AGREEMENT AND PLAN OF MERGER
dated as of November 17, 1995
by and between
Republic Bancorporation, Inc.
and
ExecuFirst Bancorp, Inc.
TABLE OF CONTENTS
I. THE MERGER; EFFECTS OF THE MERGER
1.01 The Merger
1.02 Effective Date and Effective Time
1.03 Amendment of ExecuFirst Articles and By-Laws
II. CONSIDERATION
2.01 Merger Consideration
2.02 Stockholder Rights; Stock Transfers
2.03 Fractional Shares
2.04 Exchange Procedures
2.05 Dissenting Shares
2.06 Options
III. ACTIONS PENDING MERGER
3.01 Ordinary Course
3.02 Capital Stock
3.03 Dividends, Etc.
3.04 Compensation
3.05 Benefit Plans
3.06 Acquisitions and Dispositions
3.07 Amendments
3.08 Accounting Methods
3.09 Adverse Action
3.10 Agreements
IV. REPRESENTATIONS AND WARRANTIES
4.01 Disclosure Letters
4.02 Standard
4.03 Representations and Warranties of Republic
4.04 Representations and Warranties of ExecuFirst
V. COVENANTS
5.01 Reasonable Best Efforts
5.02 Stockholder Approval
5.03 Registration Statement
5.04 Press Releases
5.05 Access; Information
5.06 Acquisition Proposals
5.07 Affiliate Agreements
5.08 Certain Modifications; Restructuring Charges
5.09 Takeover Laws
5.10 No Rights Triggered
5.11 Shares Listed
5.12 Regulatory Applications
5.13 Indemnification
5.14 Benefit Plans
5.15 Accountant's Letter
5.16 Stock Option Agreements
5.17 Notification of Certain Matters
VI. CONDITIONS TO CONSUMMATION OF THE MERGER
6.01 Shareholder Vote
6.02 Regulatory Approvals
6.03 Third Party Consents
6.04 No Injunction, Etc.
6.05 Pooling Letters
6.06 Representations, Warranties and Covenants of ExecuFirst
6.07 Representations, Warranties and Covenants of Republic
6.08 Effective Registration Statement
6.09 Blue-Sky Permits
6.10 Tax Opinion
6.11 Articles of Amendment
6.12 Listing
6.13 Dissenters Rights
6.14 Fairness Opinion
6.15 Accountants' Letters
6.16 Certain Director and Officer Positions
6.17 Consent of Republic Option Holders
6.18 Employment Agreements
6.19 Chairman's Agreement
6.20 Shareholders' Equity
6.21 Delivery of Documents, Legal Opinion
VII. TERMINATION
7.01 Termination
7.02 Effect of Termination and Abandonment
VIII. OTHER MATTERS
8.01 Survival
8.02 Waiver; Amendment
8.03 Counterparts
8.04 Governing Law
8.05 Expenses
8.06 Confidentiality
8.07 Notices
8.08 Definitions
8.09 Entire Understanding; No Third Party Beneficiaries
8.10 Headings
LIST OF EXHIBITS
EXHIBIT DESCRIPTION
------- -----------
A FORM OF EXECUFIRST BY-LAWS
B FORM OF AMENDED AND RESTATED STOCK OPTION PLAN
C FORM OF REPUBLIC AFFILIATE'S LETTER
D FORM OF EXECUFIRST AFFILIATE'S LETTER
E FORM OF REPUBLIC STOCK OPTION AGREEMENT
F FORM OF EXECUFIRST STOCK OPTION AGREEMENT
G FORM OF LEGAL OPINION
AGREEMENT AND PLAN OF MERGER, dated as of the 17th day of November,
1995 (this "Plan"), by and between Republic Bancorporation, Inc., a Pennsylvania
corporation ("Republic") and ExecuFirst Bancorp, Inc., a Pennsylvania
corporation ("ExecuFirst").
RECITALS
WHEREAS, the parties hereto desire that Republic merge with and into
ExecuFirst upon the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, the Board of Directors of each of Republic and ExecuFirst has
approved and adopted this Plan.
NOW, THEREFORE, in consideration of their mutual promises and
obligations, the parties hereto approve, adopt and make this Plan and prescribe
the terms and conditions hereof and the manner and basis of carrying it into
effect, which shall be as follows:
I. THE MERGER; EFFECTS OF THE MERGER
1.01 The Merger. At the Effective Time (as defined in Section
1.02):
(A) The Surviving Corporation. Republic shall merge with and
into ExecuFirst (the "Merger"), the separate existence of Republic shall cease
and ExecuFirst shall survive and continue to exist as a Pennsylvania corporation
(the "Surviving Corporation").
(B) Effect of the Merger. Subject to the satisfaction or
waiver of the conditions set forth in Article VI in accordance with the terms of
this Plan, the Merger shall become effective upon the filing in the office of
the Department of State of the Commonwealth of Pennsylvania of a certificate of
merger (the "Certificate of Merger"), or such later date and time as may be set
forth in the Certificate of Merger, in accordance with Section 1928 of the
Pennsylvania Business Corporation Law of 1988 (the "PABCL"). The Merger shall
have the effects prescribed in Section 1929 of the PABCL.
(C) Certificate of Incorporation and By-laws. The Certificate
of Incorporation and By-Laws of the Surviving Corporation shall be those in
effect at the Effective Time (as defined below) as described in Section 1.03
hereof.
1.02 Effective Date and Effective Time. Subject to the conditions to
the obligations of the parties to effect the Merger as set forth in Article VI,
the parties shall cause the effective date of the Merger (the "Effective Date")
to occur on (1) the fifteenth (15) calendar day to occur after the last of the
conditions set forth in Article VI hereof have been satisfied or waived in
accordance with the terms of this Plan or (2) such other date to which the
parties may agree in writing. The time on the Effective Date when the Merger
shall become effective is referred to as the "Effective Time."
1.03 Amendment of ExecuFirst Articles and By-Laws. At or prior to the
Effective Time, as the case may be, the articles of incorporation of ExecuFirst
shall be amended in substantially the form as shall be agreed upon between the
parties (the "Articles of Amendment") and the By-Laws of ExecuFirst shall be
amended in substantially the form attached hereto as Exhibit A (the "Amended
By-Laws").
II. CONSIDERATION
2.01 Merger Consideration. Subject to the provisions of this Plan, at
the Effective Time, automatically by virtue of the Merger and without any
action on the part of any stockholder:
(A) Outstanding ExecuFirst Common Stock. Each share of
ExecuFirst Common Stock (as defined in Section 4.04(B)) issued and outstanding
immediately prior to the Effective Time shall be unchanged and shall remain
issued and outstanding.
(B) Outstanding Republic Common Stock. Subject to section
2.05, each share (excluding shares held by Republic or any of its subsidiaries,
if any (as defined in Section 8.08) ("Republic Treasury Shares")) of Republic
Common Stock (as defined in Section 4.03(B)) issued and outstanding immediately
prior to the Effective Time shall become and be converted into the right to
receive a number of shares of the Surviving Corporation's Common Stock (as
defined in Section 2.02) equal to the quotient obtained from dividing the
Republic Book Value Per Share (as defined below) by the ExecuFirst Book Value
Per Share (as defined below) (the "Exchange Ratio").
The "Republic Book Value Per Share" shall mean the quotient obtained
by dividing (x) the total shareholders' equity of Republic as reflected on
Republic's Financial Statements for the calendar quarter ended immediately
preceding the Effective Time, as determined in accordance with generally
accepted accounting principles consistently applied by (y) the number of issued
and outstanding shares of Republic Common Stock as of the Effective Time, less
the number of Republic Treasury Shares as of the Effective Time. The "ExecuFirst
Book Value Per Share" shall mean the quotient obtained by dividing (x) the total
shareholders' equity of ExecuFirst as reflected on ExecuFirst' Financial
Statements for the calendar quarter ended immediately preceding the Effective
Time, as determined in accordance with generally accepted accounting principles
consistently applied; provided, however, that subsequent changes after September
30, 1995 in the valuation reserve accounted for in compliance with FAS No. 115
shall not be recognized as a change in shareholders' equity as defined in this
Agreement, by (y) the number of issued and outstanding shares of ExecuFirst
Common Stock as of the Effective Time, less the number of shares of ExecuFirst
Common Stock held by ExecuFirst or any of its subsidiaries ("ExecuFirst Treasury
Shares").
2.02 Stockholder Rights; Stock Transfers. Each share of Republic Common
Stock, without any notice by the holder thereof, which is issued and outstanding
at the Effective Time, shall be converted into the right to receive shares of
common stock $.01 par value per share, of the Surviving Corporation (the
"Surviving Corporation Common Stock") in accordance with this Article II. At the
Effective Time, holders of Republic Common Stock shall have no rights as, and
shall cease to be stockholders of Republic, other than the right to receive the
consideration
provided under this Article II. After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of shares of
Republic Stock.
2.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of the Surviving Corporation Common Stock and no certificates
or scrip therefor, or other evidence of ownership thereof, will be issued in the
Merger; instead, the Surviving Corporation shall pay to each holder of Republic
Common Stock who would otherwise be entitled to a fractional share an amount in
cash determined by multiplying such fraction by ExecuFirst Book Value Per Share.
2.04 Exchange Procedures. (A) As promptly as practicable after the
Effective Date, the Surviving Corporation shall send or cause to be sent to each
former holder of shares (other than Republic Treasury Shares) of Republic Common
Stock of record immediately prior to the Effective Date transmittal materials
for use in exchanging such stockholder's certificates formerly representing
Republic Stock ("Old Certificates") for the consideration set forth in this
Article II. The certificates representing the shares of Surviving Corporation
Common Stock ("New Certificates") into which shares of such stockholder's shares
of Republic Common Stock are converted on the Effective Date and any check in
respect of fractional share interests which such person shall be entitled to
receive will be delivered to such stockholder only upon delivery to Midlantic
Bank as Exchange Agent (the "Exchange Agent") of Old Certificates representing
all of such shares of Republic Common Stock (or indemnity satisfactory to the
Surviving Corporation and the Exchange Agent if any of such certificates are
lost, stolen or destroyed,) owned by such stockholder. No interest will be paid
on any payments to be paid in lieu of fractional share interests or dividends or
distributions which any such person shall be entitled to receive pursuant to
this Article II upon such delivery. Old Certificates surrendered for exchange by
any Affiliate (as defined in Section 5.07) of Republic shall not be exchanged
for New Certificates until the Surviving Corporation has received a written
agreement from such person as specified in Section 5.07.
(B) Notwithstanding the foregoing, neither the Exchange Agent
nor any party hereto shall be liable to any former holder of Republic Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
2.05 Dissenting Shares. Notwithstanding anything to the contrary
contained in this Agreement, shares of Republic Common Stock with respect to
which dissenters' rights, if any, are granted by reason of the Merger and the
PABCL and who do not vote in favor of the Merger and who otherwise comply with
the provisions of Subchapter D of Chapter 15 of the PABCL ("Republic Dissenting
Shares") shall not be entitled to shares of Surviving Corporation Common Stock
pursuant to Section 2.01 hereof, unless and until the holder thereof shall have
failed to perfect or shall have effectively withdrawn or lost such holder's
right to dissent from the Merger under the PABCL, and shall be entitled to
receive only the payment provided for by the PABCL. If any such holder shall
have failed to perfect or shall have effectively withdrawn or lost such holder's
dissenters' rights under the PABCL, such holder's Republic Dissenting Shares
shall thereupon be deemed to remain outstanding and entitled to shares of
Surviving Corporation Common Stock pursuant to this Agreement.
2.06 Options. In accordance with Section 5.02 hereof, ExecuFirst
shall submit to its shareholders for their approval an Amended and Restated
Stock Option Plan, in substantially the
form attached hereto as Exhibit B (the "Amended and Restated Surviving
Corporation Option Plan"), to provide for the award of long term incentives to
(i) holders of Republic Stock Options (as defined below) immediately prior to
the Effective Date, and (ii) the officers and key employees of the Surviving
Corporation and its subsidiaries. From and after the Effective Time, all
employee and director stock options to purchase shares of Republic Common Stock
(each, a "Republic Stock Option"), which are then outstanding and unexercised,
shall be converted into and become options to purchase shares of the Surviving
Corporation Common Stock, and the Surviving Corporation shall assume each such
Republic Stock Option in accordance with the terms of the plan and agreement by
which it is evidenced; provided, however, that from and after the Effective Time
(i) each such Republic Stock Option assumed by the Surviving Corporation may be
exercised solely to purchase shares of the Surviving Corporation Common Stock
pursuant to the Amended and Restated Surviving Corporation Option Plan, (ii) the
number of shares of the Surviving Corporation Common Stock purchasable upon
exercise of such Republic Stock Option shall be equal to the number of shares of
Republic Common Stock that were purchasable under such Republic Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio and
rounding down to the nearest whole share, with cash being paid for any
fractional share interest that otherwise would be purchasable, and (iii) the per
share exercise price under each such Republic Stock Option shall be equal to the
product of (x) the exercise price of such Republic Stock Option immediately
prior to the Effective Date, and (y) the quotient obtained by dividing 1 by the
Exchange Ratio, and rounding up to the nearest cent. The terms of each Republic
Stock Option shall, in accordance with its terms, be subject to further
adjustment as appropriate to reflect any stock split, stock dividend,
recapitalization or other similar transaction with respect to the Surviving
Corporation Common Stock on or subsequent to the Effective Date. It is intended
that the foregoing assumption shall be effected in a manner which is consistent
with the requirements of Section 424 of the Internal Revenue Code of 1986, as
amended (the "Code"), as to any Republic Stock Option that is an "incentive
stock option" (as defined in Section 422 of the Code).
III. ACTIONS PENDING MERGER
From the date hereof until the Effective Time, except as expressly
contemplated in this Plan, (i) without the prior written consent of ExecuFirst
(which consent shall not be unreasonably withheld or delayed) Republic will not,
and will cause each of its subsidiaries not to and (ii) without the prior
written consent of Republic (which consent shall not be unreasonably withheld or
delayed) ExecuFirst will not and will cause each of its subsidiaries not to:
3.01 Ordinary Course. Conduct the business of it and its subsidiaries
other than in the ordinary and usual course or, to the extent consistent
therewith, fail to use reasonable efforts to preserve intact their business
organizations and assets and maintain their rights, franchises and existing
relations with customers, suppliers, employees and business associates, or take
any action that would (i) affect the ability of any party to obtain any
necessary approvals of any Regulatory Authorities (as defined in Section
4.03(H)) required for the transactions contemplated hereby without the
imposition of a condition, restriction or requirement which would so materially
and adversely impact the economic or business benefits to ExecuFirst or Republic
of the transactions contemplated by this Plan that, had such condition or
requirement been known, such party would not, in its reasonable judgment, have
entered into this Plan or (ii) adversely affect its ability to perform any of
its material obligations under this Plan.
3.02 Capital Stock. Other than (i) as Previously Disclosed in Section
4.03(B) of its Disclosure Letter (as defined in Section 4.01) with respect to
Republic or Section 4.04(B) of its Disclosure Letter with respect to ExecuFirst,
(ii) in connection with acquisitions of businesses permitted in Section 3.06 or
(iii) under the relevant Stock Option Agreement (as defined in Section 5.16), or
pursuant to options to purchase Republic Common Stock or ExecuFirst Common
Stock, as the case may be, which are outstanding as of the date hereof (x)
issue, sell or otherwise permit to become outstanding any additional shares of
capital stock, any stock appreciation rights, or any Rights (as defined in
Section 8.08), or declare or otherwise effect any stock split, stock dividend,
recapitalization or any similar transaction, (y) enter into any agreement with
respect to the foregoing, or (z) permit any additional shares of capital stock
to become subject to new grants of employee stock options, stock appreciation
rights, or similar stock-based employee rights.
3.03 Dividends, Etc. (1) Make, declare or pay any dividend, (2) except
as Previously Disclosed in Section 3.03 of its Disclosure Letter, directly or
indirectly, combine, redeem, reclassify, purchase or otherwise acquire, any
shares of its capital stock or, (3) other than as Previously Disclosed in
Section 4.03(B) of its Disclosure Letter with respect to Republic or Section
4.04(B) of its Disclosure Letter with respect to ExecuFirst or as required by
the relevant Stock Option Agreement, authorize the creation or issuance of, or
issue, any additional shares of its capital stock or any Rights with respect
thereto.
3.04 Compensation. Except as otherwise mutually agreed to by Republic
and ExecuFirst, or as Previously Disclosed in Section 3.04 of its Disclosure
Letter, enter into or amend any written employment, severance or similar
agreements or arrangements with any of its directors, officers or employees, or
grant any salary or wage increase or increase any employee benefit (including
incentive or bonus payments), except for (i) normal individual increases in
compensation to employees in the ordinary course of business consistent with
past practice or consistent with individual increases for similarly situated
employees, or (ii) other changes as may be required by law or to satisfy
obligations existing as of the date hereof.
3.05 Benefit Plans. Enter into or modify (except as specifically
provided in this Agreement or as may be required by applicable law or to satisfy
contractual obligations existing as of the date hereof, which to the extent
practicable have been Previously Disclosed in Section 3.05 of its Disclosure
Letter) any pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its directors, officers or other
employees, including without limitation taking any action that accelerates the
vesting or exercise of any benefits payable thereunder.
3.06 Acquisitions and Dispositions. Except as Previously Disclosed in
Section 3.06 of its Disclosure Letter and except for dispositions and
acquisitions of assets in the ordinary and usual course of business consistent
with past practice, dispose of or discontinue any portion of its assets,
business or properties, which is material to it and its subsidiaries taken as a
whole, or merge or consolidate with or acquire (other than by way of
foreclosures or acquisitions of control in a bona fide fiduciary capacity or in
satisfaction of debts previously contracted in good faith, in each case in the
ordinary and usual course of business consistent with past practice) all or any
portion of the business or property of any other entity which is material to it
and its subsidiaries taken as a whole (any of the foregoing, a "Business
Combination Transaction").
3.07 Amendments. Except, in the case of ExecuFirst by filing the
Articles of Amendment and adopting the Amended and Restated By Laws, in
substantially the form attached hereto as Exhibit A, amend its articles or
certificate of incorporation or By Laws.
3.08 Accounting Methods. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
generally accepted accounting principles or by regulation of any banking or
governmental authority having jurisdiction over Republic or ExecuFirst.
3.09 Adverse Actions. (1) Knowingly take any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying (i) for
pooling-of-interests accounting treatment or (ii) as a reorganization within the
meaning of Section 368(a) of the Code; provided, however, that nothing contained
herein shall limit the ability of Republic or ExecuFirst to exercise its rights
under the Stock Option Agreements; or (2) knowingly take any action that is
intended or is reasonably likely to result in (x) any of its representations and
warranties set forth in this Plan being or becoming untrue in any material
respect at any time prior to the Effective Time, (y) any of the conditions to
the Merger set forth in Article VI not being satisfied or (z) a material
violation of any provision of this Plan except, in every case, as may be
required by applicable law.
3.10 Agreements. Agree or commit to do anything prohibited by
Sections 3.01 through 3.09.
IV. REPRESENTATIONS AND WARRANTIES
4.01 Disclosure Letters. On or prior to the date hereof, ExecuFirst has
delivered to Republic and Republic has delivered to ExecuFirst a letter (as the
case may be, its "Disclosure Letter") setting forth, among other things, items
the disclosure of which is necessary or appropriate in relation to any or all of
its representations, warranties and covenants; provided, that (i) no such item
is required to be set forth in a Disclosure Letter as an exception to a
representation or warranty if its absence is not reasonably likely to result in
the related representation or warranty being deemed untrue or incorrect under
the standards established by Section 4.02, and (ii) the mere inclusion of an
item in a Disclosure Letter shall not be deemed an admission by a party that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect (as
defined in Section 8.08).
4.02 Standard. No representation or warranty of Republic contained in
Section 4.03 (other than the representations and warranties contained in (i)
Sections 4.03(B) and (T)(ii), which shall be true and correct (except for
inaccuracies which are de minimis in amount) and (ii) Sections 4.03(E), (O) and
(T)(i), which shall be true and correct in all material respects) shall be
deemed untrue or incorrect, and shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
circumstance or event if such fact,
circumstance or event, individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of Section 4.03 is not
reasonably likely to, have a Material Adverse Effect. No representation or
warranty of ExecuFirst contained in Section 4.04 (other than the representations
and warranties contained in (i) Sections 4.04(B) and (T)(ii), which shall be
true and correct (except for inaccuracies which are de minimis in amount) and
(ii) Sections 4.04(E), (O), and (T)(i), which shall be true and correct in all
material respects) shall be deemed untrue or incorrect, and shall not be deemed
to have breached a representation or warranty, as a consequence of the existence
of any fact, circumstance or event if such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any paragraph of Section 4.04 is not reasonably likely to,
have a Material Adverse Effect.
4.03 Representations and Warranties of Republic. Subject to Sections
4.01 and 4.02, Republic hereby represents and warrants to ExecuFirst as follows:
(A) Organization, Standing, and Authority. It is a corporation
duly organized and existing and in good standing under the laws of the
Commonwealth of Pennsylvania, with its principal executive offices located in
Philadelphia, Pennsylvania. It is duly qualified to do business and is in good
standing in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified. It 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.
(B) Shares. (1) As of the date hereof, Republic has 10,000,000
authorized shares of common stock, par value $.01 per share ("Republic Common
Stock"), and 10,000,000 authorized shares of preferred stock, par value $.01 per
share ("Republic Preferred Stock"; and, together with the Republic Common Stock,
"Republic Stock"), (no other class or series of capital stock being authorized),
of which 794,263 shares of Republic Common Stock, and no shares of Republic
Preferred Stock, were issued and outstanding as of October 31, 1995. The
outstanding shares of its capital stock are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not
issued in violation of any preemptive rights). Except as Previously Disclosed in
Section 4.03(B) of its Disclosure Letter, there are no shares of its capital
stock authorized and reserved for issuance, it does not have any Rights issued
or outstanding with respect to its capital stock, and it does not have any
commitment to authorize, issue or sell any such shares or Rights, except
pursuant to this Plan or the relevant Stock Option Agreement. Since September
30, 1995 it has issued no shares of its capital stock except pursuant to plans
or commitments Previously Disclosed in Section 4.03(B) of its Disclosure Letter.
(2) The number of shares of Republic Common Stock
which are issuable upon exercise of the Republic Stock Option Agreement (as
defined in Section 5.16 hereof) as of the date hereof are Previously Disclosed
in Section 4.03(B) of its Disclosure Letter.
(C) Subsidiaries. (1) It has Previously Disclosed in Section
4.03(C) of its Disclosure Letter a list of all its subsidiaries together with
state of incorporation for each such subsidiary and the states or jurisdictions
in which such subsidiary is qualified to conduct business, (2) no equity
securities of any of its significant subsidiaries (as defined in Section 8.08)
are or may become required to be issued (other than to it or a subsidiary of it)
by reason of any rights), (3) there are no contracts, commitments,
understandings, or arrangements by which any of such significant subsidiaries is
or may be bound to sell or otherwise transfer any shares of the capital
stock of any such significant subsidiary (other than to it or a subsidiary of
it), (4) there are no contracts, commitments, understandings, or arrangements
relating to its rights to vote or to dispose of such shares (other than to it or
a subsidiary of it), and (5) all of the shares of capital stock of each such
significant subsidiary held by it or its subsidiaries are fully paid and
nonassessable and are owned by it or its subsidiaries free and clear of any
charge, mortgage, pledge, security interest, restriction, claim, lien, or
encumbrance ("Liens").
(2) Except as Previously Disclosed in Section 4.03(C)
of its Disclosure Letter, it does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a debt previously contracted)
beneficially, directly or indirectly, any shares of any equity securities or
similar interests of any person, or any interest in a partnership or joint
venture of any kind.
(3) Except as Previously Disclosed in Section 4.03(C)
of its Disclosure Letter, each of its significant subsidiaries has been
duly organized and is validly existing and 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 the jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified.
(D) Corporate Power. It and each of its significant
subsidiaries has the corporate power and authority to carry on its business as
it is now being conducted and to own all its properties and assets; and it has
the corporate power and authority to execute, deliver and perform its
obligations under this Plan and the Stock Option Agreements.
(E) Corporate Authority. Subject to receipt of the requisite
approval of its stockholders referred to in Section 6.01, this Plan and the
Stock Option Agreements and the transactions contemplated hereby and thereby
have been authorized by all necessary corporate action of it and this Plan is a
valid and binding agreement of it enforceable in accordance with its terms
(except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, liquidation or similar laws relating to, or
affecting the enforcement of creditor's rights and remedies or by other
equitable principles of general application whether enforceability is considered
in a proceeding in equity or at law).
(F) No Default. Except as Previously Disclosed in Section
4.03(F) of its Disclosure Letter, subject to receipt of the regulatory approvals
and expiration of the waiting periods referred to in Section 6.02, the
execution, delivery and performance of this Plan and the consummation of the
transactions contemplated hereby by it, do not and will not (i) 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 it or of any of its significant subsidiaries or to which it or
any of its significant subsidiaries or properties is subject or bound, (ii)
constitute a breach or violation of, or a default under, its articles or
certificate of incorporation or by-laws, or (iii) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license agreement, indenture or instrument.
(G) Financial Reports. Its balance sheets at December 31, 1994
and September 30, 1995 and statement of operations and statement of cash flow
for the periods ended December 31, 1994 and September 30, 1995 ("Republic
Financial Statements") fairly present the financial position and results of
operation of the entity or entities to which it relates as of its date or for
each of the applicable periods, in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal and recurring
year-end audit adjustments in the case of unaudited statements. It does not
expect to make any material audit or other adjustments to the Republic Financial
Statements.
(H) Litigation; Regulatory Action. Except as Previously
Disclosed in Section 4.03(H) of its Disclosure Letter:
(1) no litigation, proceeding or controversy before
any court or governmental agency is pending against it or any of its
subsidiaries and, to the best of its knowledge, no such litigation, proceeding
or controversy has been threatened;
(2) to the best of its knowledge, upon reasonable
investigation, no litigation, proceeding or controversy before any court is
pending against any of its current officers or directors or its subsidiaries'
current officers and directors with respect to the business of Republic and, to
the best of its knowledge, no such litigation, proceeding or controversy has
been threatened;
(3) neither it nor any of its subsidiaries or
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 federal or state governmental agency or authority
charged with the supervision or regulation of financial institutions or issuers
of securities or engaged in the insurance of deposits (including, without
limitation, the Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation or the Commonwealth of Pennsylvania Department of Banking) or the
supervision or regulation of it or any of its subsidiaries (collectively, the
"Regulatory Authorities"); and
(4) neither it nor any of its subsidiaries has been
advised by any Regulatory Authority that such Regulatory 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.
(I) Compliance with Laws. Except as Previously Disclosed in
Section 4.03 of its Disclosure Letter, it and each of its subsidiaries:
(1) is in compliance, in the conduct of its
business, 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, including, without
limitation, all applicable state and federal securities laws, the Bank Holding
Company Act, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act and all other
applicable fair lending laws and other laws relating to discriminatory business
practices, except in all cases which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect;
(2) has all permits, licenses, authorizations,
orders and approvals of, and have made all filings, applications and
registrations with, all Regulatory Authorities that are
required in order to permit them to conduct their businesses substantially as
presently conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is threatened; and
(3) has received, since December 31, 1994, no
notification or communication from any Regulatory Authority (i) asserting
that it or any of its subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances which such Regulatory Authority enforces or
(ii) threatening to revoke any license, franchise, permit, or governmental
authorization or (iii) threatening or contemplating revocation or limitation of,
or which would have the effect of revoking or limiting, federal deposit
insurance (nor, to its knowledge, do any grounds for any of the foregoing
exist).
(J) Defaults; Properties. (1) Except as Previously Disclosed
in Section 4.03(J) of its Disclosure Letter, neither it nor any of its
subsidiaries is in default under any contract, agreement, commitment,
arrangement, lease, insurance policy, or other instrument 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 default.
(2) Except as Previously Disclosed in Section 4.03(J)
of its Disclosure Letters, it and its subsidiaries have good and marketable
title, free and clear of all Liens (other than Liens for current taxes not yet
delinquent or pledges to secure deposits) to all of the material properties and
assets, tangible or intangible. To its knowledge, all buildings and all
fixtures, equipment and other property and assets that are material to its
business on a consolidated basis and are held under leases or subleases by it or
its subsidiaries are held under valid leases or subleases enforceable in
accordance with their respective terms (except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability affecting creditors' rights or by general
equity principles).
(K) No Finders Fee. Except as Previously Disclosed in Section
4.03(K) of its Disclosure Letter, all negotiations relative to this Plan and the
transactions contemplated hereby have been carried on by it directly with the
other parties hereto and no action has been taken by it that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other payment or commission as a result of the execution and delivery
hereof or the consummation of the transactions contemplated hereby.
(L) Employee Benefit Plans. (1) Its Disclosure Letter on
Section 4.03(L) contains a complete list of all bonus, vacation, 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, disability,
health and life insurance plans, all other employee benefit and fringe 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 it or any of its subsidiaries for the benefit of officers,
former officers, employees, former employees, directors, former directors, or
the beneficiaries of any of the foregoing ("Compensation and Benefit Plans").
(2) True and complete copies of its 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 the other party.
(3) Each of its Compensation and Benefit Plans has
been administered in compliance with the terms thereof. 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 it and its subsidiaries (its "Benefit
Plans"), to the extent subject to ERISA, are in compliance with ERISA, the Code,
the Age Discrimination in Employment Act and other applicable laws. Each Benefit
Plan of it or its subsidiaries 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 a
favorable determination letter from the Internal Revenue Service, and it is not
aware of any circumstances reasonably likely to result in the revocation or
denial of any such favorable determination letter. Except as Previously
Disclosed in Section 4.03(L) of its Disclosure Letter, there is no pending or,
to its knowledge, threatened litigation or governmental audit, examination or
investigation relating to the Benefit Plans. Neither it nor any of its
subsidiaries has engaged in a transaction with respect to any Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
could subject it or any of its subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA.
(4) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by it or any of its
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 it under Section 4001(a)(15) of ERISA or Section
414 of the Code (an "ERISA Affiliate"). Neither it nor any of its 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 of it or any of its subsidiaries or by any ERISA Affiliate within the past
12 months.
(5) All contributions, premiums and payments required
to be made under the terms of any Benefit Plan of it or any of its
subsidiaries have been made. Neither any Pension Plan of it or any of its
Subsidiaries nor any single-employer plan of an ERISA Affiliate of it or any of
its subsidiaries has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Code or Section 302 of ERISA. Neither
it nor any of its 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.
(6) Under each Pension Plan of it or any of its
subsidiaries which is a single-employer plan as of the last day of the most
recent plan year ended prior to the date hereof, 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 Benefit Plan's most recent actuarial valuation) did not exceed
the then current value of the assets of such Benefit Plan, and there has been no
adverse change in the financial condition of
such Benefit Plan (with respect to either assets or benefits) since the last day
of the most recent Plan year.
(7) Except as Previously Disclosed in Section 4.03(L)
of its Disclosure Letter, neither it nor any of its subsidiaries has any
obligations for retiree health and life benefits under any plan.
(8) Except as Previously Disclosed in Section 4.03(L)
of its Disclosure Letter, neither the execution and delivery of this Plan
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
employees or any of its subsidiaries under any Compensation and Benefit Plan or
otherwise from it or any of its subsidiaries, (ii) increase any benefits
otherwise payable under any Compensation and Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(M) Labor Matters. Neither it nor any of its subsidiaries is a
party to, or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is it
or any of its subsidiaries the subject of a proceeding asserting that it or any
such subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel it or such subsidiary to
bargain with any labor organization as to wages and conditions of employment,
nor is there any strike or other labor dispute involving it or any of its
subsidiaries, pending or, to the best of its knowledge, threatened, nor is it
aware of any activity involving it or any of its subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
(N) Insurance. It and its subsidiaries have taken all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to its directors' and officers' liability insurance
policy or policies in order to preserve all rights thereunder with respect to
all matters (other than matters arising in connection with this Plan and the
transactions contemplated hereby) that are known to it.
(O) Takeover Laws. It has taken all action required to be
taken by it in order to exempt this Plan, the relevant Stock Option Agreement
and the transactions contemplated hereby and thereby, from, and this Plan, and
the relevant Stock Option Agreement and the transactions contemplated hereby and
thereby are exempt from, the requirements of any "moratorium", "control share",
"fair price" or other antitakeover laws and regulations (collectively, "Takeover
Laws") of the Commonwealth of Pennsylvania.
(P) Environmental Matters. Except as Previously Disclosed in
Section 4.03(P) of its Disclosure Letter:
(1) To its knowledge, it and each of its
subsidiaries, the Participation Facilities and the Loan/Fiduciary
Properties (each as defined below) are, and have been, in compliance with all
Environmental Laws (as defined below) and it has no knowledge of any
circumstances that with the passage of time or the giving of notice would be
reasonably likely to result in noncompliance.
(2) To its knowledge, there is no reasonable basis
for any proceeding and there is no proceeding pending or, to its knowledge,
threatened before any court, governmental agency or board or other forum in
which it or any of its subsidiaries or any Participation Facility has been, or
with respect to threatened proceedings, reasonably would be expected to be,
named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law, or (ii)
relating to the presence, release or threatened release into the environment of
any Hazardous Material (as defined below), whether or not occurring at or on a
site owned, leased or operated by it or any of its subsidiaries or any
Participation Facility.
(3) To its knowledge, there is no reasonable basis
for any proceeding and there is no proceeding pending or, to its knowledge,
threatened before any court, governmental agency or board or other forum in
which any Loan/Fiduciary Property (or it or any of its subsidiaries in respect
of any Loan/Fiduciary Property) has been, or with respect to threatened
proceedings, reasonably would be expected to be, named as a defendant or
potentially responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law, or (ii) relating to the release or
threatened release into the environment of any Hazardous Material, whether or
not occurring at or on a Loan/Fiduciary Property.
(4) To its knowledge, during the period of (i) its
or any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or (iii) its or
any of its subsidiaries' holding of a security or other interest in a
Loan/Fiduciary Property, there have been no releases or threatened releases of
Hazardous Material in, on, from, under or affecting any such property,
Participation Facility or Loan/Fiduciary Property.
(5) To its knowledge, prior to the period of (i) its
or any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or (iii) its or
any of its subsidiaries' holding of a security or other interest in a
Loan/Fiduciary Property, there were no releases or threatened releases of
Hazardous Material in, on, under or affecting any such property, Participation
Facility or Loan/Fiduciary Property.
(6) The following definitions apply for purposes of
this Section 4.03(P) and Section 4.04(P) "Loan/Fiduciary Property" means
any property owned or operated by it or any of its subsidiaries or in which it
or any of its subsidiaries holds a security or other interest (including,
without limitation, a fiduciary interest), and, where required by the context,
includes any such property where it or any of its subsidiaries constitutes the
owner or operator of such property; "Participation Facility" means any facility
in which it or any of its subsidiaries participates in the management and, where
required by the context, includes the owner or operator of such property;
"Environmental Law" means (i) any federal, state and local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, legal doctrine, order, judgment, decree, injunction, requirement or
agreement with any governmental entity, relating to (a) the protection,
preservation or restoration of the environment, (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, or (b) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Material, in each case
as amended and as now in effect and includes, without limitation, the federal
Comprehensive Environmental Response Act, Comprehensive Environmental and
Liability Act, Water Pollution Control Act of 1972, the federal Clean Air Act,
the federal Clean Water Act, the federal Resource Conservation and Recovery Act
of 1976 (including the Hazardous and Solid Waste Amendments thereto), the
federal Solid Waste Disposal Act, the federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational
Safety and Health Act of 1970, and any similar state or local laws each as
amended and as now in effect, and (ii) any common law or equitable doctrine
(including. without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Material: "Hazardous Material" means
any substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, or otherwise regulated, under any Environmental
Law, whether by type or , and includes, without limitation, any oil or other
petroleum product, toxic waste, pollutant, contaminant, hazardous substance,
toxic substance, hazardous waste, special waste, solid waste or petroleum or any
derivative or by- product thereof, radon, radioactive material, asbestos,
asbestos containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
(Q) Tax Reports. Except as Previously Disclosed in Section
4.03(Q) of its Disclosure Letter: (i) all reports and returns with respect to
Taxes (as defined below) that are required to be filed by or with respect to it
or its subsidiaries, including without limitation consolidated federal income
tax returns of it and its subsidiaries (collectively, the "Tax Returns"), have
been timely filed, or requests for extensions have been timely filed and have
not expired, and such Tax Returns were true, complete and accurate; (ii) all
taxes (which shall include federal, state, local or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, employment, withholding or similar taxes imposed on
the income, properties or operations of it or its subsidiaries, together with
any interest, additions, or penalties with respect thereto and any interest in
respect of such additions or penalties, collectively the "Taxes") shown to be
due on such Tax Returns have been paid in full; (iii) all Taxes due with respect
to completed and settled examinations have been paid in full; (iv) no issues
have been raised by the relevant taxing authority in connection with the
examination of any of such Tax Returns; and (v) no waivers of statutes of
limitations (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service) have been given by or requested
with respect to any Taxes of it or any of its subsidiaries.
(R) Pooling; Reorganization. As of the date hereof, it is
aware of no reason why the Merger will fail to qualify (i) for
pooling-of-interests accounting treatment or (ii) as a reorganization under
Section 368(a) of the Code.
(S) Regulatory Approvals. As of the date hereof, it is aware
of no reason why the regulatory approvals and consents referred to in Section
6.02 will not be received without the imposition of a condition or requirement
described in the proviso thereto.
(T) No Material Adverse Effect. Since December 31, 1994,
except as Previously Disclosed in Section 4.03(T) of its Disclosure Letter or in
any other Section of its Disclosure Letter, (i) it and its subsidiaries have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses related to this Plan and the transactions
contemplated hereby) and (ii) no event has occurred or circumstance arisen that,
individually or taken together with all other facts, circumstances and events
(described in any paragraph of Section 4.03 or otherwise), is reasonably likely
to have a Material Adverse Effect with respect to it. Notwithstanding Section
8.08 hereof, for the purpose of this Section 4.03(T), Material Adverse Effect
shall be deemed to include the impact of (i) changes in banking and similar laws
of general applicability or interpretations thereof by courts or governmental
authorities and (ii) changes in generally accepted accounting principles or
regulatory accounting requirements applicable to banks and banking holding
companies.
(U) Undisclosed Liabilities. Except as Previously Disclosed in
Section 4.03(U) of its Disclosure Letter, since September 30, 1995, Republic has
not incurred or become subject to any material liabilities (absolute or
contingent) except current liabilities incurred, and liabilities under contracts
entered into, in the ordinary course of its business.
4.04 Representations and Warranties of ExecuFirst. Subject to Sections
4.01 and 4.02, ExecuFirst hereby represents and warrants to Republic as follows:
(A) Organization, Standing, and Authority. ExecuFirst is a
corporation duly organized and existing in good standing under the laws of the
Commonwealth of Pennsylvania, with its principal executive offices located in
Philadelphia, Pennsylvania. It is duly qualified to do business and is in good
standing in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified. It 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.
(B) Shares. (1) As of the date hereof, ExecuFirst has
20,000,000 authorized shares of common stock, each of par value $0.01 per share
("ExecuFirst Common Stock"), 10,000,000 authorized shares of Preferred Stock,
par value $0.01 per share ("ExecuFirst Preferred Stock" and, together with
ExecuFirst Common Stock "ExecuFirst Stock") (no other class or series of capital
stock being authorized), of which 1,226,057 shares of ExecuFirst Common Stock
and no shares of ExecuFirst Preferred Stock were issued and outstanding as of
October 31, 1995. The outstanding shares of its capital stock are validly issued
and outstanding, fully paid and nonassessable, and subject to no preemptive
rights (and were not issued in violation of any preemptive rights). Except as
Previously Disclosed in Section 4.04(B) of its Disclosure Letter, there are no
shares of its capital stock authorized and reserved for issuance, it does not
have any Rights issued or outstanding with respect to its capital stock, and it
does not have any commitment to authorize, issue or sell any such shares or
Rights, except pursuant to this Plan or the ExecuFirst Stock Option Agreement.
Since September 30, 1995 it has issued no shares of its capital stock except
pursuant to plans or commitments Previously Disclosed in Section 4.04(B) of its
Disclosure Letter.
(2) the number of shares of ExecuFirst Common Stock
which are issuable upon exercise of the ExecuFirst Stock Option Agreement
(as defined in Section 5.16 hereof) as of the date hereof are Previously
Disclosed in Section 4.04(B) of its Disclosure Letter.
(3) the shares of Surviving Corporation Common Stock
to be issued in exchange for shares of Republic Stock in the Merger, when
issued in accordance with the terms of this Plan will be duly authorized,
validly issued, fully paid and nonassessable.
(4) it has filed all reports, schedules, forms,
statements and the documents required to be filed by it with the Securities
and Exchange Commission (the "SEC") and with the NASDAQ Market pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (all the foregoing "ExecuFirst SEC Documents"). As of their
respective dates, none of ExecuFirst SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statement therein, in light of the circumstances under which they were
made, not misleading.
(C) Subsidiaries. (1) It has Previously Disclosed in Section
4.04(C) of its Disclosure Letter a list of all its subsidiaries together with
state of incorporation for each such subsidiary and the states or jurisdictions
in which such subsidiary is qualified to conduct business, (2) no equity
securities of any of its significant subsidiaries (as defined in Section 8.08)
are or may become required to be issued (other than to it or a subsidiary of it)
by reason of any rights), (3) there are no contracts, commitments,
understandings, or arrangements by which any of such significant subsidiaries is
or may be bound to sell or otherwise transfer any shares of the capital stock of
any such significant subsidiary (other than to it or a subsidiary of it), (4)
there are no contracts, commitments, understandings, or arrangements relating to
its rights to vote or to dispose of such shares (other than to it or a
subsidiary of it), and (5) all of the shares of capital stock of each such
significant subsidiary held by it or its subsidiaries are fully paid and
nonassessable and are owned by it or its subsidiaries free and clear of any
Liens.
(2) Except as Previously Disclosed in Section 4.04(C)
of its Disclosure Letter, it does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a debt previously contracted)
beneficially, directly or indirectly, any shares of any equity securities or
similar interests of any person, or any interest in a partnership or joint
venture of any kind.
(3) Except as Previously Disclosed in Section 4.04(C)
of its Disclosure Letter, each of its significant subsidiaries has been
duly organized and is validly existing 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 the jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified.
(D) Corporate Power. It and each of its significant
subsidiaries has the corporate power and authority to carry on its business as
it is now being conducted and to own all its properties and assets; and it has
the corporate power and authority to execute, deliver and perform its
obligations under this Plan and the Stock Option Agreements.
(E) Corporate Authority. Subject to receipt of the requisite
approval of its stockholders referred to in Section 6.01, this Plan and the
Stock Option Agreements and the transactions contemplated hereby and thereby
have been authorized by all necessary corporate action of it and this Plan is a
valid and binding agreement of it, enforceable in accordance with its terms
(except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, liquidation or similar laws relating to, or
affecting the enforcement of creditor's rights and remedies or by other
equitable principles of general application whether enforceability is considered
in a proceeding in equity or at law).
(F) No Default. Except as Previously Disclosed in Section
4.04(F) of its Disclosure Letter, subject to receipt of the regulatory approvals
and expiration of the waiting periods referred to in Section 6.02 and the
required filings under federal and state securities laws, the execution,
delivery and performance of this Plan and the consummation of the transactions
contemplated hereby by it, do not and will not (i) 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 it or of any of its significant subsidiaries or to which it or any
of its significant subsidiaries or properties is subject or bound, (ii)
constitute a breach or violation of, or a default under, its articles or
certificate of incorporation or by-laws, or (iii) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license agreement, indenture or instrument.
(G) Financial Reports. Its balance sheets at December 31, 1994
and September 30, 1995 and statement of operations and statement of cash flow
for the periods ended December 31, 1994 and September 30, 1995 ("ExecuFirst
Financial Statements") fairly present the financial position and results of
operation of the entity or entities to which it relates as of its date or for
each of the applicable periods, in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal and recurring
year-end audit adjustments in the case of unaudited statements. It does not
expect to make any material audit or other adjustments to the ExecuFirst
Financial Statements.
(H) Litigation; Regulatory Action. Except as Previously
Disclosed in Section 4.04(H) of its Disclosure Letter:
(1) no litigation, proceeding or controversy before
any court or governmental agency is pending against it or any of its
subsidiaries and, to the best of its knowledge, no such litigation, proceeding
or controversy has been threatened;
(2) to the best of its knowledge, upon reasonable
investigation, no litigation, proceeding or controversy before any court is
pending against any of its current officers or directors or its subsidiaries'
current officers and directors with respect to the business of ExecuFirst and,
to the best of its knowledge, no such litigation, proceeding or controversy has
been threatened;
(3) neither it nor any of its subsidiaries or
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 Authority; and
(4) neither it nor any of its subsidiaries has been
advised by any Regulatory Authority that such Regulatory 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.
(I) Compliance with Laws. Except as Previously Disclosed in
Section 4.04(I) of its Disclosure Letter, it and each of its subsidiaries:
(1) is in compliance, in the conduct of its business,
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, including, without limitation,
all applicable state and federal securities laws, the Bank Holding Company Act,
the Equal Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act and all other applicable fair
lending laws and other laws relating to discriminatory business practices,
except in all cases which individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect;
(2) has all permits, licenses, authorizations, orders
and approvals of, and have made all filings, applications and registrations
with, all Regulatory Authorities that are required in order to permit them to
conduct their businesses substantially as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the best of its knowledge, no suspension or cancellation of any
of them is threatened; and
(3) has received, since December 31, 1994, no
notification or communication from any Regulatory Authority (i) asserting
that it or any of its subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances which such Regulatory Authority enforces or
(ii) threatening to revoke any license, franchise, permit, or governmental
authorization or (iii) threatening or contemplating revocation or limitation of,
or which would have the effect of revoking or limiting, federal deposit
insurance (nor, to its knowledge, do any grounds for any of the foregoing
exist).
(J) Defaults; Properties. (1) Except as Previously Disclosed
in Section 4.04(J) of its Disclosure Letter, neither it nor any of its
subsidiaries is in default under any contract, agreement, commitment,
arrangement, lease, insurance policy, or other instrument 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 default.
(2) Except as previously disclosed in Section 4.04(J)
of its Disclosure Letters, it and its subsidiaries have good and marketable
title, free and clear of all Liens (other than Liens for current taxes not yet
delinquent or pledges to secure deposits) to all of the material properties and
assets, tangible or intangible. To its knowledge, all buildings and all
fixtures, equipment and other property and assets that are material to its
business on a consolidated basis and are held under leases or subleases by it or
its subsidiaries are held under valid leases or subleases, enforceable in
accordance with their respective terms (except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability affecting creditors' rights or by general
equity principles).
(K) No Finders Fee. Except as Previously Disclosed in Section
4.04(K) of its Disclosure Letter, all negotiations relative to this Plan and the
transactions contemplated hereby have been carried on by it directly with the
other parties hereto and no action has been taken by it that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other payment or commission as a result of the execution and delivery
hereof or the consummation of the transactions contemplated hereby.
(L) Employee Benefit Plans. (1) Its Disclosure Letter on
Section 4.04(L) contains a complete list of all Compensation and Benefit Plans.
(2) True and complete copies of its 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 the other party.
(3) Each of its Compensation and Benefit Plans has
been administered in compliance with the terms thereof. All Benefit Plans,
to the extent subject to ERISA, are in compliance with ERISA, the Code, the Age
Discrimination in Employment Act and other applicable laws. Each Benefit Plan of
it or its subsidiaries which is a Pension Plan and which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and it is not aware of
any circumstances reasonably likely to result in the revocation or denial of any
such favorable determination letter. Except as Previously Disclosed in Section
4.04(L) of its Disclosure Letter, there is no pending or, to its knowledge,
threatened litigation or governmental audit, examination or investigation
relating to the Benefit Plans. Neither it nor any of its subsidiaries has
engaged in a transaction with respect to any Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, could subject
it or any of its subsidiaries to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA.
(4) No liability under Subtitle C or D of Title IV
of ERISA has been or is expected to be incurred by it or any of its
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 ERISA Affiliate.
Neither it nor any of its 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 of it or any of its subsidiaries or by
any ERISA Affiliate within the past 12 months.
(5) All contributions, premiums and payments required
to be made under the terms of any Benefit Plan of it or any of its
subsidiaries have been made. Neither any Pension Plan of it or any of its
Subsidiaries nor any single-employer plan of an ERISA Affiliate of it or any of
its subsidiaries has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Code or Section 302 of ERISA. Neither
it nor any of its 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.
(6) Under each Pension Plan of it or any of its
subsidiaries which is a single-employer plan as of the last day of the most
recent plan year ended prior to the date hereof, the actuarial 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 Benefit Plan's most recent actuarial valuation) did not exceed
the then current value of the assets of such Benefit Plan, and there has been no
adverse change in the financial condition of such Benefit Plan (with respect to
either assets or benefits) since the last day of the most recent Benefit Plan
year.
(7) Except as Previously Disclosed in Section 4.04(L)
of its Disclosure Letter, neither it nor any of its subsidiaries has any
obligations for retiree health and life benefits under any plan.
(8) Except as Previously Disclosed in Section 4.04(L)
of its Disclosure Letter, neither the execution and delivery of this Plan
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
employees or any of its subsidiaries under any Compensation and Benefit Plan or
otherwise from it or any of its subsidiaries, (ii) increase any benefits
otherwise payable under any Compensation and Benefit Plan or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(M) Labor Matters. Neither it nor any of its subsidiaries is a
party to, or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is it
or any of its subsidiaries the subject of a proceeding asserting that it or any
such subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel it or such subsidiary to
bargain with any labor organization as to wages and conditions of employment,
nor is there any strike or other labor dispute involving it or any of its
subsidiaries, pending or, to the best of its knowledge, threatened, nor is it
aware of any activity involving it or any of its subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
(N) Insurance. It and its subsidiaries have taken all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to its directors' and officers' liability insurance
policy or policies in order to preserve all rights thereunder with respect to
all matters (other than matters arising in connection with this Plan and the
transactions contemplated hereby) that are known to it.
(O) Takeover Laws. It has taken all action required to be
taken by it in order to exempt this Plan, the relevant Stock Option Agreement
and the transactions contemplated hereby and thereby, from, and this Plan, and
the relevant Stock Option Agreement and the transactions contemplated hereby and
thereby are exempt from, the requirements of any Takeover Laws.
(P) Environmental Matters. Except as Previously Disclosed in
Section 4.04(P) of its Disclosure Letter:
(1) To its knowledge, it and each of its
subsidiaries, the Participation Facilities and the Loan/Fiduciary
Properties are, and have been, in compliance with all Environmental Laws and it
has no knowledge of any circumstances that with the passage of time or the
giving of notice would be reasonably likely to result in noncompliance.
(2) To its knowledge, there is no reasonable basis
for any proceeding and there is no proceeding pending or, to its knowledge,
threatened before any court, governmental agency or board or other forum in
which it or any of its subsidiaries or any Participation Facility has been, or
with respect to threatened proceedings, reasonably would be
expected to be, named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law,
or (ii) relating to the presence, release or threatened release into the
environment of any Hazardous Material, whether or not occurring at or on a site
owned, leased or operated by it or any of its subsidiaries or any Participation
Facility.
(3) There is no proceeding pending or, to its
knowledge, threatened before any court, governmental agency or board or
other forum in which any Loan/Fiduciary Property (or it or any of its
subsidiaries in respect of any Loan/Fiduciary Property) has been, or with
respect to threatened proceedings, reasonably would be expected to be, named as
a defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law, or (ii) relating to
the release or threatened release into the environment of any Hazardous
Material, whether or not occurring at or on a Loan/Fiduciary Property.
(4) To its knowledge, during the period of (i) its
or any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or (iii) its or
any of its subsidiaries' holding of a security or other interest in a
Loan/Fiduciary Property, there have been no releases or threatened releases of
Hazardous Material in, on, from, under or affecting any such property,
Participation Facility or Loan/Fiduciary Property.
(5) To its knowledge, prior to the period of (i) its
or any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or (iii) its or
any of its subsidiaries' holding of a security or other interest in a
Loan/Fiduciary Property, there were no releases or threatened releases of
Hazardous Material in, on, under or affecting any such property, Participation
Facility or Loan/Fiduciary Property.
(Q) Tax Reports. Except as Previously Disclosed in Section
4.04(Q) of its Disclosure Letter: (i) all Tax Returns have been timely filed, or
requests for extensions have been timely filed and have not expired, and such
Tax Returns were true, complete and accurate; (ii) all Taxes have been paid in
full; (iii) all Taxes due with respect to completed and settled examinations
have been paid in full; (iv) no issues have been raised by the relevant taxing
authority in connection with the examination of any of such Tax Returns; and (v)
no waivers of statutes of limitations (excluding such statutes that relate to
years currently under examination by the Internal Revenue Service) have been
given by or requested with respect to any Taxes of it or any of its
subsidiaries.
(R) Pooling; Reorganization. As of the date hereof, it is
aware of no reason why the Merger will fail to qualify (i) for
pooling-of-interests accounting treatment or (ii) as a reorganization under
Section 368(a) of the Code.
(S) Regulatory Approvals. As of the date hereof, it is aware
of no reason why the regulatory approvals and consents referred to in Section
6.02 will not be received without the imposition of a condition or requirement
described in the proviso thereto.
(T) No Material Adverse Effect. Since December 31, 1994,
except as Previously Disclosed in Section 4.04(T) of its Disclosure Letter or
in any other Section of its
Disclosure Letter, (i) it and its subsidiaries have conducted their respective
businesses in the ordinary and usual course (excluding the incurrence of
expenses related to this Plan and the transactions contemplated hereby) and (ii)
no event has occurred or circumstance arisen that, individually or taken
together with all other facts, circumstances and events (described in any
paragraph of Section 4.04 or otherwise), is reasonably likely to have a Material
Adverse Effect with respect to it. Notwithstanding Section 8.08 hereof, for the
purpose of this Section 4.04(T), Material Adverse Effect shall be deemed to
include the impact of (i) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental authorities
and (ii) changes in generally accepted in accounting principles or regulatory
accounting requirements applicable to banks and banking holding companies.
(U) Undisclosed Liabilities. Except as Previously Disclosed in
Section 4.04(U) of its Disclosure Letter, since September 30, 1995, Execufirst
has not incurred or become subject to any material liabilities (absolute or
contingent) except current liabilities incurred, and liabilities under contracts
entered into, in the ordinary course of business.
V. COVENANTS
Republic hereby covenants to and agrees with ExecuFirst, and ExecuFirst
hereby covenants to and agrees with Republic, that:
5.01 Reasonable Best Efforts. Subject to the terms and conditions of
this Plan, it 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 as promptly as reasonably practicable and to
otherwise enable consummation of the transactions contemplated hereby and shall
cooperate fully with the other parties hereto to that end.
5.02 Stockholder Approvals. Each of them shall take, in accordance with
applicable law, National Association of Securities Dealers rules and its
respective articles or certificate of incorporation and by-laws, all action
necessary to convene, respectively, an appropriate meeting of stockholders of
ExecuFirst to consider and vote upon the issuance of the shares of the Surviving
Corporation Common Stock to be issued in the Merger pursuant to this Plan and to
vote on any other stockholder approval matters required for or incidental to
consummation of the Merger including the approval of the Amended and Restated
Surviving Corporation Option Plan (the "ExecuFirst Meeting"), and an appropriate
meeting of stockholders of Republic to consider and vote upon the approval of
this Plan and to vote on any other stockholder approval matters required for or
incidental to consummation of the Merger (the "Republic Meeting"; each of the
ExecuFirst Meeting and the Republic Meeting, a "Meeting"), respectively, as
promptly as practicable after the Registration Statement (as defined in Section
5.03) is declared effective. Subject to Section 5.06 and the next succeeding
sentence, the Board of Directors of each of ExecuFirst and Republic will
recommend such approval, and each of ExecuFirst and Republic will take all
reasonable lawful action to solicit such approval by its respective
stockholders. The Board of Directors of ExecuFirst or Republic, acting on behalf
of ExecuFirst or Republic, respectively, may fail to make such recommendation,
or withdraw, modify or change any such recommendation if and only if such Board
of Directors, after having consulted with and considered the advice of outside
counsel, has determined that the making of such
recommendation, or the failure so to withdraw, modify or change its
recommendation, would constitute a breach of the fiduciary duties of such
directors under applicable law. Notwithstanding anything to the contrary
contained herein, each of the Stock Option Agreements shall be effective on its
own terms and an obligation of each party, independent of the provisions of this
Section 5.02 and Section 5.06.
5.03 Registration Statement. (1) Each of ExecuFirst and Republic agrees
to cooperate in the preparation of a registration statement on Form S-4 (the
"Registration Statement") to be filed by ExecuFirst with the SEC in connection
with the issuance of the Surviving Corporation Common Stock in the Merger
(including the joint proxy statement and prospectus and other proxy solicitation
materials of ExecuFirst and Republic constituting a part thereof the "Joint
Proxy Statement"). Each of Republic and ExecuFirst agrees to use all reasonable
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as reasonably practicable after filing thereof.
ExecuFirst also agrees to use all reasonable efforts to obtain all necessary
state securities law or "Blue Sky" permits and approvals required to carry out
the transactions contemplated by this Agreement. Republic agrees to furnish to
ExecuFirst all information concerning Republic, its subsidiaries, officers,
directors and stockholders as may be reasonably requested in connection with the
foregoing.
(2) Each of Republic and ExecuFirst agrees, as to
itself and its subsidiaries, that none of the information supplied or to be
supplied by it for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement and each
amendment or supplement thereto, if any, becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Joint Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to stockholders and at the times
of the ExecuFirst Meeting and the Republic Meeting, contain any statement which,
in the light of the circumstances under which such statement is made, will be
false or misleading with respect to any material fact, or which will omit to
state any material fact necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier
statement in the Joint Proxy Statement or any amendment or supplement thereto.
(3) In the case of ExecuFirst, ExecuFirst will
advise Republic, promptly after ExecuFirst receives notice thereof, of the
time when the Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order or the suspension of
the qualification of the ExecuFirst Stock or 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.
5.04 Press Releases. Neither Republic nor ExecuFirst will, without the
prior approval of the other (which approval shall not be unreasonably withheld
or delayed), issue any press release or written statement for general
circulation relating to the transactions contemplated hereby.
5.05 Access; Information. Subject to the terms and conditions of
that certain Confidentiality Agreement dated as of August 30, 1995 by and
between Republic and ExecuFirst
(the "Confidentiality Agreement") (1) upon reasonable notice, it shall afford
the other parties and their 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,
commitments and records and, during such period, it shall furnish promptly to it
(i) a copy of each material report, schedule and other document filed by it
pursuant to the requirements of federal or state securities or banking laws, and
(ii) all other information concerning the business, properties and personnel of
it as the other may reasonably request: and (2) it will not use any information
obtained pursuant to this Section 5.05 for any purpose unrelated to the
consummation of the transactions contemplated by this Plan and, if this Plan is
terminated will hold all information and documents obtained pursuant to this
paragraph in confidence. No investigation by either party of the business and
affairs of another shall affect or be deemed to modify or waive any
representation, warranty, covenant or agreement in this Plan, or the conditions
to either party's obligation to consummate the transactions contemplated by this
Plan.
5.06 Acquisition Proposals. Without the prior written consent of the
other, neither Republic nor ExecuFirst shall, and each of them shall cause its
respective subsidiaries not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any such person
relating to, any tender offer or exchange offer for, or any proposal for the
acquisition of a substantial equity interest in, or a substantial portion of the
assets of, such party or any of its significant subsidiaries; provided, however,
that the Board of Directors of Republic or ExecuFirst on behalf of Republic or
ExecuFirst, respectively, may furnish or cause to be furnished information and
may participate in such discussions and negotiations directly or through its
representatives if such Board of Directors, after having consulted with and
considered the advice of outside counsel, has determined that the failure to
provide such information or participate in such negotiations and discussions
would cause the members of such Board of Directors to breach their fiduciary
duties under applicable laws; and provided, further, that the exercise of such
fiduciary duties by the Board of Directors shall not effect such parties
obligations, if any, under its applicable Stock Option Agreement. Subject to the
foregoing, it shall instruct its and its subsidiaries' officers, directors,
agents, advisors and affiliates to refrain from doing any of the foregoing.
5.07 Affiliate Agreements. (1) Not later than the 15th day prior to the
mailing of the Joint Proxy Statement, ExecuFirst shall deliver to Republic, and
Republic shall deliver to ExecuFirst, a schedule of each person that to the best
of its knowledge, is or is reasonably likely to be, as of the date of the
relevant Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as
that term is used in Rule 145 under the Securities Act or SEC Accounting Series
Releases 130 and 135.
(2) Each of Republic and ExecuFirst shall use its
respective reasonable best efforts to cause each person who may be deemed
to be an Affiliate of Republic or ExecuFirst, as the case may be, to execute and
deliver to Republic and ExecuFirst on or before the date of mailing of the Joint
Proxy Statement an agreement in the form attached hereto as Exhibit C and
Exhibit D, respectively.
5.08 Certain Modifications; Restructuring Charges. Republic and
ExecuFirst shall consult with respect to their loan, litigation and real estate
valuation policies and practices
(including loan classifications and levels of reserves) and each shall make such
modifications or changes to its policies and practices, if any, and at such date
prior to the Effective Time, as may be mutually agreed upon. Republic and
ExecuFirst shall also consult with respect to the character, amount and timing
of restructuring charges to be taken by each of them in connection with the
transactions contemplated hereby and shall take such charges in accordance with
generally accepted accounting principles, as may be mutually agreed upon.
Republic shall use its reasonable best efforts to assist ExecuFirst in
establishing a relationship with County Bank of Rehobeth Beach Delaware with
respect to the "Refant Program". To the extent that ExecuFirst participates in
the "Refant Program" and derives net income therefrom, all of such net income
shall be added by ExecuFirst to its allowance for loan loss reserves (the "Loan
Loss Reserves"); provided, however, that such net income and offsetting addition
shall not have any effect on shareholders' equity or net income of ExecuFirst.
In addition, following the execution of this Agreement and prior to the
Effective Time, (i) ExecuFirst shall use its reasonable best efforts to modify
its internal policies and procedures with respect to the determination of loan
classifications to make such policies and procedures more consistent with the
internal policies and procedures of Republic and, to accomplish such objective,
shall maintain the amount of $250,000 in excess of the amount of its allowance
for Loan Loss Reserves as calculated pursuant to the formula currently utilized
by ExecuFirst to determine the amount of such Loan Loss Reserves, and (ii)
Republic shall increase the amount of its Loan Loss Reserves by $250,000 at
ExecuFirst's request at any time prior to the Effective Time. No party's
representations, warranties and covenants contained in this Plan shall be deemed
to be untrue or breached in any respect for any purpose as a consequence of any
modifications or changes to such policies and practices which may be undertaken
on account of this Section 5.08. Subject to the terms of Section 5.05 hereof,
each of Republic and ExecuFirst shall be entitled to review any loan commitments
exceeding $100,000 in principal balance which have entered into by the other
party subsequent to the date hereof.
5.09 Takeover Laws. No party shall take any action that would cause the
transactions contemplated by this Plan and/or the Stock Option Agreements to be
subject to requirements imposed by any Takeover Law and each of them shall take
all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Plan and the Stock Option
Agreement from, or if necessary, challenge the validity or applicability of, any
applicable Takeover Law, as now or hereafter in effect, including, without
limitation, Subchapter G of Chapter 25 of the PABCL, other Takeover Laws of the
Commonwealth of Pennsylvania or similar laws of any other State that purport to
apply to this Plan or the transactions contemplated hereby or thereby.
5.10 No Rights Triggered. Each of Republic and ExecuFirst shall take
all necessary steps to ensure that the entering into of this Plan and the Stock
Option Agreements and the consummation of the transactions contemplated hereby
and thereby and any other action or combination of actions, or any other
transactions contemplated hereby or thereby, do not and will not result in the
grant of any rights, other than rights granted by law, to any person (1) under
its articles or certificate of incorporation or by-laws, or (2) under any
material agreement to which it or any of its subsidiaries is a party.
5.11 Shares Listed. In the case of ExecuFirst, ExecuFirst shall use
its reasonable best efforts to list, as of the Effective Date, on the
National Association of Securities Dealers Automatic Quotation System ("NASDAQ")
Small Cap Market or the National Market System,
if ExecuFirst qualifies for such listing at the Effective Date, upon official
notice of issuance, the shares of the Surviving Corporation Common Stock to be
issued to the holders of Republic Stock in accordance with the terms of the
Merger.
5.12. Regulatory Applications. (1) Each party shall promptly (i)
prepare and submit applications to the appropriate Regulatory Authorities
and (ii) make all other appropriate filings to secure all other approvals,
consents and rulings, which are necessary for it to consummate the Merger.
(2) Each of ExecuFirst and Republic agrees to
cooperate with the other and, subject to the terms and conditions set forth
in this Agreement, use its reasonable best efforts to prepare and file all
necessary documentation, to effect all necessary applications, notices,
petitions, filings and other documents, and to obtain all necessary permits,
consents, orders, approvals and authorizations of, or any exemption by, all
third parties and Regulatory Authorities necessary or advisable to consummate
the transactions contemplated by this Plan, including without limitation the
regulatory approvals referred to in Section 6.02. Each of ExecuFirst and
Republic shall have the right to review in advance, and to the extent
practicable each will consult with the other, in each case subject to applicable
laws relating to the exchange of information, with respect to all material
written information submitted to, any third party or any Regulatory Authorities
in connection with the transactions contemplated by this Plan. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Each party hereto agrees that it will consult with the
other party hereto with respect to the obtaining of all material permits,
consents, approvals and authorizations of all third parties and Regulatory
Authorities necessary or advisable to consummate the transactions contemplated
by this Plan and each party will keep the other parties apprised of the status
of material matters relating to completion of the transactions contemplated
hereby.
(3) Each party agrees, upon request, to furnish the
other parties with all information concerning itself, its subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with any filing, notice or application made
by or on behalf of such other party or any of its subsidiaries to any Regulatory
Authority.
5.13 Indemnification. (A) For six years after the Effective Date, the
Surviving Corporation shall indemnify, defend and hold harmless the present and
former directors and officers of Republic and its subsidiaries (each, an
"Indemnified Party") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Plan) to the fullest extent that such persons are indemnified under the
laws of the Commonwealth of Pennsylvania and Republic's Articles of
Incorporation and By-laws as in effect on the date hereof; provided that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under the Commonwealth
of Pennsylvania law and such Articles of Incorporation and By-laws shall be made
by independent counsel (which shall not be counsel that provides material
services to the Surviving Corporation) selected by the Surviving Corporation and
reasonably acceptable to such officer or director; and provided, further, that
in the absence of applicable Pennsylvania
judicial precedent to the contrary, such counsel, in making such determination,
shall presume such officer's or director's conduct complied with such standard
and the Surviving Corporation shall have the burden to demonstrate that such
officer's or director's conduct failed to comply with such standard.
(B) If, in the determination of the Surviving Corporation, it
shall be economically feasible, the Surviving Corporation shall maintain
Republic's existing directors' and officers' liability insurance policy (or a
policy providing comparable coverage amount on terms no less favorable,
including ExecuFirst's existing policy if it meets the foregoing standard)
covering the present and former directors and officers of Republic who are
currently covered by such insurance for a period of three years after the
Effective Date.
(C) Any Indemnified Party wishing to claim indemnification
under Section 5.13(A), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify the Surviving Corporation
thereof; provided, that the failure so to notify shall not affect the
obligations of the Surviving Corporation under Section 5.13(A) unless and to the
extent such failure materially increases the Surviving Corporation's liability
under such subsection (A).
(D) If the Surviving Corporation or any of its successors or
assigns shall consolidate with or merge into any other entity and shall not be
the continuing or surviving entity of such consolidation or merger or shall
transfer all or substantially all of its assets to any entity, then and in each
case, proper provision shall be made so that the successors and assigns of the
Surviving Corporation shall assume the obligations set forth in this Section
5.13.
(E) The Surviving Corporation shall pay all reasonable Costs,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity and other obligations provided for in this Section 5.13.
The rights of each Indemnified Party hereunder shall be in addition to any other
rights such Indemnified Party may have under applicable law.
5.14 Benefit Plans. As soon as administratively practicable after the
Effective Date, the Surviving Corporation shall use its best efforts to take all
reasonable action so that employees of Republic and its subsidiaries who
thereafter become employees of the Surviving Corporation or its subsidiary shall
be covered by all employee benefit plans, practices and arrangements generally
covering employees of ExecuFirst, or such other plans as Republic and ExecuFirst
shall mutually agree shall be adopted by the Surviving Corporation (the
"Surviving Corporation Plans") and shall be given credit under the Surviving
Corporation Plans for all purposes of service with Republic as if it had been
service with ExecuFirst. The Surviving Corporation and its subsidiaries shall
honor in accordance with their terms all employment, severance, consulting and
other compensation contracts, disclosed in Section 4.03(L) of the Republic
Disclosure Letter, between Republic or any of its subsidiaries and any current
or former directors, officers or employees thereof.
5.15 Accountant's Letter. Each of Republic and ExecuFirst shall use its
reasonable best efforts to deliver to the other party, and such other party's
directors and officers who sign the Registration Statement, a letter of
independent auditors, dated (i) the date on which the Registration Statement
shall become effective and (ii) a date shortly prior to the Effective Date,
and addressed to such other party, and such directors and officers, in form and
substance customary for "comfort" letters delivered by independent accountants
in accordance with Statement of Accounting Standards No. 72.
5.16 Stock Option Agreements. Concurrent with the execution and
delivery of this Plan (i) Republic shall enter into a Stock Option Agreement
with ExecuFirst (the "Republic Stock Option Agreement") in substantially the
form attached hereto as Exhibit E, pursuant to which Republic shall grant to
ExecuFirst an option to purchase, under certain circumstances, shares of
Republic Common Stock, and (ii) ExecuFirst shall enter into a Stock Option
Agreement with Republic (the "ExecuFirst Stock Option Agreement"; and, together
with the Republic Stock Option Agreement, the "Stock Option Agreements") in
substantially the form attached hereto as Exhibit F, pursuant to which
ExecuFirst shall grant to Republic an option to purchase, under certain
circumstances, shares of ExecuFirst Common Stock.
5.17 Notification of Certain Matters. Each of Republic and ExecuFirst
shall give prompt notice to the other of any fact, event or circumstance known
to it that (i) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Material
Adverse Effect,with respect to it or (ii) would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements
contained herein.
VI. CONDITIONS TO CONSUMMATION OF THE MERGER
The obligations of each of the parties to consummate the Merger is
conditioned upon the satisfaction at or prior to the Effective Time of each of
the following, any of which, except Sections 6.01 or 6.02, may be waived by the
party receiving the benefit of such condition:
6.01 Shareholder Vote. Approval of this Plan by the requisite vote of
the shareholders of Republic and approval of this Plan by the requisite
vote of shareholders of ExecuFirst;
6.02 Regulatory Approvals. Procurement by ExecuFirst and Republic of
all requisite approvals and consents of Regulatory Authorities and the
expiration of the statutory waiting period or periods relating thereto;
provided, however, that no such approval or consent shall have imposed any
condition or requirement which would so materially and adversely impact the
economic or business benefits to ExecuFirst or Republic of the transactions
contemplated by this Plan that, had such condition or requirement been known,
such party would not, in its reasonable judgment, have entered into this Plan;
6.03 Third Party Consents. All consents or approvals of all persons
(other than Regulatory Authorities and the shareholders of each of Republic and
ExecuFirst) required for the consummation of the Merger shall have been obtained
and shall be in full force and effect, unless the failure to obtain any such
consent or approval is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Republic or ExecuFirst;
6.04 No Injunction, Etc. No order, decree or injunction of any court
or agency of competent jurisdiction shall be in effect, and no law, statute
or regulation shall have been enacted
or adopted, that enjoins, prohibits or makes illegal consummation of any of the
transactions contemplated hereby;
6.05 Pooling Letters. ExecuFirst and Republic shall have received a
letter from one or more nationally recognized accounting firms, dated the date
of or shortly prior to each of the mailing date of the Joint Proxy Statement and
the Effective Date, to the effect that such accounting firm(s) are not aware of
any facts or circumstances which might cause the Merger not to qualify for
pooling of interests accounting treatment; provided, however, that in the event
that either party has taken any action that would adversely affect such
qualification, each party will take any action as the other party requests to
cure such effect to the extent curable.
6.06 Representations, Warranties and Covenants of ExecuFirst. (i) Each
of the representations and warranties contained herein of ExecuFirst shall be
true and correct as of the date of this Plan and upon the Effective Date with
the same effect as though all such representations and warranties had been made
on the Effective Date, except for any such representations and warranties made
as of a specified date, which shall be true and correct as of such date, in any
case subject to the standards established by Section 4.02, (ii) each and all of
the agreements and covenants of ExecuFirst to be performed and complied with
pursuant to this Plan on or prior to the Effective Date shall have been duly
performed and complied with in all material respects, and (iii) Republic shall
have received a certificate signed by the Chief Executive Officer of ExecuFirst,
dated the Effective Date, to the effect set forth in clauses (i) and (ii);
6.07 Representations, Warranties and Covenants of Republic. (i) Each of
the representations and warranties contained herein of Republic shall be true
and correct as of the date of this Plan and upon the Effective Date with the
same effect as though all such representations and warranties had been made on
the Effective Date, except for any such representations and warranties made as
of a specified date, which shall be true and correct as of such date, in any
case subject to the standards established by Section 4.02, (ii) each and all of
the agreements and covenants of Republic to be performed and complied with
pursuant to this Plan on or prior to the Effective Date shall have been duly
performed and complied with in all material respects, and (iii) ExecuFirst shall
have received a certificate signed by the Chief Executive Officer of Republic,
dated the Effective Date, to the effect set forth in clauses (i) and (ii);
6.08 Effective Registration Statement. The Registration Statement shall
have become effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC or any other
Regulatory Authority;
6.09 Blue-Sky Permits. ExecuFirst shall have received all state
securities laws and "blue sky" permits necessary to consummate the Merger;
6.10 Tax Opinion. ExecuFirst and Republic shall have received an
opinion from Klehr, Harrison, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇, P.C., respectively, special tax counsel to ExecuFirst and Republic, to
the effect that (i) the Merger constitutes a reorganization under Section 368 of
the Code, and (ii) no gain or loss will be recognized by stockholders of
Republic who receive shares of ExecuFirst Stock, or in exchange for their shares
of Republic Stock, except that gain or loss may be recognized as to cash
received in lieu of fractional share interests; in rendering their opinion, they
may require and rely upon representations and agreements contained in
certificates of officers of ExecuFirst, Republic;
6.11 Articles of Amendment. The Articles of Amendment shall have
become effective in accordance with the PABCL and the Amended and Restated
By-Laws, attached hereto as Exhibit A, shall have been adopted;
6.12 Listing. The shares of the Surviving Corporation Common Stock
issuable pursuant to this Plan shall have been approved for listing on NASDAQ
Small Cap Market or, if eligible, the National Market System, subject to
official notice of issuance.
6.13 Dissenters Rights. Less than 5% of Republic Stock have exercised
their dissenters rights in accordance with Subchapter D of Chapter 15 of the
PABCL.
6.14 Fairness Opinion. Each of Republic and ExecuFirst shall have
received an opinion from its financial advisor, in form and substance reasonably
satisfactory to its Board of Directors, to the effect that the Merger is fair,
from a financial point of view, to its shareholders.
6.15 Accountants' Letters. Each of Republic and ExecuFirst shall have
received the accountant's letter as described in Section 5.15 hereof.
6.16 Certain Director and Officer Positions. (1) ExecuFirst shall have
caused the Board of Directors of the Surviving Corporation to be increased to 18
members. Nine members of Republic's Board of Directors, or the designees of
Republic who are reasonably acceptable to ExecuFirst, ("Former Republic
Directors") shall be nominated by ExecuFirst (subject to any applicable legal
restrictions) and elected or appointed as directors of the Surviving Corporation
at, or as promptly as practicable after, the Effective Time, provided, however,
that if, at or for a reasonable period after the Effective Time, the members of
ExecuFirst's then existing Board of Directors (the "ExecuFirst Directors") or
the Former Republic Directors would constitute less than 50% of the membership
of the Surviving Corporation's Board of Directors, the ExecuFirst Directors or
Former Republic Directors, as the case may be, shall have the right to appoint
such number of directors as shall be required (and the non-appointing directors
shall make such actions as are reasonably necessary to cause such appointment to
occur) in order that the ExecuFirst Directors and Former Republic Directors each
constitute 50% of the Board of Directors of the Surviving Corporation.
(2) The Surviving Corporation agrees to cause four
Former Republic Directors to be elected or appointed as members of the
Executive Committee of the Board of Directors of the Surviving Corporation at,
or as promptly as practicable after, the Effective Time (which Executive
Committee shall at such time consist of not more than eight members).
(3) At the Effective Time, the Surviving
Corporation's Board of Directors shall elect or appoint as officers of the
Surviving Corporation the persons set forth in the protocol approved and adopted
by each party hereto on or prior to the date hereof.
6.17 Consent of Republic Option Holders. ExecuFirst shall have
received duly executed and valid consents from each employee option holder of
Republic, consenting to the
conversion of such options into options to purchase shares of the Surviving
Corporation Common Stock.
6.18 Employment Agreements. ExecuFirst shall have entered into an
employment agreement or an amended and restated employment agreement, as the
case may be, with those persons so designated in the protocol described in
Section 6.16(3), in substantially the form as shall be agreed upon between the
parties hereto.
6.19 Chairman's Agreement. ExecuFirst shall have entered into an
agreement with the Chairman of the Board of Republic ("Republic's Chairman") on
substantially the terms agreed to between the parties, pursuant to which
Republic's Chairman shall serve as Chairman of the Board of the Surviving
Corporation.
6.20 Shareholders Equity. (1) The total shareholders' equity of
ExecuFirst, as determined in accordance with generally accepted accounting
principles constantly applied, shall not be less than $6,000,000.
(2) The total shareholders' equity of Republic, as
determined in accordance with generally accepted accounting principles
constantly applied, shall not be less than $6,979,000.
6.21 Delivery of Documents. All other documents, including, without
limitation, legal opinions in substantially the form attached hereto as Exhibit
G, officer and incumbency certificates and other closing documents customary for
transactions of a similar nature, which are reasonably requested by the other
party shall have been delivered to such requesting party or to have been
delivered under this Agreement.
VII. TERMINATION
7.01 Termination. This Plan may be terminated, and the Merger may be
abandoned:
(A) Mutual Consent. At any time prior to the Effective Time,
by the mutual consent of ExecuFirst and Republic, if the Board of Directors of
each so determines by vote of a majority of the members of its entire Board.
(B) Breach. At any time prior to the Effective Time, by
ExecuFirst or Republic, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event of either: (i) a
breach by the other party of any representation or warranty contained herein
(subject to the standard established by Section 4.02), which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a material breach by the other party of
any of the covenants or agreements contained herein, which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach.
(C) Delay. At any time prior to the Effective Time, by
ExecuFirst or Republic, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event that the Merger is not
consummated by June 30, 1996, except to the extent that the
failure of the Merger then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant to this
Section 7.01(C).
(D) No Approval, Dissenters Rights. By Republic or ExecuFirst,
if its Board of Directors so determines by a vote of a majority of the members
of its entire Board, in the event (i) the consent of the Board of Governors of
the Federal Reserve System for consummation of the Merger and the other
transactions contemplated by the Merger shall have been denied by final
nonappealable action of such Regulatory Authority or (ii) any stockholder
approval required by Section 6.01 herein is not obtained at the Republic Meeting
or the ExecuFirst Meeting, or (iii) more than [5]% of Republic Stock exercised
their dissenters rights in accordance with Subchapter D of Chapter 15 of the
PABCL.
(E) Failure to Recommend, Etc. At any time prior to the
Republic Meeting, by ExecuFirst if the Board of Directors of Republic shall have
failed to make its recommendation referred to in Section 5.02, withdrawn such
recommendation or modified or changed such recommendation in a manner adverse to
the interests of ExecuFirst; or at any time prior to the ExecuFirst Meeting, by
Republic if the Board of Directors of ExecuFirst shall have failed to make its
recommendation referred to in Section 5.02, withdrawn such recommendation or
modified or changed such recommendation in a manner adverse to the interests of
Republic.
7.02 Effect of Termination and Abandonment. In the event of termination
of this Plan and the abandonment of the Merger pursuant to this Article VII, no
party to this Plan shall have any liability or further obligation to any other
party hereunder except (i) as set forth in Section 8.01, (ii) that each of the
Stock Option Agreements shall be governed by its own terms as to termination and
(iii) that termination will not relieve a breaching party from liability for any
willful breach of this Plan giving rise to such termination; provided, however,
that, notwithstanding anything to the contrary herein, the sole remedy of either
party hereto for a termination of the Plan resulting from (x) the exercise of
its fiduciary duties under the PABCL or any other applicable law or statute by
the Board of Directors of either party or (y) the failure of either party to
satisfy any condition or covenant hereof provided it has used its reasonable
best efforts to so satisfy such condition or covenant, shall be such rights as
are granted pursuant to the Stock Option Agreements only.
VIII. OTHER MATTERS
8.01 Survival. All representations, warranties, agreements and
covenants contained in this Plan shall not survive the Effective Time or
termination of this Plan if this Plan is terminated prior to the Effective Time;
provided, however, if the Effective Time occurs, the agreements of the parties
in Sections 5.13, 8.01, 8.04 and 8.09 shall survive the Effective Time, and if
this Plan is terminated prior to the Effective Time, the agreements of the
parties in Sections 5.05(2), 7.02, 8.01, 8.02, 8.04, 8.05, 8.06, 8.07 and 8.09,
shall survive such termination.
8.02 Waiver; Amendment. Prior to the Effective Time, any provision of
this Plan may be (i) waived by the party benefitted by the provision, or (ii)
amended or modified at any time, by an agreement in writing among the parties
hereto approved by their respective Boards of Directors and executed in the same
manner as this Plan, except that, after the Republic Meeting
the consideration to be received by the stockholders of Republic for each share
of Republic Stock shall not thereby be decreased.
8.03 Counterparts. This Plan may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
8.04 Governing Law. This Plan shall be governed by, and interpreted in
accordance with, the laws of the Commonwealth of Pennsylvania.
8.05 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Plan and the transactions contemplated hereby prior to
the date hereof. All expenses related to (i) the preparation, printing and
distribution of any joint proxy materials and (ii) the preparation, printing,
distribution costs and SEC registration fees related to the Registration
Statement shall be shared pro-rata between the parties in proportion to the
number of shareholders of each of Republic and ExecuFirst.
8.06 Confidentiality. Except as otherwise provided in Section 5.05(2)
or in the Confidentiality Agreement, each of the parties hereto and their
respective agents, attorneys and accountants will maintain the confidentiality
of all information provided in connection herewith which has not been publicly
disclosed or as it is advised by counsel that any such information or document
is required by law or applicable NASDAQ rule or requirement to be disclosed,
provided, however, that such required disclosure shall be subject to prior
review by each party hereto.
8.07 Notices. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to ExecuFirst, to: ExecuFirst Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Klehr, Harrison, ▇▇▇▇▇▇, Branzburg & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Republic, to: Republic Bancorporation, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
With copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., Esquire
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.08 Definitions. Any term defined anywhere in this Plan shall have the
meaning ascribed to it for all purposes of this Plan (unless expressly noted to
the contrary), in addition:
(1) the term "Material Adverse Effect" shall mean,
with respect to Republic or ExecuFirst, respectively, any effect that (i)
is material and adverse to the financial position, results of operations or
business of Republic and its subsidiaries taken as a whole, or ExecuFirst and
its subsidiaries taken as a whole, respectively, or (ii) materially impairs the
ability of Republic or ExecuFirst, respectively, to perform its obligations
under this Plan or the consummation of the Merger and the other transactions
contemplated by this Plan; provided, however, that Material Adverse Effect shall
not be deemed to include the impact of (a) changes in banking and similar laws
of general applicability or interpretations thereof by courts, (b) changes in
generally accepted accounting principles or regulatory accounting requirements
applicable to banks and bank holding companies generally, (c) actions or
omissions of Republic or ExecuFirst taken with the prior informed consent of
Republic or ExecuFirst, as applicable, in contemplation of the transactions
contemplated hereby, (d) circumstances affecting regional bank holding companies
generally, and (e) the effects of the Merger and of the actions contemplated by
Section 5.08;
(2) the term "person" shall mean any individual,
bank savings association, corporation, partnership, association, joint
stock company, business trust or unincorporated organization;
(3) the term "Previously Disclosed" by a party shall
mean information set forth in its Disclosure Letter or a schedule that is
delivered by that party to the other parties prior to the execution of this Plan
and specifically designated as information "Previously Disclosed" pursuant to
this Plan;
(4) the term "Rights" means, with respect to any
person, securities or obligations convertible into or exchangeable for, or
giving any person any right to subscribe for or acquire, or any options, calls
or commitments relating to, shares of capital stock of such person;
(5) the terms "subsidiary" and "significant
subsidiary" shall have the meanings set forth in Rule 1-02 of Regulation
S-X of the SEC; and
(6) the term "willful breach" shall mean a knowing,
intentional and deliberate act or failure to act.
8.09 Entire Understanding; No Third Party Beneficiaries. This Plan, the
Stock Option Agreements, the Confidentiality Agreement and the Exhibits hereto
and thereto together represent the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and thereby and supersede
any and all other oral or written agreements
heretofore made. Except for Section 5.13, nothing in this Plan expressed or
implied, is intended to confer upon any person, other than the parties hereto or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Plan.
8.10 Headings. The headings contained in this Plan are for reference
purposes only and are not part of this Plan.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
REPUBLIC BANCORPORATION, INC.
By:
---------------------------------
Title: President
EXECUFIRST BANCORP, INC.
By:
---------------------------------
Title:
EXHIBIT A
AMENDED AND RESTATED BY-LAWS
OF
EXECUFIRST BANCORP, INC.
A Pennsylvania Corporation
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meetings. The annual meeting of the
shareholders of the Corporation shall be held on a date fixed from time to time
by the Board of Directors. An annual meeting may be held at any place in or out
of the Commonwealth of Pennsylvania as may be determined by the Board of
Directors and as shall be designated in the notice of the meeting and at the
time specified by the Board of Directors. Any business of the Corporation may be
transacted at an annual meeting without being specifically designated in the
notice unless otherwise provided by statute, the Corporation's Amended and
Restated Articles of Incorporation (the "Articles of Incorporation") or these
By-Laws, as they may be amended from time to time.
Section 2. Special Meetings. Special meetings of the
shareholders for any purpose or purposes, unless otherwise prescribed by statute
or by the Corporation's Articles of Incorporation, may be held at any place
within the United States, and may be called at any time (a) by the Chairman of
the Board, (b) by the Board of Directors [or (c) at the request in writing of
shareholders entitled to cast at least twenty (20%) percent of the votes
entitled to be cast at the meeting upon payment by such shareholders to the
Corporation of the reasonably estimated cost of preparing and mailing a notice
of the meeting (which estimated cost shall be provided to such shareholders by
the Secretary of the Corporation); provided, however, that special meetings of
shareholders of the Corporation which have as their purpose a change in control
of the Corporation, amendment to these By-Laws or an amendment of the
Corporation's Articles of Incorporation may only be called by a majority of the
Board of Directors of the Corporation. Notwithstanding the foregoing, unless
requested by shareholders entitled to cast a majority of the votes entitled to
be cast at the meeting, a special meeting of the shareholders need not be called
at the request of shareholders to consider any matter that is substantially the
same as a matter voted on at any meeting of the shareholders held during the
preceding twelve (12) months. A written request shall state the purpose or
purposes of the proposed meeting.] Shareholders of Registered Corporations are
not entitled by statute to call special meetings except under very limited
circumstances (ss.2521).
Section 3. Notice of Meetings. Written or printed notice
stating the time and place of every meeting of the shareholders and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall be given by the Secretary of the Corporation to each shareholder of record
entitled to vote at the meeting, by placing the notice in the mail at
least ten (10) days, but not more than sixty (60) days, prior to the date
designated for the meeting addressed to each shareholder at his address
appearing on the books of the Corporation or supplied by the shareholder to the
Corporation for the purpose of notice. The notice of any meeting of shareholders
may be accompanied by a form of proxy approved by the Board of Directors in
favor of the actions or persons as the Board of Directors may select. Notice of
any meeting of shareholders shall be deemed waived by any shareholder who
attends the meeting in person or by proxy, or who before or after the meeting
submits a signed waiver of notice that is filed with the records of the meeting.
Section 4. Quorum. Except as otherwise provided by statute or
by the Corporation's Articles of Incorporation, the presence at a meeting in
person or by proxy of shareholders of the Corporation entitled to cast at least
a majority of the votes entitled to be cast at such meeting shall constitute a
quorum at a meeting of the shareholders. Except as otherwise provided by statute
or by the Corporation's Articles of Incorporation, all questions to be decided
at any meeting shall be decided by majority vote of the shares so represented in
person or by proxy at the annual meeting and entitled to vote. In the absence of
a quorum, the shareholders present in person or by proxy at the meeting, by
majority vote and without notice other than by announcement at the meeting, may
adjourn the meeting from time to time as provided in Section 5 of this Article I
until a quorum shall be present in person or by proxy. The shareholders present
at any duly organized meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum present and voting at such meeting. The absence from a meeting of
shareholders representing such number of shares making it impossible to meet any
greater quorum requirement imposed by the laws of the Commonwealth of
Pennsylvania or other applicable statute, the Corporation's Articles of
Incorporation or these By-Laws for action upon any given matter shall not
prevent action at the meeting on any other matter or matters that may properly
come before the meeting, so long as there are present, in person or by proxy,
holders of the number of shares of stock of the Corporation required for action
upon the other matter or matters.
Section 5. Adjournment. Any meeting of the shareholders may be
adjourned from time to time and for such period as the shareholders present and
entitled to vote shall direct, without notice other than by announcement at the
meeting at which the adjournment is taken. At any adjourned meeting at which a
quorum shall be present, any action may be taken that could have been taken at
the meeting originally called.
Section 6. Organization. At every annual meeting of the
shareholders, the Chairman of the Board, or in his absence or inability to act
or at the request of the Chairman, the President, or in his absence or inability
to act, a Vice President, or in the absence or inability to act of the Chairman
of the Board, the President and all the Vice Presidents, a chairman chosen by
the shareholders, shall act as chairman of the meeting. The Secretary, or in his
absence or inability to act, a person appointed by the chairman of the meeting,
shall act as secretary of the meeting and keep the minutes of the meeting.
Section 7. Order of Business. The order of business at all
meetings of the shareholders shall be as determined by the chairman of the
meeting.
Section 8. Voting. Except as otherwise provided by statute or
the Corporation's Articles of Incorporation, each holder of record of shares of
stock of the
Corporation having voting power shall be entitled at each meeting of the
shareholders to one (1) vote for every share of stock standing in his name on
the records of the Corporation as of the record date determined pursuant to
Section 9 of this Article I.
Each shareholder entitled to vote at any meeting of
shareholders may authorize another person or persons to act for him by a proxy
signed by the shareholder or his attorney-in-fact. Such proxy shall be
authorized by an instrument in writing, or by a transmission permitted by law,
filed in accordance with the procedure established for the meeting. Any copy,
facsimile, telecommunication or other reliable reproduction of the writing or
transmission created pursuant to this paragraph may be substituted or used in
lieu of the original writing or transmission for any and all purposes for which
the original writing or transmission could be used provided that such copy,
facsimile, telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof, unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the shareholder executing it, except in those cases in which the proxy states
that it is irrevocable and in which an irrevocable proxy is permitted by law. A
proxy shall not be revoked by the death or incapacity of the maker unless,
before the authority is exercised or the vote counted, written notice of the
death or incapacity is given to the secretary of the corporation. (R)
Proxies solicited on behalf of management shall be voted as
directed by the shareholders or, in the absence of such direction, as determined
by the Board of Directors.
Section 9. Fixing Record Date for Voting. The Board of
Directors may set a record date for the purpose of determining shareholders
entitled to vote at any meeting of the shareholders or any adjournment thereof
or, (subject to the provisions of Article IV, Section 6 of these By-Laws) for
any other proper purpose. Such record date in any case shall be not more than
ninety (90) nor fewer than ten (10) days before the date of the particular
action to be taken. All persons who were holders of record of shares as of the
record date of a meeting, and no others, shall be entitled to vote at such
meeting and any adjournment thereof.
Section 10. Inspectors. The Board of Directors may, in
advance of any meeting of shareholders, appoint one (1) or three (3) inspectors
to act at the meeting or at any adjournment of the meeting. If the inspectors
shall not be so appointed or if any of them shall fail to appear or act, the
chairman of the meeting may appoint inspectors prior to the convening of the
meeting. Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath to execute faithfully the duties of inspector at the
meeting with strict impartiality and according to the best of his ability.
Unless otherwise prescribed by the Board, the inspectors shall: determine the
number of shares outstanding and the voting power of each share; the number of
shares represented at the meeting; the existence of a quorum and the validity
and effect of proxies; receive votes, ballots or consents; hear and determine
all challenges and questions arising in connection with the right to vote; count
and tabulate all votes, ballots or consents; determine the result thereof, and,
do those acts as are proper to conduct the election of vote with fairness to all
shareholders. Upon request of the chairman of the meeting or any shareholder
entitled to vote at the meeting, the inspectors shall make a report in writing
of any challenge, request or matter determined by them and shall execute a
certificate of any fact found by them. Inspectors need not be shareholders of
the Corporation.
Section 11. Shareholder Proposals. At all Annual Meetings of
shareholders commencing after the Annual Meeting of Shareholders to be held in
1996, if any, shareholder proposals with respect to an annual meeting shall be
made in compliance with the provisions of Rule 14a-8 of the Securities Exchange
Act of 1934, as amended ("Rule 14a-8"). With respect to a Special Meeting of
shareholders, shareholder proposals must be stated in writing and filed with the
secretary of the Corporation not later than the close of business on the seventh
(7th) day following the day on which notice of such Special Meeting is first
given to shareholders. This provision shall not prevent the consideration and
approval or disapproval at the annual meeting of reports of officers, directors
and committees; but, in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated and filed as herein provided.
Section 12. Action By Unanimous Consent. At all Annual
Meetings of shareholders commencing after the Annual Meeting of Shareholders to
be held in 1996, if any, shareholders of the Corporation shall not be entitled
to take action by means of a unanimous written consent.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers. Except as otherwise provided in the
Corporation's Articles of Incorporation, the business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. All
powers of the Corporation may be exercised by or under authority of the Board of
Directors except as conferred on or reserved to the shareholders by law, by the
Corporation's Articles of Incorporation or by these By-Laws.
Section 2. Number and Term. The number of directors shall be
fixed from time to time by resolution of the Board of Directors adopted by a
majority of the directors then in office; provided, however, that the number of
directors shall in no event be fewer than five (5) nor more than twenty-five
(25). The Board of Directors shall be divided into three classes as nearly equal
as possible. The members of each class shall be elected for a term of three
years and until their successors are elected and qualified. One class shall be
elected by ballot annually. Any vacancy created by an increase in directors may
be filled in accordance with Section 6 of this Article II. No reduction in the
number of directors shall have the effect of removing any director from office
prior to the expiration of his term unless the director is specifically removed
pursuant to Section 5 of this Article II at the time of the decrease. A director
need not be a citizen of the United States or a resident of the Commonwealth of
Pennsylvania but must be a shareholder of the Corporation at the commencement of
his term.
Section 3. Standard of Care; Justifiable Reliance. A director
shall stand in a fiduciary relation to the corporation and shall perform his or
her duties as a director, including duties as a member of any committee of the
board upon which the director may serve, in good faith, in a manner the director
reasonably believes to be in the best interests of the corporation and with such
care, including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances. In performing his or her duties,
a director shall be entitled to rely in good faith on information, opinions,
reports or statements, including
financial statements and other financial data, in each case prepared or
presented by any of the following:
(a) One or more officers or employees of the
corporation whom the director reasonably believes to be reliable and
competent in the matters presented.
(b) Counsel, public accountants or other persons as
to matters which the director reasonably believes to be within the
professional or expert competence of such person.
(c) A committee of the board upon which the director
does not serve, duly designated in accordance with law, as to matters
within its designated authority, which committee the director
reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if the
director has knowledge concerning the matter in question that would cause his or
her reliance to be unwarranted. (R)]
Section 4. Nomination by Shareholders. At all Annual Meetings
of shareholders commencing after the Annual Meeting of Shareholders to be held
in 1996, if any, any stockholder who desires to propose nominees to the Board of
Directors must provide for the receipt of a written notice of the intention to
nominate a person or persons for election as directors by the Secretary of the
Corporation: (i) with respect to an election to be held at any annual meeting of
shareholders in accordance with the provision of Rule 14a-8, and (ii) with
respect to an election to be held at a special meeting of shareholders for the
election of directors, the close of business on the seventh (7th) day following
the day on which notice of such meeting is first given to shareholders. The
notice is required to contain: (i) the name and address of the shareholder who
intends to make the nomination and of the person or persons to be nominated;
(ii) a representation that the shareholder is a holder of record of stock
entitled to vote at the meeting and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice; (iii) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such persons or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (iv) such other information regarding each nominee proposed by such
shareholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission had
each nominee been nominated or intended to be nominated, by the Board of
Directors of the Corporation; and (v) the consent of each nominee to serve as a
director of the Company if so elected. The chairman of any meeting of
shareholders to elect directors and the Board of Directors may refuse to
recognize the nomination of any person not made in compliance with the
foregoing.
Section 5. Resignation. A director of the Corporation may
resign at any time by giving written notice of his resignation to the Board of
Directors or the Chairman of the Board or the Secretary of the Corporation. Any
resignation shall take effect at the time specified in it or, should the time
when it is to become effective not be specified in it, upon its formal
acceptance by the Board of Directors. Other than as provided herein, acceptance
of a resignation shall not be necessary to make it effective unless the
resignation states otherwise. When one or more directors resign from the board
effective at a future date, the directors then in office,
including those who have so resigned, shall have power by the applicable
vote to fill the vacancies, the vote thereon to take effect when the
resignations become effective. (R)
Section 6. Removal of Directors. Subject to the rights of the
holders of any class separately entitled to elect one or more directors, any
director, or the entire Board of Directors, may be removed from office for cause
by the affirmative vote of the holders of at least 75% of the combined voting
power of all classes of capital stock entitled to vote in the election of
directors.
The Board of Directors may declare vacant the office of a
director who has been judicially declared of unsound mind or who has been
convicted of an offense punishable by imprisonment for a term of more than one
year or if, within sixty (60) days after notice of his or her selection, the
director does not accept the office either in writing or by attending a meeting
of the Board of Directors. (R)
Section 7. Vacancies. Any vacancies in the Board of Directors,
whether arising from death, resignation, removal or any other cause except an
increase in the number of directors, shall be filled by a vote of the majority
of the Board of Directors then in office even though that majority is less than
a quorum. A majority of the entire Board may fill a vacancy that results from an
increase in the number of directors. In the event that at any time a vacancy
exists in any office of a director that may not be filled by the remaining
directors, a special meeting of the shareholders shall be held as promptly as
possible and in any event within sixty (60) days, for the purpose of filling the
vacancy or vacancies. Any director elected or appointed to fill a vacancy shall
hold office for the balance of the term then remaining and until a successor has
been chosen and qualifies or until his earlier resignation or removal.
Section 8. Place of Meetings. Meetings of the Board may be
held at any place that the Board of Directors may from time to time
determine or that is specified in the notice of the meeting.
Section 9. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at the time and place determined by
the Board of Directors.
Section 10. Special Meetings. Special meetings of the Board
of Directors may be called by a majority of the Board or by the Chairman of
the Board.
Section 11. Organizational Meeting. The organizational meeting
of each newly elected Board of Directors shall be held as soon as practicable
after the meeting of shareholders at which the directors were elected. No notice
of such annual meeting shall be necessary if held immediately after the
adjournment, and at the site, of the meeting of shareholders. If not so held,
notice shall be given as hereinafter provided for special meetings of the Board
of Directors.
Section 12. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the shareholders and of the Board of Directors,
unless otherwise provided herein. Subject to the control of the Board of
Directors, the Chairman of the Board shall have general charge of the business
and affairs of the Corporation. In the absence or inability of the Chairman of
the Board to act, a majority of the Board of Directors shall designate the
person or persons to preside at meetings of Shareholders and the Board of
Directors.
Section 13. Notice of Special Meetings. Notice of each special
meeting of the Board of Directors shall be given by the Secretary as hereinafter
provided. Each notice shall state the time and place of the meeting and shall be
delivered to each director, either personally, by courier or by telephone or
other standard form of telecommunication, at least twenty-four (24) hours before
the time at which the meeting is to be held, or by first-class mail, postage
prepaid, addressed to the director at his residence or usual place of business,
and mailed at least two (2) days before the day on which the meeting is to be
held.
Section 14. Waiver of Notice of Meetings. Notice of any
special meeting need not be given to any director who shall, either before or
after the meeting, sign a written waiver of notice that is filed with the
records of the meeting or who shall attend the meeting.
Section 15. Quorum and Voting. A majority of the members of
the entire Board of Directors shall be present in person at any meeting of the
Board so as to constitute a quorum for the transaction of business at the
meeting, and except as otherwise expressly required by statute, the
Corporation's Articles of Incorporation, these By-Laws, or any applicable
statute, the act of a majority of the directors present at any meeting at which
a quorum is present shall be the act of the Board. In the absence of a quorum at
any meeting of the Board, a majority of the directors present may adjourn the
meeting to another time and place until a quorum shall be present. Notice of the
time and place of any adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place were
announced at the meeting at which the adjournment was taken, to the other
directors. At any adjourned meeting at which a quorum is present, any business
may be transacted that might have been transacted at the meeting as originally
called.
Section 16. Organization. The Board of Directors shall
designate a Chairman of the Board, who shall preside at each meeting of the
Board. In the absence or inability of the Chairman of the Board to act, or at
the Chairman's request, the President, or, in his absence or inability to act,
another director chosen by a majority of the directors present, shall act as
chairman of the meeting and preside at the meeting. The Secretary (or, in his
absence or inability to act, any person appointed by the chairman) shall act as
secretary of the meeting and keep the minutes of the meeting.
Section 17. Committees. The Board of Directors may designate
one (1) or more committees of the Board of Directors including, but not limited
to, an Executive Committee, Audit Committee, Compensation Committee and
Nominating Committee, each consisting of two (2) or more directors. To the
extent provided in the resolution creating such committees, and permitted by
law, the committee or committees shall have and may exercise the powers of the
Board of Directors in the management and conduct of the business and affairs of
the Corporation and may authorize the seal of the Corporation to be affixed to
all papers that may require it. Any committee or committees shall have the name
or names determined from time to time by resolution adopted by the Board of
Directors. Each committee shall keep regular minutes of its meetings and provide
those minutes to the Board of Directors when required. The members of a
committee present at any meeting, whether or not they constitute a quorum, may
appoint a director to act in the place of the absent member.
Section 18. Written Consent of Directors in Lieu of Meeting.
Any action required or permitted to be taken at any meeting of the Board of
Directors or of any committee
of the Board may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the Board or
committee.
Section 19. Telephone Conference. Members of the Board of
Directors or any committee of the Board may participate in any Board or
committee meeting by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time. Participation by such means shall constitute
presence in person at the meeting.
Section 20. Compensation. Each director shall be entitled to
receive compensation, if any, as may from time to time be fixed by the Board of
Directors, including a fee for each meeting of the Board or any committee
thereof, regular or special, he attends. Directors may also be reimbursed by the
Corporation for all reasonable expenses incurred in traveling to and from the
place of a Board or committee meeting. Directors who are also officers of the
Corporation and/or any of its subsidiaries shall not receive compensation in
consideration of their services as a director.
ARTICLE III
OFFICERS, AGENTS AND EMPLOYEES
Section 1. Number and Qualifications. The officers of the
Corporation shall be a Chief Executive Officer or Officers, a President, a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may elect or appoint one (1) or more Vice
Presidents and may also appoint any other officers, offices, agents and
employees as it deems necessary or proper. Any two (2) or more offices may be
held by the same person, except the offices of President and Vice President,
but, unless otherwise authorized by the Board of Directors or an executive
committee thereof, no officer shall execute, acknowledge or verify any
instrument in more than one (1) capacity. Officers shall be elected by the Board
of Directors each year at its organizational meeting held after the annual
meeting of shareholders, each to hold office until the meeting of the Board
following the next annual meeting of the shareholders and until his successor
shall have been duly elected and shall have qualified, or until his death, or
until he shall have resigned or have been removed, as provided in these By-Laws.
The Board of Directors may from time to time elect, or delegate to the Chairman
of the Board or the President the power to appoint, such officers (including,
but not limited to, one or more Assistant Vice Presidents, one or more Assistant
Treasurers and one or more Assistant Secretaries) and such agents as may be
necessary or desirable for the business of the Corporation. Such other officers
and agents shall have such duties and shall hold their offices for such terms as
may be prescribed by the Board or by the appointing authority.
Section 2. Resignations. Any officer of the Corporation may
resign at any time by giving written notice of his resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary. Any
resignation shall take effect at the time specified therein or, if the time when
it shall become effective is not specified therein, immediately upon its formal
acceptance by the Board of Directors. Other than as specifically provided
herein, the acceptance
of a resignation shall not be necessary to make it effective unless otherwise
stated in the resignation.
Section 3. Removal of Officer, Agent or Employee. Any officer,
agent or employee of the Corporation may be removed by the Board of Directors
with or without cause at any time, and the Board may delegate the power of
removal as to agents and employees not elected or appointed by the Board of
Directors. Removal shall be without prejudice to the person's contract rights,
if any, but the appointment of any person as an officer, agent or employee of
the Corporation shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office, whether arising
from death, resignation, removal or any other cause, may be filled for the
unexpired portion of the term of the office that shall be vacant, in the manner
prescribed in these By-Laws, for the regular election or appointment to the
office.
Section 5. Compensation. The compensation of the officers of
the Corporation shall be fixed by the Board of Directors or a designated
committee thereof, but this power may be delegated to any officer with respect
to other officers under his control.
Section 6. Bonds or Other Security. If required by the Board,
any officer, agent or employee of the Corporation shall give a bond or other
security for the faithful performance of his duties, in an amount and with any
surety or sureties as the Board may require.
Section 7. President. The President shall have the powers and
perform the duties that the Board or the Chairman of the Board may from time to
time prescribe.
Section 8. Vice President. Each Vice President shall have the
powers and perform the duties that the Board of Directors, the Chairman of the
Board or the President may from time to time prescribe.
Section 9. Treasurer. Unless otherwise designated by the Board
of Directors or an executive committee thereof, the Treasurer shall be the Chief
Financial Officer and Chief Accounting Officer of the Corporation. Subject to
the provisions of any contract that may be entered into with any custodian
pursuant to authority granted by the Board of Directors, the Treasurer shall
have charge of all receipts and disbursements of the Corporation and shall have
or provide for the custody of the Corporation's funds and securities; he shall
have full authority to receive and give receipts for all money due and payable
to the Corporation, and to endorse checks, drafts, and warrants, in its name and
on its behalf and to give full discharge for the same; he shall deposit all
funds of the Corporation, except those that may be required for current use,, in
such banks or other places of deposit as the Board of Directors may from time to
time desig- nate; and, in general, he shall perform all duties incident to the
office of Treasurer and such other duties as may from time to time be assigned
to him by the Board of Directors, the Chairman of the Board or the President.
Section 10. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided
for the purpose, the minutes of all meetings of the Board of Directors, the
committees of the Board and the shareholders;
(b) see that all notices are duly given in accordance with
the provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the
corporation and affix and attest the seal to all stock certificates of the
Corporation (unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and affix and attest the seal to all other
documents to be executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and
(e) in general, perform all the duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Board of Directors, the Chairman of the Board or the President.
Section 11. Delegation of Duties. In case of the absence of
any officer of the Corporation, or for any other reason that the Board of
Directors may deem sufficient, the Board of Directors may provisionally confer
the powers or duties, or any of them, of such officer upon any other officer or
upon any director.
ARTICLE IV
STOCK
Section 1. Stock Certificates. Each holder of stock of the
Corporation shall be entitled, upon specific written request to such person as
may be designated by the Corporation, to have a certificate or certificates, in
a form approved by the Board, representing the number of shares of stock of the
Corporation owned by him; provided, however, that certificates for fractional
shares will not be delivered in any case. The certificates representing shares
of stock shall be signed by or in the name of the Corporation by the Chairman of
the Board, the President or a Vice President and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer and sealed with the seal of
the Corporation. Any or all of the signatures or the seal on the certificate may
be facsimiles. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before the certificate is
issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar was still in office at the date of issue.
Section 2. Books of Account and Record of Shareholders. There
shall be kept at the principal executive office of the Corporation correct and
complete books and records of account of all the business and transactions of
the Corporation. There shall be made available, upon the request of any
shareholder, in accordance with Pennsylvania law, a record containing
the number of shares of stock issued during a specified period not to exceed
twelve (12) months and the consideration received by the Corporation for each
such share.
Section 3. Transfers of Shares. Transfers of shares of stock
of the Corporation shall be made on the stock records of the Corporation only by
the registered holder of the shares, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a transfer
agent or transfer clerk, and on surrender of the certificate or certificates, if
issued, for the shares properly endorsed or accompanied by a duly executed stock
transfer power and the payment of all taxes thereon. Except as otherwise
provided by law, the Corporation shall be entitled to recognize the exclusive
right of a person in whose name any share or shares stand on the record of
shareholders as the owner of the share or shares for all purposes, including,
without limitation, the rights to receive dividends or other distributions and
to vote as the owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person.
Section 4. Regulations. The Board of Directors may make any
additional rules and regulations, not inconsistent with these By-Laws, as it may
deem expedient concerning the issue, transfer and registration of certificates
for shares of stock of the Corporation. The Board may appoint, or authorize any
officer or officers to appoint, one or more transfer agents or one or more
transfer clerks and one or more registrars and may require all certificates for
shares of stock to bear the signature or signatures of any of them.
Section 5. Lost, Destroyed or Mutilated Certificates. The
holder of any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of its loss, destruction or mutilation and
the Corporation may issue a new certificate of stock in the place of any
certificate issued by it that has been alleged to have been lost or destroyed or
that shall have been mutilated. The Board may, in its discretion, require the
owner (or his legal representative) of a lost, destroyed or mutilated
certificate to give to the Corporation a bond in a sum, limited or unlimited,
and in a form and with any surety or sureties, as the Board in its absolute
discretion shall determine, to indemnify the Corporation against any claim that
may be made against it on account of the alleged loss or destruction of any such
certificate, or issuance of a new certificate. Anything herein to the contrary
notwithstanding, the Board of Directors, in its absolute discretion, may refuse
to issue any such new certificate, except pursuant to legal proceedings under
the laws of the Commonwealth of Pennsylvania.
Section 6. Fixing of Record Date for Dividends, Distributions,
etc. The Board may set, in advance, a date for the payment of any dividend
or the making of any distribution or the allotment of rights to subscribe for
securities of the Corporation, or for the delivery of evidences of rights or
evidences of interests arising out of any change, conversion or exchange of
common stock or other securities, as the record date for the determination of
the shareholders entitled to receive any such dividend, distribution, allotment,
rights or interests, and in such case only the shareholders of record at the
time so set shall be entitled to receive such dividend, distribution, allotment,
rights or interests. Such record date shall not be more than ninety (90) days or
fewer than ten (10) days before the date of the particular action to be taken.
Section 7. Information to Shareholders and Others. Any
shareholder of the Corporation or his agent may inspect, during the
Corporation's usual business hours, the
Corporation's By-Laws, minutes of the proceedings of its shareholders, annual
statements of its affairs and voting trust agreements on file at its principal
office.
ARTICLE V
INDEMNIFICATION AND INSURANCE
Section 1. Scope of Indemnification. The corporation shall
indemnify an indemnified representative against any liability incurred in
connection with any proceeding in which the indemnified representative may be
involved as a party or otherwise by reason of the act that such person is or was
serving in an indemnified capacity, including, without limitation, liabilities
resulting from any actual or alleged breach or neglect of duty, error,
misstatement or misleading statement, negligence, gross negligence or act giving
rise to strict or products liability, except:
(1) where such indemnification is expressly prohibited by
applicable law;
(2) where the conduct of the indemnified representative has
been finally determined pursuant to Section 6 or otherwise:
(i) to constitute willful misconduct or
recklessness within the meaning of 15 Pa.C.S. 513(b) and 1746(b) or any
superseding provision of law sufficient in the circumstances to bar
indemnification against liabilities arising from the conduct; or
(ii) to be based upon or attributable to the
receipt by the indemnified representative from the corporation of a
personal benefit to which the indemnified representative is not legally
entitled; or
(iii) to the extent such indemnification has
been finally determined in a final adjudication pursuant to Section 6 to be
otherwise unlawful.
(3) with respect to expenses or the payment of profits arising
from the purchase or sale of securities of the corporation in violation of
Section 16(b) of the Securities Exchange Act of 1934;
(4) expenses or liabilities of any type whatsoever (including,
but not limited to, judgments, fines and amounts paid in settlement) which have
been paid directly to, or for the benefit of, such person by directors'
liability insurance whose premiums are paid for by the corporation or by an
individual or entity other than such director or officer;
(5) amounts paid in settlement of any proceeding without the
written consent of the corporation or;
The Board of Directors of the corporation is hereby authorized, at any time by
resolution, to add to the above list of exceptions from the right of
indemnification, but any such additional exception shall not apply with respect
to any event, act or omission which has occurred prior to the date that the
Board of Directors in fact adopts such resolution. Any such additional exception
may, at any time after its adoption, be amended, supplemented, waived or
terminated by further resolution of the Board of Directors of the corporation.
If an indemnified representative is entitled to
indemnification in respect of a portion, but not all, of any liabilities to
which such person may be subject, the corporation shall indemnify such
indemnified representative to the maximum extent for such portion of the
liabilities.
The termination of a proceeding by judgment, order, settlement
or conviction or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the indemnified representative is not entitled
to indemnification.
For purposes of this Article:
(1) "indemnified capacity" means any and all past, present and
future service by an indemnified representative in one or more
capacities as a director, officer, employee or agent of the
corporation, or, at the request of the corporation, as a director,
officer, employee, agent, fiduciary or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other
entity or enterprise;
(2) "indemnified representative" means any and all directors
and officers of the corporation and any other person designated as an
indemnified representative by the Board of Directors of the corporation
(which may, but not, include any person serving at the request of the
corporation, as a director, officer, employee, agent, fiduciary or
trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise):
(3) "liability" means any damage, judgment, amount paid in
settlement, fine, penalty, punitive damages, excise tax assessed with
respect to an employee benefit plan, or cost or expense, of any nature
(including, without limitation, attorneys' fees and disbursements); and
(4) "proceeding" means any threatened, pending or completed
action, suit, appeal or other proceeding of any nature, whether civil,
criminal, administrative or investigative, whether formal or informal,
and whether brought by or in the right of the corporation, a class of
its security holders or otherwise.
(5) "to the fullest extent permitted by applicable law" means
the maximum extent permitted by public policy, common law or statute.
Any person covered by this Article may, to the fullest extent permitted
by applicable law, elect to have the right to indemnification or to
advancement or reimbursement of expenses, interpreted, at such person's
option (i) on the basis of the applicable law on the date this Article
was approved by shareholders, or (ii) on the basis of the applicable
law in effect at the time of the occurrence of the event or events
giving rise to the proceeding, or (iii) on the basis of the applicable
law in effect at the time indemnification or advancement or
reimbursement of expenses is sought.
(6) The corporation shall have the right to appoint the
attorney for an indemnified representative provided such appointment is
not unreasonable under the circumstances.
Section 2. Proceedings Initiated By Indemnified
Representatives. Notwithstanding any other provision of this Article, the
corporation shall not indemnify under this Article an indemnified representative
for any liability incurred in a proceeding initiated (which shall not be deemed
to include counterclaims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification unless such
initiation of or participation in the proceeding is authorized, either before or
after its commencement, by the affirmative vote of a majority of the directors
in office. This section does not apply to a reimbursement of expenses incurred
in successfully prosecuting or defending an arbitration under Section 6 or
otherwise successfully prosecuting or defending the rights of an indemnified
representative granted by or pursuant to this Article.
Section 3. Advancing Expenses. The corporation shall pay the
expenses (including attorneys' fees and disbursements) incurred in good faith by
an indemnified representative in advance of the final disposition of a
proceeding described in Section 1 or the initiation of or participation in which
is authorized pursuant to Section 2 upon receipt of an undertaking by or on
behalf of the indemnified representative to repay the amount if it is ultimately
determined pursuant to Section 6 that such person is not entitled to be
indemnified by the corporation pursuant to this Article. The financial ability
of an indemnified representative to repay an advance shall not be a prerequisite
to the making of such advance.
Section 4. Securing of Indemnification Obligations. To further
effect, satisfy or secure the indemnification obligations provided herein or
otherwise, the corporation may maintain insurance, obtain a letter of credit,
act as self-insurer, create a reserve, trust, escrow, cash collateral or other
fund or account, enter into indemnification agreements, pledge or grant a
security interest in any assets or properties of the corporation, or use any
other mechanism or arrangement whatsoever in such amounts, at such costs, and
upon such other terms and conditions as the Board of Directors shall deem
appropriate. Absent fraud, the determination of the Board of Directors with
respect to such amounts, costs, terms and conditions shall be conclusive against
all security holders, officers and directors and shall not be subject to
voidability.
Section 5. Payment of Indemnification. An indemnified
representative shall be entitled to indemnification within thirty (30) days
after a written request for indemnification has been delivered to the Secretary
of the corporation.
Section 6. Arbitration. Any dispute related to the right to
indemnification, contribution or advancement of expenses as provided under this
Article, except with respect to indemnification for liabilities arising under
the Securities Act of 1933 that the corporation has undertaken to submit to a
court for adjudication, shall be decided only by arbitration in the metropolitan
area in which the principal executive offices of the corporation are located at
the time, in accordance with the commercial arbitration rules then in effect of
the American Arbitration Association, before a panel of three arbitrators, one
of whom shall be selected by the corporation, the second of whom shall be
selected by the indemnified representative and third of whom shall be selected
by the other two arbitrators. In the absence of the American Arbitration
Association, or if for any reason arbitration under the arbitration rules of the
American
Arbitration Association cannot be initiated, or if one of the parties fails or
refuses to select an arbitrator or if the arbitrators selected by the
corporation and the indemnified representative cannot agree on the selection of
the third arbitrator within thirty (30) days after such time as the corporation
and the indemnified representative have each been notified of the selection of
the other's arbitrator, the necessary arbitrator or arbitrators shall be
selected by the presiding judge of the court of general jurisdiction in such
metropolitan area.
The party or parties challenging the right of an indemnified
representative to the benefits of this Article shall have the burden of proof.
The corporation shall reimburse an indemnified representative
for the expenses (including attorneys' fees and disbursements) incurred
unsuccessfully prosecuting or defending such arbitration.
Any award entered by the arbitrators shall be final, binding
and nonappealable and judgment may be entered thereon by any party in accordance
with applicable law in any court of competent jurisdiction, except that the
corporation shall be entitled to interpose as a defense in any such judicial
enforcement proceeding any prior final judicial determination adverse to the
indemnified representative under Section 7.01(a)(2) in a proceeding not directly
involving indemnification under this Article. This arbitration provision shall
be specifically enforceable.
Section 7. Contribution. If the indemnification provided for
in this Article or otherwise is unavailable for any reason in respect of any
liability or portion thereof, the corporation shall contribute to the
liabilities to which the indemnified representative may be subject in such
proportion as is appropriate to reflect the intent of this Article or otherwise.
Section 8. Mandatory Indemnification of Directors, Officers,
Etc. To the extent that an authorized representative of the corporation has been
successful on the merits or otherwise in defense of any action or proceeding
referred to in 15 Pa.C.S. 1741 or 1742 or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees and disbursements) actually and reasonably incurred by such
person in connection therewith.
Section 9. Optional Indemnification. The corporation may, to
the fullest extent permitted by applicable law, indemnify and advance or
reimburse expenses for, persons in all situations other than that covered by
this Article.
Section 10. Contract Rights; Amendment or Repeal. All rights
under this Article shall be deemed a contract between the corporation and the
indemnified representative pursuant to which the corporation and each
indemnified representative intend to be legally bound. Any repeal, amendment or
modification hereof shall be prospective only and shall not affect any rights or
obligations then existing.
Section 11. Scope of Article. The rights granted by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification, contribution or advancement of expenses may be entitled under
any statute, agreement, vote of shareholders or disinterested directors or
otherwise both as to action in an indemnified capacity and as to action in any
other capacity. The indemnification, contribution and advancement of expenses
provided
by or granted pursuant to this Article shall continue as to a person who has
ceased to be an indemnified representative in respect of matters arising prior
to such time, and shall inure to the benefit of the heirs, executors,
administrators and personal representatives of such a person.
Section 12. Reliance of Provisions. Each person who shall act
as an indemnified representative of the corporation shall be deemed to be
doing so in reliance upon the rights provided in this Article.
Section 13. Interpretation. The provisions of this Article
are intended to constitute By-Laws authorized by 15 Pa.C.S. 513 and 1746.
ARTICLE VI
SEAL
The seal of the Corporation shall be circular in form and
shall bear the name of the Corporation, the year of its incorporation, the words
"Corporate Seal" and "Commonwealth of Pennsylvania" and any emblem or device
approved by the Board of Directors. The seal may be used by causing it or a
facsimile to be impressed or affixed or in any other manner reproduced, or by
placing the word "(seal)" adjacent to the signature of the authorized officer of
the Corporation.
ARTICLE VII
FISCAL YEAR
Section 1. Fiscal Year. The Corporation's fiscal year shall
be fixed by the Board of Directors from time to time.
ARTICLE VIII
DIVIDENDS
Dividends upon any class of shares of the capital stock of the
Corporation may be declared as provided by and subject to the restrictions
contained in the laws of the Commonwealth of Pennsylvania and the Articles of
Incorporation of the corporation, as the same or either of them may be amended
from time to time, but only as and when and of the character and to the amount
that the Board of Directors of the Corporation may from time to time deem
advisable and only in the manner contemplated herein.
ARTICLE IX
EMERGENCY BY-LAW
In the event of an emergency declared by the President of the
United States or the person performing his functions, the officers and employees
of this Corporation will continue to conduct the affairs of the Corporation
under such guidance from the directors as may be available except as to matters
which by statute require specific approval of the Board and subject to
conformance with any governmental directives during the emergency. The Board
shall have the power, in the absence or disability of any officer, or upon the
refusal of any officer to act, to delegate and prescribe such office's power and
duties to any other officer, or to any director, for the time being. In the
event of a state of disaster of sufficient severity to prevent the conduct and
management of the affairs and business of this Corporation by its directors and
officers as contemplated by these By-Laws, any three or more available members
of the then incumbent Executive Committee shall constitute a quorum of that
committee for the full conduct and management of the affairs and business of the
Corporation in accordance with this emergency By- Law. In the event of the
unavailability, at such time, of a minimum of three members of the then
incumbent Executive Committee, any three available directors shall constitute
the management of the affairs and business of the corporation in accordance with
the foregoing provisions of this section. This section shall be subject to
implementation by resolutions of the Board passed from time to time for that
purpose, and any provision of these By-Laws other than this section and any
resolutions which are contrary to the provisions of this section or to the
provisions of any such implementary resolutions shall be suspended until it
shall be determined by any interim Executive Committee acting under this section
that it shall be to the advantage of this Corporation to resume the conduct and
management of its affairs and business under all of the other provisions of
these By-Laws. During an emergency resulting in any authorized place of business
of this Corporation being unable to function, the business ordinarily conducted
at such location shall be relocated elsewhere in suitable quarters, in addition
to or in lieu of the location heretofore mentioned, as may be designated by the
Board or by the Executive Committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board dealing with
the exercise of authority in the time of such emergency, conducting the affairs
of this Corporation. Any temporarily relocated place of business of this
Corporation shall be returned to its legally authorized location as soon as
practicable and such temporary place of business shall then be discontinued.
ARTICLE X
AMENDMENTS
These By-Laws may be amended or repealed by the affirmative
vote of a majority of the Board of Directors at any regular or special meeting
of the Board of Directors, or by the vote of shareholders holding at least
seventy-five (75%) percent of the total aggregate outstanding shares of the
Corporation's capital stock, at an annual or special meeting called for such
purpose.
EXHIBIT B
SURVIVING CORPORATION
AMENDED AND RESTATED STOCK OPTION AND RESTRICTED STOCK PLAN
The purpose of the Amended and Restated Stock Option and Restricted
Stock Plan (the "Plan") of Surviving Corporation (the "Company") is to promote
the interests of the Company by providing incentives to (i) designated officers
and other employees of the Company or a Subsidiary Corporation (as defined
herein), (ii) non-employee members of the Company's Board of Directors (the
"Board") and (iii) independent contractors and consultants (who may be
individuals or entities) who perform services for the Company, to enable the
Company to attract and retain them and to encourage them to acquire a
proprietary interest, or to increase their proprietary interest, in the Company.
The Company believes that the Plan will cause participants to contribute
materially to the growth of the Company, thereby benefitting the Company's
shareholders. For purposes of the Plan, the terms "Parent Corporation" and
"Subsidiary Corporation" shall have the meanings set forth in subsections (e)
and (f) of Section 424 of the Internal Revenue Code of 1986, as amended (the
"Code").
1. Administration
(a) The Plan shall be administered and interpreted by a committee of
the Board (the "Committee") consisting of not less than two persons, all of whom
shall be "outside directors" within the meaning of Section 162(m) of the Code
and each of whom shall be a "disinterested person" as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Committee shall have the sole authority to determine (i) who is eligible to
receive Grants (as defined in Section 2 below) under the Plan, (ii) the type,
size and terms of each Grant under the Plan (subject to Section 4 below), (iii)
the time when each Grant will be made and the duration of any exercise or
restriction period; (iv) any restrictions on resale applicable to the shares to
be issued or transferred pursuant to the Grant; and (v) any other matters
arising under the Plan. The Committee may, if it so desires, base any of the
foregoing determinations upon the recommendations of management of the Company.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt or amend such rules, regulations, agreements and
instruments as it may deem appropriate for the proper administration of the
Plan. The Committee's interpretations of the Plan and all determinations made by
the Committee pursuant to the powers vested in it hereunder shall be conclusive
and binding on all persons having any interests in the Plan or in any Grants
under the Plan. No person acting under this subsection shall be held liable for
any action or determination made in good faith with respect to the Plan or any
Grant under the Plan.
(b) Each member of the Committee shall be indemnified and held harmless
by the Company against any cost or expense (including counsel fees) reasonably
incurred by him or her, or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan, unless arising out of such member's own fraud
or bad faith, to the extent permitted by applicable law. Such indemnification
shall be in addition to any rights of indemnification the members may have as
directors or otherwise under the Articles of Incorporation or By-Laws of the
Company, any agreement of shareholders or disinterested directors or otherwise.
2. Grants
Grants. Incentives under the Plan shall consist of Incentive Stock
Options (as defined in Section 5(b) below), Nonqualified Stock Options (as
defined in Section 5(b) below), Restricted Stock Grants (as defined in Section 6
below) or SARs (as defined in Section 7 below) (hereinafter collectively
referred to as "Grants"). All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions of any nature
as long as they are not inconsistent with the Plan as the Committee deems
appropriate and specifies in writing to the participant (the "Grant Letter").
The Committee shall approve the form and provisions of each Grant Letter. Grants
under any section of the Plan need not be uniform as among the participants
receiving the same type of Grant, and Grants under two or more sections of the
Plan may be combined in one Grant Letter.
3. Shares Subject to the Plan
(a) The aggregate number of shares of the Common Stock, par value $.01
("Common Stock"), of the Company that may be issued or transferred under the
Plan is [400,000/500,000], subject to adjustment pursuant to Section 3(b) below.
Such shares may be authorized but unissued shares or reacquired shares. If and
to the extent that options granted under the Plan terminate, expire or are
canceled without having been exercised (including shares cancelled as part of an
exchange of Grants), or if any shares of restricted stock are forfeited, the
shares subject to such Grant shall again be available for subsequent Grants
under the Plan.
(b) If any change is made to the Common Stock (whether by reason of
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, combination of shares, or exchange of shares or any other change in
capital structure made without receipt of consideration), then unless such event
or change results in the termination of all outstanding Grants under the Plan,
the Committee shall preserve the value of the outstanding Grants by adjusting
the maximum number and class of shares issuable under the Plan to reflect the
effect of such event or change in the Company's capital structure, and by making
appropriate adjustments to the number and class of shares, the exercise price of
each outstanding option and otherwise, except that any fractional shares
resulting from such adjustments shall be eliminated by rounding any portion of a
share equal to .500 or greater up, and any portion of a share equal to less than
.500 down, in each case to the nearest whole number.
4. Eligibility for Participation
Officers and other employees of the Company or a Subsidiary
Corporation, non-employee members of the Board, and independent contractors and
consultants who perform services for the Company shall be eligible to
participate in the Plan (hereinafter referred to individually as an "Eligible
Participant" and collectively as "Eligible Participants"). Only Eligible
Participants who are officers or other employees of the Company or a Subsidiary
Corporation shall be eligible to receive Incentive Stock Options. All Eligible
Participants shall be eligible to receive Nonqualified Stock Options, Restricted
Stock Grants and SARs. The Committee shall select from among the Eligible
Participants those who will receive Grants (the "Grantees") and shall determine
the number of shares of Common Stock subject to each Grant; provided, however,
that the maximum number of shares of Common Stock which may be subject to Grants
awarded to any Grantee shall not exceed [400,000/500,000]. The Committee may, if
it so desires, base any
such selections or determinations upon the recommendations of management of the
Company. Nothing contained in the Plan shall be construed to limit in any manner
whatsoever the right of the Company to grant rights or options to acquire Common
Stock or awards of Common Stock otherwise than pursuant to the Plan.
5. Stock Options
(a) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Common Stock that will be subject to each
option.
(b) Type of Option and Option Price.
(1) The Committee may grant options qualifying as incentive
stock options within the meaning of Section 422 of the Code ("Incentive
Stock Options") and other stock options ("Nonqualified Stock Options"),
in accordance with the terms and conditions set forth herein, or may
grant any combination of Incentive Stock Options and Nonqualified Stock
Options (hereinafter referred to collectively as "Stock Options"). The
option price per share of an Incentive Stock Option shall be the fair
market value (as defined herein) of a share of Common Stock on the date
of grant. If the Grantee of an Incentive Stock Option owns Common Stock
(as determined under section 424(d) of the Code) possessing more than
10% of the total combined voting power of all classes of stock of the
Company or a Parent Corporation or Subsidiary Corporation, the option
price per share in the case of an Incentive Stock Option shall not be
less than 110% of the fair market value of a share of Common Stock on
the date of grant and such option by its terms is not exercisable after
the expiration of five (5) years from the date of grant.
(2) For all valuation purposes under the Plan, the fair market
value of a share of Common Stock shall be determined in accordance with
the following provisions:
(A) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded in the
over-the-counter market (but not on the Nasdaq National Market
segment of The Nasdaq Stock Market), the fair market value
shall be the mean between the last reported bid and asked
prices of one share of Common Stock on the date in question in
the over-the-counter market, as such prices are reported by
the National Association of Securities Dealers through its
Nasdaq system or any successor system. If there are no
reported bid and asked prices on the date in question, then
the mean between the last reported bid and asked prices on the
next preceding date for which such quotations exist shall be
determinative of fair market value. If the Common Stock is
traded over-the-counter on the Nasdaq National Market segment
of The Nasdaq Stock Market, the fair market value shall be the
closing selling price of one share of Common Stock on the date
in question as such price is reported by the National
Association of Securities Dealers through such system or any
successor system. If there is no reported closing selling
price for the Common Stock on the date in question, then the
closing selling price on the next preceding date for which
such quotation exists shall be determinative of fair market
value.
(B) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair
market value shall be the closing selling price of one share
of Common Stock on the date in question on the stock exchange
determined by the Committee to be the primary market for the
Common Stock, as such prices are officially quoted on such
exchange. If there is no reported closing selling price of
Common Stock on such exchange on the date in question, then
the fair market value shall be the closing selling price on
the next preceding date for which such quotation exists.
(C) If the Common Stock is at the time neither listed
nor admitted to trading on any stock exchange nor traded in
the over-the-counter market (or, the Committee determines that
the value as determined pursuant to Section 5(b)(2)(A) or (B)
above does not reflect fair market value), then the Committee
shall determine fair market value after taking into account
such factors as it deems appropriate.
(c) Exercise Period. The Committee shall determine the option exercise
period of each Stock Option. The exercise period shall not exceed ten years from
the date of grant. Notwithstanding any determinations by the Committee regarding
the exercise period of any Stock Option, all outstanding Stock Options shall be
immediately exercisable upon a Change of Control of the Company (as defined in
Section 9 below).
(d) Vesting of Options and Restrictions on Shares. The vesting period
for Stock Options shall commence on the date of grant and shall end on the date
or dates, determined by the Committee, that shall be specified in the Grant
Letter. The Committee may impose upon the shares of Common Stock issuable upon
the exercise of a Stock Option such restrictions as it deems appropriate and
specifies in the Grant Letter. During any period in which such restrictions
apply, the provisions of Section 6(d) below shall be applicable to such shares,
and the Committee, in such circumstances as it deems equitable, may determine
that all such restrictions shall lapse. Notwithstanding any other provision of
the Plan, all outstanding Stock Options shall become immediately exercisable
upon a Change of Control of the Company (as defined in Section 9 below).
(e) Manner of Exercise. A Grantee may exercise a Stock Option by
delivering a duly completed notice of exercise to the Committee, together with
payment of the option price. Such notice may include instructions authorizing
the Company to deliver the certificates representing the shares of Common Stock
issuable upon the exercise of such Stock Option to any designated registered
broker or dealer ("Designated Broker"). Such instructions shall designate the
account into which the shares are to be deposited. The Grantee may tender such
notice of exercise, which has been properly executed by the Grantee, and the
aforementioned delivery instructions to any Designated Broker.
(f) Termination of Employment, Disability or Death.
(1) If a Grantee who is an employee ceases to be an employee
(in the case of an Incentive Stock Option) or ceases to be an Eligible
Participant (in the case of a Nonqualified Stock Option) for any reason
(other than, in the case of an individual, the death of such
individual) any Stock Option which is otherwise exercisable by the
Grantee
shall terminate unless exercised within three months after the date on
which the Grantee ceases to be an employee or an Eligible Participant,
as the case may be (or within such other period of time, which may be
longer or shorter than three months, as may be specified in the Grant
Letter), but in any event no later than the date of expiration of the
option exercise period, except that in the case of an individual
Grantee who is disabled within the meaning of Section 22(e)(3) of the
Code, such period shall be one year rather than three months (except as
otherwise provided in the Grant Letter).
(2) In the event of the death of an individual Grantee while
he or she is an Eligible Participant or within not more than three
months after the date on which the Grantee ceases to be an Eligible
Participant (or within such other period of time, which may be longer
or shorter than three months, as may be specified in the Grant Letter),
any Stock Option which was otherwise exercisable by the Grantee at the
date of death may be exercised by the Grantee's personal representative
at any time prior to the expiration of one year from the date of death,
but in any event no later than the date of expiration of the option
exercise period.
(g) Satisfaction of Option Price. The Grantee shall pay the option
price in full at the time of exercise in cash, or, with the consent of the
Committee in its sole discretion, by delivering shares of Common Stock already
owned by the Grantee and having a fair market value on the date of exercise
equal to the option price or a combination of cash and shares of Common Stock
[provided, however, that in lieu of payment in full in such manner, a Grantee
may with the approval of the Board in its sole discretion, be entitled to pay
for the shares purchased upon exercise of the Stock Option by payment to the
Company in cash or by certified or bank check a sum equal at least to the par
value of the Common Stock, with the remainder of the purchase price satisfied by
the issuance of an interest bearing promissory note or notes, in a form and
having terms, including rate of interest and collateral security, satisfactory
to the Board in its sole discretion]. The Grantee shall also pay the amount of
withholding tax due, if any, at the time of exercise. Shares of Common Stock
shall not be issued or transferred upon any purported exercise of a Stock Option
until the option price and the withholding obligation are fully paid.
(h) Limits on Incentive Stock Options. Each Grant of an Incentive
Stock Option shall provide that:
(1) the Stock Option is not transferable by the Grantee,
except, in the case of an individual Grantee, by will or the laws of
descent and distribution;
(2) the Stock Option is exercisable only by the Grantee,
except as otherwise provided herein or in the Grant Letter in the
event of the death of an individual Grantee;
(3) the aggregate fair market value of the Common Stock
determined as of the date of the Grant with respect to which Incentive
Stock Options are exercisable for the first time by a Grantee during
any calendar year under the Plan and under any other stock option plan
of the Company shall not exceed $100,000; and
(4) unless the Grantee could otherwise transfer Common Stock
issued pursuant to the Stock Option without incurring liability under
Section 16(b) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), at least six
months must elapse from the date of acquisition of the Stock Option
until the date of disposition of the Common Stock issued upon exercise
thereof.
[Formula Awards for Committee Members]
6. Restricted Stock Grants
The Committee may issue shares of Common Stock to an Eligible
Participant pursuant to an incentive or long range compensation plan, program or
contract approved by the Committee (a "Restricted Stock Grant"). The following
provisions are applicable to Restricted Stock Grants:
(a) General Requirements. Shares of Common Stock issued pursuant to
Restricted Stock Grants will be issued in consideration for cash or services
rendered having a value, as determined by the Board, at least equal to the par
value thereof. All conditions and restrictions imposed under each Restricted
Stock Grant, and the period of years during which the Restricted Stock Grant
will remain subject to such restrictions, shall be set forth in the Grant Letter
and designated therein as the "Restriction Period." All restrictions imposed
under any Restricted Stock Grant shall lapse on such date or dates as the
Committee may approve until the restrictions have lapsed as to 100% of the
shares, except that upon a Change of Control of the Company, all restrictions on
the transfer of the shares which have not been forfeited prior to such date
shall lapse. In addition, the Committee, in circumstances that it deems
equitable, may determine as to any or all Restricted Stock Grants, that all the
restrictions shall lapse, notwithstanding any Restriction Period.
(b) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Common Stock that will be granted in each
Restricted Stock Grant.
(c) Requirement of Relationship with Company. If the Grantee's
relationship with the Company (as an employee, non-employee member of the Board,
independent contractor or consultant, as the case may be) terminates during the
period designated in the Grant Letter as the Restriction Period, the Restricted
Stock Grant shall terminate as to all shares covered by the Grant as to which
restrictions on transfer have not lapsed, and such shares shall be immediately
returned to the Company. The Committee may, in its sole discretion, provide for
complete or partial exceptions to the provisions of this Section 6(c).
(d) Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Common Stock to which such Restriction Period
applies except to a Successor Grantee pursuant to Section 8 below. Each
certificate representing a share of Common Stock issued or transferred under a
Restricted Stock Grant shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Grantee shall be entitled to have the legend
removed from the stock certificate or certificates representing any such shares
as to which all restrictions have lapsed.
7. Stock Appreciation Rights
(a) General Provisions. The Committee may grant stock appreciation
rights ("SARs") to any Grantee in tandem with any Stock Option, for all or a
portion of the applicable Stock
Option, either at the time the Stock Option is granted or at any time thereafter
while the Stock Option remains outstanding.
(b) Number of SARs. The number of SARs granted to a Grantee which shall
be exercisable during any given period of time shall not exceed the number of
shares of Common Stock which the Grantee may purchase upon the exercise of the
related Stock Option during such period.
(c) Settlement Amount. Upon a Grantee's exercise of some or all of the
Grantee's SARs, the Grantee shall receive in settlement of such SARs an amount
equal to the stock appreciation (as defined herein) for the number of SARs
exercised, payable in cash, Common Stock or a combination thereof. The "stock
appreciation" for a SAR is the difference between the option price specified for
the related Stock Option and the fair market value of the underlying Common
Stock on the date of exercise of the SAR; provided that the maximum value of any
stock appreciation right shall be limited to the exercise price of the tandem
Stock Option with respect to which it is issued.
(d) Settlement Election. Upon the exercise of any SARs, the Grantee
shall have the right to elect the portions of the settlement amount that the
Grantee desires to receive in cash and shares of Common Stock, respectively. For
purposes of calculating the number of shares of Common Stock to be received upon
settlement, shares of Common Stock shall be valued at their fair market value on
the date of exercise of the SARs. Notwithstanding the foregoing, the Committee
shall have the right (i) to disapprove a Grantee's election to receive such
settlement in whole or in part in cash, and to require that shares of Common
Stock be delivered in lieu of cash or (ii) to require that settlement be made in
cash. If shares of Common Stock are to be received upon exercise of an SAR, cash
shall be delivered in lieu of any fractional share.
(e) Exercise. A SAR is exercisable only during the period when the
Stock Option to which it is related is also exercisable. SARs shall be
exercisable only at the same time and to the same extent as, and shall terminate
and no longer be exercisable upon the termination or immediately after the
exercise of, the tandem Stock Options or applicable portion thereof.
8. Transferability of Options and Grants
Only a Grantee (or, in the case of an individual Grantee, his or her
authorized legal representative on behalf of Grantee) may exercise rights under
a Grant. No individual Grantee may transfer those rights except by will or by
the laws of descent and distribution or, in the case of a Grant other than an
Incentive Stock Option and to the extent permitted under Rule 16b-3 of the
Exchange Act and by the Committee in its sole discretion, (a) pursuant to a
qualified domestic relations order as defined under the Code or Title I of ERISA
or the rules thereunder and (b) to a trust for the benefit of a member of the
Grantee's immediate family. Upon the death of an individual Grantee, the
personal representative or other person entitled to succeed to the rights of the
Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee
shall furnish proof satisfactory to the Company of such person's right to
receive the Grant under the Grantee's will or under the applicable laws of
descent and distribution.
9. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
when (a) any "person" (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner", directly or indirectly, of
securities of the Company representing thirty (30%) percent or more of the
combined voting power of the Company's then outstanding securities or (b) the
Company becomes a subsidiary of another corporation or is merged or consolidated
into another corporation or if substantially all of its assets shall have been
sold to an unaffiliated party or parties unless thereafter (1) directors of the
Company immediately prior thereto continue to constitute at least fifty (50%)
percent of the directors of the surviving entity or purchaser or (2) the
Company's securities continue to represent, or are converted into securities
which represent, more than sixty-six and two thirds(66 2/3%) percent of the
combined voting power of the surviving entity or purchaser, or (c) fifty (50%)
percent or more of the Board is comprised of persons who were not nominated by
the Board for election as directors, or (d) the Board adopts a plan of complete
liquidation of the Company.
10. Certain Corporate Changes
(a) Sale or Exchange of Assets, Dissolution or Liquidation or Merger or
Consolidation Where the Company Does Not Survive. If all or substantially all of
the assets of the Company are to be sold or exchanged, the Company is to be
dissolved or liquidated, or the Company is a party to a merger or consolidation
with another corporation in which the Company will not be the surviving
corporation, then, at least ten days prior to the effective date of such event,
the Company shall give each Grantee with any outstanding Grants written notice
of such event. Each such Grantee shall thereupon have the right to exercise in
full any installments of such Grants not previously exercised (whether or not
the right to exercise such installments has accrued pursuant to such Grants),
within ten days after such written notice is sent by the Company. Any
installments of such Grants not so exercised shall thereafter lapse and be of no
further force or effect.
(b) Merger or Consolidation Where the Company Survives. If the Company
is a party to a merger or consolidation in which the Company will be the
surviving corporation, then the Committee may, in its sole discretion, elect to
give each Grantee with any outstanding Grants written notice of such event. If
such notice is given, each such Grantee shall thereupon have the right to
exercise in full any installments of such Grants not previously exercised
(whether or not the right to exercise such installments has accrued pursuant to
such Grants), within ten days after such written notice is sent by the Company.
Any installments of such Grants not so exercised shall thereafter lapse and be
of no further force or effect.
11. Shareholder Approval
This Plan is subject to and no Options shall be exercisable hereunder
until after approval of this Plan by holders of a majority of the shares of the
stock of the Company present or represented by a proxy in a separate vote at a
duly held meeting of the shareholders of the Company within twelve months after
the date of the adoption of the Plan by the Board. If the Plan is not so
approved by shareholders, the Plan and all Grants hereunder shall terminate and
be of no force or effect.
12. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time;
provided that the approval of the shareholders of the Company shall be required
in respect of any amendment that (A) materially increases the benefits accruing
to Eligible Participants under the Plan, (B) increases the aggregate number of
shares of Common Stock that may be issued or transferred under the Plan (other
than by operation of Section 3(b) above), (C) materially modifies the
requirements as to eligibility for participation in the Plan; or (D) modifies
the provisions for determining the fair market value of a share of Common Stock.
(b) Termination of Plan. The Plan shall terminate on November 14, 2005
(as set forth in Section 19 below) unless earlier terminated by the Board or
unless extended by the Board with the approval of the shareholders.
(c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not result in the
termination or amendment of the Grant unless the Grantee consents or unless the
Committee acts under Section 20(b) below. The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 20(b) below or may be amended by agreement
of the Company and the Grantee which is consistent with the Plan.
13. Funding of the Plan
The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under the Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.
14. Rights of Eligible Participants
Nothing in the Plan shall entitle any Eligible Participant or other
person to any claim or right to any Grant under the Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any Eligible Participant
or Grantee any rights to be retained by the Company in any capacity, whether as
an employee, non-employee member of the Board, independent contractor,
consultant or otherwise.
15. Withholding of Taxes
The Company shall have the right to deduct from all Grants paid in cash
any federal, state or local taxes required by law to be withheld with respect to
such Grants paid in cash. In the case of Grants paid in Common Stock, the
Company shall have the right to require the Grantee to pay to the Company the
amount of any taxes which the Company is required to withhold in respect of such
Grants or to take whatever action it deems necessary to protect the interests of
the Company in respect of such tax liabilities, including, without limitation,
withholding a portion of the shares of Common Stock otherwise deliverable
pursuant to the Plan. The Company's obligation to issue or transfer shares of
Common Stock upon the exercise of a Stock Option or
SAR or the acceptance of a Restricted Stock Grant shall be conditioned upon the
Grantee's compliance with the requirements of this section to the satisfaction
of the Committee.
16. Agreements with Grantees
Each Grant made under the Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Committee shall approve.
17. Requirements for Issuance of Shares
No Common Stock shall be issued or transferred under the Plan unless
and until all applicable legal requirements have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Stock Option, Restricted Stock Grant or SAR on the Grantee's undertaking in
writing to comply with such restrictions on any subsequent disposition of the
shares of Common Stock issued or transferred thereunder as the Committee shall
deem necessary or advisable as a result of any applicable law, regulation or
official interpretation thereof, and certificates representing such shares may
be legended to reflect any such restrictions.
18. Headings
The section headings of the Plan are for reference only. In the event
of a conflict between a section heading and the content of a section of the
Plan, the content of the section shall control.
19. Effective Date of the Plan
The Plan shall be effective as of November 14, 1995, subject to the
approval of the Company's shareholders within 12 months after such effective
date.
20. Miscellaneous
(a) Substitute Grants. The Committee may make a Grant to an employee, a
non-employee director, or an independent contractor or consultant of another
corporation, if such person shall become an Eligible Participant by reason of a
corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or a Subsidiary Corporation
and such other corporation. Any such Grant shall be made in substitution for a
stock option or restricted stock grant granted by the other corporation
("Substituted Stock Incentives"), but the terms and conditions of the substitute
Grant may vary from the terms and conditions required by the Plan and from those
of the Substituted Stock Incentives. The Committee shall prescribe the
provisions of the substitute Grants.
(b) Compliance with Law. The Plan, the exercise of Grants and the
obligations of the Company to issue or transfer shares of Common Stock under
Grants shall be subject to all applicable laws and required approvals by any
governmental or regulatory agencies. The Committee may revoke any Grant if it is
contrary to law or modify any Grant to bring it into compliance with any valid
and mandatory government regulations. The Committee may also adopt rules
regarding the withholding of taxes on payments to Grantees. The Committee may,
in its sole discretion, agree to limit its authority under this section.
(c) Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a shareholder with respect to any shares of Common Stock covered by a
Grant until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.
EXHIBIT C
November __, 1995
Republic Bancorporation, Inc.
Gentlemen:
I have been advised that as of the date of this letter, I may be deemed
to be an "affiliate" of ExecuFirst Bancorp, Inc., a corporation duly organized
and existing under the laws of the Commonwealth of Pennsylvania ("ExecuFirst"),
as the term "affiliate" is (i) defined for purposes of paragraph (c) 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"), and/or (ii) used in and for purposes of Accounting Series,
Releases 130 and 135, as amended, of the Commission. Pursuant to the terms of
the Agreement and Plan of Merger dated as of November __, 1995 (the "Agreement")
by and among Republic Bancorporation, Inc., a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania ("Republic") and
ExecuFirst, Republic will be merged with and into ExecuFirst (the "Merger").
In connection therewith, I represent, warrant and covenant that:
A. I will not, during the 30 days prior to the Effective Time (as
defined in the Agreement), sell, transfer or otherwise dispose
of any shares of common stock, $.01 par value per share, of
ExecuFirst that I may hold which results in a reduction in the
risk of ownership of such shares.
B. I will not sell, transfer or otherwise dispose of any shares
of the common stock, $.01 par value per share, of
ExecuFirst (the "Common Stock") received by me in the
Merger or any other shares of the capital stock of
ExecuFirst until after such time as results covering at
least 30 days of combined operations of Republic and
ExecuFirst have been published by ExecuFirst, in the form of
a quarterly earnings report, an effective registration
statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q, or 8-K, or any other
public filing or announcement which includes the combined
results of operations.
C. I shall not make any sale, transfer or other disposition or
offer to make any such sales, transfer or other disposition,
of the Common Stock in violation of the Act or the Rules and
Regulations.
D. I have carefully read this letter and the Agreement and
discussed the requirements of such documents and other
applicable limitations upon my ability to sell, transfer
or otherwise dispose of the Common Stock to the extent I felt
necessary, with my counsel or counsel for ExecuFirst or
Republic.
E. I understand that stop transfer instructions will be given to
ExecuFirst's transfer agent with respect to the Common Stock
and that there will be placed on the certificates for the
Common Stock, or any substitutions therefor, a legend stating
in substance:
The shares represented by this certificate were
issued in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies. The shares
represented by this certificate may not be sold,
transferred, or otherwise disposed of unless pursuant
to (i) an effective registration statement under the
Securities Act of 1933, (ii) Rule 145 or (iii) an
exemption from registration under the said Act which
is available in the opinion of counsel acceptable to
Republic.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of ExecuFirst or Republic as described in the
first paragraph of this letter, or as a waiver of any rights I may have to
object to any claim that I am such an affiliate on or after the date of this
letter.
Very truly yours,
------------------------------
Accepted this _____ day of
November, 1995 by
REPUBLIC BANCORPORATION, INC.
By:___________________________
Name:______________________
Title:_____________________
EXHIBIT D
November __, 1995
ExecuFirst Bancorp, Inc.
Gentlemen:
I have been advised that as of the date of this letter, I may be deemed
to be an "affiliate" of Republic Bancorporation, Inc., a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania
("Republic"), as the term "affiliate" is (i) defined for purposes of paragraph
(c) 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"), and/or (ii) used in and for purposes of
Accounting Series, Releases 130 and 135, as amended, of the Commission. Pursuant
to the terms of the Agreement and Plan of Merger dated as of November __, 1995
(the "Agreement") by and among ExecuFirst Bancorp, Inc., a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania
("ExecuFirst") and Republic, Republic will be merged with and into ExecuFirst
(the "Merger").
In connection therewith, I represent, warrant and covenant that:
A. I will not, during the 30 days prior to the Effective Time (as
defined in the Agreement), sell, transfer or otherwise dispose
of any shares of common stock, $.01 par value per share, of
Republic that I may hold which results in a reduction in the
risk of ownership of such shares.
B. I will not sell, transfer or otherwise dispose of any shares
of the common stock, $.01 par value per share, of ExecuFirst
(the "Common Stock") received by me in the Merger or any
other shares of the capital stock of ExecuFirst until after
such time as results covering at least 30 days of combined
operations of ExecuFirst and Republic have been published by
ExecuFirst, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a
report to the Commission on Form 10-K, 10-Q, or 8-K, or any
other public filing or announcement which includes the
combined results of operations.
C. I shall not make any sale, transfer or other disposition or
offer to make any such sales, transfer or other disposition,
of the Common Stock in violation of the Act or the Rules and
Regulations.
D. I have carefully read this letter and the Agreement and
discussed the requirements of such documents and other
applicable limitations upon my ability to sell, transfer
or otherwise dispose of the Common Stock to the extent I felt
necessary, with my counsel or counsel for Republic or
ExecuFirst.
E. I understand that stop transfer instructions will be given to
ExecuFirst' transfer agent with respect to the Common Stock
and that there will be placed on the certificates for the
Common Stock, or any substitutions therefor, a legend stating
in substance:
The shares represented by this certificate were
issued in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies. The shares
represented by this certificate may not be sold,
transferred, or otherwise disposed of unless pursuant
to (i) an effective registration statement under the
Securities Act of 1933, (ii) Rule 145 or (iii) an
exemption from registration under the said Act which
is available in the opinion of counsel acceptable to
ExecuFirst.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Republic or ExecuFirst as described in the
first paragraph of this letter, or as a waiver of any rights I may have to
object to any claim that I am such an affiliate on or after the date of this
letter.
Very truly yours,
------------------------------
Accepted this _____ day of
November, 1995 by
EXECUFIRST BANCORP, INC.
By:___________________________
Name:______________________
Title:_____________________
EXHIBIT E
REPUBLIC BANCORPORATION, INC. STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of November 17, 1995 (the
"Agreement"), by and between Republic Bancorporation, Inc., a Pennsylvania
corporation ("Issuer"), and ExecuFirst Bancorp, Inc. a Pennsylvania corporation
("Grantee").
RECITALS
(A) The Plan. Grantee and Issuer have on a date prior to the date
hereof, entered into an Agreement and Plan of Merger, dated as of November 17,
1995 (the "Plan"), providing for, among other things, the merger of Issuer with
and into the Grantee, with the Grantee being the surviving corporation.
(B) Condition to Plan. As a condition and inducement to Grantee's
execution of the Plan and Grantee's agreement referred to in the next sentence,
Grantee has required that Issuer agree, and Issuer has agreed, to grant Grantee
the Option (as hereinafter defined). As a condition and inducement to Issuer's
execution of the Plan and this Agreement, Grantee has agreed to grant an option
to Issuer on terms and conditions substantially identical to those of the Option
and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Plan.
2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase a number of shares of common stock, par value $.01 per share ("Issuer
Common Stock"), of Issuer up to 158,058 of such shares (as adjusted as set forth
herein, the "Option Shares", which shall include the Option Shares before and
after any transfer of such Option Shares, but in no event shall the number of
Option Shares for which this Option is exercisable exceed 19.9% of the issued
and outstanding shares of Issuer Common Stock) at a purchase price per Option
Share (as adjusted as set forth herein, the "Purchase Price") equal to $8.50 per
share of Issuer Common Stock.
3. Transferability of Option. The Option granted hereunder may
not be transferred by the Grantee except to a "Parent Corporation" or a
"Subsidiary Corporation", as such terms are defined in subsections (e) and (f),
respectively, of Section 424 of the Internal Revenue Code of 1986, as amended.
4. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the agreements
or covenants contained in this Agreement or the Plan, and (ii) no preliminary or
permanent injunction or other order against the delivery of shares
covered by the Option issued by any court of competent jurisdiction in the
United States shall be in effect, the Holder may exercise the Option, in whole
or in part, at any time and from time to time following the occurrence of a
Purchase Event (as hereinafter defined); provided that the Option shall
terminate and be of no force and effect upon the earliest to occur of (A) the
Effective Time, (B) termination of the Plan in accordance with the terms thereof
prior to the occurrence of a Purchase Event (other than a termination resulting
from a willful breach by the Issuer of any covenant, representation or warranty
contained therein) or (C) twelve (12) months after termination of the Plan if
such termination follows the occurrence of a Purchase Event or is due to a
willful breach by the Issuer of any covenant contained therein; provided,
however, that any purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law. The term "Holder" shall mean the
holder or holders of the Option from time to time, and which initially is
Grantee. The rights set forth in Section 9 hereof shall terminate when the right
to exercise the Option terminates (other than as a result of a complete exercise
of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Without Grantee's prior written consent, Issuer shall have
recommended, proposed or announced an intention to authorize, recommend or
propose, or entered into an agreement with any person (other than Grantee or any
subsidiary of Grantee) to effect (A) a merger, consolidation or similar
transaction involving Issuer or any of its significant subsidiaries (other than
transactions solely between Issuer's subsidiaries that are not violative of the
Plan), (B) the disposition, by sale, lease, exchange or otherwise, of assets or
deposits of Issuer or any of its significant subsidiaries representing in either
case 22.5% or more of the consolidated assets or deposits of Issuer and its
subsidiaries or (C) the issuance, sale or other disposition by Issuer of
(including by way of merger, consolidation, share exchange or any similar
transaction) securities representing 22.5% or more of the voting power of the
Issuer or any of its significant subsidiaries (each of (A), (B) or (C) an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any subsidiary of Grantee shall
have acquired beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of or the right to acquire beneficial
ownership of, or any "group" (as such term is defined in Section 13(d)(3) of the
Exchange Act), other than a group of which Grantee or Issuer or any affiliates
or persons participating with any affiliate or any subsidiary of Grantee or
Issuer shall have been formed to have acquired beneficial ownership of or has
the right to acquire beneficial ownership of, 25% or more of the voting power of
Issuer or any of its significant subsidiaries.
(c) Issuer shall notify Grantee promptly in writing of the occurrence
of any Purchase Event, it being understood that the giving of such notice by
Issuer shall not be a condition to the right of Holder to exercise the Option.
(d) In the event Holder wishes to exercise the Option or any part
thereof, it shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the total number of
Option Shares it intends to purchase pursuant to such exercise and (ii) a place
and date not earlier than three business days nor later than 15 business days
from the Notice Date for the closing (the "Closing") of such purchase (the
"Closing Date"); provided that the first notice of exercise shall be sent to
Issuer within 180 days after the first Purchase Event of which Grantee has been
notified and if no such notification is given within such 180
day time period, the right to exercise shall expire. If prior notification to or
approval of any Regulatory Authority is required in connection with such
purchase, Issuer shall cooperate with the Holder in the filing of the required
notice of application for approval and the obtaining of such approval and the
Closing shall occur immediately following such regulatory approvals (and any
mandatory waiting periods). Any exercise of the Option shall be deemed to occur
on the Notice Date relating thereto.
5. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified in Section 13(f).
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
Issuer shall deliver to Holder (A) a certificate or certificates representing
the Option Shares to be purchased at such Closing, which Option Shares shall be
free and clear of all Liens and subject to no preemptive rights, and (B) if the
Option is exercised in part only, an executed new agreement with the same terms
as this Agreement evidencing the right to purchase the balance of the shares of
Issuer Common Stock purchasable hereunder, and (ii) Holder shall deliver to
Issuer a letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state law
or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR A VALID EXEMPTION THEREFROM. THE SHARES ARE
SUBJECT TO FURTHER RESTRICTIONS WITH RESPECT TO SALE OF TRANSFER
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER
17, 1995. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST
THEREFOR.
It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificates without
such legend if Holder shall have delivered to Issuer a copy of a letter from the
staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act.
(d) Upon the giving by Holder to Issuer of the written notice of
exercise of the Option provided for under Section 3(e), the tender of the
applicable purchase price in immediately available funds and the tender of this
Agreement to Issuer, Holder shall be deemed to be the holder of record of the
shares of Issuer Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Issuer Common Stock shall not then be actually
delivered to Holder. Issuer shall pay all expenses, and any and all United
States federal, state, and local taxes and other charges that may be payable in
connection with the preparation, issuance and delivery of stock certificates
under this Section in the name of Holder or its assignee, transferee, or
designee.
(e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued shares of Issuer Common
Stock so that the Option may be exercised without additional authorization of
Issuer Common Stock after giving effect to all other options, warrants,
convertible securities and other rights to purchase Issuer Common Stock, (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer,
(iii) promptly to take all action as may from time to time be required
(including (A) complying with all premerger notification, reporting and waiting
period requirements and (B) in the event prior approval of or notice to any
Regulatory Authority is necessary before the Option may be exercised,
cooperating fully with Holder in preparing such applications or notices and
providing such information to such Regulatory Authority as it may require) in
order to permit Holder to exercise the Option and Issuer duly and effectively to
issue shares of the Issuer Common Stock pursuant hereto, and (iv) promptly to
take all action provided herein to protect the rights of Holder against
dilution.
6. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee (and Holder, if different than Grantee)
as follows:
(a) Corporate Authority. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Issuer and the Issuer's
Board of Directors, by at least a two-thirds vote, has waived the
restriction of ownership imposed in Section 11.1 of its certificate of
incorporation ("Certificate of Incorporation") with respect to this
Option, and no other corporate proceedings on the part of Issuer are
necessary to authorize this Agreement or to consummate the transactions
so contemplated.
(b) Beneficial Ownership. To the best knowledge of Issuer,
as of the date of this Agreement, no person or group has beneficial
ownership of more than 10% of the issued and outstanding shares of
Issuer Common Stock.
(c) Shares Reserved for Issuance; Capital Stock. Issuer has
taken all necessary corporate action to authorize and reserve and
permit it to issue, and at all times from the date hereof through the
termination of this Agreement in accordance with its terms, will have
reserved for issuance upon the exercise of the Option, that number of
shares of Issuer Common Stock equal to the maximum number of shares of
Issuer Common Stock
at any time and from time to time purchasable upon exercise of the
Option, and all such shares, upon issuance pursuant to the Option, will
be duly authorized, validly issued, fully paid and nonassessable, and
will be delivered free and clear of all claims, liens, encumbrances,
and security interests (other than those created by this Agreement) and
not subject to any preemptive rights.
(d) No Violations. The execution, delivery and performance of
this Agreement does not or will not, and the consummation by Issuer of
any of the transactions contemplated hereby will not, constitute or
result in (A) a breach or violation of, or a default under, its
Articles of Incorporation or by-laws ("By-Laws"), or the comparable
governing instruments of any of its subsidiaries, or (B) a breach or
violation of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of
its subsidiaries (with or without the giving of notice, the lapse of
time or both) or under any law, rule, ordinance or regulation or
judgment, decree, order, award or governmental or nongovernmental
permit or license to which it or any of its subsidiaries is subject,
that would, in any case give any other person the ability to prevent or
enjoin Issuer's performance under this Agreement in any material
respect.
7. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer that Grantee has full corporate power and authority to
enter into this Agreement and, subject to obtaining the approvals referred to in
this Agreement, to consummate the transactions contemplated by this Agreement;
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee; and this Agreement has been duly
executed and delivered by Grantee.
8. Adjustment upon Changes in Issuer Capitalization, etc. (a) In the
event of any change in Issuer Common Stock by reason of a stock dividend, stock
split, split-up, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of shares or securities subject to the Option,
and the Purchase Price therefor, shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction so that
Holder shall receive, upon exercise of the Option, the number and class of
shares or other securities or property that Holder would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such event, or the record date therefor, as applicable. If any
additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the first sentence of
this Section 8(a), upon exercise of any option to purchase Issuer Common Stock
outstanding on the date hereof or upon conversion into Issuer Common Stock of
any convertible security of Issuer outstanding on the date hereof), the number
of shares of Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance it, together with any share of Issuer Common Stock
previously issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option. No provision of this Section
8 shall be deemed to affect or change, or constitute authorization for any
violation of, any of the covenants or representations in the Plan.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person,
other than Grantee or one of its subsidiaries, to merge into Issuer and Issuer
shall be the continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common Stock shall be changed into
or exchanged for stock or other securities of Issuer or any other person or cash
or any other property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger represent less than 50%
of the outstanding shares and share equivalents of the merged company, or (iii)
to sell or otherwise transfer all or substantially all of its assets or deposits
to any person, other than Grantee or one of its subsidiaries, then, and in each
such case, the agreement governing such transaction shall be subject to this
Agreement in accordance with the terms provided herein and make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
Holder, of either (x) the Acquiring Corporation (as hereinafter defined), (y)
any person that controls the Acquiring Corporation, or (z) in the case of a
merger described in clause (ii), Issuer (such person being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Holder. Substitute Option Issuer shall also enter
into an agreement with Holder in substantially the same form as this Agreement,
which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided by
the Average Price (as hereinafter defined). The exercise price of Substitute
Option per share of Substitute Common Stock (the "Substitute Option Price")
shall then be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of Issuer Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving person, or (iii) the transferee of all or
substantially all of Issuer's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(2) "Substitute Common Stock" shall mean the shares of capital
stock (or similar equity interest) with the greatest voting power in
respect of the election of directors (or persons similarly responsible
for the direction of the business and affairs) of the Substitute Option
Issuer.
(3) "Assigned Value" shall mean the highest of (w) the price
per share of Issuer Common Stock at which a Tender Offer or an Exchange
Offer therefor has been made, (x) the price per share of Issuer Common
Stock to be paid by any third party
pursuant to an agreement with Issuer, and (y) the highest closing price
for shares of Issuer Common stock within the six month period
immediately preceding the consolidation, merger, or sale in question
and (z) in the event of a sale of all or substantially all of Issuer's
assets or deposits an amount equal to (i) the sum of the price paid in
such sale for such assets (and/or deposits) and the current market
value of the remaining assets of Issuer, as determined by a nationally
or regionally recognized investment banking firm selected by Holder
divided by (ii) the number of shares of Issuer Common Stock outstanding
at such time. In the event that a Tender Offer or an Exchange Offer is
made for Issuer Common Stock or an agreement is entered into for a
merger or consolidation involving consideration other than cash, the
value of the securities or other property issuable or deliverable in
exchange for Issuer Common Stock shall be determined by a nationally or
regionally recognized investment banking firm selected by Holder.
(4) "Average Price" shall mean the average closing price of a
share of Substitute Common Stock for the one year immediately preceding
the consolidation, merger, or sale in question, but in no event higher
than the closing price or the purchase price of the shares of
Substitute Common Stock on the day preceding such consolidation, merger
or sale; provided that if Issuer is the issuer of the Substitute
Option, the Average Price shall be computed with respect to the
Purchase Price, a share of common stock issued by Issuer, the person
merging into Issuer or by any company which controls such person, as
Holder may elect.
(f) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of Substitute Common Stock
but for the limitation in the first sentence of this Section 7(f), Substitute
Option Issuer shall make a cash payment to Holder equal to the excess of (i) the
value of the Substitute Option without giving effect to the limitation in the
first sentence of this Section 8(f) over (ii) the value of the Substitute Option
after giving effect to the limitation in the first sentence of this Section
8(f). This difference in value shall be determined by a nationally-recognized
investment banking firm selected by Holder.
(g) Issuer shall not enter into any transaction described in Section
8(b) unless prior to the entering of such transaction the Acquiring Corporation
and any person that controls the Acquiring Corporation assumed in writing all
the obligations of Issuer hereunder and took all other actions that may be
necessary so that the provisions of this Section 8 are given full force and
effect (including, without limitation, any action that may be necessary so that
the holders of the other shares of common stock issued by Substitute Option
Issuer are not entitled to exercise any rights by reason of the issuance or
exercise of the Substitute Option and the shares of Substitute Common Stock are
otherwise in no way distinguishable from or have lesser economic value (other
than any diminution in value resulting from the fact that the Substitute Common
Stock are restricted securities, as defined in Rule 144 under the Securities Act
or any successor provision) than other shares of common stock issued by
Substitute Option Issuer).
9. Repurchase at the Option of Holder. (a) Subject to the last
sentence of Section 4(a), at the demand of Holder at any time commencing
upon the first occurrence of a Repurchase Event (as defined in Section 9(d)) and
ending 12 months immediately thereafter, Issuer shall
repurchase from Holder (i) the Option or any part of the Option or (ii) any or
all shares of Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The dates on which Holder
may exercise its rights under this Section 9 are referred to as the "Request
Dates". Such repurchase shall be at an aggregate price (the "Section 9
Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired pursuant to the Option with respect to
which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Holder for
each share of Issuer Common Stock with respect to which the Option has
been exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 9, Issuer shall,
within 10 business days after any Request Date, pay the Section 9 Repurchase
Consideration to Holder in immediately available funds, and contemporaneously
with such payment, Holder shall surrender to Issuer the Option or any part of
the Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Holder then has exercised its rights
under this Section 9, and Holder shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free and clear of
all Liens. Notwithstanding the foregoing, to the extent that prior notification
to or approval of any Regulatory Authority is required in connection with the
payment of all or any portion of the Section 9 Repurchase Consideration, Holder
shall have the ongoing option to revoke its request for repurchase pursuant to
Section 9, in whole or in part, or to require that Issuer deliver from time to
time that portion of the Section 9 Repurchase Consideration that it is not then
so prohibited from paying and promptly file the required notice or application
for approval and expeditiously process the same (and each party shall cooperate
with the other in the filing of any such notice or application and the obtaining
of any such approval). If any Regulatory Authority disapproves of any part of
Issuer's proposed repurchase pursuant to this Section 8, Issuer shall promptly
give notice of such fact to Holder. If any Regulatory Authority prohibits the
repurchase in part but not in whole, then Holder shall have the right (i) to
revoke the repurchase request or (ii) to the extent permitted by such Regulatory
Authority, determine whether the repurchase should apply to the Option and/or
Option Shares and to what extent to each, and Holder shall thereupon have the
right to exercise the Option as to the number of Option Shares for which the
Option was exercisable at the Request Date less the sum of the number of shares
covered by the Option in respect of which payment has been made pursuant to
Section 9(a)(ii) and the number of shares covered by the portion of the Option
(if any) that has been repurchased. Holder shall notify Issuer of its
determination under the preceding sentence within five (5) business days of
receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Holder's
rights under this Section 9 shall terminate on the date of termination of this
Option pursuant to Section 4(a).
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i), (ii) the price
per share of Issuer Common Stock received by holders of Issuer Common Stock in
connection with any merger or other business combination transaction described
in Section 8(b)(i), 8(b)(ii) or 8(b)(iii), or (iii) the highest closing sales
price per share of Issuer Common Stock quoted on the NASDAQ Small Cap market or
the National Daily Quotation Bureau, as the case may be; provided, however, that
in the event of a sale of less than all of Issuer's assets, the Applicable Price
shall be the sum of the price paid in such sale for such assets and the current
market value of the remaining assets of Issuer as determined by a nationally or
regionally recognized investment banking firm selected by Holder, divided by the
number of shares of the Issuer Common Stock outstanding at the time of such
sale. If the consideration to be offered, paid or received pursuant to either of
the foregoing clauses (i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent nationally or
regionally recognized investment banking firm selected by Holder and reasonably
acceptable to Issuer, which determination shall be conclusive for all purposes
of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired beneficial
ownership of (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 50% or
more of the then outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 8(b)(i), 8(b)(ii) or 8(b)(iii) shall be
consummated.
10. Registration Rights. (a) If Issuer at any time after the exercise
of the Option proposes for any reason to register any shares of Issuer Common
Stock under the Securities Act or in the event that any registration pursuant to
this Section 10(a) shall be, in whole or in part, an underwritten offering of
securities of such Issuer Common Stock, Issuer will at each such time promptly
give written notice to any Holder, including Grantee and any permitted
transferee ("Selling Shareholders") of its intention to do so and, upon the
written request of any Selling Shareholder given within 30 days after receipt of
any such notice (which request shall specify the number of shares of Issuer
Common Stock intended to be included in such registration by the Selling
Shareholder), Issuer will cause all such shares for which a Selling Shareholder
requests participation in such registration, to be so registered; provided,
however, that Issuer may elect to not cause any such shares to be so registered
(i) if the managing underwriters, if any, in good faith object to the inclusion
of such shares for valid business reasons, or (ii) in the case of a registration
solely to implement an employee benefit plan or a registration filed on Form S-4
of the Securities Act or any successor Form; provided, further, however, that
such election pursuant to (i) may only be made two times. If some, but not all,
the shares of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this Section 10(a), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among the Selling Shareholders desiring to register
their shares pro rata in the proportion that the number of shares requested to
be registered by each such Selling Shareholder
bears to the total number of shares requested to be registered by all such
Selling Shareholders then desiring to have Issuer Common Stock registered for
sale.
(b) Conditions to Registration. Issuer shall use all reasonable efforts
to cause each registration statement referred to in Section 10(a) above to
become effective and to obtain all consents or waivers of other parties which
are required therefor and to keep such registration statement effective;
provided, however, that Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of nine months
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings. and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares; provided, however, that Issuer shall not
be required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business.
(c) Expenses. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to Section 10(a) above (including the related
offerings and sales by holders of Option Shares) and all other qualifications,
notifications or exemptions pursuant to Section 10(a) above.
(d) Indemnification. In connection with any registration under Section
10(a) above Issuer hereby indemnifies the Selling Shareholders, and each
underwriter thereof, including each person, if any, who controls such holder or
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement of a material fact contained in any registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission, or alleged omission, to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Selling Shareholders, or by such underwriter, as the case
may be, for all such expenses, losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement, that was included by Issuer in any
such registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section 10(d)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 10(d), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 10(d). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified art , or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section 10(d) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, the Selling Shareholders and the underwriters from the offering of
the securities and also the relative fault of Issuer, the Selling Shareholders
and the underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall any Selling
Shareholder be responsible, in the aggregate, for any amount in excess of the
net offering proceeds attributable to its Option Shares included in the
offering. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11 (f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Any
obligation by any holder to indemnify shall be several and not joint with other
holders.
In connection with any registration pursuant to Section 10(a) above,
Issuer and each Selling Shareholder (other than Grantee) shall enter into an
agreement containing the indemnification provisions of this Section 10(d).
(e) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Shareholders
thereof in accordance with and to the extent applicable and permitted by any
rule or regulation promulgated by the SEC from time to time,
including, without limitation, Rule 144A. Issuer shall at its expense provide
the Selling Shareholders with any information necessary in connection with the
completion and filing of any reports or forms required to be filed by them under
the Securities Act or the Exchange Act, or required pursuant to any state
securities laws or the rules of any stock exchange.
(f) Issue Taxes. Issuer will pay all stamp taxes in connection with the
issuance and the sale of the Option Shares and in connection with the exercise
of the Option, and will save the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.
11. Quotation; Listing. If Issuer Common Stock or any other securities
to be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on the NASDAQ or any securities exchange or
market, Issuer, upon the request of Holder, will promptly file an application,
if required, to authorize for quotation or trading or listing the shares of
Issuer Common Stock or other securities to be acquired upon exercise of the
Option on the NASDAQ or such other securities exchange or market and will use
its best efforts to obtain approval, if required, of such quotation or listing
as soon as practicable.
12. Division of Option. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Holder, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
13. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel provided,
however, that the Issuer shall bear and pay all fees, costs and expenses
incurred in connection with Section 10 hereof.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement: No Third-Party Beneficiaries; Severability.
This Agreement, together with the Plan and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (i)
constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto (other than the indemnified parties under
Section 10(d) and any transferees of the Option Shares or any permitted
transferee of this Agreement pursuant to Section 13(h)) any rights or remedies
hereunder. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or Regulatory Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
Regulatory Authority determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Section 5 (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to require Issuer
to repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard
to any applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Plan (or at such
other address for a party as shall be specified by like notice).
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Holder may assign this Agreement
to a wholly-owned subsidiary of Holder and Holder may assign its rights
hereunder in whole or in part after the occurrence of a Purchase Event. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(i) Further Assurances. In the event of any exercise of the Option by
the Holder, Issuer and the Holder shall execute and deliver all other documents
and instruments and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive
relief and other equitable relief. Both parties further agree to waive any
requirement for the securing or posting of any bond in
connection with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties hereto may
have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
REPUBLIC BANCORPORATION, INC.
By:
------------------------------
Title:
EXECUFIRST BANCORP, INC.
By:
------------------------------
Title:
EXHIBIT F
EXECUFIRST BANCORP, INC. STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of November 17, 1995 (the
"Agreement"), by and between ExecuFirst Bancorp, Inc., a Pennsylvania
corporation ("Issuer"), and Republic Bancorporation, Inc. a Pennsylvania
corporation ("Grantee").
RECITALS
(A) The Plan. Grantee and Issuer have on a date prior to the date
hereof, entered into an Agreement and Plan of Merger, dated as of November 17,
1995 (the "Plan"), providing for, among other things, the merger of Issuer with
and into the Grantee, with the Issuer being the surviving corporation.
(B) Condition to Plan. As a condition and inducement to Grantee's
execution of the Plan and Grantee's agreement referred to in the next sentence,
Grantee has required that Issuer agree, and Issuer has agreed, to grant Grantee
the Option (as hereinafter defined). As a condition and inducement to Issuer's
execution of the Plan and this Agreement, Grantee has agreed to grant an option
to Issuer on terms and conditions substantially identical to those of the Option
and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Plan.
2. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase a number of shares of common stock, par value $.01 per
share ("Issuer Common Stock"), of Issuer up to 243,985 of such shares (as
adjusted as set forth herein, the "Option Shares", which shall include the
Option Shares before and after any transfer of such Option Shares, but in no
event shall the number of Option Shares for which this Option is exercisable
exceed 19.9% of the issued and outstanding shares of Issuer Common Stock) at a
purchase price per Option Share (as adjusted as set forth herein, the "Purchase
Price") equal to $5.00 per share of Issuer Common Stock.
3. Transferability of Option. The Option granted hereunder
may not be transferred by the Grantee except to a "Parent Corporation" or a
"Subsidiary Corporation", as such terms are defined in subsections (e) and (f),
respectively, of Section 424 of the Internal Revenue Code of 1986, as amended.
4. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the agreements
or covenants contained in this Agreement or the Plan, and (ii) no preliminary or
permanent injunction or other order against the
delivery of shares covered by the Option issued by any court of competent
jurisdiction in the United States shall be in effect, the Holder may exercise
the Option, in whole or in part, at any time and from time to time following the
occurrence of a Purchase Event (as hereinafter defined); provided that the
Option shall terminate and be of no force and effect upon the earliest to occur
of (A) the Effective Time, (B) termination of the Plan in accordance with the
terms thereof prior to the occurrence of a Purchase Event (other than a
termination resulting from a willful breach by the Issuer of any covenant
contained therein) or (C) twelve (12) months after termination of the Plan if
such termination follows the occurrence of a Purchase Event or is due to a
willful breach by the Issuer of any covenant, representation or warranty
contained therein; provided, however, that any purchase of shares upon exercise
of the Option shall be subject to compliance with applicable law. The term
"Holder" shall mean the holder or holders of the Option from time to time, and
which initially is Grantee. The rights set forth in Section 9 hereof shall
terminate when the right to exercise the Option terminates (other than as a
result of a complete exercise of the Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of
the following events:
(i) Without Grantee's prior written consent,
Issuer shall have recommended, proposed or announced an intention to
authorize, recommend or propose, or entered into an agreement with any person
(other than Grantee or any subsidiary of Grantee) to effect (A) a merger,
consolidation or similar transaction involving Issuer or any of its significant
subsidiaries (other than transactions solely between Issuer's subsidiaries that
are not violative of the Plan), (B) the disposition, by sale, lease, exchange or
otherwise, of assets or deposits of Issuer or any of its significant
subsidiaries representing in either case 22.5% or more of the consolidated
assets or deposits of Issuer and its subsidiaries or (C) the issuance, sale or
other disposition by Issuer of (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing 22.5% or more of
the voting power of the Issuer or any of its significant subsidiaries (each of
(A), (B) or (C) an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any
subsidiary of Grantee shall have acquired beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such term is
defined in Section 13(d)(3) of the Exchange Act), other than a group of which
Grantee or Issuer or any affiliates or persons participating with any affiliate
or any subsidiary of Grantee or Issuer shall have been formed to have acquired
beneficial ownership of or has the right to acquire beneficial ownership of,
22.5% or more of the voting power of Issuer or any of its significant
subsidiaries.
(c) Issuer shall notify Grantee promptly in writing
of the occurrence of any Purchase Event, it being understood that the
giving of such notice by Issuer shall not be a condition to the right of Holder
to exercise the Option.
(d) In the event Holder wishes to exercise the
Option or any part thereof, it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of Option Shares it intends to purchase pursuant to such exercise
and (ii) a place and date not earlier than three business days nor later than 15
business days from the Notice Date for the closing (the "Closing") of such
purchase (the "Closing
Date"); provided that the first notice of exercise shall be sent to Issuer
within 180 days after the first Purchase Event of which Grantee has been
notified and if no such notification is given within such 180 day time period,
the right to exercise shall expire. If prior notification to or approval of any
Regulatory Authority is required in connection with such purchase, Issuer shall
cooperate with the Holder in the filing of the required notice of application
for approval and the obtaining of such approval and the Closing shall occur
immediately following such regulatory approvals (and any mandatory waiting
periods). Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.
5. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank account
designated by Issuer, an amount equal to the Purchase Price multiplied by the
number of Option Shares to be purchased on such Closing Date, and (ii) present
and surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 13(f).
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all Liens and subject to no
preemptive rights, and (B) if the Option is exercised in part only, an executed
new agreement with the same terms as this Agreement evidencing the right to
purchase the balance of the shares of Issuer Common Stock purchasable hereunder,
and (ii) Holder shall deliver to Issuer a letter agreeing that Holder shall not
offer to sell or otherwise dispose of such Option Shares in violation of
applicable federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR A VALID EXEMPTION THEREFROM. THE SHARES ARE
SUBJECT TO FURTHER RESTRICTIONS WITH RESPECT TO SALE OF TRANSFER
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER
17, 1995. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST
THEREFOR.
It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificates without
such legend if Holder shall have delivered to Issuer a copy of a letter from the
staff of the SEC, or an opinion of counsel in form
and substance reasonably satisfactory to Issuer and its counsel, to the effect
that such legend is not required for purposes of the Securities Act.
(d) Upon the giving by Holder to Issuer of the written
notice of exercise of the Option provided for under Section 4(d), the
tender of the applicable purchase price in immediately available funds and the
tender of this Agreement to Issuer, Holder shall be deemed to be the holder of
record of the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Issuer Common Stock shall not then
be actually delivered to Holder. Issuer shall pay all expenses, and any and all
United States federal, state, and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section in the name of Holder or its assignee,
transferee, or designee.
(e) Issuer agrees (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued shares of
Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer, (iii) promptly to take all action as may from time to time be required
(including (A) complying with all premerger notification, reporting and waiting
period requirements and (B) in the event prior approval of or notice to any
Regulatory Authority is necessary before the Option may be exercised,
cooperating fully with Holder in preparing such applications or notices and
providing such information to such Regulatory Authority as it may require) in
order to permit Holder to exercise the Option and Issuer duly and effectively to
issue shares of the Issuer Common Stock pursuant hereto, and (iv) promptly to
take all action provided herein to protect the rights of Holder against
dilution.
6. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee (and Holder, if different than Grantee)
as follows:
(a) Corporate Authority. Issuer has full corporate
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Issuer
and the Issuer's Board of Directors, by at least a two-thirds vote, has
waived any restriction on ownership imposed by its articles of
incorporation ("Articles of Incorporation") with respect to this
Option, and no other corporate proceedings on the part of Issuer are
necessary to authorize this Agreement or to consummate the transactions
so contemplated.
(b) Beneficial Ownership. To the best knowledge of
Issuer, except for First Fidelity Bank, N.A., or its affiliate or
designee, as of the date of this Agreement, no person or group has
beneficial ownership of more than 10% of the issued and outstanding
shares of Issuer Common Stock.
(c) Shares Reserved for Issuance; Capital Stock.
Issuer has taken all necessary corporate action to authorize and
reserve and permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms,
will have reserved for issuance upon the exercise of the Option, that
number of shares of Issuer Common Stock equal to the maximum number of
shares of Issuer Common Stock at any time and from time to time
purchasable upon exercise of the Option, and all such shares, upon
issuance pursuant to the Option, will be duly authorized, validly
issued, fully paid and nonassessable, and will be delivered free and
clear of all claims, liens, encumbrances, and security interests (other
than those created by this Agreement) and not subject to any preemptive
rights.
(d) No Violations. The execution, delivery and
performance of this Agreement does not or will not, and the
consummation by Issuer of any of the transactions contemplated hereby
will not, constitute or result in (A) a breach or violation of, or a
default under, its Articles of Incorporation or by-laws ("By-Laws"), or
the comparable governing instruments of any of its subsidiaries, or (B)
a breach or violation of, or a default under, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation of
it or any of its subsidiaries (with or without the giving of notice,
the lapse of time or both) or under any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or
nongovernmental permit or license to which it or any of its
subsidiaries is subject, that would, in any case give any other person
the ability to prevent or enjoin Issuer's performance under this
Agreement in any material respect.
7. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that Grantee has full corporate power and
authority to enter into this Agreement and, subject to obtaining the approvals
referred to in this Agreement, to consummate the transactions contemplated by
this Agreement; the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Grantee; and this Agreement has
been duly executed and delivered by Grantee.
8. Adjustment upon Changes in Issuer Capitalization, etc. (a)
In the event of any change in Issuer Common Stock by reason of a stock dividend,
stock split, split-up, recapitalization, combination, exchange of shares, or
similar transaction, the type and number of shares or securities subject to the
Option, and the Purchase Price therefor, shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such transaction so
that Holder shall receive, upon exercise of the Option, the number and class of
shares or other securities or property that Holder would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such event, or the record date therefor, as applicable. If any
additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the first sentence of
this Section 8(a), upon exercise of any option to purchase Issuer Common Stock
outstanding on the date hereof or upon conversion into Issuer Common Stock of
any convertible security of Issuer outstanding on the date hereof), the number
of shares of Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance it, together with any share of Issuer Common Stock
previously issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to
the Option. No provision of this Section 8 shall be deemed to affect or change,
or constitute authorization for any violation of, any of the covenants or
representations in the Plan.
(b) In the event that Issuer shall enter into an
agreement (i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than Grantee or one of its subsidiaries, to merge into Issuer and Issuer shall
be the continuing or surviving corporation, but, in connection with such merger,
the then outstanding shares of Issuer Common Stock shall be changed into or
exchanged for stock or other securities of Issuer or any other person or cash or
any other property or the outstanding shares of Issuer Common Stock immediately
prior to such merger shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets or deposits to any
person, other than Grantee or one of its subsidiaries, then, and in each such
case, the agreement governing such transaction shall be subject to this
Agreement in accordance with the terms provided herein and make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
Holder, of either (x) the Acquiring Corporation (as hereinafter defined), (y)
any person that controls the Acquiring Corporation, or (z) in the case of a
merger described in clause (ii), Issuer (such person being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option, provided that, if the terms of the Substitute Option cannot,
for legal reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Holder. Substitute Option Issuer
shall also enter into an agreement with Holder in substantially the same form as
this Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock (as hereinafter defined) as is
equal to the Assigned Value (as hereinafter defined) multiplied by the number of
shares of Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of
Substitute Option per share of Substitute Common Stock (the "Substitute Option
Price") shall then be equal to the Purchase Price multiplied by a fraction in
which the numerator is the number of shares of Issuer Common Stock for which the
Option was theretofore exercisable and the denominator is the number of shares
of the Substitute Common Stock for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i)
the continuing or surviving corporation of a
consolidation or merger with Issuer (if other than
Issuer), (ii) Issuer in a merger in which Issuer is
the continuing or surviving person, or (iii) the
transferee of all or substantially all of Issuer's
assets (or a substantial part of the assets of its
subsidiaries taken as a whole).
(2) "Substitute Common Stock" shall mean the
shares of capital stock (or similar equity interest)
with the greatest voting power in respect of the
election of directors (or persons similarly
responsible for the direction of the business and
affairs) of the Substitute Option Issuer.
(3) "Assigned Value" shall mean the highest
of (w) the price per share of Issuer Common Stock at
which a Tender Offer or an Exchange Offer therefor
has been made, (x) the price per share of Issuer
Common Stock to be paid by any third party pursuant
to an agreement with Issuer, and (y) the highest
closing price for shares of Issuer Common stock
within the six month period immediately preceding the
consolidation, merger, or sale in question and (z) in
the event of a sale of all or substantially all of
Issuer's assets or deposits an amount equal to (i)
the sum of the price paid in such sale for such
assets (and/or deposits) and the current market value
of the remaining assets of Issuer, as determined by a
nationally or regionally recognized investment
banking firm selected by Holder divided by (ii) the
number of shares of Issuer Common Stock outstanding
at such time. In the event that a Tender Offer or an
Exchange Offer is made for Issuer Common Stock or an
agreement is entered into for a merger or
consolidation involving consideration other than
cash, the value of the securities or other property
issuable or deliverable in exchange for Issuer Common
Stock shall be determined by a nationally or
regionally recognized investment banking firm
selected by Holder.
(4) "Average Price" shall mean the average
closing price of a share of Substitute Common Stock
for the one year immediately preceding the
consolidation, merger, or sale in question, but in no
event higher than the closing price or the purchase
price of the shares of Substitute Common Stock on the
day preceding such consolidation, merger or sale;
provided that if Issuer is the issuer of the
Substitute Option, the Average Price shall be
computed with respect to the Purchase Price, a share
of common stock issued by Issuer, the person merging
into Issuer or by any company which controls such
person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than 19.9%
of the aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option would
be exercisable for more than 19.9% of the aggregate of the shares of Substitute
Common Stock but for the limitation in the first sentence of this Section 8(f),
Substitute Option Issuer shall make a cash payment to Holder equal to the excess
of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 8(f) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 8(f). This difference in value shall be determined by a
nationally-recognized investment banking firm selected by Holder.
(g) Issuer shall not enter into any transaction
described in Section 8(b) unless prior to the entering of such transaction
the Acquiring Corporation and any person that controls the Acquiring Corporation
assumed in writing all the obligations of Issuer hereunder and
took all other actions that may be necessary so that the provisions of this
Section 8 are given full force and effect (including, without limitation, any
action that may be necessary so that the holders of the other shares of common
stock issued by Substitute Option Issuer are not entitled to exercise any rights
by reason of the issuance or exercise of the Substitute Option and the shares of
Substitute Common Stock are otherwise in no way distinguishable from or have
lesser economic value (other than any diminution in value resulting from the
fact that the Substitute Common Stock are restricted securities, as defined in
Rule 144 under the Securities Act or any successor provision) than other shares
of common stock issued by Substitute Option Issuer).
9. Repurchase at the Option of Holder. (a) Subject to the last
sentence of Section 4(a), at the demand of Holder at any time commencing upon
the first occurrence of a Repurchase Event (as defined in Section 9(d)) and
ending 12 months immediately thereafter, Issuer shall repurchase from Holder (i)
the Option or any part of the Option or (ii) any or all shares of Issuer Common
Stock purchased by Holder pursuant hereto with respect to which Holder then has
beneficial ownership. The dates on which Holder may exercise its rights under
this Section 9 are referred to as the "Request Dates". Such repurchase shall be
at an aggregate price (the "Section 9 Repurchase Consideration") equal to the
sum of:
(i) the aggregate Purchase Price paid by
Holder for any shares of Issuer Common Stock acquired
pursuant to the Option with respect to which Holder
then has beneficial ownership;
(ii) the excess, if any, of (x) the
Applicable Price (as defined below) for each share of
Issuer Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common
Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable
Price over the Purchase Price (subject to adjustment
pursuant to Section 7) paid (or, in the case of
Option Shares with respect to which the Option has
been exercised but the Closing Date has not occurred,
payable) by Holder for each share of Issuer Common
Stock with respect to which the Option has been
exercised and with respect to which Holder then has
beneficial ownership, multiplied by the number of
such shares.
(b) If Holder exercises its rights under this Section
9, Issuer shall, within 10 business days after any Request Date, pay the
Section 9 Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to Issuer the Option
or any part of the Option and the certificates evidencing the shares of Issuer
Common Stock purchased thereunder with respect to which Holder then has
exercised its rights under this Section 9, and Holder shall warrant that it has
sole record and beneficial ownership of such shares and that the same are then
free and clear of all Liens. Notwithstanding the foregoing, to the extent that
prior notification to or approval of any Regulatory Authority is required in
connection with the payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request for
repurchase pursuant to Section 9, in whole or in part, or to require that Issuer
deliver from time to time that portion of the Section 9 Repurchase Consideration
that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If any
Regulatory Authority disapproves of any part of Issuer's proposed repurchase
pursuant to this Section 9, Issuer shall promptly give notice of such fact to
Holder. If any Regulatory Authority prohibits the repurchase in part but not in
whole, then Holder shall have the right (i) to revoke the repurchase request or
(ii) to the extent permitted by such Regulatory Authority, determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Request Date
less the sum of the number of shares covered by the Option in respect of which
payment has been made pursuant to Section 9(a)(ii) and the number of shares
covered by the portion of the Option (if any) that has been repurchased. Holder
shall notify Issuer of its determination under the preceding sentence within
five (5) business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Holder's
rights under this Section 9 shall terminate on the date of termination of this
Option pursuant to Section 4(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of Issuer
Common Stock paid for any such share by the person or groups described in
Section 9(d)(i), (ii) the price per share of Issuer Common Stock received by
holders of Issuer Common Stock in connection with any merger or other business
combination transaction described in Section 8(b)(i), 8(b)(ii) or 8(b)(iii), or
(iii) the highest closing sales price per share of Issuer Common Stock quoted on
the NASDAQ Small Cap market or the National Daily Quotation Bureau, as the case
may be; provided, however, that in the event of a sale of less than all of
Issuer's assets, the Applicable Price shall be the sum of the price paid in such
sale for such assets and the current market value of the remaining assets of
Issuer as determined by a nationally or regionally recognized investment banking
firm selected by Holder, divided by the number of shares of the Issuer Common
Stock outstanding at the time of such sale. If the consideration to be offered,
paid or received pursuant to either of the foregoing clauses (i) or (ii) shall
be other than in cash, the value of such consideration shall be determined in
good faith by an independent nationally or regionally recognized investment
banking firm selected by Holder and reasonably acceptable to Issuer, which
determination shall be conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if
(i) any person (other than Grantee or any subsidiary of Grantee) shall have
acquired beneficial ownership of (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under the Exchange Act)
shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of, 50% or more of the then outstanding shares of Issuer
Common Stock, or (ii) any of the transactions described in Section 8(b)(i),
8(b)(ii) or 8(b)(iii) shall be consummated.
10. Registration Rights. (a) If Issuer at any time after the
exercise of the Option proposes for any reason to register any shares of Issuer
Common Stock under the Securities Act or in the event that any registration
pursuant to this Section 10(a) shall be, in whole or in part, an underwritten
offering of securities of such Issuer Common Stock, Issuer will at each such
time promptly give written notice to any Holder, including Grantee and any
permitted transferee ("Selling Shareholders") of its intention to do so and,
upon the written request of any Selling Shareholder given within 30 days after
receipt of any such notice (which request shall specify the number of shares of
Issuer Common Stock intended to be included in such registration by the Selling
Shareholder), Issuer will cause all such shares for which a Selling Shareholder
requests participation in such registration, to be so registered; provided,
however, that Issuer may elect to not cause any such shares to be so registered
(i) if the managing underwriters, if any, in good faith object to the inclusion
of such shares for valid business reasons, or (ii) in the case of a registration
solely to implement an employee benefit plan or a registration filed on Form S-4
of the Securities Act or any successor Form; provided, further, however, that
such election pursuant to (i) may only be made two times. If some, but not all,
the shares of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this Section 10(a), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among the Selling Shareholders desiring to register
their shares pro rata in the proportion that the number of shares requested to
be registered by each such Selling Shareholder bears to the total number of
shares requested to be registered by all such Selling Shareholders then desiring
to have Issuer Common Stock registered for sale.
(b) Conditions to Registration. Issuer shall use all
reasonable efforts to cause each registration statement referred to in
Section 10(a) above to become effective and to obtain all consents or waivers of
other parties which are required therefor and to keep such registration
statement effective; provided, however, that Issuer shall not be required to
maintain the effectiveness of any registration statement after the expiration of
nine months from the effective date of such registration statement. Issuer shall
use all reasonable efforts to make any filings. and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares; provided, however, that Issuer
shall not be required to consent to general jurisdiction or qualify to do
business in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(c) Expenses. Except where applicable state law prohibits
such payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to Section 10(a) above (including the related
offerings and sales by holders of Option Shares) and all other qualifications,
notifications or exemptions pursuant to Section 10(a) above.
(d) Indemnification. In connection with any registration
under Section 10(a) above Issuer hereby indemnifies the Selling Shareholders,
and each underwriter thereof, including each person, if any, who controls
such holder or underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such indemnified party are
caused by any untrue statement or alleged untrue statement that was included by
Issuer in any such registration statement or prospectus or notification or
offering circular (including any amendments or supplements thereto) in reliance
upon and in conformity with, information furnished in writing to Issuer by such
indemnified party expressly for use therein, and Issuer and each officer,
director and controlling person of Issuer shall be indemnified by such Selling
Shareholders, or by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged untrue,
statement, that was included by Issuer in any such registration statement or
prospectus or notification or offering circular (including any amendments or
supplements thereto) in reliance upon, and in conformity with, information
furnished in writing to Issuer by such holder or such underwriter, as the case
may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
Section 10(d) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section 10(d), such indemnified party
shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it
of any liability which it may otherwise have to any indemnified party under this
Section 10(d). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified art , or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section 10(d) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, the Selling Shareholders and the underwriters from the offering of
the securities and also the relative fault of Issuer, the Selling Shareholders
and the underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall any Selling
Shareholder be responsible, in the aggregate, for any amount in excess of the
net offering proceeds attributable to its Option Shares included in the
offering. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11 (f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Any
obligation by any holder to indemnify shall be several and not joint with other
holders.
In connection with any registration pursuant to Section 10(a)
above, Issuer and each Selling Shareholder (other than Grantee) shall enter into
an agreement containing the indemnification provisions of this Section 10(d).
(e) Miscellaneous Reporting. Issuer shall comply with all
reporting requirements and will do all such other things as may be
necessary to permit the expeditious sale at any time of any Option Shares by the
Selling Shareholders thereof in accordance with and to the extent applicable and
permitted by any rule or regulation promulgated by the SEC from time to time,
including, without limitation, Rule 144A. Issuer shall at its expense provide
the Selling Shareholders with any information necessary in connection with the
completion and filing of any reports or forms required to be filed by them under
the Securities Act or the Exchange Act, or required pursuant to any state
securities laws or the rules of any stock exchange.
(f) Issue Taxes. Issuer will pay all stamp taxes in
connection with the issuance and the sale of the Option Shares and in
connection with the exercise of the Option, and will save the Selling
Shareholders harmless, without limitation as to time, against any and all
liabilities, with respect to all such taxes.
11. Quotation; Listing. If Issuer Common Stock or any other
securities to be acquired in connection with the exercise of the Option are then
authorized for quotation or trading or listing on the NASDAQ or any securities
exchange or market, Issuer, upon the request of Holder, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the NASDAQ or such other securities exchange or market and will
use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
12. Division of Option. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Holder, upon
presentation and surrender of this Agreement at the principal office of Issuer
for other Agreements providing for Options of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement
of like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
13. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and
pay all costs and expenses incurred by it or on its behalf in connection
with the transactions contemplated hereunder, including fees and expenses of its
own financial consultants, investment bankers, accountants and counsel provided,
however, that the Issuer shall bear and pay all fees, costs and expenses
incurred in connection with Section 10 hereof.
(b) Waiver and Amendment. Any provision of this
Agreement may be waived at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement: No Third-Party Beneficiaries;
Severability. This Agreement, together with the Plan and the other
documents and instruments referred to herein and therein, between Grantee and
Issuer (i) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any person
other than the parties hereto (other than the indemnified parties under Section
10(d) and any transferees of the Option Shares or any permitted transferee of
this Agreement pursuant to Section 13(h)) any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or Regulatory Authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
Regulatory Authority determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Section 5 (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to require Issuer
to repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to any applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings
contained herein are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the parties at the addresses set forth in the
Plan (or at such other address for a party as shall be specified by like
notice).
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be
considered one and the same agreement and shall become effective when both
counterparts have been signed, it being understood that both parties need not
sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be
assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party, except that Holder may assign this Agreement to a wholly-owned
subsidiary of Holder and Holder may assign its rights hereunder in whole or in
part after the occurrence of a Purchase Event. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise
of the Option by the Holder, Issuer and the Holder shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in order to consummate the transactions provided for by
such exercise.
(j) Specific Performance. The parties hereto agree
that this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both parties further
agree to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties hereto may
have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
EXECUFIRST BANCORP, INC.
By:
-----------------------------
Title:
REPUBLIC BANCORPORATION, INC.
By:
-----------------------------
Title:
EXHIBIT G
________________, ▇▇▇▇
▇▇▇▇▇▇▇▇ Bancorporation, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
We have acted as counsel to ExecuFirst Bancorp, Inc. a Pennsylvania
corporation ("ExecuFirst"), in connection with the transactions contemplated by
the Agreement and Plan of Merger dated as of the ______ of November, 1995, by
and between Republic Bancorporation, Inc. ("Republic") and ExecuFirst (the "Plan
of Merger"), pursuant to which Republic will be merged with and into ExecuFirst
(the "Merger").
In connection with the opinion hereinafter set forth, we have examined
the originals (or copies certified or otherwise identified to us to our
satisfaction as true copies, by the appropriate public officials or appropriate
corporate officers of ExecuFirst) of (i) the Plan of Merger; (ii) the ExecuFirst
Stock Option Agreement; (iii) the Joint Proxy Statement dated _____________,
1996 (the "Joint Proxy Statement"); (iv) the Certificate of Incorporation of
each of ExecuFirst and any of its subsidiaries; (v) the By-Laws of each of
ExecuFirst and any of its subsidiaries; (vi) certificate of good standing of the
Secretary of State or other comparable public official for each of ExecuFirst
and any of its subsidiaries; (vii) minutes and records of the corporation
proceedings of ExecuFirst with respect to the transactions contemplated by the
Merger; (viii) certain resolutions adopted by the Board of Directors of
ExecuFirst relating to the Plan of Merger and the transactions contemplated
therein and (ix) minutes of the Special Meeting of ExecuFirst's shareholders
held on _________, 1996. We have also examined such other documents and
instruments and made such other investigations of law and fact as we have deemed
necessary or appropriate for the purposes of this opinion.
In our examination of the foregoing documents, we have assumed: (i) the
due authorization, execution and delivery by all relevant parties, other than
ExecuFirst, of all agreements to which ExecuFirst is a party including, but not
limited to, the Plan of Merger; (ii) the legal capacity of all natural persons;
(iii) the genuineness of all signatures; and (iv) the authenticity of all
documents submitted to us as originals as well as the conformity to the
originals of all documents submitted to us as photostatic copies. We have
further assumed the existence and good standing of each entity that is a party
to the documents examined by us (other
than ExecuFirst) under the laws of the jurisdiction of its formation or
organization and that the documents examined by us are in full force and effect
and have not been amended, supplemented or otherwise modified, except where we
are aware of any such amendment, supplement or other modification.
For purposes of this opinion letter, we have assumed that: (i) Republic
has all requisite power and authority under all applicable laws, regulations and
governing documents to execute, deliver and perform its obligations under the
Plan of Merger; (ii) Republic has duly authorized, executed and delivered the
Plan of Merger and the Republic Stock Option Agreement; (iii) each of Republic
and any of its subsidiaries is validly existing and in good standing in its
jurisdiction of incorporation; and (iv) the Plan of Merger constitutes a valid
and binding obligation, enforceable against Republic in accordance with its
terms.
All capitalized terms not otherwise defined herein have the meaning
ascribed to them in the Plan of Merger.
Based upon the foregoing, and subject to the qualifications and
limitations hereinafter set forth, it is our opinion that:
1. ExecuFirst and each of its subsidiaries, are corporations duly
organized and existing in good standing under the laws of their jurisdiction of
incorporation.
2. Each of ExecuFirst and its subsidiaries has the corporate power and
authority to carry on their banking and corporate businesses as are now being
conducted and to own all their material properties and assets and to possess all
governmental, regulatory and other permits and licenses.
3. Each of the Plan of Merger and ExecuFirst Stock Option Agreement
have been duly authorized by all necessary corporate action of ExecuFirst and
have been duly executed and delivered by ExecuFirst; all regulatory approvals
required to be obtained by ExecuFirst for the consummation of the transactions
contemplated by the Plan of Merger and ExecuFirst Stock Option Agreement have
been obtained; and, assuming the due authorization, execution and delivery by
ExecuFirst of the Plan of Merger and ExecuFirst Stock Option Agreement, and the
filing thereof with all required federal or state authorities, the Plan of
Merger and ExecuFirst Stock Option Agreement will be valid and binding in
accordance with their terms except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other laws of general
application relating to the enforcement of creditors' rights generally and to
general equitable principles.
4. ExecuFirst's authorized capital stock consists of 20,000,000 shares
of common stock, $0.01 par value per share (the "Common Stock") and 10,000,000
shares of preferred stock, $0.01 par value per share (the "Preferred Stock"), of
which ________________ shares of Common Stock and no shares of Preferred Stock
are outstanding. All of ExecuFirst's issued and outstanding Common Stock to be
exchanged in connection with the Merger have been duly authorized and when
issued pursuant to the Plan of Merger will be validly issued, fully paid and
non-assessable and subject to no preemptive rights; and, except as Previously
Disclosed in Section 4.04(B) of its Disclosure Letter, to the best of our
knowledge, there are no existing options,
warrants, calls, commitments or other rights of any character granted by
ExecuFirst relating to its authorized or issued stock.
5. ExecuFirst is the owner of record of all authorized and issued and
outstanding capital stock of First Executive Bank (to the best of our knowledge,
ExecuFirst is the beneficial owner of all authorized and outstanding capital
stock of First Executive Bank); and we know of no existing options, calls,
commitments or other rights of any character granted by ExecuFirst or First
Executive Bank relating to the authorized or issued and outstanding stock of
First Executive Bank.
6. Such number of shares of Common Stock as are issuable upon exercise
of the Option granted pursuant to the ExecuFirst Stock Option Agreement (the
"Option Shares") have been duly authorized by the Board of Directors and
reserved for issuance. The Option Shares when issued in accordance with the
terms of the ExecuFirst Stock Option Agreement, will be duly and validly issued,
outstanding, fully paid and non-assessable.
7. The delivery and consummation of the transactions contemplated by
the Plan of Merger and ExecuFirst Stock Option Agreement and the consummation of
the Merger does not violate or conflict with ExecuFirst's Certificate of
Incorporation or By-Laws, any federal or state banking law or the Pennsylvania
Business Corporation Law of 1988, as amended.
8. Except as Previously Disclosed in its Disclosure Letter, the
execution, delivery and performance of the Plan of Merger by ExecuFirst did not,
and the consummation of the transactions contemplated thereby by ExecuFirst does
not, constitute:
(i) to the best of our knowledge, after due investigation, a
breach or violation of, or a default under, any law, rule or regulation or any
judgment, decree, order, government permit or license, or agreement, indenture
or instrument of ExecuFirst or any of its subsidiaries or to which ExecuFirst or
any of its subsidiaries are subject or bound and identified to us by ExecuFirst
and set forth on Annex "A" hereto; or
(ii) a breach or violation of, or a default under, the
Certificate of Incorporation or By-Laws of ExecuFirst or any of its
subsidiaries; or
(iii) to the best of our knowledge, the consummation of the
transactions contemplated thereby will not require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license, indenture or instrument, except for such consents or approvals which
have already been obtained.
9. To the best of our knowledge, and except as previously Disclosed in
its Disclosure Letter or as previously disclosed in writing on or prior to the
date hereof (i) no material litigation, proceeding or controversy before any
court or governmental agency is pending against ExecuFirst or any of its
subsidiaries or their properties and no such litigation, proceeding or
controversy has been threatened; (ii) no material litigation, proceeding or
controversy before any court is pending against any of ExecuFirst's current
officers or directors or its subsidiaries' current officers or directors with
respect to the business of ExecuFirst or any of its subsidiaries; (iii) neither
ExecuFirst nor any of its subsidiaries or any of their properties are party to
or subject to any order, decree, agreement, memorandum of understanding or
similar arrangement with, or
commitment letter or similar submission to any regulation authority; and (iv)
neither ExecuFirst nor any of its subsidiaries has been advised by any
Regulatory Authority that such Regulatory Authority is contemplating, issuing or
requesting any such order, decree, agreement, memorandum of understanding,
commitment letter or similar submission.
We advise you further as follows:
In connection with the Plan of Merger and the transactions contemplated
thereby, we have rendered legal advice and assistance to ExecuFirst in
connection with the preparation of the Joint Proxy Statement. Rendering such
legal advice and assistance involved, among other things, discussions and
inquiries concerning various legal and related subjects and reviews of and
reports on, certain records, documents and proceedings. We also participated in
conferences with your representatives, counsel and accountants and those of
ExecuFirst at which the contents of the Joint Proxy Statement and related
materials were discussed and reviewed. The limitations inherent in the review of
factual and other matters included in or contemplated by the Joint Proxy
Statement or any amendment or supplement thereto, and the character of
determinations involved in the registration process and in the solicitation of
proxies are such, however, that we do not make any warranty or representation
concerning, or assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Joint Proxy Statement or any
amendment or supplement thereto.
Based upon and subject to the foregoing, but without passing upon, or
making any warranty or representation as to, the accuracy, completeness or
fairness of the statements contained in the Joint Proxy Statement or any
amendment or supplement thereto (a) nothing has come to our attention that would
lead us to believe that the Joint Proxy Statement at the date of its mailing, at
the date of the meeting of ExecuFirst's shareholders, or at the Effective Date
on the date hereof, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that, with your consent, we express no
belief or opinion with respect to the financial statements and schedules and
other statistical and financial data included in the Registration Statement).
Nothing has come to our attention that would lead us to believe that the
information contained in the Joint Proxy Statement, at the time which has been
identified to us by ExecuFirst for these purposes as being the time when the
Joint Proxy Statement was first mailed to the shareholders of ExecuFirst and at
the time of ExecuFirst's meeting of such shareholders held on _____________,
1996 (and reconvened on ___________, 1996), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, with your consent, we express no belief or opinion with respect to the
financial statements and schedules and other statistical and financial data
included in the Joint Proxy Statement).
Our opinion is subject to the following qualifications, limitations and
exceptions:
Whenever any statement herein is qualified by the phrase "to the best
of our knowledge," or "to our knowledge," it is intended to indicate that,
during the course of our representation of ExecuFirst or any of its
subsidiaries, no information that would give us actual knowledge of the
inaccuracy of such statement has come to the attention of the attorneys
presently in this firm and
who are actively engaged in the representation of ExecuFirst or its
subsidiaries. Insofar as this opinion relates to factual matters, information
with respect to which is in the actual possession of ExecuFirst or its
subsidiaries, we have made inquiries of ExecuFirst personnel to the extent we
believe reasonable with respect to such matters and have relied upon
representations made to us by one or more officers of ExecuFirst and its
subsidiaries.
Our opinion is limited to the laws of the United States, the laws of
the Commonwealth of Pennsylvania and the Pennsylvania Business Corporation Law
of 1988, as amended, and we express no opinion with respect to the laws of any
other jurisdiction.
This letter and the opinion and advice set forth herein are not to be
quoted or otherwise referred to in any document or filed with any governmental
agency, entity or person, or relied upon by any agency, entity or person other
than the addressee, without the prior written consent of this firm.
Very truly yours,
________________, 1996
ExecuFirst Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
We have acted as counsel to Republic Bancorporation, Inc. a
Pennsylvania corporation ("Republic"), in connection with the transactions
contemplated by the Agreement and Plan of Merger dated as of the ______ of
November, 1995, by and between ExecuFirst Bancorp, Inc. and Republic (the "Plan
of Merger"), pursuant to which Republic will be merged with and into ExecuFirst
(the "Merger").
In connection with the opinion hereinafter set forth, we have examined
the originals (or copies certified or otherwise identified to us to our
satisfaction as true copies, by the appropriate public officials or appropriate
corporate officers of Republic) of (i) the Plan of Merger; (ii) the Republic
Stock Option Agreement; (iii) the Joint Proxy Statement dated _____________,
1996 (the "Joint Proxy Statement"); (iv) the Certificate of Incorporation of
each of Republic and any of its subsidiaries; (v) the By-Laws of each of
Republic and any of its subsidiaries; (vi) certificate of good standing of the
Secretary of State or other comparable public official for each of Republic and
any of its subsidiaries; (vii) minutes and records of the corporation
proceedings of Republic with respect to the transactions contemplated by the
Merger; (viii) certain resolutions adopted by the Board of Directors of Republic
relating to the Plan of Merger and the transactions contemplated therein and
(ix) minutes of the Special Meeting of Republic's shareholders held on ________,
1996. We have also examined such other documents and instruments and made such
other investigations of law and fact as we have deemed necessary or appropriate
for the purposes of this opinion.
In our examination of the foregoing documents, we have assumed: (i) the
due authorization, execution and delivery by all relevant parties, other than
Republic, of all agreements to which Republic is a party including, but not
limited to, the Plan of Merger; (ii) the legal capacity of all natural persons;
(iii) the genuineness of all signatures; and (iv) the authenticity of all
documents submitted to us as originals as well as the conformity to the
originals of all documents submitted to us as photostatic copies. We have
further assumed the existence and good standing of each entity that is a party
to the documents examined by us (other than Republic) under the laws of the
jurisdiction of its formation or organization and that the documents examined by
us are in full force and effect and have not been amended, supplemented or
otherwise modified, except where we are aware of any such amendment, supplement
or other modification.
For purposes of this opinion letter, we have assumed that: (i)
ExecuFirst has all requisite power and authority under all applicable laws,
regulations and governing documents to execute, deliver and perform its
obligations under the Plan of Merger; (ii) ExecuFirst has duly authorized,
executed and delivered the Plan of Merger and the ExecuFirst Stock Option
Agreement; (iii) each of ExecuFirst and any of its subsidiaries is validly
existing and in good standing in its jurisdiction of incorporation; and (iv) the
Plan of Merger constitutes a valid and binding obligation, enforceable against
ExecuFirst in accordance with its terms.
All capitalized terms not otherwise defined herein have the meaning
ascribed to them in the Plan of Merger.
Based upon the foregoing, and subject to the qualifications and
limitations hereinafter set forth, it is our opinion that:
1. Republic and each of its subsidiaries, are corporations duly
organized and existing in good standing under the laws of their jurisdiction of
incorporation.
2. Each of Republic and its subsidiaries has the corporate power and
authority to carry on their banking and corporate businesses as are now being
conducted and to own all their material properties and assets and to possess all
governmental, regulatory and other permits and licenses.
3. Each of the Plan of Merger and Republic Stock Option Agreement have
been duly authorized by all necessary corporate action of Republic and have been
duly executed and delivered by Republic; all regulatory approvals required to be
obtained by Republic for the consummation of the transactions contemplated by
the Plan of Merger and Republic Stock Option Agreement have been obtained; and,
assuming the due authorization, execution and delivery by ExecuFirst of the Plan
of Merger and Republic Stock Option Agreement, and the filing thereof with all
required federal or state authorities, the Plan of Merger and Republic Stock
Option Agreement will be valid and binding in accordance with their terms except
to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other laws of general application relating to the enforcement
of creditors' rights generally and to general equitable principles.
4. Republic's authorized capital stock consists of 10,000,000 shares
of common stock, $0.01 par value per share (the "Common Stock") and 10,000,000
shares of preferred stock, $0.01
par value per share (the "Preferred Stock"), of which ________________ shares of
Common Stock and no shares of Preferred Stock are outstanding. All of Republic's
issued and outstanding Common Stock to be exchanged in connection with the
Merger have been duly authorized and are validly issued, fully paid and
non-assessable and subject to no preemptive rights or rights of rescission; and,
except as Previously Disclosed in Section 4.03(B) of its Disclosure Letter, to
the best of our knowledge, there are no existing options, warrants, calls,
commitments or other rights of any character granted by Republic relating to its
authorized or issued stock.
5. Republic is the owner of record of all authorized and issued and
outstanding capital stock of Republic Bank (to the best of our knowledge,
Republic is the beneficial owner of all authorized and outstanding capital stock
of Republic Bank); and we know of no existing options, calls, commitments or
other rights of any character granted by Republic or Republic Bank relating to
the authorized or issued and outstanding stock of Republic Bank.
6. Such number of shares of Common Stock as are issuable upon exercise
of the Option granted pursuant to the Republic Stock Option Agreement (the
"Option Shares") have been duly authorized by the Board of Directors and
reserved for issuance. The Option Shares when issued in accordance with the
terms of the Republic Stock Option Agreement, will be duly and validly issued,
outstanding, fully paid and non-assessable.
7. The delivery and consummation of the transactions contemplated by
the Plan of Merger and Republic Stock Option Agreement and the consummation of
the Merger does not violate or conflict with Republic's Certificate of
Incorporation or By-Laws, any federal or state banking law or the Pennsylvania
Business Corporation Law of 1988, as amended.
8. Except as Previously Disclosed in its Disclosure Letter, the
execution, delivery and performance of the Plan of Merger by Republic did not,
and the consummation of the transactions contemplated thereby by Republic does
not, constitute:
(i) to the best of our knowledge, after due investigation, a
breach or violation of, or a default under, any law, rule or regulation or any
judgment, decree, order, government permit or license, or agreement, indenture
or instrument of Republic or any of its subsidiaries or to which Republic or any
of its subsidiaries are subject or bound and identified to us by Republic and
set forth on Annex "A" hereto; or
(ii) a breach or violation of, or a default under, the
Certificate of Incorporation or By-Laws of Republic or any of its
subsidiaries; or
(iii) to the best of our knowledge, the consummation of the
transactions contemplated thereby will not require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license, indenture or instrument, except for such consents or approvals which
have already been obtained.
9. To the best of our knowledge, and except as previously Disclosed in
its Disclosure Letter or as previously disclosed in writing on or prior to the
date hereof (i) no material litigation, proceeding or controversy before any
court or governmental agency is pending against Republic or any of its
subsidiaries or their properties and no such litigation, proceeding or
controversy has been threatened; (ii) no material litigation, proceeding or
controversy before any
court is pending against any of Republic's current officers or directors or its
subsidiaries' current officers or directors with respect to the business of
Republic or any of its subsidiaries; (iii) neither Republic nor any of its
subsidiaries or any of their properties are party to or subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with, or
commitment letter or similar submission to any regulation authority; and (iv)
neither Republic nor any of its subsidiaries has been advised by any Regulatory
Authority that such Regulatory Authority is contemplating, issuing or requesting
any such order, decree, agreement, memorandum of understanding, commitment
letter or similar submission.
We advise you further as follows:
In connection with the Plan of Merger and the transactions contemplated
thereby, we have rendered legal advice and assistance to Republic in connection
with the preparation of the Joint Proxy Statement. Rendering such legal advice
and assistance involved, among other things, discussions and inquiries
concerning various legal and related subjects and reviews of and reports on,
certain records, documents and proceedings. We also participated in conferences
with your representatives, counsel and accountants and those of Republic at
which the contents of the Joint Proxy Statement and related materials were
discussed and reviewed. The limitations inherent in the review of factual and
other matters included in or contemplated by the Joint Proxy Statement or any
amendment or supplement thereto, and the character of determinations involved in
the registration process and in the solicitation of proxies are such, however,
that we do not make any warranty or representation concerning, or assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Joint Proxy Statement or any amendment or supplement thereto.
Based upon and subject to the foregoing, but without passing upon, or
making any warranty or representation as to, the accuracy, completeness or
fairness of the statements contained in the Joint Proxy Statement or any
amendment or supplement thereto (a) nothing has come to our attention that would
lead us to believe that the Joint Proxy Statement at the date of its mailing, at
the date of the meeting of Republic's shareholders, or at the Effective Date on
the date hereof, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that, with your consent, we express no
belief or opinion with respect to the financial statements and schedules and
other statistical and financial data included in the Registration Statement).
Nothing has come to our attention that would lead us to believe that the
information contained in the Joint Proxy Statement, at the time which has been
identified to us by Republic for these purposes as being the time when the Joint
Proxy Statement was first mailed to the shareholders of Republic and at the time
of Republic's meeting of such shareholders held on _____________, 1996 (and
reconvened on ___________, 1996), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, with your consent, we express no belief or opinion with respect to the
financial statements and schedules and other statistical and financial data
included in the Joint Proxy Statement).
Our opinion is subject to the following qualifications, limitations and
exceptions:
Whenever any statement herein is qualified by the phrase "to the best
of our knowledge," or "to our knowledge," it is intended to indicate that,
during the course of our representation of Republic or any of its subsidiaries,
no information that would give us actual knowledge of the inaccuracy of such
statement has come to the attention of the attorneys presently in this firm and
who are actively engaged in the representation of Republic or its subsidiaries.
Insofar as this opinion relates to factual matters, information with respect to
which is in the actual possession of Republic or its subsidiaries, we have made
inquiries of Republic personnel to the extent we believe reasonable with respect
to such matters and have relied upon representations made to us by one or more
officers of Republic and its subsidiaries.
Our opinion is limited to the laws of the United States, the laws of
the Commonwealth of Pennsylvania and the Pennsylvania Business Corporation Law
of 1988, as amended, and we express no opinion with respect to the laws of any
other jurisdiction.
This letter and the opinion and advice set forth herein are not to be
quoted or otherwise referred to in any document or filed with any governmental
agency, entity or person, or relied upon by any agency, entity or person other
than the addressee, without the prior written consent of this firm.
Very truly yours,