EXHIBIT 2.2
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of August 16, 1999
by and between
NORTH FORK BANCORPORATION, INC.
and
JSB FINANCIAL, INC.
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TABLE OF CONTENTS
INTRODUCTORY STATEMENT
ARTICLE I
THE MERGER
Section 1.1 Structure of the Merger.......................................2
Section 1.2 Effect on Outstanding Shares of JSB Common Stock..............2
Section 1.3 Exchange Procedures...........................................3
Section 1.4 Stock Options.................................................4
Section 1.5 Bank Merger...................................................5
Section 1.6 Directors of NFB after Effective Time.........................5
Section 1.7 Alternative Structure.........................................5
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Disclosure Letters............................................6
Section 2.2 Standards.....................................................6
Section 2.3 Representations and Warranties of JSB.........................7
Section 2.4 Representations and Warranties of NFB........................18
ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.1 Conduct of JSB's Business Prior to the Effective Time........28
Section 3.2 Forbearance by JSB...........................................28
Section 3.3 Conduct of NFB's Business Prior to the Effective Time........30
Section 3.4 Forbearance by NFB...........................................30
ARTICLE IV
COVENANTS
Section 4.1 Acquisition Proposals........................................31
Section 4.2 Certain Policies of JSB......................................32
Section 4.3 Access and Information.......................................33
Section 4.4 Certain Filings, Consents and Arrangements...................34
Section 4.5 Antitakeover Provisions......................................34
Section 4.6 Additional Agreements........................................34
Section 4.7 Publicity....................................................34
Section 4.8 Stockholders Meetings........................................34
Section 4.9 Proxy Statements; Comfort Letters............................35
Section 4.10 Registration of NFB Common Stock.............................35
Section 4.11 Affiliate Letters............................................36
Section 4.12 Notification of Certain Matters..............................36
Section 4.13 Directors and Officers.......................................36
Section 4.14 Indemnification; Directors' and Officers' Insurance..........37
Section 4.15 Employees; Benefit Plans and Programs........................38
Section 4.16 Advisory Board...............................................41
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1 Conditions to Each Party's Obligations.......................41
Section 5.2 Conditions to the Obligations of NFB and NFB Bank............42
Section 5.3 Conditions to the Obligations of JSB and JSB Bank............43
ARTICLE VI
TERMINATION
Section 6.1 Termination..................................................44
Section 6.2 Effect of Termination........................................47
Section 6.3 Termination Fee..............................................47
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.1 Effective Date and Effective Time............................49
Section 7.2 Deliveries at the Closing....................................49
ARTICLE VIII
CERTAIN OTHER MATTERS
Section 8.1 Certain Definitions; Interpretation..........................49
Section 8.2 Survival.....................................................49
Section 8.3 Waiver; Amendment............................................50
Section 8.4 Counterparts.................................................50
Section 8.5 Governing Law................................................50
Section 8.6 Expenses.....................................................50
Section 8.7 Notices......................................................50
Section 8.8 Entire Agreement; etc........................................51
Section 8.9 Assignment...................................................51
EXHIBITS AND SCHEDULES
Exhibit A Plan of Bank Merger
Exhibit B Form of Affiliate Letter for JSB Affiliates
Exhibit C Form of Affiliate Letter for NFB Affiliates
Schedule 4.13(d)
Schedule 4.15(e)
INDEX OF DEFINED TERMS
Page
Acquisition Proposal....................................................32
Acquisition Transaction.................................................31
Advisory Board..........................................................41
Agreement................................................................1
Bank Merger..............................................................1
Bank Regulator..........................................................10
BHCA....................................................................19
BIF......................................................................7
Closing.................................................................49
Closing Date............................................................49
Code.....................................................................1
Converted Options........................................................5
Costs...................................................................37
Covered Person..........................................................17
Date Data...............................................................18
Date-Sensitive System...................................................18
Derivatives Contract....................................................17
Disclosure Letter........................................................6
Effective Date..........................................................49
Effective Time..........................................................49
Environmental Law.......................................................14
ERISA...................................................................12
Exchange Act............................................................16
Exchange Agent...........................................................3
Exchange Ratio...........................................................2
Excluded Shares..........................................................2
FDIA.....................................................................7
FDIC.....................................................................7
FHLB....................................................................17
Final Index Price.......................................................45
Final Price.............................................................45
FRB......................................................................9
GAAP.....................................................................9
GATT....................................................................40
Governmental Entity.....................................................10
Hazardous Material......................................................15
HOLA.....................................................................7
Indemnified Party.......................................................37
Index Group.............................................................45
Index Ratio.............................................................45
Initial Index Price.....................................................47
Initial NFB Market Value................................................47
Initial Termination Date................................................44
IRS.....................................................................12
Joint Proxy Statement-Prospectus........................................18
JSB......................................................................1
JSB Bank.................................................................1
JSB Bank BRP............................................................40
JSB Bank ESOP...........................................................41
JSB Bank Outside Directors' Plan........................................36
JSB Certificate..........................................................3
JSB Common Stock.........................................................1
JSB Employee............................................................38
JSB Employee Plans......................................................12
JSB ERISA Affiliate.....................................................12
JSB Option...............................................................4
JSB Option Agreement.....................................................1
JSB Option Plans.........................................................4
JSB Pension Plan........................................................12
JSB Preferred Stock......................................................7
JSB Qualified Plan......................................................12
JSB Y2K Plan............................................................18
JSB's Reports............................................................9
Letter of Transmittal....................................................3
Loan....................................................................15
Loan Property...........................................................14
Material Adverse Effect..................................................6
Maximum Agreement.......................................................38
Merger...................................................................2
Merger Consideration.....................................................2
Named Individual........................................................13
New Compensation and Benefits Program...................................39
New NFB Director........................................................36
NFB......................................................................1
NFB Bank.................................................................1
NFB Common Stock.........................................................2
NFB Employee Plans......................................................23
NFB ERISA Affiliate.....................................................23
NFB Market Value.........................................................2
NFB Pension Plan........................................................23
NFB Preferred Stock.....................................................19
NFB Qualified Plan......................................................23
NFB Ratio...............................................................44
NFB Stock Plans.........................................................19
NFB Y2K Plan............................................................27
NFB's Reports...........................................................21
NYSBD....................................................................9
NYSE.....................................................................2
OREO....................................................................16
OTS......................................................................9
Participation Facility..................................................14
PBGC....................................................................12
Permitted Transaction...................................................47
Registration Statement..................................................18
Requisite Regulatory Approvals...........................................9
SEC......................................................................9
Securities Act..........................................................18
Skadden.................................................................42
Specified Compensation and Benefit Programs.............................13
SRO......................................................................9
Stock Adjustment........................................................2
Stockholder Meeting.....................................................34
Subsidiary...............................................................7
Superfund...............................................................15
Superlien...............................................................15
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇........................................................43
Unsolicited Acquisition Proposal........................................32
Valuation Date...........................................................2
Voting Debt..............................................................8
Year 2000 Compliance....................................................18
AGREEMENT AND PLAN OF MERGER
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This is an AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,
dated as of the 16th day of August, 1999 ("Agreement"), by and between
NORTH FORK BANCORPORATION, INC., a Delaware corporation ("NFB"), and JSB
FINANCIAL, INC., a Delaware corporation ("JSB").
INTRODUCTORY STATEMENT
The Board of Directors of NFB (i) has determined that this
Agreement and the business combination and related transactions
contemplated hereby are in the best interests of NFB and its stockholders,
(ii) has determined that this Agreement and the transactions contemplated
hereby are consistent with, and in furtherance of, its business strategy
and (iii) has approved this Agreement.
The Board of Directors of JSB (i) has determined that this
Agreement and the business combination and related transactions
contemplated hereby are in the best interests of JSB and in the best
long-term interests of its stockholders, (ii) has determined that this
Agreement and the transactions contemplated hereby are consistent with, and
in furtherance of, its business strategy and (iii) has approved this
Agreement.
Concurrently with the execution and delivery of this Agreement,
and as a condition and inducement to NFB's willingness to enter into this
Agreement, NFB and JSB have entered into a stock option agreement ("JSB
Option Agreement"), pursuant to which JSB has granted to NFB an option to
purchase shares of JSB's common stock, par value $.01 per share ("JSB
Common Stock"), upon the terms and conditions therein contained.
Following the consummation of the Merger (as defined below),
Jamaica Savings Bank, a wholly owned subsidiary of JSB Financial, Inc.
("JSB Bank"), may be merged with and into North Fork Bank, a wholly owned
subsidiary of North Fork Bancorporation, Inc. ("NFB Bank"), with NFB Bank
being the surviving entity ("Bank Merger").
The parties hereto intend that the Merger and the Bank Merger,
if effected, each shall qualify as a reorganization under the provisions of
Section 368(a) of the Internal Revenue Code of 1986, as amended ("Code"),
for federal income tax purposes, and that the Merger shall be
accounted for as a pooling-of-interests
for financial accounting purposes.
NFB and JSB desire to make certain representations, warranties
and agreements in connection with the business combination and related
transactions provided for herein and to prescribe various conditions to
such transactions.
In consideration of their mutual promises and obligations
hereunder, the parties hereto adopt and make this Agreement and prescribe
the terms and conditions hereof and the manner and basis of carrying it
into effect, which shall be as follows:
ARTICLE I
THE MERGER
Section 1.1 Structure of the Merger. On the Effective Date (as
defined in Section 7.1), JSB will merge with and into NFB ("Merger"), with
NFB being the surviving entity, pursuant to the provisions of, and with the
effect provided in, the Delaware General Corporation Law. Upon consummation
of the Merger, the separate corporate existence of JSB shall cease. NFB
shall continue to be governed by the laws of the State of Delaware and its
name and separate corporate existence, with all of its rights, privileges,
immunities, powers and franchises, shall continue unaffected by the Merger.
Section 1.2 Effect on Outstanding Shares of JSB Common Stock.
(a) By virtue of the Merger, automatically and without
any action on the part of the holder thereof, each share of JSB Common
Stock issued and outstanding at the Effective Time (as defined in Section
7.1), other than (i) shares held directly or indirectly by NFB (other than
shares held in a fiduciary capacity or in satisfaction of a debt previously
contracted) and (ii) shares held by JSB as treasury stock (such shares
referred to in clauses (i) and (ii) being referred to herein as the
"Excluded Shares"), shall become and be converted into the right to receive
3.0 shares (the "Exchange Ratio") of NFB's common stock, par value $2.50
per share ("NFB Common Stock"); provided, however, that, notwithstanding
any other provision hereof, no fraction of a share of NFB Common Stock and
no certificates or scrip therefor will be issued in the Merger; instead,
NFB shall pay to each holder of JSB Common Stock who would otherwise be
entitled to a fraction of a share of NFB Common Stock an amount in cash,
rounded to the nearest cent, determined by multiplying such fraction by the
NFB Market Value (as defined below). The shares of NFB Common Stock and any
cash for fractional shares are collectively referred to in this Agreement
as the "Merger Consideration."
(b) As used herein, "NFB Market Value" shall be the
average of the daily closing sales prices of a share of NFB Common Stock
(and if there is no closing sales price on any such day, then the mean
between the closing bid and the closing asked prices on that day), as
reported on the New York Stock Exchange ("NYSE"), for the 15 consecutive
trading days immediately preceding the Valuation Date.
(c) As used herein, "Valuation Date" shall mean the date
that is the latest of (i) the day of expiration of the last waiting period
with respect to any of the Requisite Regulatory Approvals (as defined in
Section 2.3(e)), (ii) the day on which the last of the Requisite Regulatory
Approvals is obtained and (iii) the day on which the last of the required
stockholder approvals have been obtained.
(d) If, between the date of this Agreement and the
Effective Time, the outstanding shares of NFB Common Stock shall have been
changed into a different number of shares or into a different class by
reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares (each, a "Stock
Adjustment"), the Exchange Ratio shall be adjusted correspondingly to the
extent appropriate to reflect the Stock Adjustment.
(e) As of the Effective Time, each Excluded Share shall
be canceled and retired and shall cease to exist, and no exchange or
payment shall be made with respect thereto. All shares of NFB Common Stock
and NFB Preferred Stock (as defined in Section 2.4(b)) that are held by
JSB, if any, other than shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted, shall become treasury stock
of NFB.
Section 1.3 Exchange Procedures.
(a) Appropriate transmittal materials ("Letter of
Transmittal") shall be mailed as soon as reasonably practicable after the
Effective Time, and in no event later than 5 business days thereafter, to
each holder of record of JSB Common Stock as of the Effective Time. A
Letter of Transmittal will be deemed properly completed only if accompanied
by certificates representing all shares of JSB Common Stock to be converted
thereby.
(b) At and after the Effective Time, each certificate
("JSB Certificate") previously representing shares of JSB Common Stock
(except as specifically set forth in Section 1.2) shall represent only
the right to receive the Merger Consideration.
(c) Prior to the Effective Time, NFB shall deposit, or
shall cause to be deposited, with such bank or trust company that is
selected by NFB and is reasonably acceptable to JSB to act as exchange
agent ("Exchange Agent"), for the benefit of the holders of shares of JSB
Common Stock, for exchange in accordance with this Section 1.3, an
estimated amount of cash sufficient to pay the aggregate amount of cash in
lieu of fractional shares to be paid pursuant to Section 1.2, and NFB shall
reserve for issuance with its transfer agent and registrar a sufficient
number of shares of NFB Common Stock to provide for payment of the Merger
Consideration.
(d) The Letter of Transmittal shall (i) specify that
delivery shall be effected, and risk of loss and title to the JSB
Certificates shall pass, only upon delivery of the JSB Certificates to the
Exchange Agent, (ii) be in a form and contain any other provisions as NFB
may reasonably determine and (iii) include instructions for use in
effecting the surrender of the JSB Certificates in exchange for the Merger
Consideration. Upon the proper surrender of the JSB Certificates to the
Exchange Agent, together with a properly completed and duly executed Letter
of Transmittal, the holder of such JSB Certificates shall be entitled to
receive in exchange therefor (m) a certificate representing that number of
whole shares of NFB Common Stock that such holder has the right to receive
pursuant to Section 1.2 and (n) a check in the amount equal to the cash in
lieu of fractional shares, if any, that such holder has the right to
receive pursuant to Section 1.2 and any dividends or other distributions to
which such holder is entitled pursuant to this Section 1.3. JSB
Certificates so surrendered shall forthwith be canceled. As soon as
practicable, but no later than 10 business days following receipt of the
properly completed Letter of Transmittal and any necessary accompanying
documentation, the Exchange Agent shall distribute NFB Common Stock and
cash as provided herein. The Exchange Agent shall not be entitled to vote
or exercise any rights of ownership with respect to the shares of NFB
Common Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or distributed
with respect to such shares for the account of the persons entitled
thereto. If there is a transfer of ownership of any shares of JSB Common
Stock not registered in the transfer records of JSB, the Merger
Consideration shall be issued to the transferee thereof if the JSB
Certificates representing such JSB Common Stock are presented to the
Exchange Agent, accompanied by all documents required, in the reasonable
judgment of NFB and the Exchange Agent, (x) to evidence and effect such
transfer and (y) to evidence that any applicable stock transfer taxes have
been paid.
(e) No dividends or other distributions declared or made
after the Effective Time with respect to NFB Common Stock shall be remitted
to any person entitled to receive shares of NFB Common Stock hereunder
until such person surrenders his or her JSB Certificates in accordance with
this Section 1.3. Upon the surrender of such person's JSB Certificates,
such person shall be entitled to receive any dividends or other
distributions, without interest thereon, which theretofore had become
payable with respect to shares of NFB Common Stock represented by such
person's JSB Certificates.
(f) From and after the Effective Time there shall be no
transfers on the stock transfer records of JSB of any shares of JSB Common
Stock. If, after the Effective Time, JSB Certificates are presented to NFB,
they shall be canceled and exchanged for the Merger Consideration
deliverable in respect thereof pursuant to this Agreement in accordance
with the procedures set forth in this Section 1.3.
(g) Any portion of the aggregate amount of cash to be
paid in lieu of fractional shares pursuant to Section 1.2, any dividends or
other distributions to be paid pursuant to this Section 1.3 or any proceeds
from any investments thereof that remain unclaimed by the stockholders of
JSB for six months after the Effective Time shall be repaid by the Exchange
Agent to NFB upon the written request of NFB. After such request is made,
any stockholders of JSB who have not theretofore complied with this Section
1.3 shall look only to NFB for the Merger Consideration deliverable in
respect of each share of JSB Common Stock such stockholder holds, as
determined pursuant to Section 1.2 of this Agreement, without any interest
thereon. If outstanding JSB Certificates are not surrendered prior to the
date on which such payments would otherwise escheat to or become the
property of any governmental unit or agency, the unclaimed items shall, to
the extent permitted by any abandoned property, escheat or other applicable
laws, become the property of NFB (and, to the extent not in its possession,
shall be paid over to it), free and clear of all claims or interest of any
person previously entitled to such claims. Notwithstanding the foregoing,
none of NFB, NFB Bank, the Exchange Agent or any other person shall be
liable to any former holder of JSB Common Stock for any amount delivered to
a public official pursuant to applicable abandoned property, escheat or
similar laws.
(h) NFB and the Exchange Agent shall be entitled to rely
upon JSB's stock transfer books to establish the identity of those persons
entitled to receive the Merger Consideration, which books shall be
conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any JSB Certificate, NFB and the Exchange
Agent shall be entitled to deposit any Merger Consideration represented
thereby in escrow with an independent third party and thereafter be
relieved with respect to any claims thereto.
(i) If any JSB Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such JSB Certificate to be lost, stolen or destroyed and, if
required by the Exchange Agent, the posting by such person of a bond in
such amount as the Exchange Agent may direct as indemnity against any claim
that may be made against it with respect to such JSB Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
JSB Certificate the Merger Consideration deliverable in respect thereof
pursuant to Section 1.2.
Section 1.4 Stock Options.
(a) Each option to purchase shares of JSB Common Stock
issued by JSB and outstanding at the Effective Time (a "JSB Option")
pursuant to the JSB 1990 Incentive Stock Option Plan, the JSB 1990 Stock
Option Plan for Outside Directors and the JSB 1996 Stock Option Plan
(collectively, the "JSB Option Plans") shall be converted into an option to
purchase shares of NFB Common Stock as follows:
(i) the aggregate number of shares of NFB
Common Stock issuable upon the exercise of the converted JSB Option
after the Effective Time shall be equal to the product of the Exchange
Ratio multiplied by the number of shares of JSB Common Stock issuable
upon exercise of the JSB Option immediately prior to the Effective
Time, such product to be rounded to the nearest whole share of NFB
Common Stock; and
(ii) the exercise price per share of each
converted JSB Option shall be equal to the quotient of the exercise
price of such JSB Option at the Effective Time divided by the Exchange
Ratio, such quotient to be rounded to the nearest whole cent;
provided, however, that, in the case of any JSB Option that is intended to
qualify as an incentive stock option under Section 422 of the Code, the
number of shares of NFB Common Stock issuable upon exercise of and the
exercise price per share for such converted JSB Option determined in the
manner provided above shall be further adjusted in such manner as NFB may
determine to be necessary to conform to the requirements of Section 424(b)
of the Code. Options to purchase shares of NFB Common Stock that arise from
the operation of this Section 1.4 shall be referred to as the "Converted
Options." All Converted Options shall be exercisable for the same period
and otherwise have the same terms and conditions applicable to the JSB
Options that they replace; provided, however, that such exercise period,
terms and conditions shall be further modified if and to the extent
necessary to enable the Merger to qualify for pooling-of-interests
accounting treatment. Prior to the Effective Time, NFB shall take, or cause
to be taken, all necessary action to effect the intent of the provisions
set forth in this Section 1.4.
(b) Prior to the date of the JSB stockholders meeting
contemplated by Section 4.8, JSB shall take, or cause to be taken,
appropriate action under the terms of any stock option plan, agreement or
arrangement under which JSB Options have been granted to provide for the
conversion of JSB Options outstanding at the Effective Time into Converted
Options and to effect any other modifications contemplated by Section
1.4(a).
(c) Concurrently with the reservation of shares of NFB
Common Stock to provide for the payment of the Merger Consideration, NFB
shall take all corporate action necessary to reserve for future issuance a
sufficient additional number of shares of NFB Common Stock to provide for
the satisfaction of its obligations with respect to the Converted Options.
On or before the Effective Time, NFB shall file a registration statement on
Form S-8 (or any successor or other appropriate form) and make any state
filings or obtain state exemptions with respect to the NFB Common Stock
issuable upon exercise of the Converted Options. Within 15 days after the
Effective Time, NFB shall cause to be executed and delivered to each holder
of a Converted Option an agreement, certificate or other instrument, in
such form and of such substance as NFB may reasonably determine, evidencing
such holder's rights with respect to the Converted Options. JSB shall use
its best efforts to obtain from each person holding JSB Options, within 30
days after the date of this Agreement, a waiver of such person's limited
stock appreciation rights for purposes of the Merger, in the form mutually
agreed to by the parties.
Section 1.5 Bank Merger. At the election of NFB, concurrently
with or within 60 days after the execution and delivery of this Agreement,
NFB Bank and JSB Bank shall enter into the Plan of Bank Merger, in the form
attached hereto as Exhibit A, pursuant to which the Bank Merger will be
effected. The parties hereto intend that, if the Plan of Bank Merger is
entered into, the Bank Merger shall become effective promptly following
consummation of the Merger. The Plan of Bank Merger shall provide that the
directors of NFB Bank as the surviving entity of the Bank Merger shall be
all of the directors of NFB Bank serving immediately prior to the Bank
Merger and the additional person who shall become a director of NFB Bank in
accordance with Section 4.13.
Section 1.6 Directors of NFB after Effective Time. At and after
the Effective Time, the directors of NFB shall consist of all of the
directors of NFB serving immediately prior to the Effective Time and the
additional person who shall become a director of NFB in accordance with
Section 4.13.
Section 1.7.Alternative Structure. Notwithstanding anything to the
contrary contained in this Agreement, prior to the Effective Time, NFB may
specify that the structure of the transactions contemplated hereby be
revised and the parties shall enter into such alternative transactions as
NFB may determine to effect the purposes of this Agreement; provided,
however, that such revised structure shall not adversely affect the tax
effects or economic benefits of the transactions contemplated hereby to the
holders of JSB Common Stock, and, further, such revised structure shall not
materially delay the Closing Date (as defined in Section 7.1). This
Agreement and any related documents shall be appropriately amended in order
to reflect any such revised structure.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Disclosure Letters. On or prior to the execution
and delivery of this Agreement, JSB and NFB each shall have delivered to
the other a letter (each, its "Disclosure Letter") setting forth, among
other things, facts, circumstances and events the disclosure of which is
required or appropriate in relation to any or all of their respective
representations and warranties (and making specific reference to the
Section of this Agreement to which they relate), other than Section 2.3(g)
and Section 2.4(g); provided, that (a) no such fact, circumstance or event
is required to be set forth in the 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 2.2 and (b) the mere
inclusion of a fact, circumstance or event in a Disclosure Letter shall not
be deemed an admission by a party that such item represents a material
exception or that such item is reasonably likely to result in a Material
Adverse Effect (as defined in Section 2.2(b)).
Section 2.2 Standards.
(a) No representation or warranty of JSB or NFB contained
in Sections 2.3 or 2.4, respectively, shall be deemed untrue or incorrect,
and no party hereto shall be deemed to have breached a representation or
warranty, on account of the existence of any fact, circumstance or event
unless, as a direct or indirect consequence of such fact, circumstance or
event, individually or taken together with all other facts, circumstances
or events inconsistent with any paragraph of Sections 2.3 or 2.4, as
applicable, there is reasonably likely to exist a Material Adverse Effect.
JSB's representations, warranties and covenants contained in this Agreement
shall not be deemed to be untrue or breached as a result of effects arising
solely from actions taken in compliance with a written request of NFB.
(b) As used in this Agreement, the term "Material Adverse
Effect" means either:
(i) an effect which is material and adverse to the
business, financial condition or results of operations of JSB or NFB,
as the context may dictate, and its Subsidiaries taken as a whole;
provided, however, that any such effect resulting from any (A)
changes in laws, rules or regulations or generally accepted
accounting principles or interpretations thereof that apply to both
NFB and NFB Bank and JSB and JSB Bank, as the case may be, or (B)
changes in the general level of market interest rates shall not be
considered in determining if a Material Adverse Effect has occurred;
or
(ii) the failure of (x) a representation or warranty
contained in Section 2.3(a)(i) and (iv), Section 2.3(d), Section
2.3(g)(iii), Section 2.4(a)(i) and (iv), Section 2.4(d), Section
2.4(g)(ii) or Section 2.4(l) to be true and correct or (y) a
representation or warranty contained in Section 2.3(b)(i), Section
2.3(c), clause (ii) of Section 2.3(e), the last sentence of Section
2.3(e), Section 2.3(f), Section 2.3(j), the first sentence of Section
2.3(m), Section 2.3(q), Section 2.3(u), Section 2.3(v), the first two
sentences of Section 2.3(bb), Section 2.4(b)(i), Section 2.4(c),
clause (ii) of Section 2.4(e), the last sentence of Section 2.4(e),
Section 2.4(f), Section 2.4(j), the first sentence of Section 2.4(n),
Section 2.4(q), Section 2.4(t) and the first two sentences of 2.4(w)
to be true and correct in all material respects.
(c) For purposes of this Agreement, "knowledge" shall
mean, with respect to a party hereto, actual knowledge of the members of
the Board of Directors of that party, its counsel, any officer of that
party with the title ranking not less than senior vice president and, with
respect to JSB, any Vice President of JSB whose name is listed in Section
4.13(d) hereof.
Section 2.3 Representations and Warranties of JSB. Subject to
Sections 2.1 and 2.2, JSB represents and warrants to NFB that, except as
disclosed in JSB's Disclosure Letter:
(a) Organization(i) JSB is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is duly registered as a savings and loan holding company under
the Home Owners' Loan Act of 1933, as amended ("HOLA"). JSB Bank is a
savings association duly organized, validly existing and in good standing
under the laws of the United States of America and is a wholly owned
Subsidiary (as defined below) of JSB. Each Subsidiary of JSB, other than
JSB Bank, is a corporation, limited liability company or partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of JSB and its
Subsidiaries has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
As used in this Agreement, unless the context requires otherwise, the term
"Subsidiary" when used with respect to any party means any corporation or
other organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes or which is
controlled, directly or indirectly, by such party.
(ii) JSB and each of its Subsidiaries has the requisite
corporate power and authority, and is duly qualified and is in good
standing, to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary.
(iii) JSB's Disclosure Letter sets forth all of JSB's
Subsidiaries and all entities (whether corporations, partnerships or
similar organizations), including the corresponding percentage ownership,
in which JSB owns, directly or indirectly, 5% or more of the ownership
interests as of the date of this Agreement and indicates for each of JSB's
Subsidiaries, as of such date, its jurisdiction of organization and the
jurisdiction(s) wherein it is qualified to do business. All such
Subsidiaries and ownership interests are in compliance with all applicable
laws, rules and regulations relating to direct investments in equity
ownership interests. JSB owns, either directly or indirectly, all of the
outstanding capital stock of each of its Subsidiaries. No Subsidiary of JSB
other than JSB Bank is an "insured depository institution" as defined in
the Federal Deposit Insurance Act, as amended ("FDIA"), and the applicable
regulations thereunder. All of the shares of capital stock of each of the
Subsidiaries of JSB are duly authorized and validly issued, fully paid and
nonassessable and not subject to any preemptive rights and are owned by JSB
or a Subsidiary of JSB free and clear of any claims, liens, encumbrances or
restrictions (other than those imposed by applicable federal and state
securities laws), and there are no agreements or understandings with
respect to the voting or disposition of any such shares.
(iv) The deposits of JSB Bank are insured by the Bank
Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation
("FDIC") to the extent provided in the FDIA. JSB Bank is a member
of the Federal Home Loan Bank of New York.
(b) Capital Structure.(i) The authorized capital stock of
JSB consists of 65,000,000 shares of JSB Common Stock and 15,000,000 shares
of preferred stock, par value $.01 per share ("JSB Preferred Stock"). As of
the date of this Agreement: (A) 9,286,897 shares of JSB Common Stock were
issued and outstanding, (B) no shares of JSB Preferred Stock were issued
and outstanding, (C) no shares of JSB Common Stock were reserved for
issuance, except that 952,676 shares of JSB Common Stock were reserved for
issuance pursuant to the JSB Option Plans, which includes 810,676 shares
reserved for issuance upon the exercise of options that have already been
granted under the JSB Option Plans, plus 142,000 shares reserved for
issuance upon the exercise of options that will be automatically granted
pursuant to the terms of the JSB 1996 Option Plan as a result of the
execution of this Agreement, (D) no shares of JSB Preferred Stock were
reserved for issuance and (E) 6,713,103 shares of JSB Common Stock were
held by JSB in its treasury or by its Subsidiaries. The authorized capital
stock of JSB Bank consists of 40,000,000 shares of common stock, par value
$1.00 per share, and 20,000,000 shares of preferred stock, par value $1.00
per share. As of the date of this Agreement, 1,000 shares of such common
stock were outstanding, no shares of such preferred stock were outstanding
and all outstanding shares of such common stock were, and as of the
Effective Time will be, owned by JSB. All outstanding shares of capital
stock of JSB and JSB Bank are duly authorized and validly issued, fully
paid and nonassessable and not subject to any preemptive rights and, with
respect to shares held by JSB in its treasury or by its Subsidiaries, are
free and clear of all claims, liens, encumbrances or restrictions (other
than those imposed by applicable federal or state securities laws) and
there are no agreements or understandings with respect to the voting or
disposition of any such shares. JSB's Disclosure Letter sets forth a
complete and accurate list of all outstanding options to purchase JSB
Common Stock that have been granted pursuant to the JSB Option Plans,
including the dates of grant, exercise prices, dates of vesting, dates of
termination and shares subject to each grant, and all options to purchase
JSB Common Stock that will be automatically granted as a result of the
execution of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which stockholders may vote
("Voting Debt") of JSB are issued or outstanding.
(iii) As of the date of this Agreement, except for this
Agreement, the JSB Option Agreement, the JSB Option Plans and as set forth
in JSB's Disclosure Letter, neither JSB nor any of its Subsidiaries has or
is bound by any outstanding options, warrants, calls, rights, convertible
securities, commitments or agreements of any character obligating JSB or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional shares of capital stock of JSB or any of
its Subsidiaries or obligating JSB or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, convertible
security, commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of JSB or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of JSB
or any of its Subsidiaries.
(c) Authority. Each of JSB and JSB Bank has the requisite
corporate power and authority to enter into this Agreement and the Plan of
Bank Merger, respectively, and, subject to approval of this Agreement by
the requisite vote of JSB's stockholders and receipt of all required
regulatory or governmental approvals, as contemplated by Section 5.1(b) of
this Agreement, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, and, subject to the approval of
this Agreement by JSB's stockholders, the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
actions on the part of JSB and JSB Bank. This Agreement has been duly
executed and delivered by JSB and constitutes a valid and binding
obligation of JSB, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a court of
equity.
(d) Stockholder Approval; Fairness Opinion. The
affirmative vote of the holders of a majority of the outstanding shares of
JSB Common Stock entitled to vote on this Agreement is the only vote of the
stockholders of JSB required for approval of this Agreement by JSB and the
consummation by JSB of the Merger and the related transactions contemplated
hereby. JSB has received the written opinion of Northeast Capital &
Advisory, Inc. to the effect that, as of the date hereof, the Exchange
Ratio is fair, from a financial point of view, to JSB's stockholders.
(e) No Violations. The execution, delivery and
performance of this Agreement by JSB do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) assuming
receipt of all Requisite Regulatory Approvals (as defined below) and
requisite stockholder approvals, 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
JSB or any of its Subsidiaries, or to which JSB or any of its Subsidiaries
(or any of their respective properties) is subject, (ii) a breach or
violation of, or a default under, the certificate of incorporation or
bylaws of JSB or the similar organizational documents of any of its
Subsidiaries or (iii) a breach or violation of, or a default under (or an
event which, with due notice or lapse of time or both, would constitute a
default under), or result in the termination of, accelerate the performance
required by, or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the properties or assets
of JSB or any of its Subsidiaries, under, any of the terms, conditions or
provisions of any note, bond, indenture, deed of trust, loan agreement or
other agreement, instrument or obligation to which JSB or any of its
Subsidiaries is a party, or to which any of their respective properties or
assets may be subject; and the consummation of the transactions (including
the Bank Merger) contemplated hereby (exclusive of the effect of any
changes effected pursuant to Section 1.7) will not require any approval,
consent or waiver under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the approval, consent or waiver of
any other party to any such agreement, indenture or instrument, other than
(x) the approval of the holders of a majority of the outstanding shares of
JSB Common Stock and the approval of JSB as the sole stockholder of JSB
Bank and (y) the provision of notice to or the approval of, if required,
the Office of Thrift Supervision ("OTS") under HOLA, the approval, if
required, of the Federal Deposit Insurance Corporation under Section 18(c)
of the FDIA, the approval of the Board of Governors of the Federal Reserve
System ("FRB") under the Bank Holding Company Act of 1956, as amended, and
the approval of the New York State Banking Department ("NYSBD") under the
Banking Law of the State of New York (collectively, the "Requisite
Regulatory Approvals"), and (z) such approvals, consents or waivers as are
required under the federal and state securities or "blue sky" laws in
connection with the transactions contemplated by this Agreement. As of the
date hereof, the executive officers of JSB know of no reason pertaining to
JSB why any of the approvals referred to in this Section 2.3(e) should not
be obtained.
(f) Reports. (i) As of their respective dates, none of
the reports or other statements filed by JSB or JSB Bank on or subsequent
to December 31, 1997 with the Securities and Exchange Commission ("SEC")
(collectively, "JSB's Reports"), contained, or will contain, any untrue
statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Each of the financial statements of JSB included in JSB's
Reports complied as to form, as of their respective dates of filing with
the SEC, in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect
thereto and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved ("GAAP") (except as may be indicated in the notes thereto or, in
the case of unaudited financial statements, as permitted by Form 10-Q of
the SEC). Each of the consolidated statements of condition, consolidated
statements of operations, consolidated statements of cash flows and
consolidated statements of changes in stockholders' equity contained or
incorporated by reference in JSB's Reports (including in each case any
related notes and schedules) fairly presented, or will fairly present, as
the case may be, the financial position, results of operations, cash flows
and stockholders' equity, as the case may be, of the entity or entities to
which it relates for the periods set forth therein (subject, in the case of
unaudited interim statements, to normal year-end audit adjustments that are
not material in amount or effect), in each case in accordance with GAAP,
except as may be noted therein.
(ii) JSB and its Subsidiaries have each timely filed all
material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file since December 31, 1996 with (A) the OTS, (B) the FDIC,
(C) the SEC, (D) the NYSE and (E) any other self-regulatory organization
("SRO"), and have paid all fees and assessments due and payable in
connection therewith.
(g) Absence of Certain Changes or Events. Except as
disclosed in JSB's Reports filed on or prior to the date of this Agreement,
since December 31, 1998, (i) JSB and its Subsidiaries have not incurred any
liability, except in the ordinary course of their businesses consistent
with past practice, (ii) JSB and its Subsidiaries have conducted their
respective businesses only in the ordinary and usual course of such
businesses and (iii) there has not been any Material Adverse Effect with
respect to JSB.
(h) Absence of Claims. Except as disclosed in JSB's
Disclosure Letter, no litigation, proceeding, controversy, claim or action
before any court or any federal, state, local or foreign governmental or
regulatory body (each, a "Governmental Entity") is pending against JSB or
any of its Subsidiaries and, to the best of JSB's knowledge, no such
litigation, proceeding, controversy, claim or action has been threatened.
(i) Absence of Regulatory Actions. Neither JSB nor any of
its Subsidiaries is a party to any cease and desist order, written
agreement or memorandum of understanding with, or any commitment letter or
similar written undertaking to, or is subject to any action, proceeding,
order or directive by, or is a recipient of any extraordinary supervisory
letter from any federal or state governmental authority charged with the
supervision or regulation of depository institutions or depository
institution holding companies or engaged in the insurance of bank and/or
savings and loan deposits (each, a "Bank Regulator"), or has adopted any
board resolutions at the request of any Bank Regulator, nor has it been
advised by any Bank Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting)
any such action, proceeding, order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolutions or similar written undertaking.
(j) Taxes. All federal, state, local and foreign tax
returns required to be filed by or on behalf of JSB or any of its
Subsidiaries have been timely filed or requests for extensions have been
timely filed and any such extension shall have been granted and not have
expired, and all such filed returns are complete and accurate in all
material respects. All taxes shown on such returns, all taxes required to
be shown on returns for which extensions have been granted and all other
taxes required to be paid by JSB or any of its Subsidiaries have been paid
in full or adequate provision has been made for any such taxes on JSB's
balance sheet (in accordance with GAAP). For purposes of this Section
2.3(j), the term "taxes" shall include all federal, state, local or foreign
taxes, charges or other assessments, including, without limitation, income,
franchise, gross receipts, real and personal property, real property
transfer and gains, wage and employment taxes, and the term "tax return"
shall mean any return or other report (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
filed with respect to any tax. Except as disclosed in JSB's Disclosure
Letter, as of the date of this Agreement, there is no audit examination,
deficiency assessment, tax investigation or refund litigation with respect
to any taxes of JSB or any of its Subsidiaries, and no claim has been made
by any authority in a jurisdiction where JSB or any of its Subsidiaries do
not file tax returns that JSB or any such Subsidiary is subject to taxation
in that jurisdiction. All taxes, interest, additions and penalties due with
respect to completed and settled examinations or concluded litigation
relating to JSB or any of its Subsidiaries have been paid in full or
adequate provision has been made for any such taxes on JSB's balance sheet
(in accordance with GAAP). JSB and its Subsidiaries have not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect. JSB and
each of its Subsidiaries has withheld and paid all taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third
party, and JSB and each of its Subsidiaries has timely complied with all
applicable information reporting requirements under Part III, Subchapter A
of Chapter 61 of the Code and similar applicable state and local
information reporting requirements. Neither JSB nor any of its Subsidiaries
(i) has made an election under Section 341(f) of the Code, (ii) has issued
or assumed any obligation under Section 279 of the Code, any high yield
discount obligation as described in Section 163(i) of the Code or any
registration-required obligation within the meaning of Section 163(f)(2) of
the Code that is not in registered form or (iii) is or has been a United
States real property holding corporation within the meaning of Section
897(c)(2) of the Code.
(k) Agreements. (i) Except for the JSB Option Agreement
and arrangements made in the ordinary course of business, and except as
disclosed in JSB's Disclosure Letter, JSB and its Subsidiaries are not
bound by any material contract (as defined in Item 601(b)(10) of Regulation
S-K) to be performed after the date hereof that has not been filed with or
incorporated by reference in JSB's Reports. Except as disclosed in JSB's
Reports filed prior to the date of this Agreement or as disclosed in JSB's
Disclosure Letter, neither JSB nor any of its Subsidiaries is a party to an
oral or written (A) consulting agreement (other than data processing,
software programming and licensing contracts entered into in the ordinary
course of business) not terminable on 60 days' or less notice, (B)
agreement with any executive officer or other key employee of JSB or any of
its Subsidiaries the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction
involving JSB or any of its Subsidiaries of the nature contemplated by this
Agreement or the JSB Option Agreement, (C) agreement with respect to any
employee or director of JSB or any of its Subsidiaries providing any term
of employment or compensation guarantee extending for a period longer than
60 days or for the payment of in excess of $50,000 per annum, (D) agreement
or plan, including any stock option plan, phantom stock or stock
appreciation rights plan, restricted stock plan or stock purchase plan, any
of the benefits of which will be increased, or the vesting or payment of
the benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the JSB Option Agreement or
the value of any of the benefits of which will be calculated on the basis
of any of the transactions contemplated by this Agreement or the JSB Option
Agreement or (E) agreement containing covenants that limit the ability of
JSB or any of its Subsidiaries to compete in any line of business or with
any person, or that involve any restriction on the geographic area in
which, or method by which, JSB (including any successor thereof) or any of
its Subsidiaries may carry on its business (other than as may be required
by law or any regulatory agency).
(ii) Neither JSB nor any of its Subsidiaries is in
default under or in violation of any provision of any note, bond,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement to which it is a party or by which it is bound or to which any of
its respective properties or assets is subject.
(iii) JSB and each of its Subsidiaries owns or possesses
valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, servicemarks and
trademarks used in its businesses, and neither JSB nor any of its
Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others. Each of JSB and its Subsidiaries has performed
all the obligations required to be performed by it and are not in default
under any contact, agreement, arrangement or commitment relating to any of
the foregoing.
(l) Labor Matters. Neither JSB nor any of its
Subsidiaries is or has ever been a party to, or is or has ever been bound
by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with respect to its
employees, nor is JSB or any of its Subsidiaries the subject of any
proceeding asserting that it has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike, other labor dispute or
organizational effort involving JSB or any of its Subsidiaries pending or,
to the best of JSB's knowledge, threatened. JSB and its Subsidiaries are in
compliance with applicable laws regarding employment of employees and
retention of independent contractors and are in compliance with applicable
employment tax laws.
(m) Employee Benefit Plans. JSB's Disclosure Letter
contains a complete and accurate list of all pension, retirement, stock
option, stock purchase, stock ownership, savings, stock appreciation right,
profit sharing, deferred compensation, consulting, bonus, group insurance,
severance and other benefit plans, contracts, agreements and arrangements,
including, but not limited to, "employee benefit plans," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), incentive and welfare policies, contracts, plans and
arrangements and all trust agreements related thereto with respect to any
present or former directors, officers or other employees of JSB or any of
its Subsidiaries (hereinafter collectively referred to as the "JSB Employee
Plans"). Except as disclosed in JSB's Disclosure Letter:
(i) all of the JSB Employee Plans comply in all material
respects with all applicable requirements of ERISA, the Code and
other applicable laws; there has occurred no "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
which is likely to result in the imposition of any penalties or taxes
under Section 502(i) of ERISA or Section 4975 of the Code upon JSB or
any of its Subsidiaries.
(ii) no liability to the Pension Benefit Guaranty
Corporation ("PBGC") has been or is expected by JSB or any of its
Subsidiaries to be incurred with respect to any JSB Employee Plan
which is subject to Title IV of ERISA ("JSB Pension Plan"), or with
respect to any "single-employer plan" (as defined in Section 4001(a)
of ERISA) currently or formerly maintained by JSB or any entity which
is considered one employer with JSB under Section 4001(b)(1) of ERISA
or Section 414 of the Code (a "JSB ERISA Affiliate");
(iii) no JSB Pension Plan had an "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, as of the last day of the end of the most recent plan year
ending prior to the date hereof; the fair market value of the assets
of each JSB Pension Plan exceeds the present value of the "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
JSB Pension Plan as of the end of the most recent plan year with
respect to the respective JSB Pension Plan ending prior to the date
hereof, calculated on the basis of the actuarial assumptions used in
the most recent actuarial valuation for such JSB Pension Plan as of
the date hereof; and no notice of a "reportable event" (as defined in
Section 4043 of ERISA) for which the 30-day reporting requirement has
not been waived has been required to be filed for any JSB Pension
Plan within the 12-month period ending on the date hereof;
(iv) neither JSB nor any of its Subsidiaries has
provided, or is required to provide, security to any JSB Pension Plan
or to any single-employer plan of a JSB ERISA Affiliate pursuant to
Section 401(a)(29) of the Code;
(v) neither JSB, its Subsidiaries, nor any JSB ERISA
Affiliate has contributed to any "multiemployer plan," as defined in
Section 3(37) of ERISA, on or after September 26, 1980;
(vi) each JSB Employee Plan that is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) and which is
intended to be qualified under Section 401(a) of the Code ("JSB
Qualified Plan") has received a favorable determination letter from
the Internal Revenue Service ("IRS"), and JSB and its Subsidiaries
are not aware of any circumstances likely to result in revocation of
any such favorable determination letter;
(vii) there is no pending or, to JSB's knowledge,
threatened litigation, administrative action or proceeding relating
to any JSB Employee Plan;
(viii)there has been no announcement or commitment by JSB
or any of its Subsidiaries to create an additional JSB Employee Plan,
or to amend any JSB Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such JSB
Employee Plan; and, except as specifically identified in JSB's
Disclosure Letter, JSB and its Subsidiaries do not have any
obligations for post-retirement or post-employment benefits under any
JSB Employee Plan that cannot be amended or terminated upon 60 days'
notice or less without incurring any liability thereunder, except for
coverage required by Part 6 of Title I of ERISA or Section 4980B of
the Code, or similar state laws, the cost of which is borne by the
insured individuals;
(ix) neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
result in any payment or series of payments by JSB or any of its
Subsidiaries to any person which is an "excess parachute payment" (as
defined in Section 280G of the Code), increase or secure (by way of a
trust or other vehicle) any benefits payable under any JSB Employee
Plan or accelerate the time of payment or vesting of any such
benefit; and
(x) with respect to each JSB Employee Plan, JSB has made
available to NFB a true and correct copy of (A) the annual report on
the applicable form of the Form 5500 series filed with the IRS for
the most recent three plan years, if required to be filed, (B) such
JSB Employee Plan, including amendments thereto, (C) each trust
agreement, insurance contract or other funding arrangement relating
to such JSB Employee Plan, including amendments thereto, (D) the most
recent summary plan description and summary of material modifications
thereto for such JSB Employee Plan, if the JSB Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report or
valuation if such JSB Employee Plan is a JSB Pension Plan and any
subsequent changes to the actuarial assumptions contained therein and
(F) the most recent determination letter issued by the IRS if such
JSB Employee Plan is a Qualified Plan.
(n) Termination Benefits. JSB's Disclosure Letter
contains a schedule identifying the types of benefits and other payments
due under the Specified Compensation and Benefit Programs (as defined
herein) for each Named Individual (as defined herein) individually and for
all persons other than the Named Individuals as a group. For purposes
hereof, "Specified Compensation and Benefit Programs" shall include all
employment agreements, change in control agreements, severance or special
termination agreements, severance plans, pension, retirement or deferred
compensation plans for non-employee directors, supplemental executive
retirement programs, tax indemnification agreements, outplacement programs,
cash bonus programs, deferred compensation plans, all performance and/or
bonus plans, stock appreciation right, phantom stock or stock unit plan,
and health, life, disability and other insurance or welfare plans, but
shall not include any tax-qualified pension, profit-sharing or employee
stock ownership plan or any JSB Option Plans. For purposes hereof, "Named
Individual" shall include each non-employee director of JSB or any of its
Subsidiaries and each executive officer of JSB.
(o) Title to Assets. JSB and each of its Subsidiaries has
good and marketable title to its properties and assets (including any
intellectual property asset such as any trademark, servicemark, trade name
or copyright) and property acquired in a judicial foreclosure proceeding or
by way of a deed in lieu of foreclosure or similar transfer, other than
property as to which it is lessee, in which case the related lease is valid
and in full force and effect. Each lease pursuant to which JSB or any of
its Subsidiaries is lessor is valid and in full force and effect and no
lessee under any such lease is in material default or violation of any
provisions of any such lease. All material tangible properties of JSB and
each of its Subsidiaries are in a good state of maintenance and repair,
conform with all applicable ordinances, regulations and zoning laws and are
considered by JSB to be adequate for the current business of JSB and its
Subsidiaries.
(p) Compliance with Laws. JSB and each of its
Subsidiaries has all permits, licenses, certificates of authority, orders
and approvals of, and has made all filings, applications and registrations
with, all Governmental Entities that are required in order to permit it to
carry on its business as it is presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force
and effect, and, to the best knowledge of JSB, no suspension or
cancellation of any of them is threatened. Since the date of its
incorporation, the corporate affairs of JSB have not been conducted in
violation of any law, ordinance, regulation, order, writ, rule, decree or
approval of any Governmental Entity. The businesses of JSB and its
Subsidiaries are not being conducted in violation of any law, ordinance,
regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity.
(q) Fees. Other than financial advisory services
performed for JSB by Northeast Capital & Advisory, Inc. pursuant to an
agreement dated May 27, 1999, a true and complete copy of which has been
previously delivered to NFB, neither JSB nor any of its Subsidiaries, nor
any of their respective officers, directors, employees or agents, has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and no broker
or finder has acted directly or indirectly for JSB or any of its
Subsidiaries in connection with this Agreement or the transactions
contemplated hereby.
(r) Environmental Matters (i) With respect to JSB and each
of its Subsidiaries, except as disclosed in JSB's Disclosure Letter:
(A) each of JSB and its Subsidiaries and,
to JSB's knowledge, the Participation Facilities (as defined herein)
and the Loan Properties (as defined herein) are, and have been, in
substantial compliance with, and are not liable under, all
Environmental Laws (as defined herein);
(B) there is no suit, claim, action,
demand, executive or administrative order, directive, investigation or
proceeding pending or, to the best of JSB's knowledge, threatened,
before any court, Governmental Entity or board or other forum against
it or any of its Subsidiaries or any Participation Facility (x) for
alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the presence
of or release into the environment of any Hazardous Material (as
defined herein), whether or not occurring at or on a site owned,
leased or operated by it or any of its Subsidiaries or any
Participation Facility;
(C) to the best of JSB's knowledge, there
is no suit, claim, action, demand, executive or administrative order,
directive, investigation or proceeding pending or threatened before
any court, Governmental Entity or board or other forum relating to or
against any Loan Property (or JSB or any of its Subsidiaries in
respect of such Loan Property) (x) relating to alleged noncompliance
(including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into
the environment of any Hazardous Material, whether or not occurring at
or on a site owned, leased or operated by a Loan Property; and
(D) to the best of JSB's knowledge,
during the period of (l) JSB's or any of its Subsidiaries' ownership
or operation of any of their respective current properties or (m)
JSB's or any of its Subsidiaries' participation in the management of
any Participation Facility, there has been no contamination by or
release of Hazardous Materials in, on, under or affecting such
properties.
(ii) The following definitions apply for purposes of this
Section 2.3(r) and Section 2.4(r): (w) "Loan Property" means any property
in which the applicable party (or any of its Subsidiaries) holds a security
interest, and, where required by the context, includes the owner or
operator of such property, but only with respect to such property; (x)
"Participation Facility" means any facility in which the applicable party
(or any of its Subsidiaries) participates in the management (including all
property held as trustee or in any other fiduciary capacity) and, where
required by the context, includes the owner or operator of such property,
but only with respect to such property; (y) "Environmental Law" means (i)
any federal, state or local law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, legal doctrine,
order, directive, executive or administrative order, judgment, decree,
injunction, legal requirement or agreement with any Governmental Entity
relating to (A) the protection, preservation or restoration of the
environment (which includes, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, structures, soil, surface land,
subsurface land, plant and animal life or any other natural resource), or
to human health or safety as it relates to Hazardous Materials, or (B) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of, Hazardous Materials, in each case as amended and as now in
effect. The term Environmental Law includes all federal, state and local
laws, rules, regulations or requirements relating to the protection of the
environment or health and safety, including, without limitation, (i) the
Federal Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the
Federal 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, but not limited to, the Hazardous and Solid Waste
Amendments thereto and Subtitle I relating to underground storage tanks),
the Federal Solid Waste Disposal and the Federal Toxic Substances Control
Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Federal
Occupational Safety and Health Act of 1970 as it relates to Hazardous
Materials, the Federal Hazardous Substances Transportation Act, the
Emergency Planning and Community Right-To-Know Act, the Safe Drinking Water
Act, the Endangered Species Act, the National Environmental Policy Act, the
Rivers and Harbors Appropriation Act or any so-called "Superfund" or
"Superlien" law, each as amended and as now or hereafter 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; and (z) "Hazardous Material" means any
substance (whether solid, liquid or gas) which is or could be detrimental
to human health or safety or to the environment, currently or hereafter
listed, defined, designated or classified as hazardous, toxic, radioactive
or dangerous, or otherwise regulated, under any Environmental Law, whether
by type or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without limitation,
any toxic waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste, industrial substance, oil or
petroleum, or any derivative or by-product thereof, radon, radioactive
material, asbestos, asbestos-containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
(s) Loan Portfolio; Allowance; Asset Quality. (i) With
respect to each loan owned by JSB or its Subsidiaries in whole or in part
(each, a "Loan"), to the best knowledge of JSB:
(A) the note and the related security
documents are each legal, valid and binding obligations of the maker
or obligor thereof, enforceable against such maker or obligor in
accordance with their terms;
(B) neither JSB nor any of its
Subsidiaries, nor any prior holder of a Loan, has modified the note or
any of the related security documents in any material respect or
satisfied, canceled or subordinated the note or any of the related
security documents except as otherwise disclosed by documents in the
applicable Loan file;
(C) JSB or a Subsidiary is the sole
holder of legal and beneficial title to each Loan (or JSB's applicable
participation interest, as applicable), except as otherwise referenced
on the books and records of JSB;
(D) the note and the related security
documents, copies of which are included in the Loan files, are true
and correct copies of the documents they purport to be and have not
been suspended, amended, modified, canceled or otherwise changed,
except as otherwise disclosed by documents in the applicable Loan
file;
(E) there is no pending or threatened
condemnation proceeding or similar proceeding affecting the property
that serves as security for a Loan, except as otherwise referenced on
the books and records of JSB;
(F) there is no litigation or proceeding
pending or threatened relating to the property that serves as security
for a Loan that would have a material adverse effect upon the related
Loan; and
(G) with respect to a Loan held in the
form of a participation, the participation documentation is legal,
valid, binding and enforceable.
(ii) The allowance for possible losses reflected in JSB's
audited statement of condition at December 31, 1998 was, and the allowance
for possible losses shown on the balance sheets in JSB's Reports for
periods ending after December 31, 1998 will be, adequate, as of the dates
thereof, under GAAP.
(iii) JSB's Disclosure Letter sets forth by category the
amounts of all loans, leases, advances, credit enhancements, other
extensions of credit, commitments and interest-bearing assets of JSB and
its Subsidiaries that have been classified by any bank examiner (whether
regulatory or internal) as "Special Mention," "Substandard," "Doubtful,"
"Loss" or words of similar import, and JSB and its Subsidiaries shall
promptly after the end of any month inform NFB of any such classification
arrived at any time after the date hereof. The other real estate owned
("OREO") included in any non-performing assets of JSB or any of its
Subsidiaries is carried net of reserves at the lower of cost or fair value,
less estimated selling costs, based on current management appraisals or
evaluations to the extent material; provided, however, that "current" shall
mean within the past 12 months. JSB's Disclosure Letter sets forth a list
of the unsold co-operative shares owned by JSB or its Subsidiaries.
(t) Deposits. None of the deposits of JSB or any of its
Subsidiaries is a "brokered" deposit.
(u) Accounting Matters. Except as disclosed in JSB's
Disclosure Letter, neither JSB nor any of its Subsidiaries or, to the best
of its knowledge, any of its other affiliates has, through the date hereof,
taken or agreed to take any action that would prevent NFB from accounting
for the business combination to be effected by the Merger as a
pooling-of-interests, and JSB has no knowledge of any fact or circumstance
that would prevent such accounting treatment.
(v) Antitakeover Provisions Inapplicable. JSB and its
Subsidiaries have taken all actions required to exempt JSB, the Agreement,
the Plan of Bank Merger, the Merger, the Bank Merger and the JSB Option
Agreement from any provisions of an antitakeover nature in their
organization certificates and bylaws, including Article Eighth of JSB's
certificate of incorporation, and the provisions of any federal or state
"antitakeover," "fair price," "moratorium," "control share acquisition" or
similar laws or regulations.
(w) Material Interests of Certain Persons. Except as
disclosed in JSB's Proxy Statement for its 1999 Annual Meeting of
Stockholders, no officer or director of JSB, or any "associate" (as such
term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) of any such officer or director, has any material
interest in any material contract or property (real or personal), tangible
or intangible, used in or pertaining to the business of JSB or any of its
Subsidiaries. No such interest has been created or modified since the date
of the last regulatory examination of JSB or its Subsidiaries.
(x) Insurance. JSB and its Subsidiaries are presently
insured, and since December 31, 1996, have been insured, for reasonable
amounts with financially sound and reputable insurance companies, against
such risks as companies engaged in a similar business would, in accordance
with good business practice, customarily be insured. All of the insurance
policies and bonds maintained by JSB and its Subsidiaries are in full force
and effect, JSB and its Subsidiaries are not in default thereunder and all
material claims thereunder have been filed in due and timely fashion.
(y) Investment Securities; Borrowings. (i) Except for
investments in Federal Home Loan Bank ("FHLB") stock and pledges to secure
FHLB borrowings and reverse repurchase agreements entered into in
arms-length transactions pursuant to normal commercial terms and conditions
and entered into in the ordinary course of business and restrictions that
exist for securities to be classified as "held to maturity," none of the
investments reflected in the consolidated balance sheet of JSB included in
JSB's Report on Form 10-K for the year ended December 31, 1998, and none of
the investment securities held by it or any of its Subsidiaries since
December 31, 1998, is subject to any restriction (contractual or statutory)
that would materially impair the ability of the entity holding such
investment freely to dispose of such investment at any time.
(ii) Neither JSB nor any Subsidiary is a party to or has
agreed to enter into an exchange-traded or over-the-counter equity,
interest rate, foreign exchange or other swap, forward, future, option,
cap, floor or collar or any other contract that is not included on the
consolidated statements of condition and is a derivative contract
(including various combinations thereof) (each, a "Derivatives Contract")
or owns securities that (A) are referred to generically as "structured
notes," "high risk mortgage derivatives," "capped floating rate notes" or
"capped floating rate mortgage derivatives" or (B) are likely to have
changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes, except for those Derivatives Contracts and other
instruments legally purchased or entered into in the ordinary course of
business, consistent with safe and sound banking practices and regulatory
guidance, and listed (as of the date hereof) in JSB's Disclosure Letter or
disclosed in JSB's Reports filed on or prior to the date hereof.
(iii) Set forth in JSB's Disclosure Letter is a true and
complete list of JSB's borrowed funds (excluding deposit accounts) as of
the date hereof.
(z) Indemnification. Except as provided in JSB's
Disclosure Letter, JSB's Employment Agreements or the organization
certificate or bylaws of JSB and its Subsidiaries, neither JSB nor any
Subsidiary is a party to any indemnification agreement with any of its
present or future directors, officers, employees, agents or other persons
who serve or served in any other capacity with any other enterprise at the
request of JSB (a "Covered Person"), and, except as disclosed in JSB's
Disclosure Letter, to the best knowledge of JSB, there are no claims for
which any Covered Person would be entitled to indemnification under the
organization certificate or bylaws of JSB or any of its Subsidiaries, under
any applicable law or regulation or under any indemnification agreement.
(aa) Books and Records. The books and records of JSB and
its Subsidiaries on a consolidated basis have been, and are being,
maintained in accordance with applicable legal and accounting requirements
and reflect in all material respects the substance of events and
transactions that should be included therein.
(bb) Corporate Documents. JSB has made available to NFB
true and complete copies of its certificate of incorporation and bylaws and
of JSB Bank's organization certificate and bylaws. The minute books of JSB
and JSB Bank constitute a complete and correct record of all actions taken
by their respective boards of directors (and each committee thereof) and
their stockholders. The minute books of each of JSB's Subsidiaries
constitutes a complete and correct record of all actions taken by the
respective boards of directors (and each committee thereof) and the
stockholders of each such Subsidiary.
(cc) Liquidation Account. Neither the Merger nor the Bank
Merger will result in any payment or distribution payable out of the
liquidation account of JSB Bank established in connection with JSB Bank's
conversion from mutual to stock form.
(dd) Tax Treatment of the Merger. As of the date hereof,
JSB has no knowledge of any fact or circumstance that would prevent the
Merger or the Bank Merger, if effected, from qualifying as a reorganization
under Section 368(a) of the Code.
(ee) Beneficial Ownership of NFB Common Stock. As of the
date hereof, JSB does not beneficially own any shares of NFB Common Stock
and does not have any option, warrant or right of any kind to acquire the
beneficial ownership of any shares of NFB Common Stock.
(ff) Year 2000 Matters.(i) JSB's Disclosure Letter sets
forth a true and complete copy of JSB's plan to cause all of the
Date-Sensitive Systems owned, leased or used by JSB or any of its
Subsidiaries intended and necessary for use after December 31, 1999, or
licensed to JSB or any of its Subsidiaries for use by JSB or any of its
Subsidiaries, and all of the Date Data of JSB or any of its Subsidiaries to
be Year 2000 Compliant (the "JSB Y2K Plan"). JSB believes that the JSB Y2K
Plan can be substantially achieved on or before September 30, 1999, with
aggregate expenditures under the JSB Y2K Plan not materially in excess of
$200,000.
(ii) The following definitions apply for purposes of this
Section 2.3(ff) and Section 2.4(z): (x) "Date Data" means any data of any
type that includes date information or that is otherwise derived from,
dependent on or related to date information; (y) "Date-Sensitive System"
means, with respect to a particular entity, any software, microcode or
hardware system or component, including any electronic or electronically
controlled system or component, that processes any Date Data and that is
installed in a development or on order by such entity or any Subsidiary of
such entity for its internal use; and (z) "Year 2000 Compliance" means, (A)
with respect to Date Data, that such data are in proper format for all
dates in the twentieth and twenty-first centuries and (B) with respect to
Date-Sensitive Systems, that such system accurately processes all Date
Data, including for the twentieth and twenty-first centuries, without loss
of any functionality or performance, including calculating, comparing,
sequencing, storing and displaying such Date Data (including all leap-year
considerations), when used as a stand-alone system or in combination with
other software or hardware.
(gg) Registration Statement. The information regarding
JSB to be supplied by JSB for inclusion in (i) the Registration Statement
on Form S-4 and/or such other form(s) as may be appropriate to be filed
under the Securities Act of 1933, as amended ("Securities Act"), with the
SEC by NFB for the purpose of, among other things, registering the NFB
Common Stock to be issued to JSB's stockholders in the Merger (as amended
or supplemented from time to time, the "Registration Statement"), or (ii)
the joint proxy statement to be filed with the SEC by JSB and NFB under the
Exchange Act and distributed in connection with JSB's and NFB's respective
meeting of stockholders to vote upon this Agreement (together with the
prospectus included in the Registration Statement, the "Joint Proxy
Statement-Prospectus") will not, at the time such Registration Statement
becomes effective, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not misleading.
Section 2.4 Representations and Warranties of NFB. Subject to
Sections 2.1 and 2.2, NFB represents and warrants to JSB that, except as
disclosed in NFB's Disclosure Letter:
(a) Organization (i) NFB is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended ("BHCA"). NFB Bank is a bank duly
organized, validly existing and in good standing under the laws of the
State of New York and is a wholly owned Subsidiary of NFB. Each Subsidiary
of NFB, other than NFB Bank, is a corporation, limited liability company or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each of NFB and
its Subsidiaries has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
(ii) NFB and each of its Subsidiaries has the requisite
corporate power and authority, and is duly qualified and is in good
standing, to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary.
(iii) NFB's Disclosure Letter sets forth all of NFB's
Subsidiaries and all entities (whether corporations, partnerships or
similar organizations), including the corresponding percentage ownership,
in which NFB owns, directly or indirectly, 5% or more of the ownership
interests as of the date of this Agreement and indicates for each of NFB's
Subsidiaries, as of such date, its jurisdiction of organization and the
jurisdiction(s) wherein it is qualified to do business. All such
Subsidiaries and ownership interests are in compliance with all applicable
laws, rules and regulations relating to direct investments in equity
ownership interests. NFB owns, either directly or indirectly, all of the
outstanding capital stock of each of its Subsidiaries. No Subsidiary of NFB
other than NFB Bank and Superior Savings of New England is an "insured
depository institution" as defined in the FDIA and the applicable
regulations thereunder. All of the shares of capital stock of each of the
Subsidiaries of NFB are duly authorized and validly issued, fully paid and
nonassessable and not subject to any preemptive rights and are owned by NFB
or a Subsidiary of NFB free and clear of any claims, liens, encumbrances or
restrictions (other than those imposed by applicable federal and state
securities laws) and there are no agreements or understandings with respect
to the voting or disposition of any such shares.
(iv) The deposits of NFB Bank are insured by the BIF or
the Savings Association Insurance Fund of the FDIC to the extent provided
in the FDIA.
(b) Capital Structure.(i) The authorized capital stock of
NFB consists of 200,000,000 shares of NFB Common Stock and 10,000,000
shares of preferred stock, par value $1.00 per share ("NFB Preferred
Stock"). As of the date of this Agreement, (A) 135,767,087 shares of NFB
Common Stock were issued and outstanding, (B) no shares of NFB Preferred
Stock were issued and outstanding, (C) no shares of NFB Common Stock were
reserved for issuance, except that 2,000,000 shares of NFB Common Stock
were reserved for issuance pursuant to the NFB Dividend Reinvestment and
Stock Purchase Plan and 1,973,140 shares of NFB Common Stock were reserved
for issuance pursuant to the NFB 1985 Incentive Stock Option Plan, the NFB
1987 Long-Term Incentive Plan, the NFB 1989 Executive Management and
Compensation Plan, the NFB 1994 Key Employee Stock Plan, the NFB 1997
Non-Officer Stock Plan and the NFB 1998 Stock Compensation Plan (the "NFB
Stock Plans"), (D) no shares of NFB Preferred Stock were reserved for
issuance and (E) 9,359,435 shares of NFB Common Stock were held by NFB in
its treasury or by its Subsidiaries. The authorized capital stock of NFB
Bank consists of 5,500,000 shares of common stock, par value $1.00 per
share, and no shares of preferred stock. As of the date of this Agreement,
5,500,000 shares of such common stock were outstanding, no shares of such
preferred stock were outstanding and all outstanding shares of such common
stock were, and as of the Effective Time will be, owned by NFB. All
outstanding shares of capital stock of NFB and NFB Bank are duly authorized
and validly issued, fully paid and nonassessable and not subject to any
preemptive rights and, with respect to shares held by NFB in its treasury
or by its Subsidiaries, are free and clear of all claims, liens,
encumbrances or restrictions (other than those imposed by applicable
federal or state securities laws) and there are no agreements or
understandings with respect to the voting or disposition of any such
shares.
(ii) No Voting Debt of NFB is issued or outstanding.
(iii) As of the date of this Agreement, except for this
Agreement, the NFB Stock Plans and as set forth in NFB's Disclosure Letter,
neither NFB nor any of its Subsidiaries has or is bound by any outstanding
options, warrants, calls, rights, convertible securities, commitments or
agreements of any character obligating NFB or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, any
additional shares of capital stock of NFB or any of its Subsidiaries or
obligating NFB or any of its Subsidiaries to grant, extend or enter into
any such option, warrant, call, right, convertible security, commitment or
agreement. As of the date hereof, there are no outstanding contractual
obligations of NFB or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of NFB or any of its
Subsidiaries.
(c) Authority. Each of NFB and NFB Bank has the requisite
corporate power and authority to enter into this Agreement and the Plan of
Bank Merger, respectively and, subject to approval of this Agreement by the
requisite vote of NFB's stockholders and receipt of all required regulatory
or governmental approvals, as contemplated by Section 5.1(b) of this
Agreement, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, and, subject to the approval of
this Agreement by NFB's stockholders, the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
actions on the part of NFB and NFB Bank. This Agreement has been duly
executed and delivered by NFB and constitutes a valid and binding
obligation of NFB, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity, whether applied in a court of law or a court of
equity.
(d) Stockholder Approval; Fairness Opinion. The
affirmative vote of the holders of a majority of the outstanding shares of
NFB Common Stock entitled to vote on this Agreement is the only vote of the
stockholders of NFB required for approval of this Agreement by NFB and the
consummation by NFB of the Merger and the related transactions contemplated
hereby. NFB has received the written opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation to the effect that, as of the date hereof,
the Exchange Ratio is fair, from a financial point of view, to NFB's
stockholders.
(e) No Violations. The execution, delivery and
performance of this Agreement by NFB do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) assuming receipt
of all Requisite Regulatory Approvals and requisite stockholder approvals,
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 NFB or any of its Subsidiaries, or to
which NFB or any of its Subsidiaries (or any of their respective
properties) is subject, (ii) a breach or violation of, or a default under,
the certificate of incorporation or bylaws of NFB or the similar
organizational documents of any of its Subsidiaries or (iii) a breach or
violation of, or a default under (or an event which, with due notice or
lapse of time or both, would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the properties or assets of NFB or any of its
Subsidiaries, under, any of the terms, conditions or provisions of any
note, bond, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which NFB or any of its Subsidiaries is a
party, or to which any of their respective properties or assets may be
subject; and the consummation of the transactions (including the Bank
Merger) contemplated hereby (exclusive of the effect of any changes
effected pursuant to Section 1.7) will not require any approval, consent or
waiver under any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the approval, consent or waiver of any
other party to any such agreement, indenture or instrument, other than (x)
the approval of the holders of a majority of the outstanding shares of NFB
Common Stock, (y) the Requisite Regulatory Approvals and (z) such
approvals, consents or waivers as are required under the federal and state
securities or "blue sky" laws in connection with the transactions
contemplated by this Agreement. As of the date hereof, the executive
officers of NFB know of no reason pertaining to NFB why any of the
approvals referred to in this Section 2.4(e) should not be obtained.
(f) Reports. (i) As of their respective dates, none of
the reports or other statements filed by NFB or NFB Bank on or subsequent
to December 31, 1997 with the SEC (collectively, "NFB's Reports"),
contained, or will contain, any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Each of the
financial statements of NFB included in NFB's Reports complied as to form,
as of their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto and have been
prepared in accordance with GAAP (except as may be indicated in the notes
thereto or, in the case of unaudited financial statements, as permitted by
Form 10-Q of the SEC). Each of the consolidated statements of condition,
consolidated statements of operations, consolidated statements of cash
flows and consolidated statements of changes in stockholders' equity
contained or incorporated by reference in NFB's Reports (including in each
case any related notes and schedules) fairly presented, or will fairly
present, as the case may be, the financial position, results of operations,
cash flows and stockholders' equity, as the case may be, of the entity or
entities to which it relates for the periods set forth therein (subject, in
the case of unaudited interim statements, to normal year-end audit
adjustments that are not material in amount or effect), in each case in
accordance with GAAP, except as may be noted therein.
(ii) NFB and its Subsidiaries have each timely filed all
material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file since December 31, 1996 with (A) the NYSBD, (B) FRB (C)
the FDIC, (D) the SEC, (E) the NYSE and (F) any other SRO, and have paid
all fees and assessments due and payable in connection therewith.
(g) Absence of Certain Changes or Events. Except as
disclosed in NFB's Reports filed on or prior to the date of this Agreement,
since December 31, 1998, (i) NFB and its Subsidiaries have not incurred any
liability, except in the ordinary course of their businesses
consistent with past practice and (ii) there has not been any Material
Adverse Effect with respect to NFB.
(h) Absence of Claims. Except as disclosed in NFB's
Disclosure Letter, no litigation, proceeding, controversy, claim or action
before any court or Governmental Entity is pending against NFB or any of
its Subsidiaries, and, to the best of NFB's knowledge, no such litigation,
proceeding, controversy, claim or action has been threatened.
(i) Absence of Regulatory Actions. Neither NFB nor any of
its Subsidiaries is a party to any cease and desist order, written
agreement or memorandum of understanding with, or any commitment letter or
similar written undertaking to, or is subject to any action, proceeding,
order or directive by, or is a recipient of any extraordinary supervisory
letter from any Bank Regulator, or has adopted any board resolutions at the
request of any Bank Regulator, nor has it been advised by any Bank
Regulator that it is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such action, proceeding,
order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions or
similar written undertaking.
(j) Taxes. All federal, state, local and foreign tax
returns required to be filed by or on behalf of NFB or any of its
Subsidiaries have been timely filed or requests for extensions have been
timely filed and any such extension shall have been granted and not have
expired, and all such filed returns are complete and accurate in all
material respects. All taxes shown on such returns, all taxes required to
be shown on returns for which extensions have been granted and all other
taxes required to be paid by NFB or any of its Subsidiaries have been paid
in full or adequate provision has been made for any such taxes on NFB's
balance sheet (in accordance with GAAP). For purposes of this Section
2.4(j), the terms "taxes" and "tax return" shall have the meanings assigned
to such terms in Section 2.3(j) of this Agreement. Except as disclosed in
NFB's Disclosure Letter, as of the date of this Agreement, there is no
audit examination, deficiency assessment, tax investigation or refund
litigation with respect to any taxes of NFB or any of its Subsidiaries, and
no claim has been made by any authority in a jurisdiction where NFB or any
of its Subsidiaries do not file tax returns that NFB or any such Subsidiary
is subject to taxation in that jurisdiction. All taxes, interest, additions
and penalties due with respect to completed and settled examinations or
concluded litigation relating to NFB or any of its Subsidiaries have been
paid in full or adequate provision has been made for any such taxes on
NFB's balance sheet (in accordance with GAAP). NFB and its Subsidiaries
have not executed an extension or waiver of any statute of limitations on
the assessment or collection of any material tax due that is currently in
effect. NFB and each of its Subsidiaries has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or
other third party, and NFB and each of its Subsidiaries has timely complied
with all applicable information reporting requirements under Part III,
Subchapter A of Chapter 61 of the Code and similar applicable state and
local information reporting requirements. Neither NFB nor any of its
Subsidiaries (i) has made an election under Section 341(f) of the Code,
(ii) has issued or assumed any obligation under Section 279 of the Code,
any high yield discount obligation as described in Section 163(i) of the
Code or any registration-required obligation within the meaning of Section
163(f)(2) of the Code that is not in registered form or (iii) is or has
been a United States real property holding corporation within the meaning
of Section 897(c)(2) of the Code.
(k) Agreements. (i) Except for arrangements made in the
ordinary course of business, and except as disclosed in NFB's Disclosure
Letter, NFB and its Subsidiaries are not bound by any material contract (as
defined in Item 601(b)(10) of Regulation S-K) to be performed after the
date hereof that has not been filed with or incorporated by reference in
NFB's Reports. Except as disclosed in NFB's Reports filed prior to the date
of this Agreement or as disclosed in NFB's Disclosure Letter, neither NFB
nor any of its Subsidiaries is a party to an oral or written agreement
containing covenants that limit the ability of NFB or any of its
Subsidiaries to compete in any line of business or with any person, or that
involve any restriction on the geographic area in which, or method by
which, NFB (including any successor thereof) or any of its Subsidiaries may
carry on its business (other than as may be required by law or any
regulatory agency).
(ii) Neither NFB nor any of its Subsidiaries is in
default under or in violation of any provision of any note, bond,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement to which it is a party or by which it is bound or to which any of
its respective properties or assets is subject.
(iii) NFB and each of its Subsidiaries owns or possesses
valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, servicemarks and
trademarks used in its businesses, and neither NFB nor any of its
Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others. Each of NFB and its Subsidiaries has performed
all the obligations required to be performed by it and are not in default
under any contact, agreement, arrangement or commitment relating to any of
the foregoing.
(l) NFB Common Stock. The shares of NFB Common Stock to
be issued pursuant to this Agreement, when issued in accordance with the
terms of this Agreement, will be duly authorized and validly issued, fully
paid and nonassessable and not subject to any preemptive rights.
(m) Labor Matters. Neither NFB nor any of its Subsidiaries
is or has ever been a party to, or is or has ever been bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with respect to its
employees, nor is NFB or any of its Subsidiaries the subject of any
proceeding asserting that it has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike, other labor dispute or
organizational effort involving NFB or any of its Subsidiaries pending or,
to the best of NFB's knowledge, threatened. NFB and its Subsidiaries are in
compliance with applicable laws regarding employment of employees and
retention of independent contractors and are in compliance with applicable
employment tax laws.
(n) Employee Benefit Plans. NFB's Disclosure Letter
contains a complete and accurate list of all pension, retirement, stock
option, stock purchase, stock ownership, savings, stock appreciation right,
profit sharing, deferred compensation, consulting, bonus, group insurance,
severance and other benefit plans, contracts, agreements and arrangements,
including, but not limited to, "employee benefit plans," as defined in
Section 3(3) of ERISA, incentive and welfare policies, contracts, plans and
arrangements and all trust agreements related thereto with respect to any
present or former directors, officers or other employees of NFB or any of
its Subsidiaries (hereinafter collectively referred to as the "NFB Employee
Plans"). Except as disclosed in NFB's Disclosure Letter:
(i) all of the NFB Employee Plans comply in all material
respects with all applicable requirements of ERISA, the Code and
other applicable laws; there has occurred no "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
which is likely to result in the imposition of any penalties or taxes
under Section 502(i) of ERISA or Section 4975 of the Code upon NFB or
any of its Subsidiaries;
(ii) no liability to the PBGC has been or is expected by
NFB or any of its Subsidiaries to be incurred with respect to any NFB
Employee Plan which is subject to Title IV of ERISA ("NFB Pension
Plan"), or with respect to any "single-employer plan" (as defined in
Section 4001(a) of ERISA) currently or formerly maintained by NFB or
any entity which is considered one employer with NFB under Section
4001(b)(1) of ERISA or Section 414 of the Code (a "NFB ERISA
Affiliate");
(iii) no NFB Pension Plan had an "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, as of the last day of the end of the most recent plan year
ending prior to the date hereof; the fair market value of the assets
of each NFB Pension Plan exceeds the present value of the "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
NFB Pension Plan as of the end of the most recent plan year with
respect to the respective NFB Pension Plan ending prior to the date
hereof, calculated on the basis of the actuarial assumptions used in
the most recent actuarial valuation for such NFB Pension Plan as of
the date hereof; and no notice of a "reportable event" (as defined in
Section 4043 of ERISA) for which the 30-day reporting requirement has
not been waived has been required to be filed for any NFB Pension
Plan within the 12-month period ending on the date hereof;
(iv) neither NFB nor any of its Subsidiaries has
provided, or is required to provide, security to any NFB Pension Plan
or to any single-employer plan of a NFB ERISA Affiliate pursuant
to Section 401(a)(29) of the Code;
(v) neither NFB, its Subsidiaries, nor any NFB ERISA
Affiliate has contributed to any "multiemployer plan," as defined in
Section 3(37) of ERISA, on or after September 26, 1980;
(vi) each NFB Employee Plan that is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) and which is
intended to be qualified under Section 401(a) of the Code ("NFB
Qualified Plan") has received a favorable determination letter from
the IRS, and NFB and its Subsidiaries are not aware of any
circumstances likely to result in revocation of any such favorable
determination letter;
(vii) there is no pending or, to NFB's knowledge,
threatened litigation, administrative action or proceeding relating
to any NFB Employee Plan;
(viii)there has been no announcement or commitment by NFB
or any of its Subsidiaries to create an additional NFB Employee Plan,
or to amend any NFB Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such NFB
Employee Plan; and, except as specifically identified in NFB's
Disclosure Letter, NFB and its Subsidiaries do not have any
obligations for post-retirement or post-employment benefits under any
NFB Employee Plan that cannot be amended or terminated upon 60 days'
notice or less without incurring any liability thereunder, except for
coverage required by Part 6 of Title I of ERISA or Section 4980B of
the Code, or similar state laws, the cost of which is borne by the
insured individuals;
(ix) neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
result in any payment or series of payments by NFB or any of its
Subsidiaries to any person which is an "excess parachute payment" (as
defined in Section 280G of the Code), increase or secure (by way of a
trust or other vehicle) any benefits payable under any NFB Employee
Plan or accelerate the time of payment or vesting of any such
benefit; and
(x) with respect to each NFB Employee Plan, NFB has made
available to JSB a true and correct copy of (A) the annual report on
the applicable form of the Form 5500 series filed with the IRS for
the most recent three plan years, if required to be filed, (B) such
NFB Employee Plan, including amendments thereto, (C) each trust
agreement, insurance contract or other funding arrangement relating
to such NFB Employee Plan, including amendments thereto, (D) the most
recent summary plan description and summary of material modifications
thereto for such NFB Employee Plan, if the NFB Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report or
valuation if such NFB Employee Plan is an NFB Pension Plan and any
subsequent changes to the actuarial assumptions contained therein and
(F) the most recent determination letter issued by the IRS if such
NFB Employee Plan is a Qualified Plan.
(o) Title to Assets. NFB and each of its Subsidiaries has
good and marketable title to its properties and assets (including any
intellectual property asset such as any trademark, servicemark, trade name
or copyright) and property acquired in a judicial foreclosure proceeding or
by way of a deed in lieu of foreclosure or similar transfer, other than
property as to which it is lessee, in which case the related lease is valid
and in full force and effect. Each lease pursuant to which NFB or any of
its Subsidiaries is lessor is valid and in full force and effect and no
lessee under any such lease is in material default or violation of any
provisions of any such lease. All material tangible properties of NFB and
each of its Subsidiaries are in a good state of maintenance and repair,
conform with all applicable ordinances, regulations and zoning laws and are
considered by NFB to be adequate for the current business of NFB and its
Subsidiaries.
(p) Compliance with Laws. NFB and each of its
Subsidiaries has all permits, licenses, certificates of authority, orders
and approvals of, and has made all filings, applications and registrations
with, all Governmental Entities that are required in order to permit it to
carry on its business as it is presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force
and effect, and, to the best knowledge of NFB, no suspension or
cancellation of any of them is threatened. Since the date of its
incorporation, the corporate affairs of NFB have not been conducted in
violation of any law, ordinance, regulation, order, writ, rule, decree or
approval of any Governmental Entity. The businesses of NFB and its
Subsidiaries are not being conducted in violation of any law, ordinance,
regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity.
(q) Fees. Other than financial advisory services performed
for NFB by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation pursuant to
an agreement dated July 29, 1999, a true and complete copy of which has
been previously delivered to JSB, neither NFB nor any of its Subsidiaries,
nor any of their respective officers, directors, employees or agents, has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder's fees, and no broker
or finder has acted directly or indirectly for NFB or any of its
Subsidiaries in connection with this Agreement or the transactions
contemplated hereby.
(r) Environmental Matters. With respect to NFB and each of
its Subsidiaries, except as disclosed in NFB's Disclosure Letter:
(i) each of NFB and its Subsidiaries and, to
NFB's knowledge, the Participation Facilities and the Loan Properties
are, and have been, in substantial compliance with, and are not liable
under, all Environmental Laws;
(ii) there is no suit, claim, action, demand,
executive or administrative order, directive, investigation or
proceeding pending or, to the best of NFB's knowledge, threatened,
before any court, Governmental Entity or board or other forum against
it or any of its Subsidiaries or any Participation Facility (x) for
alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the presence
of or 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;
(iii) to the best of NFB's knowledge, there is no
suit, claim, action, demand, executive or administrative order,
directive, investigation or proceeding pending or threatened before
any court, Governmental Entity or board or other forum relating to or
against any Loan Property (or NFB or any of its Subsidiaries in
respect of such Loan Property) (x) relating to alleged noncompliance
(including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into
the environment of any Hazardous Material, whether or not occurring at
or on a site owned, leased or operated by a Loan Property; and
(iv) to the best of NFB's knowledge, during the
period of (l) NFB's or any of its Subsidiaries' ownership or operation
of any of their respective current properties or (m) NFB's or any of
its Subsidiaries' participation in the management of any Participation
Facility, there has been no contamination by or release of Hazardous
Materials in, on, under or affecting such properties.
(s) Loan Portfolio; Allowance; Asset Qua(i)y. With
respect to each Loan owned by NFB or its Subsidiaries in whole or in part,
to the best knowledge of NFB:
(A) the note and the related security
documents are each legal, valid and binding obligations of the maker
or obligor thereof, enforceable against such maker or obligor in
accordance with their terms;
(B) neither NFB nor any of its
Subsidiaries nor any prior holder of a Loan has modified the note or
any of the related security documents in any material respect or
satisfied, canceled or subordinated the note or any of the related
security documents except as otherwise disclosed by documents in the
applicable Loan file;
(C) NFB or a Subsidiary is the sole
holder of legal and beneficial title to each Loan (or NFB Bank's
applicable participation interest, as applicable); except as otherwise
referenced on the books and records of NFB;
(D) the note and the related security
documents, copies of which are included in the Loan files, are true
and correct copies of the documents they purport to be and have not
been suspended, amended, modified, canceled or otherwise changed,
except as otherwise disclosed by documents in the applicable Loan
file;
(E) there is no pending or threatened
condemnation proceeding or similar proceeding affecting the property
that serves as security for a Loan, except as otherwise referenced on
the books and records of NFB;
(F) there is no litigation or proceeding
pending or threatened, relating to the property that serves as
security for a Loan that would have a material adverse effect upon the
related Loan; and
(G) with respect to a Loan held in the
form of a participation, the participation documentation is legal,
valid, binding and enforceable.
(ii) The allowance for possible losses reflected in NFB's
audited statement of condition at December 31, 1998 was, and the allowance
for possible losses shown on the balance sheets in NFB's Reports for
periods ending after December 31, 1998 will be, adequate, as of the dates
thereof, under GAAP.
(iii) NFB's Disclosure Letter sets forth by category the
amounts of all loans, leases, advances, credit enhancements, other
extensions of credit, commitments and interest-bearing assets of NFB and
its Subsidiaries that have been classified by any bank examiner (whether
regulatory or internal) as "Special Mention," "Substandard," "Doubtful,"
"Loss" or words of similar import, and NFB and its Subsidiaries shall
promptly after the end of any month inform JSB of any such classification
arrived at any time after the date hereof. The OREO included in any
non-performing assets of NFB or any of its Subsidiaries is carried net of
reserves at the lower of cost or fair value, less estimated selling costs,
based on current independent appraisals or evaluations or current
management appraisals or evaluations; provided, however, that "current"
shall mean within the past 12 months.
(t) Accounting Matters. Except as disclosed in NFB's
Disclosure Letter, neither NFB nor any of its Subsidiaries or, to the best
of its knowledge, any of its other affiliates has, through the date hereof,
taken or agreed to take any action that would prevent NFB from accounting
for the business combination to be effected by the Merger as a
pooling-of-interests, and NFB has no knowledge of any fact or circumstance
that would prevent such accounting treatment.
(u) Insurance. NFB and its Subsidiaries are presently
insured, and since December 31, 1996, have been insured, for reasonable
amounts with financially sound and reputable insurance companies, against
such risks as companies engaged in a similar business would, in accordance
with good business practice, customarily be insured. All of the insurance
policies and bonds maintained by NFB and its Subsidiaries are in full force
and effect, NFB and its Subsidiaries are not in default thereunder and all
material claims thereunder have been filed in due and timely fashion.
(v) Investment Securities; Borrowings. (i) Except for
investments in FHLB Stock and pledges to secure FHLB borrowings and reverse
repurchase agreements entered into in arms-length transactions pursuant to
normal commercial terms and conditions and entered into in the ordinary
course of business and restrictions that exist for securities to be
classified as "held to maturity," none of the investments reflected in the
consolidated balance sheet of NFB included in NFB's Report on Form 10-K for
the year ended December 31, 1998, and none of the investment securities
held by it or any of its Subsidiaries since December 31, 1998 is subject to
any restriction (contractual or statutory) that would materially impair the
ability of the entity holding such investment freely to dispose of such
investment at any time.
(ii) Neither NFB nor any Subsidiary is a party to or has
agreed to enter into any Derivatives Contract or owns securities that (A)
are referred to generically as "structured notes," "high risk mortgage
derivatives," "capped floating rate notes" or "capped floating rate
mortgage derivatives" or (B) are likely to have changes in value as a
result of interest or exchange rate changes that significantly exceed
normal changes in value attributable to interest or exchange rate changes,
except for those Derivatives Contracts and other instruments legally
purchased or entered into in the ordinary course of business, consistent
with safe and sound banking practices and regulatory guidance, and listed
(as of the date hereof) in NFB's Disclosure Letter or disclosed in NFB's
Reports filed on or prior to the date hereof.
(iii) Set forth in NFB's Disclosure Letter is a true and
complete list of NFB's borrowed funds (excluding deposit accounts) as of
the date hereof.
(w) Corporate Documents. NFB has made available to JSB
true and complete copies of its certificate of incorporation and bylaws and
of NFB Bank's organization certificate and bylaws. The minute books of NFB
and NFB Bank constitute a complete and correct record of all actions taken
by their respective boards of directors (and each committee thereof) and
their stockholders. The minute books of each of NFB's Subsidiaries
constitutes a complete and correct record of all actions taken by the
respective boards of directors (and each committee thereof) and the
stockholders of each such Subsidiary.
(x) Tax Treatment of the Merger. As of the date hereof,
NFB has no knowledge of any fact or circumstance that would prevent the
Merger or the Bank Merger, if effected, from qualifying as a reorganization
under Section 368(a) of the Code.
(y) Beneficial Ownership of JSB Common Stock. As of the
date hereof, NFB does not beneficially own any shares of JSB Common Stock
and, other than as contemplated by the JSB Option Agreement, does not have
any option, warrant or right of any kind to acquire the beneficial
ownership of any shares of JSB Common Stock.
(z) Year 2000 Matters. NFB's Disclosure Letter sets forth
a true and complete copy of NFB's plan to cause all of the Date-Sensitive
Systems owned, leased or used by NFB or any of its Subsidiaries intended
and necessary for use after December 31, 1999, or licensed to NFB or any of
its Subsidiaries for use by NFB or any of its Subsidiaries, and all of the
Date Data of NFB or any of its Subsidiaries to be Year 2000 Compliant (the
"NFB Y2K Plan"). NFB believes that the NFB Y2K Plan can be substantially
achieved on or before September 30, 1999, with aggregate expenditures under
the NFB Y2K Plan not materially in excess of $2 million.
(aa) Registration Statement. The information to be
supplied by NFB for inclusion in (i) the Registration Statement or (ii) the
Joint Proxy Statement-Prospectus will not, at the time such Registration
Statement becomes effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.1 Conduct of JSB's Business Prior to the Effective Time.
Except as expressly provided in this Agreement, during the period from the
date of this Agreement to the Effective Time, JSB shall, and shall cause
its Subsidiaries to, use commercially reasonable efforts to (i) conduct its
business in the regular, ordinary and usual course consistent with past
practice; (ii) maintain and preserve intact its business organization,
properties, leases, employees and advantageous business relationships and
retain the services of its officers and key employees, (iii) take no action
which would materially adversely affect or delay the ability of JSB or NFB
to perform their respective covenants and agreements on a timely basis
under this Agreement, (iv) take no action which would adversely affect or
delay the ability of JSB, JSB Bank, NFB or NFB Bank to obtain any necessary
approvals, consents or waivers of any governmental authority required for
the transactions contemplated hereby or which would reasonably be expected
to result in any such approvals, consents or waivers containing any
material condition or restriction, and (v) take no action that results in
or is reasonably likely to have a Material Adverse Effect on JSB or JSB
Bank.
Section 3.2 Forbearance by JSB. Without limiting the covenants
set forth in Section 3.1 hereof, except as otherwise provided in this
Agreement and except to the extent required by law or regulation or any
Bank Regulators, during the period from the date of this Agreement to the
Effective Time, JSB shall not, and shall not permit any of its Subsidiaries
to, without the prior consent of NFB, which consent shall not be
unreasonably withheld:
(a) change any provisions of the certificate of
incorporation or bylaws of JSB or the similar governing documents of its
Subsidiaries;
(b) issue any shares of capital stock or change the terms
of any outstanding stock options or warrants or issue, grant or sell any
option, warrant, call, commitment, stock appreciation right, right to
purchase or agreement of any character relating to the authorized or issued
capital stock of JSB, except pursuant to (i) the exercise of stock options
or warrants outstanding as of the date of this Agreement, (ii) the
automatic grant of 142,000 stock options under the JSB 1996 Stock Option
Plan as a result of the execution of this Agreement or (iii) the JSB Option
Agreement; adjust, split, combine or reclassify any capital stock; make,
declare or pay any dividend (except for JSB's regular quarterly dividend,
which shall not be increased by more than $.05 per share from the current
level) or make any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares
of its capital stock. As promptly as practicable following the date of this
Agreement, the Board of Directors of JSB shall cause its regular quarterly
dividend record dates and payment dates to be the same as NFB's regular
quarterly dividend record dates and payments dates for NFB Common Stock,
and JSB shall not thereafter change its regular dividend payment dates and
record dates. Nothing contained in this Section 3.2(b) or in any other
Section of this Agreement shall be construed to permit holders of shares of
JSB Common Stock to receive two dividends from either JSB or from JSB and
NFB in any one quarter or to deny or prohibit such holders from receiving
one dividend from either JSB or NFB in any quarter. Subject to applicable
regulatory restrictions, if any, JSB Bank may pay a cash dividend that is,
in the aggregate, sufficient to fund any dividend by JSB permitted
hereunder and to allow JSB to make the payments required under Section
4.13(d) of this Agreement;
(c) other than in the ordinary course of business
consistent with past practice and pursuant to policies currently in effect,
sell, transfer, mortgage, encumber or otherwise dispose of any of its
material properties, leases or assets to any individual, corporation or
other entity other than a direct or indirect wholly owned Subsidiary of JSB
or cancel, release or assign any indebtedness of any such individual,
corporation or other entity, except pursuant to contracts or agreements in
force at the date of this Agreement and which have been disclosed to NFB
and except for the sale of unsold cooperative shares owned by JSB or its
Subsidiaries, as disclosed in JSB's Disclosure Letter;
(d) except to the extent required by law or as disclosed
in JSB's Disclosure Letter or specifically provided for elsewhere herein,
(i) increase the compensation or fringe benefits of any of its employees or
directors, other than general increases in compensation in the ordinary
course of business consistent with past practice and, upon consultation
with NFB, the payment of reasonable "stay in place" pay where necessary or
appropriate to retain key employees in an amount not to exceed $500,000 in
the aggregate; (ii) pay any pension or retirement allowance not required by
any existing plan or agreement to any such employees or directors, or
become a party to, amend or commit itself to fund or otherwise establish
any trust or account related to any JSB Employee Plan (as defined in
Section 2.3(m)) with or for the benefit of any employee or director; or
(iii) voluntarily accelerate the vesting of any stock options or other
compensation or benefit;
(e) except as contemplated by Section 4.2, change its
method of accounting as in effect at December 31, 1998, except as required
by changes in GAAP as concurred in by JSB's independent auditors;
(f) settle any claim, action or proceeding involving any
liability of JSB or any of its Subsidiaries for money damages in excess of
$500,000 or impose material restrictions upon the operations of JSB or any
of its Subsidiaries;
(g) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire or agree to acquire any assets, in
each case which are material, individually or in the aggregate, to JSB,
except in satisfaction of debts previously contracted;
(h) except pursuant to commitments existing at the date
hereof which have previously been disclosed to NFB, make any real estate
loans secured by undeveloped land or real estate located outside the States
of New York, New Jersey or Connecticut (other than real estate secured by
one-to-four family homes) or make any construction loan (other than
construction loans secured by one-to-four family homes) outside the States
of New York, New Jersey or Connecticut;
(i) establish or commit to the establishment of any new
branch or other office facilities other than those for which all regulatory
approvals have been obtained;
(j) take, fail to take, or cause to be taken or not taken
any action that would prevent or impede the Merger from qualifying (A) for
pooling-of-interests accounting treatment or (B) as a reorganization within
the meaning of Section 368(a) of the Code; or
(k) make any capital expenditures other than those which
(i) are made in the ordinary course of business or are necessary to
maintain existing assets in good repair and (ii) in any event are in an
amount of no more than $500,000 in the aggregate;
(l) enter into any new line of business;
(m) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth
in this Agreement being or becoming untrue in any material respect, or any
of the conditions to the Merger set forth in Article V not being satisfied;
(n) other than in the ordinary course of business
consistent with prudent banking practices, incur any indebtedness for
borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual, corporation or other entity;
(o) make any equity investment or commitment to make such
an investment in real estate or in any real estate development project,
other than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructurings in the ordinary course
of business consistent with prudent banking practices;
(p) other than in prior consultation with NFB,
restructure or materially change its investment securities portfolio,
through purchases, sales or otherwise, or the manner in which the portfolio
is classified or reported; or
(q) agree or commit to take any action that is prohibited
by this Section 3.2.
In the event that NFB does not respond in writing to JSB within five
business days of receipt by NFB of a written request for JSB to engage in
any of the actions for which NFB's prior written consent is required
pursuant to this Section 3.2, NFB shall be deemed to have consented to such
action. Any request by JSB or response thereto by NFB shall be made in
accordance with the notice provisions of Section 8.7, shall note that it is
a request pursuant to this Section 3.2 and shall state that a failure to
respond within five business days shall constitute consent.
Section 3.3 Conduct of NFB's Business Prior to the Effective Time.
Except as expressly provided in this Agreement, during the period from the
date of this Agreement to the Effective Time, NFB shall, and shall cause
its Subsidiaries to, use commercially reasonable efforts to (i) conduct its
business in the regular, ordinary and usual course consistent with past
practice; (ii) maintain and preserve intact its business organization,
properties, leases, employees and advantageous business relationships and
retain the services of its officers and key employees, (iii) take no action
which would materially adversely affect or delay the ability of JSB or NFB
to perform their respective covenants and agreements on a timely basis
under this Agreement, (iv) take no action which would adversely affect or
delay the ability of JSB, NFB, JSB Bank or NFB Bank to obtain any necessary
approvals, consents or waivers of any Governmental Entity required for the
transactions contemplated hereby and (v) take no action that results in or
is reasonably likely to have a Material Adverse Effect on NFB.
Section 3.4 Forbearance by NFB. Without limiting the covenants
set forth in Section 3.3 hereof, except as otherwise provided in this
Agreement and except to the extent required by law or regulation or any
Bank Regulators, during the period from the date of this Agreement to the
Effective Time, NFB shall not, and shall not permit any of its Subsidiaries
to, without the prior consent of JSB, which consent shall not be
unreasonably withheld:
(a) change any provisions of the certificate of
incorporation of NFB or the organization certificate of NFB Bank, other
than to increase the authorized capital stock of NFB or to change the par
value of NFB Common Stock;
(b) issue any shares of capital stock or change the terms
of any outstanding stock options or warrants or issue, grant or sell any
option, warrant, call, commitment, stock appreciation right, right to
purchase or agreement of any character relating to the authorized or issued
capital stock of NFB except (i) in transactions permitted under Section
3.4(e), (ii) pursuant to the exercise of stock options or warrants
outstanding as of the date of this Agreement or granted in accordance with
this Section 3.4(b), (iii) for the grant of options under the NFB Stock
Plans consistent with NFB's past practice or (iv) for the issuance of such
number of shares of NFB Common Stock as is necessary to permit the Merger
to be accounted for as a pooling-of-interests; adjust, split, combine or
reclassify any capital stock; or, solely in the case of NFB, make, declare
or pay any dividend (except for NFB's regular quarterly cash dividend) or
make any other distribution on any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares
of its capital stock; provided, however, that nothing contained herein
shall prohibit NFB from increasing the quarterly cash dividend on NFB
Common Stock;
(c) make any acquisition or take any other action that
individually or in the aggregate could materially adversely affect the
ability of NFB to consummate the transactions contemplated hereby, or enter
into any agreement providing for, or otherwise participate in, any merger,
consolidation or other transaction in which NFB or any surviving
corporation may be required not to consummate the Merger or any of the
other transactions contemplated hereby in accordance with the terms of this
Agreement;
(d) take, fail to take, or cause to be taken or not taken
any action that would prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code; provided,
however, that nothing contained herein shall limit the ability of NFB to
exercise its rights under the JSB Option Agreement;
(e) enter into an agreement with respect to an
Acquisition Transaction (as defined below) with a third party; provided,
that the foregoing shall not prevent NFB or any of its Subsidiaries from
entering into any agreement with respect to an Acquisition Transaction if
such action is, in the reasonable judgment of NFB, desirable in the conduct
of the business of NFB and its Subsidiaries and would not, in the
reasonable judgment of NFB, likely delay the Effective Time to a date
subsequent to the date set forth in Section 6.1(d) of this Agreement or
adversely affect the Merger Consideration to be received by JSB's
stockholders pursuant to this Agreement. For purposes of this Agreement,
"Acquisition Transaction" shall mean (x) a merger or consolidation, or any
similar transaction, involving NFB, (y) a purchase, lease or other
acquisition of all or substantially all of the assets of NFB or (z) a
purchase or other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing 10% or more of the
voting power of NFB; provided, that the term "Acquisition Transaction" does
not include (i) any internal merger or consolidation involving only NFB and
its Subsidiaries or (ii) any acquisition or acquisitions by NFB subsequent
to August 15, 1999 involving in the aggregate, for all such acquisitions,
the issuance of up to the difference between (1) 10% of the shares of NFB
Common Stock outstanding as of the date hereof and (2) the number of
shares, if any, issued pursuant to Section 3.4(b)(iv), or cash
consideration equal to such number of shares multiplied by $20.44 per
share;
(f) change its method of accounting as in effect at
December 31, 1998, except as required by changes in GAAP as concurred in by
JSB's independent auditors;
(g) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth
in this Agreement being or becoming untrue in any material respect, or any
of the conditions to the Merger set forth in Article V not being satisfied;
or
(h) agree or commit to take any action that is prohibited
by this Section 3.4.
ARTICLE IV
COVENANTS
Section 4.1 Acquisition Proposals. JSB agrees that neither it nor
any of its Subsidiaries, nor any of the respective officers and directors
of JSB or any of its Subsidiaries, shall, and JSB shall not authorize or
permit any of its employees, agents or representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or
any of its Subsidiaries) to, (a) initiate, solicit or encourage, directly
or indirectly, any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to JSB's
stockholders) with respect to a merger, consolidation or similar
transaction involving, or any purchase of all or any significant portion of
the assets or any equity securities of, JSB or any of its material
Subsidiaries (any such proposal or offer being hereinafter referred to as
an "Acquisition Proposal") or (b) engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions
with, any person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition
Proposal; provided, however, that nothing contained in this Agreement shall
prevent JSB or its Board of Directors from (i) complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal
or (ii) (A) providing information in response to a request therefor by a
person who has made an unsolicited bona fide written Acquisition Proposal
(an "Unsolicited Acquisition Proposal") if the Board of Directors receives
from the person so requesting such information an executed confidentiality
agreement on terms substantially equivalent to those contained in the
confidentiality agreement between NFB and JSB, dated as of July 13, 1999;
or (B) engaging in any negotiations or discussions with any person who has
made an Unsolicited Acquisition Proposal, if and only to the extent that,
in each such case referred to in clause (A) or (B) above, (x) the Board of
Directors of JSB, after consultation with and based upon the written
opinion of outside legal counsel, in good ▇▇▇▇▇ ▇▇▇▇▇ such action to be
legally necessary for the proper discharge of its fiduciary duties under
applicable law and (y) the Board of Directors of JSB, after consultation
with its financial advisor, determines in good faith that such Unsolicited
Acquisition Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the
proposal and the person making the proposal and would, if consummated,
result in a more favorable transaction than the transaction contemplated by
this Agreement, taking into account the prospects and interests of JSB and
its stockholders. JSB will notify NFB immediately orally (within one day)
and in writing (within three days) if any such Unsolicited Acquisition
Proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued
with JSB after the date hereof, the identity of the person making such
inquiry, proposal or offer and the substance thereof and will keep NFB
informed of any developments with respect thereto immediately upon the
occurrence thereof. Subject to the foregoing, JSB will immediately cease
and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of
the foregoing. JSB will take the necessary steps to inform the appropriate
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 4.1. JSB will promptly request each
person (other than NFB) that has executed a confidentiality agreement prior
to the date hereof in connection with its consideration of a business
combination with JSB or any of its Subsidiaries to return or destroy all
confidential information previously furnished to such person by or on
behalf of JSB or any of its Subsidiaries. JSB shall take all steps
necessary to enforce all such confidentiality agreements.
Section 4.2 Certain Policies of JSB.
(a) At the request of NFB, JSB shall cause JSB Bank to
modify and change its loan, litigation and real estate valuation policies
and practices (including loan classifications and levels of reserves) and
investment and asset/liability management policies and practices after the
date on which all Requisite Regulatory Approvals and stockholder approvals
are received, and after receipt of written confirmation from NFB that it is
not aware of any fact or circumstance that would prevent completion of the
Merger, and prior to the Effective Time so as to be consistent on a
mutually satisfactory basis with those of NFB Bank; provided, however, that
JSB shall not be required to take such action more than 30 days prior to
the Effective Date; and provided, further, that such policies and
procedures are not prohibited by GAAP or any applicable laws and
regulations.
(b) JSB's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or breached in
any respect for any purpose as a consequence of any modifications or
changes undertaken solely on account of this Section 4.2. NFB agrees to
hold harmless, indemnify and defend JSB and its Subsidiaries, and their
respective directors, officers and employees, for any loss, claim,
liability or other damage caused by or resulting from compliance with this
Section 4.2.
Section 4.3 Access and Information.
(a) Upon reasonable notice, JSB and NFB shall (and shall
cause their respective Subsidiaries to) afford to the other and their
respective representatives (including, without limitation, directors,
officers and employees of such party and its affiliates and counsel,
accountants and other professionals retained by such party) such reasonable
access during normal business hours throughout the period prior to the
Effective Time to the books, records (including, without limitation, tax
returns and work papers of independent auditors), properties, personnel and
to such other information as either party may reasonably request; provided,
however, that no investigation pursuant to this Section 4.3 shall affect or
be deemed to modify any representation or warranty made herein. In
furtherance, and not in limitation of the foregoing, JSB shall make
available to NFB all information necessary or appropriate for the
preparation and filing of all real property and real estate transfer tax
returns and reports required by reason of the Merger or the Bank Merger.
NFB and JSB will not, and will cause their respective representatives not
to, use any information obtained pursuant to this Section 4.3 for any
purpose unrelated to the consummation of the transactions contemplated by
this Agreement. Subject to the requirements of applicable law, each of NFB
and JSB will keep confidential, and will cause their respective
representatives to keep confidential, all information and documents
obtained pursuant to this Section 4.3 unless such information (i) was
already known to such party or an affiliate of such party, other than
pursuant to a confidentiality agreement or other confidential relationship,
(ii) becomes available to such party or an affiliate of such party from
other sources not known by such party to be bound by a confidentiality
agreement or other obligation of secrecy, (iii) is disclosed with the prior
written approval of the other party or (iv) is or becomes readily
ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents or extracts thereof containing information
and data as to another party hereto (or an affiliate of any party hereto)
to be returned to the party that furnished the same.
(b) During the period of time beginning on the day
application materials to obtain the Requisite Regulatory Approvals for the
Merger are initially filed and continuing to the Effective Time, including
weekends and holidays, JSB shall cause JSB Bank to provide NFB, NFB Bank
and their authorized agents and representatives full access to JSB Bank's
offices after normal business hours for the purpose of installing necessary
wiring and equipment to be utilized by NFB Bank after the Effective Time;
provided, that:
(i) reasonable advance notice of each entry
shall be given to JSB Bank and JSB Bank approves of each entry, which
approval shall not be unreasonably withheld;
(ii) JSB Bank shall have the right to have
its employees or contractors present to inspect the work being done;
(iii) to the extent practicable, such work
shall be done in a manner that will not interfere with JSB Bank's
business conducted at any affected branch offices;
(iv) all such work shall be done in compliance
with all applicable laws and government regulations, and NFB Bank
shall be responsible for the procurement, at NFB Bank's expense, of
all required governmental or administrative permits and approvals;
(v) NFB Bank shall maintain appropriate
insurance satisfactory to JSB Bank in connection with any work done by
NFB Bank's agents and representatives pursuant to this Section 4.3;
(vi) NFB Bank shall reimburse JSB Bank for
any material out-of-pocket costs or expenses incurred by JSB Bank in
connection with this undertaking; and
(vii) in the event this Agreement is terminated
in accordance with Article VI hereof, NFB Bank, within a reasonable
time period and at its sole cost and expense, will restore such
offices to their condition prior to the commencement of any such
installation.
Section 4.4 Certain Filings, Consents and Arrangements. NFB and
JSB shall (a) as soon as practicable (and in any event within 45 days after
the date hereof) make, or cause to be made, any filings and applications
and provide any notices required to be filed or provided in order to obtain
all approvals, consents and waivers of Governmental Entities and third
parties necessary or appropriate for the consummation of the transactions
contemplated hereby or by the JSB Option Agreement; (b) cooperate with one
another in promptly (i) determining what filings and notices are required
to be made or approvals, consents or waivers are required to be obtained
under any relevant federal or state law or regulation or under any relevant
agreement or other document and (ii) making any such filings and notices,
furnishing information required in connection therewith and seeking timely
to obtain any such approvals, consents or waivers; and (c) deliver to the
other copies of the publicly available portions of all such filings,
notices and applications promptly after they are filed.
Section 4.5 Antitakeover Provisions. JSB and its Subsidiaries
shall take all steps required by any relevant federal or state law or
regulation or under any relevant agreement or other document to exempt or
continue to exempt NFB, the Agreement, the Plan of Bank Merger, the Merger,
the Bank Merger and the JSB Option Agreement from any provisions of an
antitakeover nature in JSB's or its Subsidiaries' organization certificates
and bylaws and the provisions of any federal or state antitakeover laws.
Section 4.6 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take promptly, or cause to be taken promptly, all
actions and to do promptly, or cause to be done promptly, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement (including, if the Plan of Bank Merger is executed, the Bank
Merger) as expeditiously as possible, including using efforts to obtain all
necessary actions or non-actions, extensions, waivers, consents and
approvals from all applicable Governmental Entities, effecting all
necessary registrations, applications and filings (including, without
limitation, filings under any applicable state securities laws) and
obtaining any required contractual consents and regulatory approvals.
Section 4.7 Publicity. The initial press release announcing
this Agreement shall be a joint press release and thereafter JSB and NFB
shall consult with each other in issuing any press releases or otherwise
making public statements with respect to the Merger and any other
transaction contemplated hereby and in making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto.
Section 4.8 Stockholders Meetings. JSB and NFB each shall take
all action necessary, in accordance with applicable law and its respective
corporate documents, to convene a meeting of its respective stockholders
(each, a "Stockholder Meeting") as promptly as practicable for the purpose
of considering and voting on approval and adoption of the transactions
provided for in this Agreement. Except to the extent legally required for
the discharge by the Board of Directors of its fiduciary duties as advised
by such Board's counsel in writing, the Board of Directors of each of JSB
and NFB shall (a) recommend at its Stockholder Meeting that the
stockholders vote in favor of and approve the transactions provided for in
this Agreement and (b) use its best efforts to solicit such approvals. JSB
and NFB, in consultation with the other, shall each employ professional
proxy solicitors to assist in contacting stockholders in connection with
soliciting favorable votes on the Merger. JSB and NFB shall coordinate and
cooperate with respect to the timing of their respective Stockholder
Meetings.
Section 4.9 Proxy Statements; Comfort Letters. (i) As soon
as practicable after the date hereof, NFB and JSB shall cooperate with
respect to the preparation of a Joint Proxy Statement-Prospectus for the
purpose of taking stockholder action on the Merger and this Agreement and
file the Joint Proxy Statement- Prospectus with the SEC, respond to
comments of the staff of the SEC and, promptly after the Registration
Statement is declared effective by the SEC, mail the Joint Proxy
Statement-Prospectus to the respective holders of record (as of the
applicable record date) of shares of voting stock of each of JSB and NFB.
NFB and JSB each represents and covenants to the other that the Joint Proxy
Statement-Prospectus, and any amendment or supplement thereto, with respect
to the information pertaining to it or its Subsidiaries at the date of
mailing to its stockholders and the date of its Stockholder Meeting will be
in compliance with the Exchange Act and all relevant rules and regulations
of the SEC and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(ii) NFB shall cause KPMG LLP, its independent public
accounting firm, to deliver to JSB, and JSB shall cause KPMG LLP, its
independent public accounting firm, to deliver to NFB and to its officers
and directors who sign the Registration Statement for this transaction, a
"comfort letter" or "agreed upon procedures" letter, in the form
customarily issued by such accountants at such time in transactions of this
type, dated (a) the date of the mailing of the Joint Proxy
Statement-Prospectus for the Stockholders Meeting of JSB and the date of
mailing of the Joint Proxy Statement-Prospectus for the Stockholders
meeting of NFB, respectively, and (b) a date not earlier than five business
days preceding the date of the Closing (as defined in Section 7.1).
Section 4.10Registration of NFB Common Stock.
(a) NFB shall, as promptly as practicable following the
preparation thereof, file the Registration Statement (including any
pre-effective or post-effective amendments or supplements thereto) with the
SEC under the Securities Act in connection with the transactions
contemplated by this Agreement, and NFB and JSB shall use all reasonable
efforts to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing. NFB will
advise JSB promptly after NFB receives notice 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 shares of capital stock issuable pursuant to the
Registration Statement, or 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. NFB
will provide JSB with as many copies of such Registration Statement and all
amendments thereto promptly upon the filing thereof as JSB may reasonably
request.
(b) NFB shall use its reasonable best efforts to obtain,
prior to the effective date of the Registration Statement, all necessary
state securities laws or "blue sky" permits and approvals required to carry
out the transactions contemplated by this Agreement.
(c) NFB shall use its reasonable best efforts to list,
prior to the Effective Time, on the NYSE, or on such other exchange as NFB
Common Stock shall then be trading, subject only to official notice of
issuance, the shares of NFB Common Stock to be issued by NFB in exchange
for the shares of JSB Common Stock.
Section 4.11 Affiliate Letters. Promptly, but in any event
within two weeks after the execution and delivery of this Agreement, JSB
shall deliver to NFB a letter identifying all persons who, to the knowledge
of JSB, may be deemed to be "affiliates" of JSB under Rule 145 of the
Securities Act and the pooling-of-interests accounting rules, including,
without limitation, all directors and executive officers of JSB. Within two
weeks after delivery of such letter, JSB shall deliver executed letter
agreements, each substantially in the form attached hereto as Exhibit B,
executed by each such person so identified as an affiliate of JSB agreeing
(i) to comply with Rule 145, (ii) to refrain from transferring shares as
required by the pooling-of-interests accounting rules and (iii) to be
present in person or by proxy and vote in favor of the Merger at the JSB
Stockholders Meeting. Within four weeks after the date hereof, NFB shall
cause its directors and executive officers to enter into letter agreements,
in the form attached hereto as Exhibit C, with NFB concerning the
pooling-of-interests accounting rules. NFB hereby agrees to publish, or
file a Form 8-K, Form 10-K or Form 10-Q containing, financial results
covering at least 30 days of post-Merger combined operations of NFB and JSB
as soon as practicable, but in no event later than 30 days following the
end of the first calendar month ending at least 30 days after the Effective
Time, in form and substance sufficient to remove the restrictions in
connection with the pooling-of-interests accounting rules contained
therein.
Section 4.12 Notification of Certain Matters. Each party shall
give prompt notice to the others of: (a) any event or notice of, or other
communication relating to, a default or event that, with notice or lapse of
time or both, would become a default, received by it or any of its
Subsidiaries subsequent to the date of this Agreement and prior to the
Effective Time, under any contract material to the financial condition,
properties, businesses or results of operations of each party and its
Subsidiaries taken as a whole to which each party or any Subsidiary is a
party or is subject; and (b) any event, condition, change or occurrence
which individually or in the aggregate has, or which, so far as reasonably
can be foreseen at the time of its occurrence, is reasonably likely to
result in a Material Adverse Effect. Each of JSB and NFB shall give prompt
notice to the other party of any notice or other communication from any
third party alleging that the consent of such third party is or may be
required in connection with any of the transactions contemplated by this
Agreement.
Section 4.13 Directors and Officers.
(a) NFB agrees to cause Park ▇. ▇▇▇▇▇▇ (the "New NFB
Director") to be elected or appointed as a director of NFB and NFB Bank at,
or as promptly as practicable after, the Effective Time; provided, however,
that if ▇▇. ▇▇▇▇▇▇ does not become a director of NFB or NFB Bank because of
death, disability or otherwise, or if ▇▇. ▇▇▇▇▇▇ shall cease to be a
director of NFB or NFB Bank at any time before the third anniversary of the
Effective Time, NFB agrees to cause a person who is a member of the Board
of Directors of JSB as of the date hereof to be elected or appointed as the
New NFB Director.
(b) At the Effective Time, NFB shall cause NFB Bank, or,
if the Bank Merger is not effected, JSB Bank, to assume and honor the JSB
Bank Outside Directors' Consultation and Retirement Plan ("JSB Bank Outside
Directors' Plan") in accordance with the terms and conditions of such plan
as of the date hereof; provided, however, that, notwithstanding any
provision of such plan to the contrary, (i) effective immediately prior to
the Effective Time, the references to "fifteen (15) years" in Section 3 of
the JSB Bank Outside Directors' Plan regarding eligibility shall be amended
so as to refer to "one (1) year" for the purpose of making all eight
outside directors of JSB Bank participants under such plan and (ii) any
outside member of the JSB Bank Board of Directors who does not become a
member of the Board of Directors of NFB Bank from and after the Effective
Time shall have the right to commence receiving benefits under the JSB Bank
Outside Directors' Plan effective as of the Effective Time and shall not be
required to provide consulting services in order to receive such benefits;
provided, further, that in no event shall any amendment or termination of
the JSB Bank Outside Directors' Plan on or after the Effective Time
adversely affect the right of any plan participant, former participant or
beneficiary thereof to receive any benefits under such plan in respect of
participation for any period ending on or before the date on which such
amendment or termination is adopted or, if later, the date on which it is
made effective. NFB Bank and JSB Bank also agree that all individuals who,
prior to the Effective Time, were receiving benefits under the JSB Bank
Outside Directors' Plan shall continue to receive all such benefits from
this plan on the same terms and conditions from and after the Effective
Time.
(c) NFB shall use all reasonable efforts to identify and
offer employment opportunities to qualified, satisfactorily performing
officers and employees of JSB and its Subsidiaries in positions within the
business operations of NFB and its Subsidiaries for which such officers and
employees are qualified. NFB shall give, and shall cause its Subsidiaries
to give, priority consideration to all such officers and employees of JSB
and its Subsidiaries vis-a-vis all individuals other than current officers
and employees of NFB; provided, however, that officers and employees of JSB
and its Subsidiaries who become employed by NFB or its Subsidiaries shall
then be treated on an equal basis with the officers and employees of NFB
and its Subsidiaries.
(d) NFB shall honor (i) the Employment Agreements between
JSB and, respectively, Park ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each as amended and restated as of
June 22, 1999 and (ii) the Employment Agreements between JSB Bank and,
respectively, Park ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each as amended and restated as of June 22,
1999, by permitting JSB to pay to each such individual on the Closing Date
the lump sum amounts that are due under each agreement and by providing any
additional payments or benefits in accordance with the terms of such
Employment Agreements, regardless of whether or not the individual officer
continues employment with NFB or NFB Bank. NFB and JSB have delivered to
each other a good faith reasonable estimate of the amounts payable on the
Closing Date under the Employment Agreements, based upon procedures and
information available at the date of this Agreement, and the procedures
used in preparing such estimates shall be followed in determining the
actual amounts payable under the Employment Agreements on the Closing Date,
which estimate is attached hereto as Schedule 4.13(d).
Section 4.14 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time through the sixth
anniversary of the Effective Date, NFB agrees to indemnify and hold
harmless each present and former director and officer of JSB and its
Subsidiaries and each officer or employee of JSB and its Subsidiaries that
is serving or has served as a director or trustee of another entity
expressly at JSB's request or direction (each, an "Indemnified Party"),
against any 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 matters existing or occurring at or prior to the Effective
Time (including the transactions contemplated by this Agreement, including
the entering into of the JSB Option Agreement), whether asserted or claimed
prior to, at or after the Effective Time, and to advance any such Costs to
each Indemnified Party as they are from time to time incurred, in each case
to the fullest extent such Indemnified Party would have been indemnified as
a director, officer or employee of JSB and its Subsidiaries and as then
permitted under applicable law.
(b) Any Indemnified Party wishing to claim indemnification
under Section 4.14(a), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify NFB thereof, but the
failure to so notify shall not relieve NFB of any liability it may have
hereunder to such Indemnified Party if such failure does not materially
prejudice the indemnifying party. In the event of any such claim, action,
suit, proceeding or investigation, (i) NFB shall have the right to assume
the defense thereof with counsel reasonably acceptable to the Indemnified
Party and NFB shall not be liable to such Indemnified Party for any legal
expenses of other counsel subsequently incurred by such Indemnified Party
in connection with the defense thereof, except that if NFB does not elect
to assume such defense within a reasonable time or counsel for the
Indemnified Party at any time advises that there are issues which raise
conflicts of interest between NFB and the Indemnified Party (and counsel
for NFB does not disagree), the Indemnified Party may retain counsel
satisfactory to such Indemnified Party, and NFB shall remain responsible
for the reasonable fees and expenses of such counsel as set forth above, to
be paid promptly as statements therefor are received; provided, however,
that NFB shall be obligated pursuant to this paragraph (b) to pay for only
one firm of counsel for all Indemnified Parties in any one jurisdiction
with respect to any given claim, action, suit, proceeding or investigation
unless the use of one counsel for such Indemnified Parties would present
such counsel with a conflict of interest; (ii) the Indemnified Party will
reasonably cooperate in the defense of any such matter; and (iii) NFB shall
not be liable for any settlement effected by an Indemnified Party without
its prior written consent, which consent may not be withheld unless such
settlement is unreasonable in light of such claims, actions, suits,
proceedings or investigations against, or defenses available to, such
Indemnified Party.
(c) NFB shall pay all reasonable Costs, including
attorneys' fees, that may be incurred by any Indemnified Party in
successfully enforcing the indemnity and other obligations provided for in
this Section 4.14 to the fullest extent permitted under applicable law. The
rights of each Indemnified Party hereunder shall be in addition to any
other rights such Indemnified Party may have under applicable law.
(d) For a period of six years after the Effective Time,
NFB shall cause the former directors and officers of JSB to be covered by
the policy of directors and officers liability insurance currently
maintained by JSB; provided, however, that NFB may substitute therefor a
policy of at least the same coverage and containing terms no less
advantageous to the beneficiaries thereof than such policies (including,
without limitation, by providing coverage under its existing policy);
provided, however, that in no event shall NFB be obligated to expend, in
order to maintain or provide insurance coverage pursuant to this Section
4.14(d), any premium per annum in excess of 175% of the amount of the
annual premiums paid as of the date hereof by JSB for such insurance
("Maximum Agreement"); provided, further, that if the amount of the annual
premiums necessary to maintain or procure such insurance coverage exceeds
the Maximum Amount, NFB shall obtain the most advantageous coverage of
directors' and officers' insurance obtainable for an annual premium equal
to the Maximum Amount; and provided, further, that officers and directors
of JSB may be required to make application and provide customary
representations and warranties to NFB's insurance carrier for the purpose
of obtaining such insurance.
Section 4.15 Employees; Benefit Plans and Programs.
(a) Each person who is employed by JSB or JSB Bank
immediately prior to the Effective Time (a "JSB Employee") shall, at the
Effective Time, become an employee of NFB or NFB Bank (unless the Bank
Merger is not effected, in which case the references in this Section 4.15
to NFB Bank shall mean JSB Bank). Beginning at the Effective Time, each of
the JSB Employees shall serve NFB or NFB Bank in the same capacity in which
he or she served immediately prior to the Effective Time and upon the same
terms and conditions generally applicable to other employees of NFB or NFB
Bank with comparable positions, with the following special provisions:
(i) No JSB Employee shall be, or have or
exercise the authority of, an officer of NFB or NFB Bank unless and
until elected or appointed an officer of NFB or NFB Bank in accordance
with NFB's or NFB Bank's bylaws.
(ii) At or as soon as practicable following the
Effective Time, NFB and NFB Bank shall establish and implement a
program of compensation and benefits designed to cover all similarly
situated employees on a uniform basis ("New Compensation and Benefits
Program"). The New Compensation and Benefits Program may contain any
combination of new plans, continuations of plans maintained by NFB or
NFB Bank immediately prior to the Effective Time and continuation of
plans maintained by JSB or JSB Bank immediately prior to the Effective
Time as NFB, in its discretion, may determine. To the extent that it
is not practicable to implement any constituent part of the New
Compensation and Benefits Program at the Effective Time, NFB and NFB
Bank shall continue in effect any comparable plan maintained
immediately prior to the Effective Time for the respective employees
of NFB, JSB, NFB Bank and JSB Bank for a transition period. During the
transition period, the persons who were employees of JSB or JSB Bank
immediately prior to the Effective Time who become employees of NFB or
NFB Bank at the Effective Time shall continue to participate in the
plans of JSB and JSB Bank that are continued for transitional
purposes, and all other employees of NFB or NFB Bank will participate
only in the comparable plans of NFB and NFB Bank that are continued
for transitional purposes.
(iii) Each constituent part of the New
Compensation and Benefits Program shall recognize, in the case of
persons employed by NFB, NFB Bank, JSB or JSB Bank immediately prior
to the Effective Time who are also employed by NFB or NFB Bank
immediately after the Effective Time, all service with NFB, NFB Bank,
JSB or JSB Bank as service with NFB and NFB Bank for all purposes,
including eligibility, vesting, benefit accrual and level of matching
contributions; provided, however, that such service shall not be
recognized to the extent that such recognition would result in a
duplication of benefit; provided further, however, that in no event
will such recognition result in any current or former employees of JSB
or any of its Subsidiaries being covered under the post-retirement
medical benefits plan of NFB or any of its Subsidiaries to the extent
such coverage is provided at the expense of NFB or any of its
Subsidiaries.
(iv) In the case of any constituent part of the
New Compensation and Benefits Program which is a life or health
insurance plan: (A) such plan shall not apply any preexisting
condition limitations for conditions covered under the applicable life
or health insurance plans maintained by NFB, NFB Bank, JSB and JSB
Bank as of the Effective Time, (B) each such plan which is a life or
health insurance plan shall honor any deductible and out of pocket
expenses incurred under the applicable life or health insurance plans
maintained by NFB, NFB Bank, JSB and JSB Bank as of the Effective Time
and (C) each such plan which is a life insurance plan shall waive any
medical certification otherwise required in order to assure the
continuation of coverage at a level not less than that in effect
immediately prior to the implementation of such plan (but subject to
any overall limit on the maximum amount of coverage under such plans).
(b) NFB shall assume the obligations of JSB and JSB Bank
with respect to any severance plans or agreements identified in JSB's
Disclosure Letter, as they may be in effect at the Effective Time, and
shall pay amounts thereunder when due; provided, however, that in the event
of the termination of employment of officers and employees of JSB or JSB
Bank within 15 months following the Effective Time, such persons shall be
provided severance benefits equal to the greater of those provided under
the JSB Bank Severance Plan or those provided by NFB or NFB Bank under any
severance plan maintained by NFB or NFB Bank.
(c) Notwithstanding any other provision in this Agreement
to the contrary, officers and employees of JSB and its Subsidiaries who are
covered under the JSB Pension Plan immediately prior to the Effective Time
and who continue to be employed by NFB or its Subsidiaries on and after the
Effective Time shall, if, as of the Effective Time, they either:
(i) are within 10 years of their normal retirement age
(as defined in the JSB Pension Plan) and have a period of service (as
defined in the JSB Pension Plan) of at least 10 years with JSB or its
Subsidiaries, or
(ii) have a period of service (as defined in the JSB Pension
Plan) of at least 25 years with JSB or its Subsidiaries, have the right to
elect to continue to accrue benefits under the benefit accrual formula
under the JSB Pension Plan rather than having their benefits be determined
under the NFB Cash Balance Retirement Plan.
(d) Notwithstanding any other provision in this Agreement
to the contrary, if the Closing Date occurs after December 31, 1999, the
amounts payable to any officer or employee of JSB under the Benefit
Restoration Plan of Jamaica Savings Bank FSB ("JSB Bank BRP") shall be
determined under the actuarial factors and interest rate assumptions in
effect on December 31, 1999 even if such factors and assumptions would
otherwise have changed by the express terms of the JSB Bank BRP, the JSB
Pension Plan, by changes in the law (such as the pension and benefit
provisions of the Uruguay Round Agreements Act of the General Agreement on
Tariffs and Trade ("GATT")), or otherwise, the purpose of this Section
4.15(d) being that any benefits payable under the JSB Bank BRP shall be
determined under the actuarial factors and interest rate assumptions in
effect on December 31, 1999. JSB shall, and shall cause JSB Bank to, take
all actions as shall be necessary to provide that no change-in-control,
termination or severance payments or benefits (including without limitation
any amounts paid under the agreements listed in Section 4.13(d)) will be
taken into account for purposes of determining any amounts payable under
the JSB Bank BRP.
(e) In the event that the Closing Date occurs on or
before December 31, 1999, the employees of JSB Bank shall receive bonuses
in accordance with JSB Bank's past practices (and the amount of such
bonuses shall be based upon such employees' compensation for the entire
year of 1999), and such bonuses shall be paid at least five business days
prior to the Closing Date. In the event that the Closing Date occurs on or
after January 1, 2000, (i) the employees of JSB Bank shall be paid bonuses
in accordance with JSB Bank's past practices (and the amount of such
bonuses shall be based upon such employees' compensation for the entire
year of 1999) for 1999, which shall be paid in December 1999 in accordance
with JSB Bank's past practices, and (ii) the employees of JSB Bank shall be
paid additional bonuses equal to the amounts payable to each such employee
as a bonus for 1999 multiplied by a fraction, the numerator of which is the
number of days in 2000 through and including the Closing Date and the
denominator of which is 366, and such additional bonuses shall be paid at
least five business days prior to the Closing Date. A schedule showing the
aggregate bonus estimates for 1999 is attached hereto as Schedule 4.15(e).
(f) Employees of JSB Bank who have obtained or who have
received approval to obtain, at any time prior to the Closing Date, a loan
or a mortgage loan under the existing JSB Bank employee loan program shall
continue to receive the benefits of such employee loan program, subject to
the terms and conditions of such program; provided, however, that if the
employment of any such employee with JSB Bank or, after the Closing Date,
NFB Bank, shall terminate for any reason other than cause, the interest
rate reduction under the employee loan shall continue in effect
notwithstanding such termination of employment.
(g) Employees of JSB Bank (other than officers) shall be
entitled to receive attendance bonuses in accordance with JSB Bank's past
practices for 1999, and, if the Closing Date occurs after December 31,
1999, such persons shall be entitled to attendance bonuses in accordance
with JSB Bank's past practices for 2000, pro-rated through the Closing Date
in the manner described in Section 4.15(e).
(h) Employees of JSB Bank shall be entitled to receive
payment for accrued but unused vacation days in accordance with JSB Bank's past
practices, and any accrued but unused vacation days of employees of JSB
Bank as of the Closing Date shall, at the employee's option, either be paid
immediately prior to the Closing Date or taken as vacation time as soon as
practicable following the Closing Date; provided, however, that JSB shall
deliver to NFB, not later than 15 business days after the date of this
Agreement, a schedule of employees indicating their accrued but unused
vacation days as of the most recent date practicable. Life insurance and
continued health insurance for retirees of JSB Bank shall be continued in
accordance with JSB Bank's past practices, to the extent that such
continued coverage does not result in a material increase in the costs of
such continued coverage to NFB Bank over the costs of such coverage to JSB
Bank. JSB and NFB agree to use all reasonable efforts to review the
tax-qualified defined benefit plans of both banks with a view towards,
effective as of the Closing Date, continuing, to the extent practicable,
the types and forms of benefits under the JSB Pension Plan for participants
in such JSB Pension Plan whose employment is terminated upon or within
one-year following the Closing Date, particularly with respect to the 100%
joint and survivor form of benefits provided in the event that the
participant dies prior to the commencement of the participant's benefit
payments. JSB Bank shall make a contribution to the JSB Bank Employee Stock
Ownership Plan ("JSB Bank ESOP") for 1999 in accordance with its past
practices and such contribution shall be allocated in accordance with the
terms of the JSB Bank ESOP. A pro-rated JSB Bank contribution shall be made
to the JSB Bank ESOP for the portion of the year 2000 through the Closing
Date.
Section 4.16 Advisory Board. NFB shall, promptly following the
Effective Time, cause all of the members of JSB's Board of Directors as of
the date of this Agreement, other than the New NFB Director, who are
willing to so serve to be elected or appointed as members of NFB's advisory
board ("Advisory Board"), the function of which shall be to advise NFB with
respect to deposit and lending activities in JSB's former market area and
to maintain and develop customer relationships. The members of the Advisory
Board who are willing to so serve shall be elected to serve an initial term
of three years beginning on the Effective Date. Each member of the Advisory
Board shall receive an annual retainer fee for such service of $25,000,
payable in monthly installments or in one lump sum at any time in advance
at the option of NFB, notwithstanding that such Advisory Board members are
receiving benefits under the JSB Bank Outside Directors' Plan. Service on
the Advisory Board shall be considered service as a director of NFB for
purposes of any stock option plan of JSB or NFB.
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1 Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Merger , the Bank Merger
and any other transactions contemplated by this Agreement shall be subject
to the satisfaction of the following conditions:
(a) this Agreement shall have been approved by (i) the
requisite vote of JSB's stockholders in accordance with applicable law and
regulations and (ii) the requisite vote of NFB's stockholders in accordance
with applicable law and regulations;
(b) the Requisite Regulatory Approvals and any necessary
regulatory consents and waivers with respect to this Agreement and the
transactions contemplated hereby shall have been obtained and shall remain
in full force and effect, and all statutory waiting periods shall have
expired;
(c) no party hereto shall be subject to any order, decree
or injunction of a court or agency of competent jurisdiction which enjoins
or prohibits the consummation of the Merger or the Bank Merger;
(d) no statute, rule or regulation shall have been
enacted, entered, promulgated, interpreted, applied or enforced by any
Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger or the Bank Merger;
(e) the Registration Statement shall have been declared
effective by the SEC and no proceedings shall be pending or threatened by
the SEC to suspend the effectiveness of the Registration Statement; all
required approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement shall have been
obtained; and
(f) NFB shall have caused to be listed on the NYSE, or on
such other market on which shares of NFB Common Stock shall then be
trading, subject only to official notice of issuance, the shares of NFB
Common Stock to be issued by NFB in exchange for the shares of JSB Common
Stock.
Section 5.2 Conditions to the Obligations of NFB and NFB Bank.
The obligations of NFB and NFB Bank to effect the Merger, the Bank Merger
and any other transactions contemplated by this Agreement shall be further
subject to the satisfaction of the following additional conditions, any one
or more of which may be waived by NFB:
(a) each of the obligations of JSB and JSB Bank,
respectively, required to be performed by it at or prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed and
complied with in all material respects and the representations and
warranties of JSB and JSB Bank contained in this Agreement shall be true
and correct, subject to Sections 2.1 and 2.2, as of the date of this
Agreement and as of the Effective Time as though made at and as of the
Effective Time (except as to any representation or warranty which
specifically relates to an earlier date). NFB shall have received a
certificate to the foregoing effect signed by the chief executive officer
and the chief financial or principal accounting officer of JSB;
(b) all action required to be taken by, or on the part
of, JSB and JSB Bank to authorize the execution, delivery and performance
of this Agreement and the consummation by JSB and JSB Bank of the
transactions contemplated hereby shall have been duly and validly taken by
the Board of Directors and stockholders of JSB or JSB Bank, as the case may
be, and NFB shall have received certified copies of the resolutions
evidencing such authorization;
(c) JSB shall have obtained the consent, waiver or
approval of each person (other than the regulatory approvals or consents
referred to in Section 5.1(b)) whose consent, waiver or approval shall be
required in order to consummate the Merger or the Bank Merger or to permit
the succession by the surviving corporation pursuant to the Merger to any
obligation, right or interest of JSB or its Subsidiaries under any loan or
credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument to which JSB or its Subsidiaries is a party or is
otherwise bound, except those for which failure to obtain such consents,
waivers and approvals would not, individually or in the aggregate, have a
Material Adverse Effect on NFB (after giving effect to the consummation of
the transactions contemplated hereby) or upon the consummation of the
transactions contemplated hereby;
(d) NFB shall have received certificates (such
certificates to be dated as of a day as close as practicable to the Closing
Date) from appropriate authorities as to the corporate existence and good
standing of JSB and JSB Bank; and
(e) NFB shall have received an opinion of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("Skadden"), counsel to NFB, dated as of the
Effective Date, in form and substance reasonably satisfactory to NFB,
substantially to the effect that on the basis of the facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code. In rendering its opinion, Skadden may require
and rely upon, in addition to the review of such matters of fact and law as
Skadden considers appropriate, representations and covenants, including
those contained in certificates of officers of NFB, NFB Bank, JSB, JSB Bank
and others, reasonably satisfactory in form and substance to Skadden.
Section 5.3 Conditions to the Obligations of JSB and JSB Bank.
The obligations of JSB and JSB Bank to effect the Merger, the Bank Merger
and any other transactions contemplated by this Agreement shall be further
subject to the satisfaction of the following additional conditions, any one
or more of which may be waived by JSB:
(a) each of the obligations of NFB and NFB Bank,
respectively, required to be performed by it at or prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed and
complied with in all material respects and the representations and
warranties of NFB and NFB Bank contained in this Agreement shall be true
and correct, subject to Sections 2.1 and 2.2, as of the date of this
Agreement and as of the Effective Time as though made at and as of the
Effective Time (except as to any representation or warranty which
specifically relates to an earlier date). JSB shall have received a
certificate to the foregoing effect signed by the chief executive officer
and the chief financial or principal accounting officer of NFB;
(b) all action required to be taken by, or on the part
of, NFB and NFB Bank to authorize the execution, delivery and performance
of this Agreement and the consummation by NFB and NFB Bank of the
transactions contemplated hereby shall have been duly and validly taken by
the Board of Directors and stockholders of NFB or NFB Bank, as the case may
be, and JSB shall have received certified copies of the resolutions
evidencing such authorization;
(c) NFB shall have obtained the consent, waiver or
approval of each person (other than the governmental approvals or consents
referred to in Section 5.1(b)) whose consent, waiver or approval shall be
required in connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease, license or
other agreement or instrument to which NFB or its Subsidiaries is a party
or is otherwise bound, except those for which failure to obtain such
consents, waivers and approvals would not, individually or in the
aggregate, have a Material Adverse Effect on NFB (after giving effect to
the transactions contemplated hereby) or upon the consummation of the
transactions contemplated hereby;
(d) JSB shall have received certificates (such
certificates to be dated as of a day as close as practicable to the Closing
Date) from appropriate authorities as to the corporate existence and good
standing of NFB and NFB Bank; and
(e) JSB shall have received an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Wood ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), counsel to JSB, dated as of the
Effective Date, in form and substance reasonably satisfactory to JSB,
substantially to the effect that on the basis of the facts, representations
and assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code. In rendering its opinion, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may
require and rely upon, in addition to the review of such matters of fact
and law as ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ considers appropriate, representations and
covenants, including those contained in certificates of officers of NFB,
NFB Bank, JSB, JSB Bank and others, reasonably satisfactory in form and
substance to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be terminated, and
the Merger abandoned, at or prior to the Effective Date, either before or
after its approval by the stockholders of JSB and NFB:
(a) by the mutual consent of NFB and JSB, if the Board of
Directors of each so determines by vote of a majority of the members of its
entire Board;
(b) by NFB or JSB, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in the
event of (i) the failure of the stockholders of JSB or NFB to approve the
Agreement at its Stockholder Meeting called to consider such approval;
provided, however, that JSB or NFB, as the case may be, shall only be
entitled to terminate the Agreement pursuant to this clause (i) if it has
complied in all material respects with its obligations under Sections 4.8
and 4.9, or (ii) a material breach by the other party hereto of any
representation, warranty, covenant or agreement contained herein which
causes the conditions set forth in Section 5.2(a) (in the case of
termination by NFB) and Section 5.3(a) (in the case of the termination by
JSB) not to be satisfied and such breach is not cured within 25 business
days after written notice of such breach is given to the party committing
such breach by the other party or which breach is not capable of being
cured by the date set forth in Section 6.1(d) or any extension thereof;
(c) by NFB or JSB, by written notice to the other party,
if either (i) any approval, consent or waiver of a Governmental Entity
required to permit consummation of the transactions contemplated hereby
shall have been denied or (ii) any governmental authority of competent
jurisdiction shall have issued a final, unappealable order enjoining or
otherwise prohibiting consummation of the transactions contemplated by this
Agreement;
(d) by NFB or JSB, 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 February 29, 2000 ("Initial
Termination Date"), unless the failure to so consummate by such time is due
to the breach of any representation, warranty or covenant contained in this
Agreement by the party seeking to terminate; provided, that if, as of such
date, all necessary regulatory or governmental approvals, consents or
waivers required to consummate the transactions contemplated hereby shall
not have been obtained but all other conditions to the consummation of the
Merger (other than the delivery of executed documents at the Closing) shall
be fulfilled, the Initial Termination Date shall be extended to April 30,
2000;
(e) by NFB or JSB, if the Board of Directors of the other
party does not publicly recommend in the Joint Proxy Statement-Prospectus
that its stockholders approve and adopt this Agreement or if, after
recommending in the Joint Proxy Statement-Prospectus that its stockholders
approve and adopt this Agreement, the Board of Directors of the other party
shall have withdrawn, qualified or revised such recommendation in any
respect materially adverse to the party seeking to terminate this
Agreement; or
(f) by JSB, if its Board of Directors so determines by a
majority vote of the members of its entire Board, if both of the following
conditions are satisfied:
(i) the NFB Market Value on the Valuation Date
is less than $16.35; and
(ii) (A) the number obtained by dividing the
NFB Market Value as of the Valuation Date by the Initial NFB Market
Value ("NFB Ratio") shall be less than (B) the number obtained by
dividing the Final Index Price by the Initial Index Price and
subtracting 0.10 from the quotient in this clause (ii)(B) ("Index
Ratio");
subject, however, to the following three sentences. If JSB elects to
exercise its termination right pursuant to this Section 6.1(f), it shall
give written notice thereof to NFB at any time during the five business day
period commencing on the day following the Valuation Date; provided, that
such notice of election to terminate may be withdrawn at any time during
the 15 business day period commencing on the day such notice is received by
NFB. During the five business day period commencing with its receipt of
such notice, NFB shall have the option to increase the consideration to be
received by the holders of JSB Common Stock hereunder by increasing the
Exchange Ratio from 3.0 to a number equal to the lesser of (1) the product
of (x) the Index Ratio plus 0.10 and (y) 3.0, divided by the NFB Ratio or
(2) the quotient obtained by dividing $61.31 by the NFB Market Value. If
NFB so elects, it shall give, within such five business day period, written
notice to JSB of such election and the revised Exchange Ratio, whereupon no
termination shall be deemed to have occurred pursuant to this Section
6.1(f) and this Agreement shall remain in full force and effect in
accordance with its terms (except as the Exchange Ratio shall have been so
modified).
For purposes of this Section 6.1(f), the following terms shall have the
meanings indicated below:
"Acquisition Transaction" shall have the meaning set forth in
Section 3.4(e), without regard to subsection (ii) of the proviso set forth
therein.
"Final Index Price" means the sum of the Final Prices for each
company comprising the Index Group multiplied by the weighting set forth
opposite such company's name in the definition of Index Group
below.
"Final Price," with respect to any company belonging to the
Index Group, means the average of the daily closing sales prices of a share
of common stock of such company (and if there is no closing sales price on
any such day, then the mean between the closing bid and the closing asked
prices on that day), as reported on the consolidated transaction reporting
system for the market or exchange on which such common stock is principally
traded, for the 15 consecutive trading days immediately preceding the
Valuation Date.
"Index Group" means the 23 financial institution holding
companies listed below, the common stock of all of which shall be publicly
traded and as to which there shall not have been an Acquisition Transaction
involving any of such companies publicly announced at any time during the
period beginning on the date of this Agreement and ending on the day
immediately preceding the Valuation Date. In the event that:
(i) the common stock of any of such companies ceases to be
publicly traded, or
(ii) an Acquisition Transaction involving any of such companies
is announced at any time during the period beginning on the date of
this Agreement and ending on the day immediately preceding the
Valuation Date, or
(iii) any such company shall announce at any time during the
period beginning on the date of this Agreement and ending on the day
immediately preceding the Valuation Date that it has entered into a
definitive agreement to acquire insured deposits from another
financial institution in excess of 20% of its deposit base as of the
most recent quarter end for which information is available or intends
to issue additional capital securities in excess of 10% of the total
value of its Tier 1 capital securities outstanding as of the most
recent quarter end for which information is available,
then such company or companies will be removed from the Index Group, and
the weights attributed to the remaining companies will be adjusted
proportionately for purposes of determining the Final Index Price and the
Initial Index Price; provided, however, that, in the event an Acquisition
Transaction is publicly announced which involves only companies that are
listed below, none of such companies shall be removed from the Index Group.
The 23 financial institution holding companies and the weights attributed
to them are as follows:
Holding Company Symbol Weighting
--------------- ------ ---------
Astoria Financial Corporation ASFC 4.26%
CCB Financial Corporation CCB 3.10%
Charter One Financial, Inc. COFI 12.85%
▇▇▇▇▇▇▇▇▇▇ Corporation CHZ 2.19%
City National Corporation CYN 3.55%
Dime Community Bancshares, Inc. DCOM 0.99%
First Commonwealth Financial Corporation FCF 2.41%
FirstMerit Corporation FMER 7.03%
▇▇▇▇▇▇ Financial Corporation FULT 5.37%
GreenPoint Financial Corp. GPT 8.48%
Independence Community Bank Corp. ICBC 5.29%
Keystone Financial, Inc. KSTN 3.69%
M & T Bank Corporation MTB 0.61%
Peoples Heritage Financial Group, Inc. PHBK 8.12%
Queens County Bancorp, Inc. QCSB 1.67%
Richmond County Financial Corp. RCBK 2.46%
State Bancorp, Inc. STB 0.54%
Staten Island Bancorp, Inc. SIB 3.19%
Suffolk Bancorp SUBK 0.47%
Summit Bancorp SUB 13.19%
Susquehanna Bancshares, Inc. SUSQ 2.88%
Valley National Bancorp VLY 4.70%
▇▇▇▇▇▇▇ Financial Corporation WBST 2.96%
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100.00%
"Initial Index Price" means the sum of the per share closing
sales price of the common stock of each company comprising the Index Group
multiplied by the applicable weighting, as such prices are reported on the
consolidated transaction reporting system for the market or exchange on
which such common stock is principally traded on the trading day
immediately preceding the public announcement of this Agreement.
"Initial NFB Market Value" means the closing sales price of a
share of NFB Common Stock, as reported on the NYSE, on the trading day
immediately preceding the public announcement of this Agreement, adjusted
as indicated in the last sentence of this Section 6.1(f).
"NFB Market Value" shall have the meaning set forth in Section
1.2(b) hereof.
"Valuation Date" shall have the meaning set forth in Section 1.2(c)
hereof.
If NFB or any company belonging to the Index Group declares or effects a
stock dividend, reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the date of this
Agreement and the Valuation Date, the prices for the common stock of such
company shall be appropriately adjusted for the purposes of applying this
Section 6.1(f).
Section 6.2 Effect of Termination. In the event of the
termination of this Agreement by either NFB or JSB, as provided above, this
Agreement shall thereafter become void and, subject to Section 6.3, there
shall be no liability on the part of any party hereto or their respective
officers or directors, except that (a) any such termination shall be
without prejudice to the rights of any party hereto arising out of the
breach by any other party of any covenant, representation or obligation
contained in this Agreement and (b) the obligations of the parties under
the last three sentences in Section 4.3(a) and under Section 8.6 shall
survive.
Section 6.3 Termination Fee. In recognition of the efforts,
expenses and other opportunities foregone by NFB and JSB, respectively,
while structuring the Merger, the parties hereto agree that:
(a) NFB shall pay to JSB a termination fee of Twelve Million,
Five Hundred Thousand Dollars ($12,500,000) plus JSB's documented,
reasonable out-of-pocket expenses (including fees and expenses of legal,
financial and accounting advisors) in cash on demand if, within 12 months
after the date of this Agreement, after a written bona fide proposal is
made after the date of this Agreement by a third party to NFB or its
stockholders to engage in an Acquisition Transaction (as defined in Section
3.4(e)), other than any Acquisition Transaction permitted pursuant to the
terms of this Agreement, including without limitation Section 3.4(e) (a
"Permitted Transaction"), any of the following occur:
(i) NFB shall have willfully breached any covenant or
obligation contained in this Agreement and such breach would entitle
JSB to terminate the Agreement;
(ii) the stockholders of NFB shall not have approved the
Agreement at the meeting of such stockholders held for the purpose of
voting on the Agreement, such meeting shall not have been held or
shall have been canceled prior to termination of the Agreement; or
(iii) NFB's Board of Directors shall have withdrawn or
modified in a manner adverse to JSB the recommendation of NFB's Board
of Directors with respect to the Agreement; and
(b) NFB shall pay to JSB a termination fee of Twenty-Five
Million Dollars ($25,000,000) plus JSB's documented, reasonable
out-of-pocket expenses (including fees and expenses of legal, financial and
accounting advisors) in cash on demand if, during a period of 18 months
after the date hereof, NFB or any of its Subsidiaries, without having
received JSB's prior written consent, shall have entered into an agreement
to engage in an Acquisition Transaction (as defined in Section 3.4(e)),
other than a Permitted Transaction, with any person (the term "person" for
purposes of this Agreement having the meaning assigned thereto in Sections
3(a)(9) and 13(d)(3) of the Exchange Act and the rules and regulations
thereunder) other than JSB or any of its Subsidiaries or the Board of
Directors of NFB shall have recommended that the stockholders of NFB
approve or accept an Acquisition Transaction other than a Permitted
Transaction with any person other than JSB or any of its Subsidiaries. Any
fee payable to JSB pursuant to Section 6.3(b) shall be reduced dollar for
dollar to the extent that any fee is actually paid pursuant to Section
6.3(a). Notwithstanding the foregoing, NFB shall not be obligated to pay to
JSB the termination fee described in Section 6.3(a) or Section 6.3(b) in
the event that at or prior to such time as such fee becomes payable (i) NFB
and JSB validly terminate this Agreement pursuant to Section 6.1(a), (ii)
NFB or JSB validly terminates this Agreement pursuant to Sections 6.1(c) or
6.1(d), (iii) NFB validly terminates this Agreement pursuant to Section
6.1(b) or Section 6.1(e) or (iv) JSB validly terminates this Agreement
pursuant to Section 6.1(f).
(c) JSB shall pay to NFB a termination fee of Twelve Million,
Five Hundred Thousand Dollars ($12,500,000) plus NFB's documented,
reasonable out-of-pocket expenses (including fees and expenses of legal,
financial and accounting advisors) in cash on demand if, within 12 months
after the date of this Agreement, after a bona fide proposal is made after
the date of this Agreement by a third party to JSB or its stockholders to
engage in an Acquisition Transaction (as defined in the JSB Option
Agreement), any of the following occur:
(i) JSB shall have willfully breached any covenant or
obligation contained in this Agreement and such breach would entitle
NFB to terminate the Agreement;
(ii) the stockholders of JSB shall not have approved the
Agreement at the meeting of such stockholders held for the purpose of
voting on the Agreement, such meeting shall not have been held or
shall have been canceled prior to termination of the Agreement; or
(iii) JSB's Board of Directors shall have withdrawn or
modified in a manner adverse to NFB the recommendation of JSB's Board
of Directors with respect to the Agreement; and
(d) JSB shall pay to NFB a termination fee of Twenty-Five
Million Dollars ($25,000,000) plus NFB's documented, reasonable
out-of-pocket expenses (including fees and expenses of legal, financial and
accounting advisors) in cash on demand if, during a period of 18 months
after the date hereof, JSB or any of its Subsidiaries, without having
received NFB's prior written consent, shall have entered into an agreement
to engage in an Acquisition Transaction (as defined in the JSB Option
Agreement) with any person other than NFB or any of its Subsidiaries or the
Board of Directors of JSB shall have recommended that the stockholders of
JSB approve or accept an Acquisition Transaction (as defined in the JSB
Option Agreement) with any person other than NFB or any of its
Subsidiaries. Any fee payable to NFB pursuant to this Section 6.3(d) shall
be reduced dollar for dollar to the extent that any fee is actually paid
pursuant to Section 6.3(c). Notwithstanding the foregoing, JSB shall not be
obligated to pay to NFB the termination fee described in Section 6.3(c) or
Section 6.3(d) in the event that at or prior to such time as such fee
becomes payable (i) NFB and JSB validly terminate this Agreement pursuant
to Section 6.1(a), (ii) NFB or JSB validly terminates this Agreement
pursuant to Sections 6.1(c) or 6.1(d) or (iii) JSB validly terminates this
Agreement pursuant to Section 6.1(b), Section 6.1(e) or Section 6.1(f).
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.1 Effective Date and Effective Time. The closing of
the transactions contemplated hereby ("Closing") shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, on a date ("Closing Date") that is no later than five business
days following the date on which the expiration of the last applicable
waiting period in connection with notices to and approvals of regulatory
and governmental authorities shall occur and all conditions to the
consummation of this Agreement are satisfied or waived, or on such other
date as may be agreed to by the parties. Prior to the Closing Date, NFB and
JSB shall execute a Certificate of Merger in accordance with all
appropriate legal requirements, which shall be filed as required by law on
the Closing Date, and the Merger provided for therein shall become
effective upon such filing or on such date as may be specified in such
Certificate of Merger. The date of such filing or such later effective date
as specified in the Certificate of Merger is herein referred to as the
"Effective Date." The "Effective Time" of the Merger shall be as set forth
in the Certificate of Merger.
Section 7.2 Deliveries at the Closing. Subject to the provisions
of Articles V and VI, on the Closing Date there shall be delivered to NFB
and JSB the documents and instruments required to be delivered under
Article V.
ARTICLE VIII
CERTAIN OTHER MATTERS
Section 8.1 Certain Definitions; Interpretation. As used in this
Agreement, the following terms shall have the meanings indicated:
"material" means material to NFB or JSB (as the case may be) and
its respective Subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization.
When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of, Exhibit or Schedule to,
this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for ease of reference only and
shall not affect the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement,
they shall be deemed followed by the words "without limitation." Any
singular term in this Agreement shall be deemed to include the plural, and
any plural term the singular. Any reference to gender in this Agreement
shall be deemed to include any other gender.
Section 8.2 Survival. Only those agreements and covenants of
the parties that are by their terms applicable in whole or in part after
the Effective Time, including Sections 4.3(a), 4.13, 4.14, 4.15, 4.16, 4.17
and 8.6 of this Agreement, shall survive the Effective Time. All other
representations, warranties, agreements and covenants shall not survive the
Effective Time. If the Agreement shall be terminated, the agreements of the
parties in the last three sentences of Section 4.3(a) and in Section 8.6
shall survive such termination.
Section 8.3 Waiver; Amendment. Prior to the Effective Time, any
provision of this Agreement may be: (i) waived in writing by the party
benefitted by the provision or (ii) amended or modified at any time
(including the structure of the transaction) by an agreement in writing
between the parties hereto except that, after the vote by the stockholders
of JSB or NFB, no amendment or modification may be made that would reduce
the Merger Consideration or contravene any provision of the Delaware
General Corporation Law or the federal banking laws, rules and regulations.
Section 8.4 Counterparts. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an original, but
all of which together shall constitute one and the same instrument.
Section 8.5 Governing Law. This Agreement shall be governed by,
and interpreted in accordance with, the laws of the State of New York,
without regard to conflicts of laws principles.
Section 8.6 Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
Section 8.7 Notices. All notices, requests, acknowledgments and
other communications hereunder to a party shall be in writing and shall be
deemed to have been duly given when delivered by hand, overnight courier or
facsimile transmission (confirmed in writing) to such party at its address
or facsimile number set forth below or such other address or facsimile
transmission as such party may specify by notice to the other party hereto.
If to JSB, to:
JSB Financial, Inc.
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. Park ▇. ▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
With copies to:
JSB Financial, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇
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Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to NFB, to:
North Fork Bancorporation, Inc.
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Chairman, President and
Chief Executive Officer
With copies to:
North Fork Bancorporation, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 8.8 Entire Agreement; etc. This Agreement, together
with the Plan of Bank Merger, the JSB Option Agreement and the Disclosure
Letters, represents the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and supersedes any and
all other oral or written agreements heretofore made. All terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Except for Section 4.13 (other than Section 4.13(c)) and Section 4.14,
which confer rights on the parties described therein, nothing in this
Agreement is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 8.9 Assignment. This Agreement may not be assigned by
either party hereto without the written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date
first above written.
NORTH FORK BANCORPORATION, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Chairman of the Board, President and
Chief Executive Officer
JSB FINANCIAL, INC.
By:/s/ Park ▇. ▇▇▇▇▇▇
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Park ▇. ▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer