shall be entitled, for the period set forth in the applicable plan, to
exercise stock options granted to him by the Company and Bancorp as would
otherwise have vested and been exercisable, had the Executive not died prior to
the date that such Options are exercised. All Options not so exercised shall
terminate.
5. Disability of the Executive. If the Executive is unable to perform
his regular duties and services by reason of illness or incapacity for a period
of four consecutive months in any 12 month period: (a) the Company shall
continue to pay his salary at his then current rate during such period of
illness or incapacity, less the amount of any disability insurance benefits paid
directly to the Executive from any policy or policies the premiums for which
have been paid by the Company, and (b) the Company may thereafter terminate the
Executive's employment under this Agreement upon payment of severance pay to the
Executive in a lump sum ten days following termination in the amount of the
Executive's annual base salary in effect immediately prior to the disability,
and assignment to the Executive at no cost to him of all rights which the
Company may then have in any disability income insurance policies on the
Executive, which shall become the property of the disabled Executive.
6. Termination and Severance Pay.
This Agreement may be terminated during its term as follows:
(a) Voluntary Resignation.
(i) The Executive may terminate this Agreement
without cause by voluntary resignation upon thirty (30) days' written notice to
the Company.
(ii) In that event, monetary compensation (salary or
otherwise) due to the Executive hereunder will be terminated upon the effective
date of the employment termination.
(iii) Following such termination of the Executive's
employment, the Company shall continue to provide such medical and other
benefits to Executive as it is required by law to provide and such other
benefits as called for pursuant to the Company's plans and policies, if any.
(b) Involuntary Termination Without Cause (or Resignation for
Good Reason).
(i) The Company may terminate this Agreement without
cause upon thirty (30) days' written notice to the Executive.
(ii) If Executive resigns from his employment
hereunder within six months of the occurrence of any of the events set forth
below (each such event being referred to as "Good Reason"), such resignation
shall have the same effect as a termination of this Agreement by the Company
without cause provided that the Company has no basis for terminating the
Executive pursuant to (c)(i) below (in which event it shall be treated as a
termination pursuant to (c)). Any of the following shall constitute "Good
Reason" hereunder: (a) the Company assigns Executive to a primary office located
outside of Livingston, New Jersey, Executive objects to such assignment in
writing and ten days pass following delivery of such written objection to
Bancorp and to the Board of Directors without such assignment being withdrawn;
(b) Executive is assigned any material duties inconsistent with his duties as a
President and Chief Executive Officer of the Company, (c) Executive is removed
from, or not re-elected to, his position as President and Chief Executive
Officer of the Company or any successor, or (d) persons are elected to the Board
of Directors other than those designated by the individuals specified in and
pursuant to the Independence Agreement without the prior written consent of
Executive, (e) Bancorp causes the Company to adopt substantive and material
policies with respect to the ongoing operations of the Company's business (such
as compensation of non-executive officers or more aggressive underwriting
policies) to which the Executive has indicated his opposition in a writing
delivered to Bancorp and to the Board of Directors and such policies are not
withdrawn within ten days after such written opposition is delivered, (f)
Bancorp fails to provide reasonably appropriate capital upon reasonable terms to
the Company to allow the company to operate and grow, Executive has notified
Bancorp of such failure in a writing delivered to Bancorp and to the Board of
Directors and such failure is not cured within ten days after such written
notice is delivered, (g) the annual base salary of the Executive is reduced, or
(h) Bancorp breaches this Agreement or the Independence Agreement and fails to
cure such breach within ten days after receiving written notice thereof from
Executive.
(iii) In the event the Company terminates this
Agreement without cause or the Executive resigns for Good Reason, the Company
shall pay severance pay to the Executive in an amount equal to the Executive's
annual base salary. Such severance pay shall be paid in a lump sum, within ten
(10) days after the effective date of termination.
(iv) If, but only if, a bonus or bonuses are
declared for the salaried officers of the Company for such calendar year, the
Company shall also pay Executive a cash bonus reflecting Executive's performance
for the partial calendar year in which such termination occurs, in an amount
equal to the average of the bonus accrued by the Company for the two previous
fiscal years, multiplied by a fraction, the numerator of which is the number of
days of the calendar year in which Executive was actively employed and the
denominator of which is 365; then subtracting from the product so calculated any
cash bonus or bonuses previously paid to Executive relating to (not necessarily
paid during) such calendar year. Such bonus, if any, shall be payable at such
time as the Company next pays bonuses generally to other executives.
(v) In the event of such termination without cause
or resignation for Good Reason, shares in the Company's retention pool created
pursuant to the Merger Agreement, awarded to or held by the Executive and which
have not fully vested shall automatically and fully vest and Executive shall
have a period of no less than three months following termination in which to
exercise such stock options.
(vi) Following such termination, the Company shall
continue to provide such medical and other benefits to Executive as it is
required by law to provide and such other benefits as called for pursuant to the
Company's then current plans and policies, if any.
(c) Involuntary Termination with Cause.
(i) The Company may terminate this Agreement for
cause by giving written notice to the Executive stating that it is the Company's
intention to terminate the Agreement effective immediately, and the Agreement
shall so terminate. The term "cause" as used in this Agreement shall mean any of
the following: (i) gross negligence, (ii) gross insubordination, (iii) material
violations of any regulatory compliance rules, or (iv) a felony conviction of
Executive.
(ii) Following such termination, the Company shall
continue to provide such medical and other benefits to Executive as it is
required by law to provide and such other benefits as called for pursuant to the
Company's then current plans and policies, if any.
7. Confidentiality.
(a) Non-Disclosure of Confidential Information. Except in the
course of his employment with the Company and in the pursuit of the business of
the Company or any of its subsidiaries or affiliates, Executive shall not, at
any time during or following the term hereof, disclose or use, any confidential
information or proprietary data of the Company or any of its subsidiaries or
affiliates.
(b) No Hire. During the term of this Agreement and for a
period of one year after the termination of this Agreement, Executive agrees
that he will not, directly or indirectly, for or on behalf of himself or any
other persons or entities, hire, initiate any offer of employment to or in a any
other manner solicit the services of any person or entity who was, at any time
during the one year period prior to the date of termination of this Agreement,
an employee, or sales agent of the Company; provided however, that this
provision shall not prohibit any person employing Executive from hiring any
former Company employee or sales agent who will not be supervised by or
reporting to the Executive.
(c) Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this section. The invalidity or unenforceability of any
provision of this Agreement shall not affect the force and effect of the
remaining valid portions.
(d) Survival. This section shall survive the termination of
Executive's employment hereunder and the expiration of this Agreement.
8. Notice.
Any notice to be given by either party under this Agreement
shall be in writing and hand-delivered, delivered by Federal Express (or a
similar courier) or mailed by certified mail with return receipt requested, and
addressed to the other party at the address stated herein or such other address
as may subsequently have been furnished by such other party in writing.. Any
such notice shall be deemed to have been given on the date of delivery or
mailing. Notices to the Company shall be sent to:
▇▇▇▇, ▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: CFO
and notices to the Executive shall be sent to him at:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
9. Entire Agreement. Upon termination of the Prior agreement as set
forth herein, this Agreement shall set forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
whether written or oral will be superseded by this Agreement; provided, however,
that this Agreement shall not limit or in any way affect the rights, duties, or
obligations that the Executive may have under any benefit plan of the Company,
including, but not limited to, any pension plan, profit-sharing plan, or medical
or health plan.
10. Governing Law.
This Agreement has been executed and delivered in the State of New
Jersey and shall in all respects be governed by and construed and enforced in
accordance with the laws of New Jersey, including all matters of construction,
validity, and performance.
11. Modifications, etc.
No modification, amendment, or waiver of any of the provisions of this
Agreement shall be effective unless in writing specifically referring to this
Agreement and signed by both parties.
12. Enforcement of Agreement.
The failure of either party at any time to enforce any of the
provisions of this Agreement or to require performance by the other party of any
of the provisions hereof shall not operate as or be construed as a waiver of
such provisions or to affect either the validity of this Agreement, or any part
hereof, or the right of either party thereafter to enforce each and every
provision in accordance with the terms of this Agreement.
13. Severability.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects and to the fullest extent permitted by law as if
such invalid or unenforceable provision were omitted.
14. Binding Agreement; Assignment.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and Bancorp any legal successor to either of the Company or Bancorp
shall be deemed to be substituted for the Company or Bancorp, as the case may
be, under the provisions hereof.
This Agreement shall also be binding upon and shall inure to the
benefit of the Executive, his heirs, executors, legal representatives and
assigns.
Other than as set forth above in this Section, none of the Company,
Bancorp or Executive shall have the right to assign its or his obligations or
duties hereunder.
15. Litigation: Prevailing Party. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable fees and expenses of counsel for the prevailing party but in no event
shall such amount exceed $50,000.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the day and date first
above written.
▇▇▇▇, ▇▇▇▇ & CO.
By: ______________________________
---------------------------------
EXECUTIVE
Exhibit E
INDEPENDENCE AGREEMENT
THIS INDEPENDENCE AGREEMENT (the "Agreement") is entered into as of
this ___________ day of ___________, 1998 by and among BankAtlantic Bancorp,
Inc., a Florida corporation ("Bancorp"), BCP Acquisition Corporation, a New
Jersey corporation which is wholly-owned by Bancorp ("Acquisition") and ▇▇▇▇,
▇▇▇▇ & Co., Inc., a New Jersey company ("▇▇▇▇, ▇▇▇▇").
WHEREAS, the parties have entered into an Acquisition Agreement dated
___________, 1998 pursuant to which ▇▇▇▇, ▇▇▇▇ will be merged into Acquisition
(the "Acquisition Agreement"); and
WHEREAS, it is the parties desire to maintain the operations of ▇▇▇▇,
▇▇▇▇ (which after its merger with Acquisition will be referred to herein as the
"Resulting Company") as an independent, autonomous subsidiary; and
WHEREAS, Bancorp is in a position to provide capital to the Resulting
Company to enable the Resulting Company to grow and pursue its business plan;
and
WHEREAS, the parties wish to evidence their respective understandings
with respect to the ongoing operations of the Resulting Company after the
merger.
NOW THEREFORE, in consideration of the sum of ten dollars and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Separate Subsidiary. The parties agree that the Resulting Company
will be operated as a separate autonomous entity with operations separate and
apart from the operations of Bancorp and Bancorp's other subsidiaries. To this
end, the parties agree and acknowledge that (a) separate operating budgets will
be established for the Resulting Company which are mutually acceptable to both
Bancorp and the Resulting Company and (b) the books and records of the Resulting
Company will be maintained in a way which will accurately reflect the separate
operations and financial condition of the Resulting Company. Further, to the
extent permitted under and subject to the Internal Revenue Code of 1986, as
amended and the governing provisions of ERISA, Bancorp will seek to maintain
▇▇▇▇, ▇▇▇▇'▇ existing benefit plans in place for employees of the Resulting
Company after the merger.
2. Intercompany Transactions and Charges. The parties agree and
acknowledge that it is impossible at this time to predict the transactions
between and relative contributions of Bancorp and the Resulting Company after
the merger. However, in any event, for purposes of the internal budgets and
accounting contemplated by Paragraph 1, Bancorp and the Resulting Company will
not enter into or effect any transaction, or provide or receive any services
between the Resulting Company, on the one hand, and Bancorp and its subsidiaries
on the other hand, except at prices and on terms which are not materially
different than the prices and terms available for similar transactions and
services with unrelated third parties. Further, Bancorp will not, for such
purposes, charge the Resulting Company any intercompany charges or similar
charges, except that Bancorp may charge the Resulting Company for charges or
expenses actually incurred, whether directly by the Resulting Company or
attributable to the Resulting Company, for which the Resulting Company receives
an actual service or benefit. Additionally, Bancorp agrees that any restricted
shares of its Class A Common Stock, par value $.01 per share, granted under the
Incentive Plan (the "Plan") created pursuant to Section 5.17 of the Acquisition
Agreement which are forfeited pursuant to the terms of the Plan will revert to
Bancorp, and Bancorp stock options or restricted shares for a like amount of
shares shall be made available for grant to newly-hired employees and officers
of the Resulting Company (who are not participants in the Plan) pursuant to the
terms of the relevant Bancorp plan without any additional charge to the
Resulting Company for purposes of the internal budgets and accounting
contemplated by Paragraph 1 hereof.
3. Management.
(a) Bancorp, as the sole shareholder of the Resulting Company, agrees
to grant to ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇ (so long as they are available and
employed by Bancorp in the case of ▇▇▇▇▇ and the Resulting Company in the case
of ▇▇▇▇▇▇▇) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or such other third party as may be mutually
agreed upon by Messrs. ▇▇▇▇▇ and ▇▇▇▇▇▇▇, the right to designate those persons
who shall serve as the members of the Resulting Company's Board of Directors;
provided, however, that any designee to the Resulting Company's Board of
Directors shall be acceptable to each of Messrs. ▇▇▇▇▇ and ▇▇▇▇▇▇▇. Consistent
with the terms of this Agreement, Bancorp agrees to vote its shares of the
Resulting Company in favor of the election of the individuals so designated to
the Resulting Company's Board of Directors.
(b) The Board of Directors of the Resulting Company shall (i) elect the
officers of the Resulting Company who shall serve at the pleasure of the
Board,(ii) subject to the approval of Bancorp, establish annual budgets and
performance goals for the Resulting Company, (iii) designate a management
compensation committee which shall make recommendations to the Board regarding
the compensation of the Resulting Company's non-executive officers and employees
and recommendations to Bancorp regarding the compensation of executive officers
and the granting of options to purchase Bancorp common stock available under
Bancorp benefit plans and (iv) subject to anything to the contrary set forth
herein, exercise such other responsibilities as customarily exercised by the
Board of Directors of a corporation including, without limitation, the hiring
and firing of employees.
(c) Responsibilities of the Officers. Subject to the direction of the
Resulting Company's Board of Directors, the officers of the Company shall be
responsible for the day to day operations of the Resulting Company.
4. Resources of Bancorp. Bancorp agrees that it will make available to
the Resulting Company such resources as the parties mutually agree is
appropriate, including capital, on terms consistent with past borrowings of the
Company and mutually acceptable to the Boards of Directors of Bancorp and the
Resulting Company.
5. Extraordinary Events. The parties agree and acknowledge that,
without Bancorp's prior approval, Resulting Company will take no extraordinary
actions outside of the ordinary course of its business and will in no event (a)
incur debt in violation of any net capital requirements applicable to the
Company, (b) raise capital from third parties or issue any securities, (c) make
any acquisitions or investments in excess of $100,000 for investment purposes,
(d) settle lawsuits outside of the ordinary course of business or on terms which
could establish an adverse precedent for subsequent settlements or adversely
affect the Resulting Company's future operations or (e) change the compensation
of its executive officers.
6. Termination. This agreement shall terminate in the event (a) the
parties fail to agree upon a budget or performance goals for the Resulting
Company, (b) the Resulting Company materially fails to meet its previously
established performance goals other than as a consequence of adverse changes in
market conditions or (c) there occurs a material change in the executive
officers of the Resulting Company, including but not limited to, any change in
the Chief Executive Officer of the Resulting Company.
7. Miscellaneous Assignment.
(a) Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
(b) Waiver. Any of the parties hereto may extend the time for or waive
compliance with the performance of any obligation or other act of any other
party hereto. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
(c) No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(including, without limitation, any employees of the Company) other than the
parties hereto and their respective successors and permitted assigns, any rights
or remedies under or by reason of this Agreement.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(e) Governing Law. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of Florida
without reference to the choice of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the
date and year first above written.
BANKATLANTIC BANCORP, INC.
By:-----------------------
Name:
Title:
BCP ACQUISITION CORPORATION
By:-----------------------
Name:
Title:
▇▇▇▇, ▇▇▇▇ & CO., INC.
By:-----------------------
Name:
Title: