EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
dated as of February 18, 1998
by and between
UNITED BANKSHARES, INC.
and
FED ONE BANCORP, INC.
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TABLE OF CONTENTS
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ARTICLE I
Certain Definitions
1.01 Certain Definitions................................................1
ARTICLE II
The Merger
2.01 The Merger.........................................................7
2.02 Articles Amendment.................................................7
2.03 Effective Date and Effective Time..................................8
2.04 Closing............................................................8
ARTICLE III
Consideration; Exchange Procedures
3.01 Merger Consideration...............................................8
3.02 Rights as Stockholders; Stock Transfers............................9
3.03 Fractional Shares..................................................9
3.04 Exchange Procedures................................................9
3.05 Anti-Dilution Provisions..........................................10
3.06 Options...........................................................10
ARTICLE IV
Actions Pending Acquisition
4.01 Forebearances of Fed One..........................................11
4.02 Forebearances of United...........................................14
ARTICLE V
Representations and Warranties
5.01 Disclosure Schedules..............................................14
5.02 Standard..........................................................15
5.03 Representations and Warranties of Fed One.........................15
5.04 Representations and Warranties of United..........................25
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ARTICLE VI
Covenants
6.01 Reasonable Best Efforts...........................................32
6.02 Stockholder Approvals.............................................32
6.03 Registration Statement............................................33
6.04 Press Releases....................................................34
6.05 Access; Information...............................................34
6.06 Acquisition Proposals.............................................35
6.07 Affiliate Agreements..............................................35
6.08 Takeover Laws.....................................................35
6.09 Certain Policies..................................................36
6.10 NASDAQ Listing....................................................36
6.11 Regulatory Applications...........................................36
6.12 Indemnification...................................................37
6.13 Benefit Plans and Arrangements....................................38
6.14 Notification of Certain Matters...................................39
6.15 Dividend Coordination.............................................40
6.16 Directorship of United and Advisory Board of Directors............40
6.17 Fed One Stock Issuance............................................40
6.18 Bank Merger.......................................................40
ARTICLE VII
Conditions to Consummation of the Merger
7.01 Conditions to Each Party's Obligation to Effect the Merger........41
7.02 Conditions to Obligation of Fed One...............................42
7.03 Conditions to Obligation of United................................43
ARTICLE VIII
Termination
8.01 Termination.......................................................43
8.02 Effect of Termination and Abandonment.............................47
ARTICLE IX
Miscellaneous
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9.01 Survival..........................................................47
9.02 Waiver; Amendment.................................................47
9.03 Counterparts......................................................47
9.04 Governing Law.....................................................47
9.05 Expenses..........................................................48
9.06 Notices...........................................................48
9.07 Entire Understanding; No Third Party Beneficiaries................49
9.08 Interpretation; Effect; Assignment; Successors....................49
EXHIBIT A Form of Stock Option Agreement
EXHIBIT B Form of Fed One Affiliate Agreement
EXHIBIT C Form of United Affiliate Agreement
ANNEX A Form of Supplement for Merger Sub
Accession to Merger Agreement
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AGREEMENT AND PLAN OF MERGER, dated as of February 18, 1998 (this
"Agreement"), by and between United Bankshares, Inc. ("United") and Fed One
Bancorp, Inc. ("Fed One").
RECITALS
A. United. United is a West Virginia corporation, having its principal
place of business in Charleston, West Virginia.
B. Fed One. Fed One is a Delaware corporation, having its principal
place of business in Wheeling, West Virginia.
C. Stock Option Agreement. As a condition and an inducement to United's
entering into this Agreement , Fed One has granted to United an option pursuant
to a stock option agreement, in substantially the form of Exhibit A.
D. Intentions of the Parties. It is the intention of the parties to
this Agreement that the business combination contemplated hereby be accounted
for under the "pooling-of-interests" accounting method and treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"Code").
E. Board Action. The respective Boards of Directors of each of United
and Fed One have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. The following terms are used in this
Agreement with the meanings set forth below:
"Acquisition Proposal" means any tender or exchange offer, proposal for
a merger, consolidation or other business combination involving Fed One or
any of its Subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, Fed One or any of its Subsidiaries, other than the
transactions contemplated by this Agreement.
"Agreement" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.
"Articles Amendment" has the meaning set forth in Section 2.02.
"Bank Merger" has the meaning set forth in Section 6.18.
"Closing" has the meaning set forth in Section 2.04.
"Code" means the Internal Revenue Code of 1986, as amended.
"Costs" has the meaning set forth in Section 6.12(a).
"Delaware Secretary" means the Office of the Secretary of State of the
State of Delaware.
"DGCL" means the Delaware General Corporation Law.
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" means the effective time of the Merger, as provided
for in Section 2.03.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water
Act, the Federal Clean Air Act, and the Occupational Safety and Health Act,
each as amended, regulations promulgated thereunder, and state
counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(m).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.04.
"Exchange Ratio" has the meaning set forth in Section 3.01.
"Fed One" has the meaning set forth in the preamble to this Agreement.
"Fed One Affiliate" has the meaning set forth in Section 6.07(a).
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"Fed One Bank" means Fed One Bank, a federal savings bank.
"Fed One Board" means the Board of Directors of Fed One.
"Fed One Bylaws" means the Bylaws of Fed One.
"Fed One Certificate" means the Certificate of Incorporation of Fed
One.
"Fed One Common Stock" means the common stock, par value $0.10 per
share, of Fed One.
"Fed One Compensation and Benefit Plans" has the meaning set forth in
Section 5.03(m).
"Fed One ESOP" means the Fed One Employee Stock Ownership Plan, as
amended.
"Fed One Meeting" has the meaning set forth in Section 6.02.
"Fed One Preferred Stock" means the preferred stock, par value $0.10
per share, of Fed One.
"Fed One Stock" means, collectively, Fed One Common Stock and Fed One
Preferred Stock.
"Fed One Stock Option" has the meaning set forth in Section 3.06(a).
"Fed One Stock Option Plans" means the following plans of Fed One: the
1995 Stock Option Plan, the 1992 Stock Option Plan for Officers and
Employees and the 1992 Stock Option Plan for Outside Directors.
"Fed One Stock Plans"means the following plans of Fed One: the Fed One
ESOP, the 1995 Recognition and Retention Plan and Trust, the 1992
Recognition and Retention Plan and Trust, the 1995 Stock Option Plan, the
1992 Stock Option Plan for Officers and Employees, the 1992 Stock Option
Plan for Outside Directors and the Dividend Reinvestment Plan.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"H-S-R Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"Indemnified Party" has the meaning set forth in Section 6.12(a).
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"Insurance Amount" has the meaning set forth in Section 6.12(b).
"Insurance Policy" has the meaning set forth in Section 5.03(t).
"IRS" means the Internal Revenue Service.
"Lien" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to United or Fed One, any
effect that (i) is material and adverse to the financial position, results
of operations or business of United and its Subsidiaries taken as a whole
or Fed One and its Subsidiaries taken as a whole, respectively, or (ii)
would materially impair the ability of either United or Fed One to perform
its obligations under this Agreement or otherwise materially threaten or
materially impede the consummation of the Merger and the other transactions
contemplated by this Agreement; provided, however, that Material Adverse
Effect shall not be deemed to include the impact of (a) changes in banking
and similar laws of general applicability or interpretations thereof by
courts or Governmental Authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to
banks or savings associations and their holding companies generally, (c)
actions or omissions of United or Fed One taken with the prior written
consent of Fed One and United, respectively, in contemplation of the
transaction contemplated hereby, (d) circumstances affecting banks or
savings associations or their holding companies generally and (e) the
effects of the Merger and compliance by either party with the provisions of
this Agreement on the financial position, results of operations or business
of such party and its Subsidiaries, or the other party and its
Subsidiaries, as the case may be.
"Merger" has the meaning set forth in Section 2.01.
"Merger Consideration" has the meaning set forth in Section 3.01.
"Merger Sub" means UBC Holding Company, Inc., or one or more
corporations or limited liability companies to be organized under the corporate
laws of a state of the United States by United prior to the Effective Time;
provided that the laws of the state of incorporation thereof shall permit the
merger of corporations or limited liability companies organized thereunder with
a Delaware corporation.
"Multiemployer Plan" has the meaning set forth in Section 5.03(m).
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"New Certificate" has the meaning set forth in Section 3.04.
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"Old Certificate" has the meaning set forth in Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust or unincorporated
organization.
"Pension Plan" has the meaning set forth in Section 5.03(m).
"Plans" has the meaning set forth in Section 5.03(m).
"Previously Disclosed" by a party shall mean information set forth in
its Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.03.
"Registration Statement" has the meaning set forth in Section 6.03.
"Regulatory Authority" has the meaning set forth in Section 5.03(i).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person
any right to subscribe for or acquire, or any options, calls or commitments
relating to, or any stock appreciation right or other instrument the value
of which is determined in whole or in part by reference to the market price
or value of, shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.03(g).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Stock Option Agreement" has the meaning set forth in Recital C.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
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"Surviving Corporation" has the meaning set forth in Section 2.01.
"Takeover Laws" has the meaning set forth in Section 5.03 (o).
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts,
sales, use, ad valorem, goods and services, capital, production, transfer,
franchise, windfall profits, license, withholding, payroll, employment,
disability, employer health, excise, estimated, severance, stamp,
occupation, property, environmental, unemployment or other taxes, custom
duties, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority whether arising before, on or after the
Effective Date.
"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Treasury Stock" shall mean shares of Fed One Stock held by Fed One or
any of its Subsidiaries or by United or any of its Subsidiaries, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted in good faith.
"United" has the meaning set forth in the preamble to this Agreement.
"United Affiliates" has the meaning set forth in Section 6.07(a).
"United Articles" means the Restated Articles of Incorporation of
United.
"United Bank" means United National Bank, a national bank.
"United Board" means the Board of Directors of United.
"United Common Stock" means the common stock, par value $2.50 per
share, of United.
"United Compensation and Benefit Plans" has the meaning set forth in
Section 5.04(m).
"United Meeting" has the meaning set forth in Section 6.02.
"United Stock Dividend" means the 100% stock dividend declared by
United payable March 27, 1998 to shareholders of record of United as of
March 13, 1998, subject to approval of an amendment to the United Articles
at a special meeting of United's shareholders to be held on March 9, 1998.
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"West Virginia Secretary" means the Office of the Secretary of State of
the State of West Virginia.
"WVCA" means the West Virginia Corporation Act.
ARTICLE II
THE MERGER
2.01 The Merger. (a) Prior to the Effective Time, United shall take any
and all action necessary (i) to cause the Merger Sub to become a party to this
Agreement, to be evidenced by the execution by the Merger Sub of a supplement to
this Agreement in substantially the form of Annex A, and delivery thereof to Fed
One; and (ii) to cause the Merger Sub to take all actions necessary or proper to
comply with the obligations of United and the Merger Sub to consummate the
transactions contemplated hereby.
(b) At the Effective Time, Fed One shall merge with and into Merger Sub
(the "Merger"), the separate corporate existence of Fed One shall cease and
Merger Sub shall survive and continue to be governed by the laws of its state of
incorporation (Merger Sub, as the surviving corporation in the Merger, sometimes
being referred to herein as the "Surviving Corporation"). United may at any time
prior to the Effective Time (i) change the method of effecting the combination
with Fed One (including, without limitation, the provisions of this Article II)
or (ii) change the method of effecting, or not consummate, the Bank Merger
pursuant to Section 6.18, in each case if and to the extent it deems such change
to be necessary, appropriate or desirable; provided, however, that no such
change shall (i) alter or change the amount or kind of consideration to be
issued to holders of Fed One Stock as provided for in this Agreement (the
"Merger Consideration"), (ii) adversely affect the tax treatment of Fed One's
stockholders as a result of receiving the Merger Consideration or the Merger
qualifying for "pooling-of-interests" accounting treatment or (iii) materially
impede or delay consummation of the transactions contemplated by this Agreement;
and provided further, that United shall provide Fed One written notice of such
change.
(c) Subject to the satisfaction or waiver of the conditions set forth
in Article VII, the Merger shall become effective upon the occurrence of the
filing (i) in the office of the Delaware Secretary of a certificate of merger in
accordance with the DGCL and (ii) in the office of the West Virginia Secretary
of articles of merger in accordance with the WVCA or such later date and time as
may be set forth in such certificate of merger and articles of merger. The
Merger shall have the effects prescribed in the DGCL and the WVCA.
2.02 Articles Amendment. At or prior to the Effective Time, Article VI
of the United Articles shall be amended to read as follows (the "Articles
Amendment"):
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"VI. The amount of the authorized capital stock of the
corporation is $250,000,000 which shall be divided into 100,000,000
shares of a par value of $2.50 per share."
2.03 Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article VII (other than the delivery of
certificates, opinions and other instruments and documents to be delivered at
the Closing), the parties shall cause the effective date of the Merger (the
"Effective Date") to occur on (i) the fifth business day to occur after the last
of the conditions set forth in Article VII shall have been satisfied or waived
in accordance with the terms of this Agreement (or, at the election of United,
on the last business day of the month in which such fifth business day occurs
or, if such fifth business day occurs within the last five business days of such
month, on the last business day of the succeeding month) or (ii) such other date
to which the parties may agree in writing. The time on the Effective Date when
the Merger shall become effective is referred to as the "Effective Time."
2.04 Closing. A closing of the Merger (the "Closing") shall take place
at such place, at such time and on such date as is determined by the parties
pursuant to Section 2.03 hereof. At the Closing, there shall be delivered to
United and Fed One the opinions, certificates and other documents required to be
delivered under Sections 7.02 and 7.03 hereof.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 Merger Consideration. Subject to the provisions of this Agreement,
at the Effective Time, automatically by virtue of the Merger and without any
action on the part of any Person:
(a) Outstanding Fed One Common Stock. Each share, excluding Treasury
Stock, of Fed One Common Stock issued and outstanding immediately prior to
the Effective Time shall become and be converted into 0.75 of a share of
United Common Stock (subject to adjustment as set forth herein, the
"Exchange Ratio"). The Exchange Ratio shall be subject to adjustment as set
forth in Sections 3.05 and 8.01(f).
(b) Outstanding United Stock. Each share of United Common Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unaffected by the Merger.
(c) Treasury Shares. Each share of Fed One Common Stock held as
Treasury Stock immediately prior to the Effective Time shall be canceled
and retired at the Effective Time and no consideration shall be issued in
exchange therefor.
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3.02 Rights as Stockholders; Stock Transfers. At the Effective Time,
holders of Fed One Stock shall cease to be, and shall have no rights as,
stockholders of Fed One, other than to receive any dividend or other
distribution with respect to such Fed One Stock with a record date occurring
prior to the Effective Time and the consideration provided under this Article
III. After the Effective Time, there shall be no transfers on the stock transfer
books of Fed One or the Surviving Corporation of shares of Fed One Stock.
3.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of United Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
United shall pay to each holder of Fed One Common Stock who would otherwise be
entitled to a fractional share of United Common Stock (after taking into account
all Old Certificates delivered by such holder) an amount in cash (without
interest) determined by multiplying such fraction by the average of the last
sale prices of United Common Stock, as reported by NASDAQ reporting system (as
reported in The Wall Street Journal or, if not reported therein, in another
authoritative source), for the five NASDAQ trading days immediately preceding
the Effective Date.
3.04 Exchange Procedures. (a) At or prior to the Effective Time, United
shall deposit, or shall cause to be deposited, with United Bank (in such
capacity, the "Exchange Agent"), for the benefit of the holders of certificates
formerly representing shares of Fed One Common Stock ("Old Certificates"), for
exchange in accordance with this Article III, certificates representing the
shares of United Common Stock ("New Certificates") and an estimated amount of
cash (such cash and New Certificates, together with any dividends or
distributions with a record date occurring after the Effective Date with respect
thereto (without any interest on any such cash, dividends or distributions),
being hereinafter referred to as the "Exchange Fund") to be paid pursuant to
this Article III in exchange for outstanding shares of Fed One Common Stock.
(b) As promptly as practicable after the Effective Date, United shall
send or cause to be sent to each former holder of record of shares of Fed One
Common Stock immediately prior to the Effective Time transmittal materials for
use in exchanging such stockholder's Old Certificates for the consideration set
forth in this Article III. United shall cause the New Certificates into which
shares of a stockholder's Fed One Common Stock are converted on the Effective
Date and/or any check in respect of any fractional share interests or dividends
or distributions which such person shall be entitled to receive to be delivered
to such stockholder upon delivery to the Exchange Agent of Old Certificates
representing such shares of Fed One Common Stock (or indemnity reasonably
satisfactory to United and the Exchange Agent, if any of such certificates are
lost, stolen or destroyed) owned by such stockholder. No interest will be paid
on any such cash to be paid in lieu of fractional share interests or in respect
of dividends or distributions which any such person shall be entitled to receive
pursuant to this Article III upon such delivery.
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(c) Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to any former holder of Fed One Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect to United Common
Stock with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of Fed One
Common Stock converted in the Merger into the right to receive shares of such
United Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth in
this Section 3.04. After becoming so entitled in accordance with this Section
3.04, the record holder thereof also shall be entitled to receive any such
dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to shares of United Common Stock
such holder had the right to receive upon surrender of the Old Certificates.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Fed One for six months after the Effective Time shall be paid to
United. Any stockholders of Fed One who have not theretofore complied with this
Article III shall thereafter look only to United for payment of the shares of
United Common Stock, cash in lieu of any fractional shares and unpaid dividends
and distributions on United Common Stock deliverable in respect of each share of
Fed One Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
3.05 Anti-Dilution Provisions. In the event United changes (or a record
date for any such change occurs prior to the Effective Date) the number of, or
provides for the exchange of, shares of United Common Stock issued and
outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization or similar transaction with respect to the
outstanding United Common Stock and the record date therefor shall be prior to
the Effective Date, including without limitation pursuant to the United Stock
Dividend (which shall result in an adjustment of the Exchange Ratio as of the
date hereof to 1.5), the Exchange Ratio shall be proportionately adjusted.
3.06 Options. (a) At the Effective Time, each outstanding option to
purchase shares of Fed One Common Stock under the Fed One Stock Option Plans
(each, a "Fed One Stock Option"), whether vested or unvested, shall be converted
into an option to acquire, on the same terms and conditions as were applicable
under such Fed One Stock Option, the number of shares of United Common Stock
equal to (a) the number of shares of Fed One Common Stock subject to the Fed One
Stock Option, multiplied by (b) the Exchange Ratio (such product rounded to the
nearest whole number) (a "Replacement Option"), at an exercise price per share
(rounded down to the nearest whole cent) equal to (y) the per share exercise
price pursuant to such Fed One Stock Option divided by the Exchange Ratio.
Notwithstanding the foregoing, each Fed One Stock Option which is intended to be
an "incentive stock option" (as defined in Section 422 of the Code) shall be
adjusted in accordance with the requirements of Section 424 of the Code.
Accordingly, with respect to "incentive stock options," fractional shares shall
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be rounded down to the nearest whole number of shares and where necessary the
per share exercise price shall be rounded up to the nearest cent. At or prior to
the Effective Time, Fed One shall use its best efforts, including using its
reasonable best efforts to obtain any necessary consents from optionees, with
respect to the Fed One Stock Option Plans to permit the replacement of the
outstanding Fed One Stock Options by United pursuant to this Section and to
permit United to assume the Fed One Stock Option Plans. Fed One shall further
take all action necessary to amend the Fed One Stock Option Plans to eliminate
automatic grants or awards thereunder following the Effective Time. At the
Effective Time, United shall assume the Fed One Stock Option Plans; provided,
that such assumption shall be only in respect of the Replacement Options and
that United shall have no obligation with respect to any awards under the Fed
One Stock Option Plans other than the Replacement Options and shall have no
obligation to make any additional grants or awards under such assumed Fed One
Stock Option Plans.
(b) At all times after the Effective Time, United shall reserve for
issuance such number of shares of United Common Stock as necessary so as to
permit the exercise of options granted under the Fed One Stock Option Plans in
the manner contemplated by this Agreement and the instruments pursuant to which
such options were granted. United shall file with the SEC a registration
statement on an appropriate form under the Securities Act with respect to the
shares of United Common Stock subject to options to acquire United Common Stock
issued pursuant to Section 3.06(a) hereof, and shall use its reasonable best
efforts to maintain the current status of the prospectus contained therein, as
well as comply with any applicable state securities or "blue sky" laws, for so
long as such options remain outstanding.
ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 Forebearances of Fed One. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of United, Fed One will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. Conduct the business of Fed One and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates, or take any action
reasonably likely to have an adverse affect upon Fed One's ability to
perform any of its material obligations under this Agreement.
(b) Capital Stock. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof or pursuant to Fed One's Dividend
Reinvestment Plan (but only with respect to open
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market, non-discounted purchases), (i) issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional shares of Fed One
Stock or any Rights, (ii) enter into any agreement with respect to the
foregoing, or (iii) permit any additional shares of Fed One Stock to become
subject to new grants of employee or director stock options, other Rights or
similar stock-based employee rights.
(c) Dividends, Etc. (a) Make, declare, pay or set aside for payment any
dividend, other than (A) quarterly cash dividends on Fed One Stock in an
amount not to exceed $0.155 per share with record and payment dates
consistent with past practice, and (B) dividends from wholly owned
Subsidiaries to Fed One or another wholly owned Subsidiary of Fed One) on
or in respect of, or declare or make any distribution on any shares of Fed
One Stock or (b) directly or indirectly adjust, split, combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of Fed One or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit, (including incentive or bonus payments) except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, (ii) for other changes that are
required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof, or (iv) for grants
of awards to newly hired employees consistent with past practice.
(e) Benefit Plans. Enter into, establish, adopt or amend (except as may
be required by applicable law) any pension, retirement, stock option, stock
purchase, savings, profit sharing, deferred compensation, consulting,
bonus, group insurance or other employee benefit, incentive or welfare
contract, plan or arrangement, or any trust agreement (or similar
arrangement) related thereto, in respect of any director, officer or
employee of Fed One or its Subsidiaries, or take any action to accelerate
the vesting or exercisability of stock options, restricted stock or other
compensation or benefits payable thereunder.
(f) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course of
business and in a transaction that is not material to it and its
Subsidiaries taken as a whole.
(g) Acquisitions. Except as Previously Disclosed, acquire (other than
by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith,
in each case in the ordinary and usual course of business consistent with
past practice) all or any portion of, the assets, business, deposits or
properties of any other entity.
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(h) Governing Documents. Amend the Fed One Certificate, Fed One Bylaws
or the certificate of incorporation or by-laws (or similar governing
documents) of any of Fed One's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by
generally accepted accounting principles.
(j) Contracts. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any
of its existing material contracts.
(k) Claims. Except in the ordinary course of business consistent with
past practice, settle any claim, action or proceeding, except for any
claim, action or proceeding which does not involve precedent for other
material claims, actions or proceedings and which involve solely money
damages in an amount, individually or in the aggregate for all such
settlements, that is not material to Fed One and its Subsidiaries, taken as
a whole.
(l) Adverse Actions. (a) Take any action while knowing that such action
would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for "pooling-of- interests" accounting treatment or (ii) as
a reorganization within the meaning of Section 368 of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (ii) any of the conditions to the Merger
set forth in Article VII not being satisfied or (iii) a material violation
of any provision of this Agreement except, in each case, as may be required
by applicable law or regulation.
(m) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure
to interest rate risk.
(n) Indebtedness. Incur any indebtedness for borrowed money other than
in the ordinary course of business.
(o) Commitments. Agree or commit to do any of the foregoing.
13
4.02 Forebearances of United. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Fed One, United will not, and will cause each of its
Subsidiaries not to:
(a) Preservation. Fail to use reasonable efforts to preserve intact in
any material respect their business organizations and assets and maintain
their rights, franchises and existing relations with customers, suppliers,
employees and business associates.
(b) Extraordinary Dividends. Make, declare, pay or set aside for
payment any extraordinary dividend.
(c) Adverse Actions. (a) Take any action while knowing that such action
would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for "pooling-of- interests" accounting treatment or (ii) as
a reorganization within the meaning of Section 368 of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (ii) any of the conditions to the Merger
set forth in Article VII not being satisfied or (iii) a material violation
of any provision of this Agreement except, in each case, as may be required
by applicable law or regulation; provided, however, that nothing contained
herein shall limit the ability of United to exercise its rights under the
Stock Option Agreement.
(d) Commitments. Agree or commit to do any of the foregoing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Disclosure Schedules. On or prior to the date hereof, United has
delivered to Fed One a schedule and Fed One has delivered to United a schedule
(respectively, its "Disclosure Schedule") setting forth, among other things,
items the disclosure of which is necessary or appropriate in relation to any or
all of its representations and warranties contained in Section 5.03 or 5.04 or
to one or more of its covenants contained in Article IV; provided, that (a) no
such item is required to be set forth in a Disclosure Schedule as an exception
to a representation or warranty if its absence would not be reasonably likely to
result in the related representation or warranty being deemed untrue or
incorrect under the standard established by Section 5.02, and (b) the mere
inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to result in a Material Adverse Effect on the party
making the representation. Fed One's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue
14
or breached as a result of effects arising solely from actions taken in
compliance with a written request of United.
5.02 Standard. No representation or warranty of Fed One or United
contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04 has had or is reasonably likely to have a
Material Adverse Effect. For purposes of this Agreement, "knowledge" shall mean,
with respect to a party hereto, actual knowledge of any officer of that party
with the title, if any ranking not less than senior vice president and that
party's in-house counsel, if any.
5.03 Representations and Warranties of Fed One. Subject to Sections
5.01 and 5.02 and except as Previously Disclosed in a paragraph of its
Disclosure Schedule corresponding to the relevant paragraph below, Fed One
hereby represents and warrants to United:
(a) Organization, Standing and Authority. Fed One is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Fed One is duly qualified to do business and is in good
standing in the states of the United States and any foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified.
(b) Fed One Stock. As of the date hereof, the authorized capital stock
of Fed One consists solely of (i) 15,000,000 shares of Fed One Common
Stock, of which 2,375,556 shares were outstanding as of the date hereof,
and (ii) 5,000,000 shares of Fed One Preferred Stock, of which no shares
are outstanding. As of the date hereof, 443,206 shares of Fed One Common
Stock and no shares of Fed One Preferred Stock were held in treasury by Fed
One or otherwise owned by Fed One or its Subsidiaries ("Treasury Stock").
The outstanding shares of Fed One Stock have been duly authorized and are
validly issued and outstanding, fully paid and nonassessable, and subject
to no preemptive rights (and were not issued in violation of any preemptive
rights). As of the date hereof, except as Previously Disclosed in its
Disclosure Schedule, there are no shares of Fed One Stock authorized and
reserved for issuance, Fed One does not have any Rights issued or
outstanding with respect to Fed One Stock, and Fed One does not have any
commitment to authorize, issue or sell any Fed One Stock or Rights, except
pursuant to this Agreement and the Stock Option Agreement. The number of
shares of Fed One Common Stock which are issuable and reserved for issuance
upon exercise of Fed One Stock Options as of the date hereof are Previously
Disclosed in Fed One's Disclosure Schedule. Fed One has Previously
Disclosed all purchases of Fed One Stock in the prior two years.
15
(c) Subsidiaries. (i)(A) Fed One has Previously Disclosed a list of all
of its Subsidiaries together with the jurisdiction of organization of each
such Subsidiary, (B) except as Previously Disclosed, it owns, directly or
indirectly, all the issued and outstanding equity securities of each of its
Subsidiaries, (C) no equity securities of any of its Subsidiaries are or
may become required to be issued (other than to it or its wholly-owned
Subsidiaries) by reason of any Right or otherwise, (D) there are no
contracts, commitments, understandings or arrangements by which any of such
Subsidiaries is or may be bound to sell or otherwise transfer any equity
securities of any such Subsidiaries (other than to it or its wholly-owned
Subsidiaries), (E) there are no contracts, commitments, understandings, or
arrangements relating to its rights to vote or to dispose of such
securities and (F) all the equity securities of each Subsidiary held by Fed
One or its Subsidiaries are fully paid and nonassessable and are owned by
Fed One or its Subsidiaries free and clear of any Liens.
(ii) Fed One does not own beneficially, directly or indirectly, any
equity securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than its Subsidiaries.
(iii) Each of Fed One's Subsidiaries has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good standing in
the jurisdictions where its ownership or leasing of property or the conduct
of its business requires it to be so qualified.
(d) Corporate Power. Each of Fed One and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and Fed One has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.
(e) Corporate Authority. Subject in the case of this Agreement to
receipt of the requisite approval and adoption of this Agreement (including
the agreement of merger set forth herein) by the holders of more than a
majority of the outstanding shares of Fed One Common Stock entitled to vote
thereon pursuant to the DGCL (which is the only shareholder vote required
thereon), this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary
corporate action of Fed One and the Fed One Board prior to the date hereof.
This Agreement is a valid and legally binding obligation of Fed One,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to
or affecting creditors' rights or by general equity principles). The
actions leading up to the entering into of this Agreement and the Stock
Option Agreement, the entering into of this Agreement and the Stock Option
Agreement, and the consummation of the transactions contemplated hereby and
thereby are not prohibited or in any way affected by the provisions of
Article 10 of the Fed One
16
Certificate. The Fed One Board of Directors has received the written opinion of
Xxxx, Xxxx & Co. to the effect that as of the date hereof the consideration to
be received by the holders of Fed One Common Stock in the Merger is fair to the
holders of Fed One Common Stock from a financial point of view.
(f) Regulatory Filings; No Defaults. (i) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by Fed One or any of its
Subsidiaries in connection with the execution, delivery or performance by
Fed One of this Agreement or the Stock Option Agreement or to consummate
the Merger except for (A) filings of applications or notices with federal
and state banking and thrift authorities, (B) filings with the SEC and
state securities authorities, (C) filings of applications or notices with
the U.S. Department of Justice and Federal Trade Commission pursuant to the
H-S-R Act, (D) the filing of the certificate of merger with the Delaware
Secretary pursuant to the DGCL and the filing of articles of merger with
the West Virginia Secretary pursuant to the WVCA, and (E) the adoption and
approval of this Agreement by the stockholders of Fed One. As of the date
hereof, Fed One is not aware of any reason why the approvals set forth in
Section 7.01(b) will not be received without the imposition of a condition,
restriction or requirement of the type described in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph, and expiration of related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the Stock Option Agreement
and the consummation of the transactions contemplated hereby and thereby do
not and will not (A) constitute a breach or violation of, or a default
under, or give rise to any Lien, any acceleration of remedies or any right
of termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or
instrument of Fed One or of any of its Subsidiaries or to which Fed One or
any of its Subsidiaries or properties is subject or bound, (B) constitute a
breach or violation of, or a default under, the Fed One Certificate or the
Fed One Bylaws or (C) require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license,
agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse Effect. (i)
Fed One's Annual Reports on Form 10-K for the fiscal years ended December
31, 1994, 1995 and 1996, and all other reports, registration statements,
definitive proxy statements or information statements filed or to be filed
by it or any of its Subsidiaries subsequent to December 31, 1994 under the
Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, in the form filed or to be filed (collectively, Fed One's "SEC
Documents") with the SEC, as of the date filed, (A) complied or will comply
in all material respects with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
17
statements therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets or statements of
condition contained in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of Fed One and its
Subsidiaries as of its date, and each of the statements of income and
changes in stockholders' equity and cash flows or equivalent statements in
such SEC Documents (including any related notes and schedules thereto)
fairly presents, or will fairly present, the results of operations, changes
in stockholders' equity and cash flows, as the case may be, of Fed One and
its Subsidiaries for the periods to which they relate, in each case in
accordance with generally accepted accounting principles consistently
applied during the periods involved, except in each case as may be noted
therein, subject to normal year-end audit adjustments and the absence of
footnotes in the case of unaudited statements. Fed One's press release
announcing its 1997 year end results fairly presents the financial
condition of Fed One as of December 31, 1997 and the results of its
operations for the year ended December 31, 1997, in each case as determined
in accordance with generally accepted accounting principles.
(ii) Since December 31, 1997, Fed One and its Subsidiaries have not
incurred any liability other than in the ordinary course of business
consistent with past practice (excluding expenses incurred in connection
with this Agreement and the transactions contemplated hereby).
(iii) Since December 31, 1997, (A) Fed One and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding matters related to this Agreement
and the transactions contemplated hereby) and (B) no event has occurred or
circumstance arisen that, individually or taken together with all other
facts, circumstances and events (described in any paragraph of Section 5.03
or otherwise), is reasonably likely to have a Material Adverse Effect with
respect to Fed One.
(h) Litigation. No litigation, claim or other proceeding before any
court or governmental agency is pending against Fed One or any of its
Subsidiaries and, to Fed One's knowledge, no such litigation, claim or other
proceeding has been threatened.
(i) Regulatory Matters. (i) Neither Fed One nor any of its Subsidiaries
or properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, or extraordinary supervisory letter from, any federal
or state governmental agency or authority charged with the supervision or
regulation of financial institutions (or their holding companies) or issuers of
securities or engaged in the insurance of deposits (including, without
limitation, the Office of Thrift Supervision, the Board of Governors of the
Federal Reserve System and the Federal Deposit Insurance Corporation) or the
supervision or regulation of it or any of its Subsidiaries (collectively, the
"Regulatory Authorities").
18
(ii) Neither Fed One nor any of its Subsidiaries has been advised by
any Regulatory Authority that such Regulatory Authority is contemplating issuing
or requesting (or is considering the appropriateness of issuing or requesting)
any such order, decree, agreement, memorandum of understanding, commitment
letter, supervisory letter or similar submission.
(j) Compliance with Laws. Each of Fed One and its Subsidiaries:
(i) is in compliance with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting
such businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act,
the Home Mortgage Disclosure Act and all other applicable fair lending
laws and other laws relating to discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to own or lease their properties and to conduct their businesses
as presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to
Fed One's knowledge, no suspension or cancellation of any of them is
threatened; and
(iii) has received, since December 31, 1995, no notification or
communication from any Governmental Authority (A) asserting that Fed
One or any of its Subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances which such Governmental Authority
enforces, (B) threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to Fed One's knowledge, do any grounds
for any of the foregoing exist) or (C) as of the date hereof, failing
to approve any proposed acquisition, or stating its intention not to
approve acquisitions proposed to be effected by it within a certain
time period or indefinitely.
(k) Material Contracts; Defaults. Except for this Agreement, the Stock
Option Agreement and those agreements and other documents filed as exhibits
to its SEC Documents, neither it nor any of its Subsidiaries is a party to,
bound by or subject to any agreement, contract, arrangement, commitment or
understanding (whether written or oral) (i) that is a "material contract"
within the meaning of Item 601(b)(10) of the SEC's Regulation S-K or (ii)
that restricts or limits in any way the conduct of business by it or any of
its Subsidiaries (including without limitation a non-compete or similar
provision). Neither Fed One nor any of its Subsidiaries is in default under
any contract, agreement, commitment, arrangement, lease, insurance policy
or other instrument to which it is a party, by which its respective assets,
business, or operations may be bound or affected, or under which it or its
respective assets, business, or operations receive benefits, and there has
not occurred any event that, with the lapse of time or the giving of notice
or both, would constitute such a default.
19
(l) No Brokers. No action has been taken by Fed One that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement, excluding a Previously
Disclosed fee to be paid to Xxxx, Xxxx & Co.
(m) Employee Benefit Plans. (i) Fed One's Disclosure Schedule contains
a complete and accurate list of all existing bonus, incentive, deferred
compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock,
stock option, severance, welfare and fringe benefit plans, employment or
severance agreements and all similar practices, policies and arrangements
in which any employee or former employee (the "Employees"), consultant or
former consultant (the "Consultants") or director or former director (the
"Directors") of Fed One or any of its Subsidiaries participates or to which
any such Employees, Consultants or Directors are a party (the "Fed One
Compensation and Benefit Plans"). Neither Fed One nor any of its
Subsidiaries has any commitment to create any additional Compensation and
Benefit Plan or to modify or change any existing Compensation and Benefit
Plan.
(ii) Each Fed One Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act,
or any regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the Securities Act,
the Exchange Act, the Age Discrimination in Employment Act and any other
applicable law have been timely made. Each Fed One Compensation and Benefit
Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA (a "Pension Plan") and which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter (including a determination that the related trust
under such Fed One Compensation and Benefit Plan is exempt from tax under
Section 501(a) of the Code) from the IRS, and Fed One is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter. There is no material pending or, to the knowledge of
Fed One, threatened legal action, suit or claim relating to the Fed One
Compensation and Benefit Plans. Neither Fed One nor any of its Subsidiaries
has engaged in a transaction, or omitted to take any action, with respect
to any Fed One Compensation and Benefit Plan that would reasonably be
expected to subject Fed One or any of its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
20
(iii) No liability (other than for payment of premiums to the PBGC
which have been made or will be made on a timely basis) under Title IV of
ERISA has been or is expected to be incurred by Fed One or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or any single-employer
plan of any entity (an "ERISA Affiliate") which is considered one employer
with Fed One under Section 4001(a)(14) of ERISA or Section 414(b) or (c) of
the Code (an "ERISA Affiliate Plan"). None of Fed One, any of its
Subsidiaries or any ERISA Affiliate has contributed, or has been obligated
to contribute, to a multi-employer plan under Subtitle E of Title IV of
ERISA at any time since September 26, 1980. No notice of a "reportable
event", within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to be filed
for any Fed One Compensation and Benefit Plan or by any ERISA Affiliate
Plan within the 12-month period ending on the date hereof, and no such
notice will be required to be filed as a result of the transactions
contemplated by this Agreement. The PBGC has not instituted proceedings to
terminate any Pension Plan or ERISA Affiliate Plan and, to Fed One's
knowledge, no condition exists that presents a material risk that such
proceedings will be instituted. To the knowledge of Fed One, there is no
pending investigation or enforcement action by the PBGC, the U.S.
Department of Labor (the "DOL") or IRS or any other governmental agency
with respect to any Fed One Compensation and Benefit Plan. Under each
Pension Plan and ERISA Affiliate Plan, as of the date of the most recent
actuarial valuation performed prior to the date of this Agreement, the
actuarially determined present value of all "benefit liabilities", within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of
the actuarial assumptions contained in such actuarial valuation of such
Pension Plan or ERISA Affiliate Plan), did not exceed the then current
value of the assets of such Pension Plan or ERISA Affiliate Plan and since
such date there has been neither an adverse change in the financial
condition of such Pension Plan or ERISA Affiliate Plan nor any amendment or
other change to such Pension Plan or ERISA Affiliate Plan that would
increase the amount of benefits thereunder which reasonably could be
expected to change such result.
(iv) All contributions required to be made under the terms of any Fed
One Compensation and Benefit Plan or ERISA Affiliate Plan or any employee
benefit arrangements under any collective bargaining agreement to which Fed
One or any of its Subsidiaries is a party have been timely made or have
been reflected on Fed One's financial statements. Neither any Pension Plan
nor any ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA and all required payments to the PBGC with respect to
each Pension Plan or ERISA Affiliate Plan have been made on or before their
due dates. None of Fed One, any of its Subsidiaries or any ERISA Affiliate
(x) has provided, or would reasonably be expected to be required to
provide, security to any Pension Plan or to any ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code, and (y) has taken any action,
or omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a lien under Section 412(n) of the
Code or pursuant to ERISA.
21
(v) Neither Fed One nor any of its Subsidiaries has any obligations to
provide retiree health and life insurance or other retiree death benefits
under any Fed One Compensation and Benefit Plan, other than benefits
mandated by Section 4980B of the Code, and each such Fed One Compensation
and Benefit Plan may be amended or terminated without incurring liability
thereunder. There has been no communication to Employees by Fed One or any
of its Subsidiaries that would reasonably be expected to promise or
guarantee such Employees retiree health or life insurance or other retiree
death benefits on a permanent basis.
(vi) Fed One and its Subsidiaries do not maintain any Fed One
Compensation and Benefit Plans covering foreign Employees.
(vii) With respect to each Fed One Compensation and Benefit Plan, if
applicable, Fed One has provided or made available to United, true and
complete copies of existing: (A) Fed One Compensation and Benefit Plan
documents and amendments thereto; (B) trust instruments and insurance
contracts; (C) two most recent Forms 5500 filed with the IRS; (D) most
recent actuarial report and financial statement; (E) the most recent
summary plan description; (F) forms filed with the PBGC (other than for
premium payments); (G) most recent determination letter issued by the IRS;
(H) any Form 5310 or Form 5330 filed with the IRS; and (I) most recent
nondiscrimination tests performed under ERISA and the Code (including
401(k) and 401(m) tests).
(viii) The consummation of the transactions contemplated by this
Agreement would not, directly or indirectly (including, without limitation,
as a result of any termination of employment prior to or following the
Effective Time) reasonably be expected to (A) entitle any Employee,
Consultant or Director to any payment (including severance pay or similar
compensation) or any increase in compensation, (B) result in the vesting or
acceleration of any benefits under any Fed One Compensation and Benefit
Plan or (C) result in any material increase in benefits payable under any
Fed One Compensation and Benefit Plan.
(ix) Neither Fed One nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations
under Section 162(m) of the Code and the regulations issued thereunder.
(x) As a result, directly or indirectly, of the transactions
contemplated by this Agreement (including, without limitation, as a result
of any termination of employment prior to or following the Effective Time),
none of United, Fed One or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is a
"disqualified individual" (as such terms are defined in Section 280G of the
Code), without regard to whether such payment is reasonable compensation
for personal services performed or to be performed in the future.
22
(n) Labor Matters. Neither Fed One nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization,
nor is Fed One or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair labor
practice (within the meaning of the National Labor Relations Act) or
seeking to compel Fed One or any such Subsidiary to bargain with any labor
organization as to wages or conditions of employment, nor is there any
strike or other labor dispute involving it or any of its Subsidiaries
pending or, to Fed One's knowledge, threatened, nor is Fed One aware of any
activity involving its or any of its Subsidiaries' employees seeking to
certify a collective bargaining unit or engaging in other organizational
activity.
(o) Takeover Laws; Dissenters' Rights. Fed One has taken all action
required to be taken by it in order to exempt this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby from,
and this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby (the "Covered Transactions") are exempt
from, the requirements of any "moratorium", "control share", "fair price",
"affiliate transaction", "business combination" or other anti-takeover laws
and regulations of any state (collectively, "Takeover Laws"), including,
without limitation, the State of Delaware and Section 203 of the DGCL,
applicable to Fed One. Assuming the United Common Stock meets the
requirements set forth in Section 262(b)(2) of the DGCL, holders of Fed One
Common Stock do not have dissenters' rights in connection with the Merger.
(p) Environmental Matters. To Fed One's knowledge, neither the conduct
nor operation of Fed One or its Subsidiaries nor any condition of any
property presently or previously owned, leased or operated by any of them
(including, without limitation, in a fiduciary or agency capacity), or on
which any of them holds a Lien, violates or violated Environmental Laws and
to Fed One's knowledge, no condition has existed or event has occurred with
respect to any of them or any such property that, with notice or the
passage of time, or both, is reasonably likely to result in liability under
Environmental Laws. To Fed One's knowledge, neither Fed One nor any of its
Subsidiaries has received any notice from any person or entity that Fed One
or its Subsidiaries or the operation or condition of any property ever
owned, leased, operated, or held as collateral or in a fiduciary capacity
by any of them are or were in violation of or otherwise are alleged to have
liability under any Environmental Law, including, but not limited to,
responsibility (or potential responsibility) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such
property.
(q) Tax Matters. (i) All Tax Returns that are required to be filed by
or with respect to Fed One and its Subsidiaries have been duly filed, (ii)
all Taxes shown to be due on the Tax Returns referred to in clause (i) have
been paid in full, (iii) the Tax Returns referred to in clause (i) have
been examined by the IRS or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired, (iv) all
deficiencies asserted or assessments made as a result of such examinations
have been paid in full, (v)
23
no issues that have been raised by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in
clause (i) are currently pending, and (vi) no waivers of statutes of
limitation have been given by or requested with respect to any Taxes of Fed
One or its Subsidiaries. Fed One has made available to United true and
correct copies of the United States federal income Tax Returns filed by Fed
One and its Subsidiaries for each of the three most recent fiscal years
ended on or before December 31, 1996. Neither Fed One nor any of its
Subsidiaries has any liability with respect to income, franchise or similar
Taxes that accrued on or before the end of the most recent period covered
by Fed One's SEC Documents filed prior to the date hereof in excess of the
amounts accrued with respect thereto that are reflected in the financial
statements included in Fed One's SEC Documents filed on or prior to the
date hereof. As of the date hereof, neither Fed One nor any of its
Subsidiaries has any reason to believe that any conditions exist that might
prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(ii) No Tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transfer contemplated by this Agreement.
(r) Risk Management Instruments. All interest rate swaps, caps, floors,
option agreements, futures and forward contracts and other similar risk
management arrangements, whether entered into for Fed One's own account, or
for the account of one or more of Fed One's Subsidiaries or their customers
(all of which are listed on Fed One's Disclosure Schedule), were entered
into (i) in accordance with applicable laws, rules, regulations and
regulatory policies and (ii) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and legally
binding obligation of Fed One or one of its Subsidiaries, enforceable in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles), and is in full force
and effect. Neither Fed One nor its Subsidiaries, nor to Fed One's
knowledge any other party thereto, is in breach of any of its obligations
under any such agreement or arrangement.
(s) Books and Records. The books and records of Fed One and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein and they fairly reflect the
substance of events and transactions included therein.
24
(t) Insurance. Fed One's Disclosure Schedule sets forth all of the
insurance policies, binders, or bonds maintained by Fed One or its
Subsidiaries. Fed One and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of Fed
One reasonably has determined to be prudent in accordance with industry
practices. All such insurance policies are in full force and effect; Fed
One and its Subsidiaries are not in material default thereunder; and all
claims thereunder have been filed in due and timely fashion.
(u) Accounting Treatment. As of the date hereof, it is aware of no
reason why the Merger will fail to qualify for "pooling-of-interests"
accounting treatment, assuming compliance by Fed One and United with the
requirements of Section 6.17 hereof.
(v) Disclosure. The representations and warranties contained in this
Section 5.03 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.03 not misleading.
5.04 Representations and Warranties of United. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, United hereby represents
and warrants to Fed One as follows:
(a) Organization, Standing and Authority. United is a corporation duly
organized, validly existing and in good standing under the laws of the
State of West Virginia. United is duly qualified to do business and is in
good standing in the states of the United States and foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified.
(b) United Stock. (i) As of the date hereof, the authorized capital
stock of United consists solely of 20,000,000 shares of United Common
Stock, of which no more than 15,004,661 shares were outstanding as of the
date hereof. As of the date hereof, except as set forth in its Disclosure
Schedule, United does not have any Rights issued or outstanding with
respect to United Stock and United does not have any commitment to
authorize, issue or sell any United Stock or Rights, except pursuant to
this Agreement. The outstanding shares of United Common Stock have been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights).
(ii) The shares of United Common Stock to be issued in exchange for
shares of Fed One Common Stock in the Merger, when issued in accordance
with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable and subject to no preemptive rights.
25
(c) Subsidiaries. Each of United's Subsidiaries has been duly organized
and is validly existing in good standing under the laws of the jurisdiction
of its organization, and is duly qualified to do business and is in good
standing in the jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and it owns,
directly or indirectly, all the issued and outstanding equity securities of
each of its Significant Subsidiaries.
(d) Corporate Power. Each of United and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and United has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.
(e) Corporate Authority. Subject in the case of this Agreement to
receipt of the requisite approval by the holders of a majority of the
outstanding shares of United Common Stock entitled to vote thereon of the
Articles Amendment (which is the only shareholder vote required thereon),
this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary
corporate action of United and the United Board prior to the date hereof.
This Agreement is a valid and legally binding agreement of United,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to
or affecting creditors' rights or by general equity principles).
(f) Regulatory Approvals; No Defaults. (i) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by United or any of its
Subsidiaries in connection with the execution, delivery or performance by
United of this Agreement or to consummate the Merger except for (A) the
filing of applications and notices, as applicable, with the federal and
state banking and thrift authorities; (B) the adoption and approval by the
shareholders of United of the Articles Amendment as contemplated hereby;
(C) the filing and declaration of effectiveness of the Registration
Statement; (D) the filing of applications or notices with the U.S.
Department of Justice and Federal Trade Commission pursuant to the H-S-R
Act; (E) the filing of a certificate of merger with the Delaware Secretary
pursuant to the DGCL and the filing of articles of merger and the Articles
Amendment with the West Virginia Secretary; (F) such filings as are
required to be made or approvals as are required to be obtained under the
securities or "Blue Sky" laws of various states in connection with the
issuance of United Stock in the Merger; and (G) receipt of the approvals
set forth in Section 7.01(b). As of the date hereof, United is not aware of
any reason why the approvals set forth in Section 7.01(b) will not be
received without the imposition of a condition, restriction or requirement
of the type described in Section 7.01(b).
26
(ii) Subject to the satisfaction of the requirements referred to in the
preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of United or of any of its
Subsidiaries or to which United or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the certificate of incorporation or by-laws (or similar governing
documents) of United or any of its Subsidiaries, or (C) require any consent
or approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse Effect. (i)
United's SEC Documents, as of the date filed, (A) complied or will comply
in all material respects with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets or statements of
condition contained in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of United and its
Subsidiaries as of its date, and each of the statements of income or
results of operations and changes in stockholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes
and schedules thereto) fairly presents, or will fairly present, the results
of operations, changes in stockholders' equity and cash flows, as the case
may be, of United and its Subsidiaries for the periods to which they
relate, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in each
case as may be noted therein, subject to normal year-end audit adjustments
in the case of unaudited statements. United's press release announcing its
1997 year end results fairly presents the financial condition of United as
of December 31, 1997 and the results of its operations for the year ended
December 31, 1997, in each case as determined in accordance with generally
accepted accounting principles.
(ii) Since December 31, 1997, no event has occurred or circumstance
arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to United.
(h) Litigation; Regulatory Action. (i) No litigation, claim or other
proceeding before any Governmental Authority is pending against United or
any of its Subsidiaries and, to the best of United's knowledge, no such
litigation, claim or other proceeding has been threatened.
27
(ii) Neither United nor any of its Subsidiaries or properties is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, or extraordinary supervisory letter from a
Regulatory Authority, nor has United or any of its Subsidiaries been
advised by a Regulatory Authority that such agency is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(i) Compliance with Laws. Each of United and its Subsidiaries:
(i) is in compliance with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting
such businesses, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act,
the Home Mortgage Disclosure Act and all other applicable fair lending
laws and other laws relating to discriminatory business practices; and
(ii)has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) has received, since December 31, 1995, no notification or
communication from any Governmental Authority (A) asserting that United
or any of its Subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances which such Governmental Authority
enforces, (B) threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to United's knowledge, do any grounds
for any of the foregoing exist) or (C) as of the date hereof, failing
to approve any proposed acquisition, or stating its intention not to
approve acquisitions proposed to be effected by it within a certain
time period or indefinitely.
(j) Defaults. Neither United nor any of its Subsidiaries is in default
under any contract, agreement, commitment, arrangement, lease, insurance
policy or other instrument to which it is a party, by which its respective
assets, business, or operations may be bound or affected, or under which it
or its respective assets, business, or operations receive benefits, and
there has not occurred any event that, with the lapse of time or the giving
of notice or both, would constitute such a default.
(k) No Brokers. No action has been taken by United that would give rise
to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions
contemplated by this Agreement.
28
(l) Takeover Laws; Dissenters' Rights. United has taken all action
required to be taken by it in order to exempt this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby from,
and this Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
Takeover Laws applicable to United. Holders of United Common Stock do not
have dissenters' rights in connection with the Articles Amendment.
(m) Employee Benefit Plans. (i) Each existing bonus, incentive,
deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted
stock, stock option, severance, welfare and fringe benefit plans,
employment or severance agreements and all similar practices, policies and
arrangements in which any Employees, Consultants or Directors of United or
any of its Subsidiaries participates or to which any such Employees,
Consultants or Directors are a party (each, a "United Compensation and
Benefit Plan") has been operated and administered in all material respects
in accordance with its terms and with applicable law, including, but not
limited to, ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act, or any regulations or rules promulgated
thereunder, and all filings, disclosures and notices required by ERISA, the
Code, the Securities Act, the Exchange Act, the Age Discrimination in
Employment Act and any other applicable law have been timely made. Each
United Compensation and Benefit Plan which is a Pension Plan and which is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter (including a determination that the related
trust under such United Compensation and Benefit Plan is exempt from tax
under Section 501(a) of the Code) from the IRS, and United is not aware of
any circumstances likely to result in revocation of any such favorable
determination letter. There is no material pending or, to the knowledge of
United, threatened legal action, suit or claim relating to the United
Compensation and Benefit Plans. Neither United nor any of its Subsidiaries
has engaged in a transaction, or omitted to take any action, with respect
to any United Compensation and Benefit Plan that would reasonably be
expected to subject United or any of its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(ii) No liability (other than for payment of premiums to the PBGC which
have been made or will be made on a timely basis) under Title IV of ERISA
has been or is expected to be incurred by United or any of its Subsidiaries
with respect to any ongoing, frozen or terminated "single-employer plan",
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or any ERISA Affiliate Plan. None of United, any
of its Subsidiaries or any ERISA Affiliate has contributed, or has been
obligated to contribute, to a multi-employer plan under Subtitle E of Title
IV of ERISA at any time since September 26, 1980. No notice of a
"reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to
be filed for any United Compensation and Benefit Plan or by any ERISA
Affiliate
29
Plan within the 12-month period ending on the date hereof, and no such
notice will be required to be filed as a result of the transactions
contemplated by this Agreement. The PBGC has not instituted proceedings to
terminate any Pension Plan or ERISA Affiliate Plan and, to United's
knowledge, no condition exists that presents a material risk that such
proceedings will be instituted. To the knowledge of United, there is no
pending investigation or enforcement action by the PBGC, the DOL or IRS or
any other governmental agency with respect to any United Compensation and
Benefit Plan. Under each Pension Plan and ERISA Affiliate Plan, as of the
date of the most recent actuarial valuation performed prior to the date of
this Agreement, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in such
actuarial valuation of such Pension Plan or ERISA Affiliate Plan), did not
exceed the then current value of the assets of such Pension Plan or ERISA
Affiliate Plan and since such date there has been neither an adverse change
in the financial condition of such Pension Plan or ERISA Affiliate Plan nor
any amendment or other change to such Pension Plan or ERISA Affiliate Plan
that would increase the amount of benefits thereunder which reasonably
could be expected to change such result.
(iii) All contributions required to be made under the terms of any
United Compensation and Benefit Plan or ERISA Affiliate Plan or any
employee benefit arrangements under any collective bargaining agreement to
which United or any of its Subsidiaries is a party have been timely made or
have been reflected on United's financial statements. Neither any Pension
Plan nor any ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA and all required payments to the PBGC with respect to
each Pension Plan or ERISA Affiliate Plan have been made on or before their
due dates. None of United, any of its Subsidiaries or any ERISA Affiliate
(x) has provided, or would reasonably be expected to be required to
provide, security to any Pension Plan or to any ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code, and (y) has taken any action,
or omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a lien under Section 412(n) of the
Code or pursuant to ERISA.
(n) Environmental Matters. To United's knowledge, neither the conduct
nor operation of United or its Subsidiaries nor any condition of any
property presently or previously owned, leased or operated by any of them
(including, without limitation, in a fiduciary or agency capacity), or on
which any of them holds a Lien, violates or violated Environmental Laws and
to Fed One's knowledge no condition has existed or event has occurred with
respect to any of them or any such property that, with notice or the
passage of time, or both, is reasonably likely to result in liability under
Environmental Laws. To United's knowledge, neither United nor any of its
Subsidiaries has received any notice from any person or entity that United
or its Subsidiaries or the operation or condition of any property ever
owned, leased, operated, or held as collateral or in a fiduciary capacity
by any of them are or were in violation of or otherwise are alleged to have
liability under any Environmental Law, including, but not limited to,
responsibility (or potential responsibility) for the cleanup or other
30
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such
property.
(o) Tax Matters. (i) All Tax Returns that are required to be filed by
or with respect to United and its Subsidiaries have been duly filed, (ii)
all Taxes shown to be due on the Tax Returns referred to in clause (i) have
been paid in full, (iii) the Tax Returns referred to in clause (i) have
been examined by the IRS or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired, (iv) all
deficiencies asserted or assessments made as a result of such examinations
have been paid in full, (v) no issues that have been raised by the relevant
taxing authority in connection with the examination of any of the Tax
Returns referred to in clause (i) are currently pending, and (vi) no
waivers of statutes of limitation have been given by or requested with
respect to any Taxes of United or its Subsidiaries. Neither United nor any
of its Subsidiaries has any liability with respect to income, franchise or
similar Taxes that accrued on or before the end of the most recent period
covered by United's SEC Documents filed prior to the date hereof in excess
of the amounts accrued with respect thereto that are reflected in the
financial statements included in United's SEC Documents filed on or prior
to the date hereof. As of the date hereof, neither United nor any of its
Subsidiaries has any reason to believe that any conditions exist that might
prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(p) Books and Records. The books and records of United and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
substance of events and transactions included therein.
(q) Insurance. United and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of United
reasonably has determined to be prudent in accordance with industry
practices. All such insurance policies are in full force and effect; United
and its Subsidiaries are not in material default thereunder; and all claims
thereunder have been filed in due and timely fashion.
(r) Accounting Treatment. As of the date hereof, it is aware of no
reason why the Merger will fail to qualify for "pooling-of-interests"
accounting treatment.
(s) Disclosure. The representations and warranties contained in this
Section 5.04 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.04 not misleading.
(t) Representations and Warranties of United with Respect to Merger
Subs. United represents and warrants to Fed One with respect to any Merger
Sub that executes the supplement attached to this Agreement as Annex A
that, at the time of such execution and as of the Effective Date:
31
(i) Organization, Standing and Authority. Each Merger Sub has been
duly organized and is validly existing in good standing under the laws of
the State of its organization, and is duly qualified to do business and in
good standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified.
(ii) Power. Each Merger Sub has the power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby.
(iii) Authority. This Agreement and the transactions contemplated
hereby have been authorized by all requisite action on the part of each
Merger Sub and its respective shareholders or members. This Agreement is a
valid and legally binding agreement of each Merger Sub enforceable in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
ARTICLE VI
COVENANTS
6.01 Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, each of Fed One and United agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end. Without limiting the foregoing, United agrees to use its reasonable
best efforts prior to the Effective Time to file the Articles Amendment and, if
necessary, organize one or more Merger Subs.
6.02 Stockholder Approvals. United and Fed One agree to take, in
accordance with applicable law or NASDAQ rules and its articles of incorporation
and bylaws, all action necessary to convene an appropriate meeting of its
stockholders (which in the case of United or Fed One may be its regular annual
meeting or a special meeting) to consider and vote upon, in the case of United,
the approval and adoption of the Articles Amendment as contemplated hereby
(including any adjournment or postponement, the "United Meeting") and, in the
case of Fed One, the approval and adoption of this Agreement (including any
adjournment or postponement, the "Fed One Meeting"), in each case as promptly as
practicable after
32
the Registration Statement is declared effective. The United Board will
recommend that the United shareholders approve the Articles Amendment. The Fed
One Board will recommend that the Fed One stockholders approve and adopt the
Agreement and the transactions contemplated hereby, provided that the Fed One
Board may fail to make such recommendation, or withdraw, modify or change any
such recommendation, if the Fed One Board, after having consulted with and
considered the advice of outside counsel, has determined that the making of such
recommendation, or the failure to withdraw, modify or change such
recommendation, would constitute a breach of the fiduciary duties of the members
of the Fed One Board under applicable law.
6.03 Registration Statement. (a) Each of United and Fed One agrees to
cooperate in the preparation of a registration statement on Form S-4 (the
"Registration Statement") to be filed by United with the SEC in connection with
the issuance of United Common Stock in the Merger (including the joint proxy
statement and prospectus and other proxy solicitation materials of United and
Fed One constituting a part thereof (the "Proxy Statement") and all related
documents). Provided that Fed One has cooperated as required above, United
agrees to file the Proxy Statement in preliminary form with the SEC as promptly
as reasonably practicable, and to file the Registration Statement with the SEC
as soon as reasonably practicable after any SEC comments with respect to the
preliminary Proxy Statement are resolved. Each of Fed One and United agrees to
use all reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. United also agrees to use all reasonable efforts to obtain,
prior to the effective date of the Registration Statement, all necessary state
securities law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement. Fed One agrees to furnish to United
all information concerning Fed One, its Subsidiaries, officers, directors and
stockholders as may be reasonably requested in connection with the foregoing.
(b) Each of Fed One and United agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or supplement thereto,
if any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of the United Meeting or the Fed One
Meeting, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or any statement which, in the light
of the circumstances under which such statement is made, will be false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier statement in the
Proxy Statement or any amendment or supplement thereto. Each of Fed One and
United further agrees that if it shall become aware prior to the Effective Date
of any information furnished by it that would cause any of the statements in the
Proxy Statement to be false or misleading with respect to any material fact, or
to omit to state any material fact necessary to make the statements therein not
false or misleading, to
33
promptly inform the other party thereof and to take the necessary steps to
correct the Proxy Statement.
(c) United agrees to advise Fed One, promptly after United receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop order
or the suspension of the qualification of United Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
(d) United and Fed One, each in consultation with the other, shall
employ professional proxy solicitors to assist it in contacting stockholders in
connection with soliciting votes on the Agreement and the Articles Amendment.
6.04 Press Releases. Each of Fed One and United agrees that it will
not, without the prior approval of the other party, issue any press release or
written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NASDAQ rules.
6.05 Access; Information. (a) Each of Fed One and United agrees that
upon reasonable notice and subject to applicable laws relating to the exchange
of information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
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 any party may reasonably request and, during such period, it
shall furnish promptly to such other party (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
the business, properties and personnel of it as the other may reasonably
request.
(b) Each agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 6.05 (as well as
any other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement. Subject to the requirements
of law, each party will keep confidential, and will cause its representatives to
keep confidential, all information and documents obtained pursuant to this
Section 6.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such party, (ii) becomes available to such party from
other sources not known by such party to be bound by a confidentiality
obligation, (iii) is disclosed with the prior written approval of the party to
which such information pertains or (iv) is or becomes readily ascertainable from
published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of
34
documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same. No
investigation by either party of the business and affairs of the other shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to either party's obligation to
consummate the transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to the Effective
Time, each party shall promptly furnish the other with copies of all monthly and
other interim financial statements produced in the ordinary course of business
as the same shall become available.
6.06 Acquisition Proposals. Fed One agrees that it shall not, and shall
cause its Subsidiaries and its and its Subsidiaries' officers, directors,
agents, advisors and affiliates not to, solicit or encourage inquiries or
proposals with respect to, or, except to the extent that the Fed One Board has
determined, after consulting with and considering the advice of outside counsel,
that the failure to do so would constitute a breach of the fiduciary duties of
the Fed One Board's directors under applicable law, engage in any negotiations
concerning, or provide any confidential information to, or have any discussions
with, any person relating to, any Acquisition Proposal. It shall immediately
cease and cause to be terminated any activities, discussions or negotiations
conducted prior to the date of this Agreement with any parties other than United
with respect to any of the foregoing and shall use its reasonable best efforts
to enforce any confidentiality or similar agreement relating to an Acquisition
Proposal. Fed One shall promptly (within 24 hours) advise United following the
receipt by Fed One of any Acquisition Proposal and the substance thereof
(including the identity of the person making such Acquisition Proposal), and
advise United of any developments with respect to such Acquisition Proposal
immediately upon the occurrence thereof.
6.07 Affiliate Agreements. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, (i) United shall deliver to Fed One a schedule
of each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the United Meeting, deemed to be an "affiliate" of United
(each, a "United Affiliate") as that term is used in SEC Accounting Series
Releases 130 and 135; and (ii) Fed One shall deliver to United a schedule of
each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the Fed One Meeting, deemed to be an "affiliate" of Fed
One (each, a "Fed One Affiliate") as that term is used in Rule 145 under the
Securities Act or SEC Accounting Series Releases 130 and 135.
(b) Each of Fed One and United shall use its respective reasonable best
efforts to cause each person who may be deemed to be a Fed One Affiliate or a
United Affiliate, as the case may be, to execute and deliver to Fed One and
United on or before the date of mailing of the Proxy Statement an agreement in
the form attached hereto as Exhibit B or Exhibit C, respectively.
6.08 Takeover Laws. No party hereto shall take any action that would
cause the transactions contemplated by this Agreement or the Stock Option
Agreement to be subject to requirements imposed by any Takeover Law and each of
them shall take all necessary steps within its control to exempt (or
35
ensure the continued exemption of) the transactions contemplated by this
Agreement from, or if necessary challenge the validity or applicability of, any
applicable Takeover Law, as now or hereafter in effect.
6.09 Certain Policies. Prior to the Effective Date, Fed One shall,
consistent with generally accepted accounting principles and on a basis mutually
satisfactory to it and United, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with that
of United; provided, however, that Fed One shall not be obligated to take any
such action pursuant to this Section 6.09 (i) if such action is not in
accordance with generally accepted accounting principles, is not consistent with
the "pooling-of-interests" accounting method for the Merger or is prohibited by
applicable law, and (ii) unless and until United acknowledges that all
conditions to its obligation to consummate the Merger have been satisfied and
certifies to Fed One that United's representations and warranties, subject to
Section 5.02, are true and correct as of such date and that United is otherwise
in material in compliance with this Agreement. Fed One'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 6.09.
6.10 NASDAQ Listing. To the extent so required, United agrees to use
its reasonable best efforts to list, prior to the Effective Date, on the NASDAQ,
subject to official notice of issuance, the shares of United Common Stock to be
issued to the holders of Fed One Common Stock in the Merger.
6.11 Regulatory Applications. (a) United and Fed One and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement, and to comply with the terms and conditions of such permits,
consents, approvals and authorizations. Each of United and Fed One shall have
the right to review in advance, and to the extent practicable each will consult
with the other, in each case subject to applicable laws relating to the exchange
of information, with respect to, all material written information submitted to
any third party or any Governmental Authority in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees that it will consult with the other party
hereto with respect to the obtaining of all material permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other party apprised of the status of
material matters relating to completion of the transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with
all information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably
36
necessary or advisable in connection with any filing, notice or application
made by or on behalf of such other party or any of its Subsidiaries to any third
party or Governmental Authority.
6.12 Indemnification. (a) Following the Effective Date and for a period
of six years thereafter, United shall indemnify, defend and hold harmless the
present and former directors, officers and employees of Fed One or a Fed One
Subsidiary, determined as of the Effective Date (each, an "Indemnified Party"),
against all costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively, "Costs") incurred
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement and the Stock Option
Agreement) to the fullest extent that Fed One or the relevant Fed One Subsidiary
is permitted to indemnify (and advance expenses to) its directors, officers and
employees under the DGCL or other applicable state law, as in effect from time
to time, or any of the Fed One Certificate, the Fed One Bylaws, the charter (or
similar governing instrument) of any Fed One Subsidiary or the bylaws of any Fed
One Subsidiary, in each case as in effect on the date hereof. United agrees that
all limitations on liability existing in favor of the Indemnified Parties as
provided in the Fed One Certificate as in effect on the date hereof shall
survive the Merger and shall continue in full force and effect.
(b) For a period of six years from the Effective Time, United shall use
its reasonable best efforts to maintain Fed One's existing director's and
officer's liability insurance with respect to claims against such directors and
officers arising from facts or events which occurred before the Effective Time,
(or substitute insurance which shall contain at least the same coverage and
amounts, and contain terms and conditions no less advantageous, as that coverage
currently provided by Fed One); provided, however, that in no event shall United
be required to expend on an annual basis more than 200 percent of the current
annual amount expended by Fed One (the "Insurance Amount") to maintain or
procure such directors and officers insurance coverage; provided, further, that
if United is unable to maintain or obtain the insurance called for by this
Section 6.12(b), United shall use its reasonable best efforts to obtain as much
comparable insurance as is available for the Insurance Amount; provided,
further, that officers and directors of Fed One or any Fed One Subsidiary may be
required to make application and provide customary representations and
warranties to United's insurance carrier for the purpose of obtaining such
insurance.
(c) Any Indemnified Party wishing to claim indemnification under
Section 6.12(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify United thereof; provided
that the failure so to notify shall not affect the obligations of United under
Section 6.12(a) unless and to the extent that United is actually materially
prejudiced as a result of such failure.
37
(d) If United or any of its successors or assigns shall consolidate
with or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any entity, then and in each case, proper provision shall
be made so that the successors and assigns of United shall assume the
obligations set forth in this Section 6.12.
(e) The provisions of this Section 6.12 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
6.13 Benefit Plans and Arrangements. (a) It is the intention of United
that within a reasonable period of time following the Effective Time (i) it will
provide employees of the Surviving Corporation with employee benefit plans
substantially similar in the aggregate to those provided to similarly situated
employees of United, (ii) any such employees will receive credit for years of
service with Fed One or any of its Subsidiaries prior to the Effective Time for
the purpose of eligibility and vesting and (iii) United shall cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under the Compensation and Benefit Plans) and
eligibility waiting periods under group health plans to be waived with respect
to such participants and their eligible dependents.
(b) Following the Effective Time, United shall, and shall cause its
appropriate Subsidiaries to, honor in accordance with their terms the employment
agreements, severance agreements, severance policies, consulting agreement and
excess benefit plan which have been Previously Disclosed by Fed One to United
pursuant to this Agreement. United shall take no action that would adversely
affect the rights of holders of awards granted under the Fed One Stock Plans
which are outstanding as of the date hereof.
(c) United agrees to maintain the terms of the existing consulting
arrangement between Fed One Bank and Xxxxx Xxxxxxxxx, as Previously Disclosed by
Fed One to United pursuant to this Agreement, until Xx. Xxxxxxxxx'x death.
(d) As soon as practicable after the execution of this Agreement, Fed
One and United will use their reasonable best efforts to take such actions as
may be necessary or advisable to provide that the Fed One ESOP will terminate on
the Effective Date. Between the date hereof and the Effective Date, the existing
Fed One ESOP indebtedness shall be paid in the ordinary course of business and
Fed One or Fed One Bank shall make such contributions to the Fed One ESOP as is
necessary to fund such payments. Any indebtedness of the Fed One ESOP remaining
as of the Effective Date shall be repaid from the related Trust, provided,
however, that (i) any related sale or distribution of shares by the Fed One ESOP
shall be effected in accordance with the requirements of federal and any
applicable state securities laws and regulations, (ii) any related sale or
distribution of shares by the Fed One ESOP and any participant shall be effected
in such a manner (and with such safeguards as may be necessary or appropriate)
so as not to jeopardize "pooling-of-interests" accounting treatment for the
Merger, and (iii) all distributions from the Fed One ESOP after the Effective
Date shall be in shares of United Common Stock. Upon the
38
repayment of the Fed One ESOP loan, the remaining funds in the Fed One ESOP
suspense account will be allocated (to the extent permitted by Sections 401(a),
415 and 4975 of the Code and the applicable provisions of ERISA) to Fed One ESOP
participants, as determined under the terms of the Fed One ESOP. Fed One and
United agree that, subject to the conditions described herein, as soon as
practicable after the Effective Date and repayment of the Fed One ESOP loan,
participants in the Fed One ESOP shall be entitled at their election to have the
amounts in their Fed One ESOP accounts either distributed to them in a lump sum
or rolled over to another tax-qualified plan (including United plans to the
extent permitted by United) or individual retirement account. The actions
relating to termination of the Fed One ESOP will be adopted conditioned upon the
consummation of the Merger and upon receiving a favorable determination letter
from the IRS with regard to the continued qualification of the Fed One ESOP. Fed
One and United will cooperate in submitting appropriate requests for such a
determination letter to the IRS and will use their reasonable best efforts to
seek the issuance of such letter as soon as practicable after the date hereof.
As of and following the Effective Date, United shall cause the Fed One ESOP to
be maintained for the exclusive benefit of employees and other persons who are
participants or beneficiaries therein prior to the Effective Date and proceed
with termination of the Fed One ESOP through distribution of its assets in
accordance with this Section 6.13(d) and as otherwise may be required to comply
with applicable law or to obtain a favorable determination from the IRS as to
the continuing qualified status of the Fed One ESOP, provided, however, that no
such termination distributions of the Fed One ESOP shall occur after the
Effective Date until a favorable determination letter has been received from the
IRS.
(e) United shall have the right to merge the Fed One defined benefit
retirement plan (the "Fed One Retirement Plan") into the United defined benefit
retirement plan (the "United Retirement Plan"), provided that upon consummation
of such merger the United Retirement Plan shall be deemed, in the reasonable
opinion of United and Fed One, to be a "qualified successor plan," as defined in
the Fed One Retirement Plan. In the event that the United Retirement Plan would
not qualify as such upon consummation of such merger, United shall either
maintain the Fed One Retirement Plan for the benefit of participating Fed One
employees or amend the Fed One Retirement Plan in order to maximize the use of
the excess funding or future employer contribution offset. The effectiveness of
such amendments shall be conditioned upon the receipt of a favorable
determination letter from the IRS with regard to the continued qualification of
the Fed One Retirement Plan.
(f) The Excess Benefit Plan for the benefit of Mr. and Xxx. Xxxx
Xxxxxxx, effective as of January 1, 1995, shall be terminated as of the
Effective Date and shall not apply to the final distribution or allocation of
the Fed One ESOP expense account.
6.14 Notification of Certain Matters. Each of Fed One and United shall
give prompt notice to the other of any fact, event or circumstance known to it
that (i) is reasonably likely, individually or taken
39
together with all other facts, events and circumstances known to it, to result
in any Material Adverse Effect with respect to it or (ii) would cause or
constitute a material breach of any of its representations, warranties,
covenants or agreements contained herein.
6.15 Dividend Coordination. The Fed One Board shall cause its regular
quarterly dividend record dates and payment dates for Fed One Common Stock to be
the same as United's regular quarterly dividend record dates and payment dates
for United Common Stock (e.g., Fed One shall move its next dividend record and
payment dates to the next dividend record and payment date for United Common
Stock), and Fed One shall not thereafter change its regular dividend payment
dates and record dates (it being the intention of the parties that the
stockholders of Fed One shall not receive two dividends, or fail to receive one
dividend, for any single calendar quarter with respect to their shares of Fed
One Common Stock or the United Common Stock exchanged therefor in the Merger).
Notwithstanding the foregoing, nothing contained in this Section 6.15 shall
require either of the parties to take any action that would materially impair
their ability to satisfy the conditions set forth in Sections 7.02(d) and
7.03(d) hereof.
6.16 Directorship of United and Advisory Board of Directors.
(a) United agrees to cause Xx. Xxxxxxx to be elected or appointed as a
director of United as of the Effective Time.
(b) United agrees to cause four members of the Fed One Board on the
date hereof (selected by Fed One after consultation with United), who are
members of the Fed One Board immediately prior to the Effective Time and willing
and eligible to serve, to be elected or appointed to the Northern West Virginia
Regional Advisory Board of Directors of United Bank.
6.17 Fed One Stock Issuance. After the stockholder approvals
contemplated by Section 6.02 hereof and the regulatory approvals contemplated by
Section 7.01(b) hereof have been obtained and prior to the Effective Date, Fed
One shall use its reasonable best efforts to offer and sell for fair value to
individuals or entities unaffiliated with Fed One and United such number of
shares of Treasury Stock held by Fed One as shall be sufficient in the opinion
of Fed One's and United's respective independent auditors to permit them to
issue the letters referenced in Section 7.02(d) and 7.03(d) hereof, respectively
(the "Fed One Stock Issuance"). Fed One and United shall cooperate with each
other in connection with the Fed One Stock Issuance and shall enter into such
placement or underwriting agreements as may be necessary or advisable in
connection therewith.
6.18 Bank Merger. Upon the request of United, United and Fed One shall
use their reasonable best efforts to cause, including causing the entering into
of a merger agreement, their respective subsidiaries, Fed One Bank and United
Bank, to merge (the "Bank Merger") immediately after the consummation of the
Merger, with United Bank being the surviving bank ("Surviving Bank") thereof
pursuant to the provisions of applicable law. At the effective time of the Bank
Merger, the articles of
40
association and by-laws of the Surviving Bank shall be the articles of
association and by-laws of United Bank in effect immediately prior to the
effective time of the Bank Merger. At the effective time of the Bank Merger, the
directors and officers of the Surviving Bank shall be the directors and officers
of United Bank immediately prior to the effective time of the Bank Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each of United and Fed One to consummate the Merger is
subject to the fulfillment or written waiver by United and Fed One prior to the
Effective Time of each of the following conditions:
(a) Stockholder Approvals. This Agreement shall have been duly approved
and adopted by the requisite vote of the stockholders of Fed One and the
Articles Amendment shall have been duly approved by the requisite vote of
the stockholders of United.
(b) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, including the Bank Merger
if requested by United pursuant to Section 6.18, shall have been obtained
and shall remain in full force and effect and all statutory waiting periods
in respect thereof shall have expired and no such approvals shall contain
(i) any conditions, restrictions or requirements which the United Board
reasonably determines would either before or after the Effective Time have
a Material Adverse Effect on the Surviving Corporation and its Subsidiaries
taken as a whole or (ii) any conditions, restrictions or requirements that
are not customary and usual for approvals of such type and which the United
Board reasonably determines would either before or after the Effective Date
be unduly burdensome.
(c) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits,
restricts or makes illegal consummation of the transactions contemplated by
this Agreement.
(d) Registration Statement. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.
(e) Blue Sky Approvals. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of United Common Stock to be issued in the
Merger shall have been received and be in full force and effect.
41
(f) Listing. To the extent required, the shares of United Common Stock
to be issued in the Merger shall have been approved for listing on the
NASDAQ, subject to official notice of issuance.
(g) Articles Amendment. The Articles Amendment shall have been filed
and effective under the WVCA.
7.02 Conditions to Obligation of Fed One. The obligation of Fed One to
consummate the Merger is also subject to the fulfillment or written waiver by
Fed One prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of United set forth in this Agreement shall be true and correct, subject to
Section 5.02, as of the date of this Agreement and as of the Effective Date
as though made on and as of the Effective Date (except that representations
and warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of such date), and Fed One
shall have received a certificate, dated the Effective Date, signed on
behalf of United by the Chief Executive Officer and the Chief Financial
Officer of United to such effect.
(b) Performance of Obligations of United. United shall have performed
in all material respects all obligations required to be performed by them
under this Agreement at or prior to the Effective Time, and Fed One shall
have received a certificate, dated the Effective Date, signed on behalf of
United by the Chief Executive Officer and the Chief Financial Officer of
United to such effect.
(c) Opinion of Fed One's Counsel. Fed One shall have received an
opinion of Xxxxx, Xxxx, Xxxxxxx & Xxxxxxx L.L.P., counsel to Fed One, dated
the Effective Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, (i) the Merger
constitutes a "reorganization" within the meaning of Section 368 of the
Code and (ii) no gain or loss will be recognized by stockholders of Fed One
who receive shares of United Common Stock in exchange for shares of Fed One
Common Stock, except that gain or loss may be recognized as to cash
received in lieu of fractional share interests. In rendering its opinion,
Xxxxx, Xxxx, Xxxxxxx & Xxxxxxx L.L.P. may require and rely upon
representations contained in letters from Fed One, United and others.
(d) Accounting Treatment. Fed One shall have received from KPMG Peat
Marwick LLP, Fed One's independent auditors, a letter, dated the Effective
Date, stating its opinion that the Merger shall qualify for
"pooling-of-interests" accounting treatment.
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7.03 Conditions to Obligation of United. The obligation of United to
consummate the Merger is also subject to the fulfillment or written waiver by
United prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Fed One set forth in this Agreement shall be true and correct, subject
to Section 5.02, as of the date of this Agreement and as of the Effective
Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of
this Agreement or some other date shall be true and correct as of such
date) and United shall have received a certificate, dated the Effective
Date, signed on behalf of Fed One by the Chief Executive Officer and the
Chief Financial Officer of Fed One to such effect.
(b) Performance of Obligations of Fed One. Fed One shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Effective Time, and United shall
have received a certificate, dated the Effective Date, signed on behalf of
Fed One by the Chief Executive Officer and the Chief Financial Officer of
Fed One to such effect.
(c) Opinion of United's Counsel. United shall have received an opinion
of Xxxxxxxx & Xxxxxxxx, special counsel to United, dated the Effective
Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, the Merger constitutes a
reorganization under Section 368 of the Code. In rendering its opinion,
Xxxxxxxx & Xxxxxxxx may require and rely upon representations contained in
letters from United, Fed One and others.
(d) Accounting Treatment. United shall have received from Ernst & Young
LLP, United's independent auditors, a letter, dated the Effective Date,
stating its opinion that the Merger shall qualify for
"pooling-of-interests" accounting treatment.
ARTICLE VIII
TERMINATION
8.01 Termination. This Agreement may be terminated, and the Acquisition
may be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the
mutual consent of United and Fed One, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(b) Breach. At any time prior to the Effective Time, by United or Fed
One, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of
43
either: (i) a breach by the other party of any representation or warranty
contained herein (subject to the standard set forth in Section 5.02), which
breach cannot be or has not been cured within 30 days after the giving of
written notice to the breaching party of such breach; or (ii) a breach by the
other party of any of the covenants or agreements contained herein, which breach
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach, provided that such breach (whether
under (i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) Delay. At any time prior to the Effective Time, by United or Fed
One, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Merger is not
consummated by December 31, 1998, except to the extent that the failure of
the Merger then to be consummated arises out of or results from the willful
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein.
(d) No Approval. By Fed One or United, if its Board of Directors so
determines by a vote of a majority of the members of its entire Board, in
the event (i) the approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) any stockholder approval required by Section
7.01(a) herein is not obtained at the Fed One Meeting or the United
Meeting, except in the case of clause (i) or clause (ii) that the failure
of an action specified therein arises out of or results from the willful
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein.
(e) Failure to Recommend, Etc. At any time prior to the Fed One
Meeting, by United if the Fed One Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse in any
respect to the interests of United; or at any time prior to the United
Meeting, by Fed One, if the United Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse in any
respect to the interests of Fed One.
(f) Decline in United Common Stock Price. By Fed One, if the Fed One
Board so determines by a vote of a majority of the members of its entire
board, at any time during the five-day period commencing with the
Determination Date (as defined below), if both of the following conditions
are satisfied:
(i) the number obtained by dividing the Average Closing Price by the
Starting Price (each as defined below) (the "United Ratio") shall be less
than .80; and
44
(ii) (x) the United Ratio shall be less than (y) the number obtained by
dividing the Final Index Price by the Index Price on the Starting Date
(each as defined below) and subtracting 0.20 from the quotient in this
clause (ii)(y) (such number in this clause (ii)(y) being referred to herein
as the "Index Ratio");
subject, however, to the following three sentences. If Fed One elects to
exercise its termination right pursuant to this Section 8.01(f), it shall give
written notice to United (provided that such notice of election to terminate may
be withdrawn at any time within the aforementioned five-day period). During the
five-day period commencing with its receipt of such notice, United shall have
the option to increase the consideration to be received by the holders of Fed
One Common Stock hereunder, by adjusting the Exchange Ratio (calculated to the
nearest one one-thousandth) to equal the lesser of (x) a number (rounded to the
nearest one one-thousandth) obtained by dividing (A) the product of the Starting
Price, 0.80 and the Exchange Ratio (as then in effect) by (B) the Average
Closing Price and (y) a number (rounded to the nearest one one-thousandth)
obtained by dividing (A) the product of the Index Ratio and the Exchange Ratio
(as then in effect) by (B) the United Ratio. If United so elects within such
five-day period, it shall give prompt written notice to Fed One of such election
and the revised Exchange Ratio, whereupon no termination shall have occurred
pursuant to this Section 8.01(f) and this Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have been so
modified).
For purposes of this Section 8.01(f), the following terms shall have
the meanings indicated:
"Average Closing Price" shall mean the average of the closing prices of
a share of United Common Stock on the NASDAQ reporting system (as reported
in The Wall Street Journal, or if not reported therein, in another
authoritative source) during the period of 20 consecutive full trading days
ending on the trading day prior to the Determination Date, rounded to the
nearest whole cent.
"Determination Date" shall mean the date on which the last required
approval of a Governmental Entity is obtained with respect to the Merger,
and if requested by United pursuant to Section 6.18, the Bank Merger,
without regard to any requisite waiting period in respect thereof.
"Final Index Price" shall mean the average of the Index Prices for the
20 consecutive full trading days ending on the trading day prior to the
Determination Date.
"Index Group" shall mean the 21 financial institutions or financial
institution holding companies listed below, the common stock of which shall
be publicly traded and as to which there shall not have been a publicly
announced proposal since the Starting Date and before the Determination
Date for any such company to be acquired. In the event that the common
stock of any such company ceases to be publicly traded or a proposal to
acquire any such company is announced after the Starting Date
45
and before the Determination Date, such company shall be removed from the Index
Group, and the weights (which have been determined based on the number of
outstanding shares of common stock and the market prices of such stock)
attributed to the remaining companies shall be adjusted proportionately for
purposes of determining the Final Index Price. The 21 financial institutions or
financial institution holding companies and the weights attributed to them are
as follows:
Company Weighting
------- ---------
Keystone Financial Inc. 11.98%
FirstMerit Corp. 10.05
Valley National Bancorp 8.94
Xxxxxx Financial Corp. 7.16
One Valley Bancorp Inc. 5.37
Park National Corp. 4.68
Xxxxx National Corp. 4.59
Susquehanna Bancshares Inc.. 4.56
First Financial Bancorp. 4.55
HUBCO Inc. 4.52
Commerce Bancorp Inc. 4.45
Provident Bankshares Corp. 4.26
F&M National Corp. 3.80
Mid Am Inc. 3.61
First Commonwealth Financial 3.54
F.N.B. Corp. 2.98
Trust Co. of New Jersey 2.71
Trans Financial Inc. 2.46
Carolina First Corp. 2.14
USBANCORP Inc. 1.92
First Citizens Bancorp. of SC 1.74
--------
100.00%
"Index Price," on a given date, shall mean the weighted average
(weighted in accordance with the factors listed above) of the closing
prices on such date of the common stocks of the companies comprising the
Index Group, as such prices are reported on the consolidated transactions
reporting system for the market or exchange on which such common stock is
principally traded on such date.
"Starting Date" shall mean the last trading day immediately preceding
the date of the first public announcement of entry into this Agreement.
46
"Starting Price" shall mean the closing price of a share of United
Common Stock on the NASDAQ reporting system (as reported in The Wall Street
Journal, or if not reported therein, in another authoritative source) on
the Starting Date.
If any company belonging to the Index Group or United declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between and including the
Starting Date and the Determination Date, the prices for the common stock of
such company or United and the Exchange Ratio shall be appropriately adjusted
for the purposes of applying this Section 8.01(f).
8.02 Effect of Termination and Abandonment. In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (i) as set forth in Section 9.01 and (ii)
that termination will not relieve a breaching party from liability for any
willful breach of this Agreement giving rise to such termination.
ARTICLE IX
MISCELLANEOUS
9.01 Survival. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
Sections 3.04, 3.06, 6.12, 6.13, 6.16 and this Article IX which shall survive
the Effective Time) or the termination of this Agreement if this Agreement is
terminated prior to the Effective Time (other than Sections 6.03(b), 6.04,
6.05(b), 8.02 and this Article IX which shall survive such termination).
9.02 Waiver; Amendment. Prior to the Effective Time, any provision of
this Agreement may be (i) waived by the party benefitted by the provision, to
the extent permitted by applicable law, or (ii) amended or modified at any time,
by an agreement in writing between the parties hereto executed in the same
manner as this Agreement, except that (A) after the Fed One Meeting, this
Agreement may not be amended if it would violate the DGCL and (B) after the
United Meeting, this Agreement may not be amended if it would violate the WVCA.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of West Virginia
applicable to contracts made and to be performed entirely within such State
(except to the extent that mandatory provisions of federal law or of the DGCL
are applicable).
47
9.05 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby,
except that expenses incurred in connection with the printing of the
Registration Statement and joint proxy statement and SEC fees shall be shared
equally between Fed One and United.
9.06 Notices. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to Fed One, to:
Fed One Bancorp, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-3295
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
With a copy to:
Xxxxx, Xxxx, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Washington, D.C. 20005
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
If to United, to:
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
Chairman of the Board and Chief Executive Officer
Xxxxxx Xxxxxx
Chief Financial Officer
With a copy to:
Xxxxxxxx & Xxxxxxxx
48
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
9.07 Entire Understanding; No Third Party Beneficiaries. This Agreement
and the Stock Option Agreement represent the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and thereby and
this Agreement supersedes any and all other oral or written agreements
heretofore made (other than the Stock Option Agreement). Except for Sections
6.12, 6.13(c) and 6.16, nothing in this Agreement expressed or implied, is
intended to confer upon any person, other than the parties hereto or their
respective successors, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
9.08 Interpretation; Effect; Assignment; Successors. (a) When a
reference is made in this Agreement to Sections, Exhibits or Schedules, such
reference shall be to a Section of, or Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." No provision of this Agreement shall be construed to require Fed
One, United or any of their respective Subsidiaries, affiliates or directors to
take any action which would violate applicable law (whether statutory or common
law), rule or regulation.
(b) A party hereto may not assign any of its rights or obligations
under this Agreement to any other person without the prior written consent of
the other party (provided that any merger, consolidation, share exchange or
similar business combination involving United shall not be deemed to be an
assignment for purposes of this clause (b)). The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors.
* * *
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
UNITED BANKSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
FED ONE BANCORP, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman, President and Chief Executive
Officer
50
EXHIBIT A
FORM OF STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of February 18, 1998, between United
Bankshares, Inc., a West Virginia corporation ("Grantee"), and Fed One Bancorp,
Inc., a Delaware corporation ("Issuer").
W I T N E S S E T H:
WHEREAS, Xxxxxxx and Issuer have entered into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, as a condition to Xxxxxxx's entering into the Merger Agreement,
Issuer has agreed to grant Grantee the Option (as hereinafter defined); and
WHEREAS, the Board of Directors of Issuer has approved the grant of the
Option and the Merger Agreement prior to the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to an
aggregate of 474,800 fully paid and nonassessable shares of the common stock,
par value $0.10 per share, of Issuer ("Common Stock") at a price per share equal
to $33.50; provided, however, that in the event Issuer issues or agrees to issue
any shares of Common Stock (other than shares of Common Stock issued pursuant to
stock options or restricted stock grants granted pursuant to any employee
benefit plan prior to the date hereof) at a price less than such average price
per share (as adjusted pursuant to subsection (b) of Section 5), such price
shall be equal to such lesser price (such price, as adjusted if applicable, the
"Option Price"); provided, further, that in no event shall the number of shares
for which this Option is exercisable exceed 19.9% of the issued and outstanding
shares of Common Stock. The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are either (i)
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof) or (ii) redeemed, repurchased, retired or otherwise cease
to be outstanding after the date of this Agreement, the number of shares of
Common Stock subject to the Option shall be increased or decreased, as
appropriate, so that, after such event, such number equals 19.9% of the number
of shares of Common Stock then issued and outstanding without giving effect to
any shares subject or issued pursuant to the Option. Nothing contained in this
Section l(b) or elsewhere in this Agreement shall be deemed to authorize Issuer
to issue shares in breach of any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), provided that the Holder shall have sent the written
notice of such exercise (as provided in
subsection (e) of this Section 2) within six (6) months following such
Subsequent Triggering Event (or such later period as provided in Section 10).
Each of the following shall be an Exercise Termination Event: (i) the Effective
Time; (ii) termination of the Merger Agreement in accordance with the provisions
thereof if such termination occurs prior to the occurrence of an Initial
Triggering Event except a termination by Grantee pursuant to Section 8.01(b) or
Section 8.01(e) of the Merger Agreement (but only in each case if the breach
giving rise to the termination was willful) (each, a "Listed Termination"); or
(iii) the passage of fourteen (14) months (or such longer period as provided in
Section 10) after termination of the Merger Agreement if such termination
follows the occurrence of an Initial Triggering Event or is a Listed
Termination. The term "Holder" shall mean the holder or holders of the Option
pursuant to this Agreement. Notwithstanding anything to the contrary contained
herein, (i) the Option may not be exercised (nor may Grantee's rights under
Sections 7, 8, 9, 12 or 14 hereof be exercised) at any time when Grantee shall
be in willful material breach of any of its covenants or agreements contained in
the Merger Agreement such that Issuer shall be entitled to terminate the Merger
Agreement pursuant to Section 8.01(b) thereof as a result of such a willful
material breach and (ii) this Agreement shall automatically terminate upon the
proper termination of the Merger Agreement (x) by Issuer pursuant to Section
8.01(b) thereof as a result of the willful material breach by Grantee of its
covenants or agreements contained in the Merger Agreement, (y) by Issuer or
Grantee pursuant to Section 8.01(d)(ii) if Grantee's shareholders do not approve
the Articles Amendment, or (z) by Issuer or Grantee pursuant to Section
8.01(d)(i).
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Issuer or any Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) of Issuer (an "Issuer Subsidiary"), without having received
Grantee's prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as hereinafter defined) with any
person (the term "person" for purposes of this Agreement having the
meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations thereunder) other than Grantee or any of its
Subsidiaries (each a "Grantee Subsidiary") or the Board of Directors of
Issuer (the "Issuer Board") shall have recommended that the shareholders
of Issuer approve or accept any Acquisition Transaction other than as
contemplated by the Merger Agreement. For purposes of this Agreement, (a)
"Acquisition Transaction" shall mean (x) a merger or consolidation, or any
similar transaction, involving Issuer or any Issuer Subsidiary (other than
mergers, consolidations or similar transactions (i) involving solely
Issuer and/or one or more wholly-owned (except for directors' qualifying
shares and a de minimis number of other shares) Subsidiaries of the
Issuer, provided, any such transaction is not entered into in violation of
the terms of the Merger Agreement, or (ii) in which the shareholders of
Issuer immediately prior to the completion of such transaction own at
least 50% of the Common Stock of the Issuer (or the resulting or surviving
entity in such transaction) immediately after completion of such
transaction, provided any such transaction is not entered into in
violation of the terms of the Merger Agreement), (y) a purchase, lease or
other acquisition of all or any substantial part of the assets or deposits
of Issuer or any Issuer Subsidiary, or (z) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise)
of securities representing 10%
2
or more of the voting power of Issuer or any Issuer Subsidiary and (b)
"Subsidiary" shall have the meaning set forth in Rule 12b-2 under the 1934
Act;
(ii) Any person other than the Grantee or any Grantee Subsidiary
shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 10% or more of the outstanding shares of Common
Stock (the term "beneficial ownership" for purposes of this Agreement
having the meaning assigned thereto in Section 13(d) of the 1934 Act, and
the rules and regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed to
adopt and approve the Merger Agreement and the Merger at a meeting which
has been held for that purpose or any adjournment or postponement thereof,
or such meeting shall not have been held in violation of the Merger
Agreement or shall have been canceled prior to termination of the Merger
Agreement if, prior to such meeting (or if such meeting shall not have
been held or shall have been canceled, prior to such termination), it
shall have been publicly announced that any person (other than Grantee or
any of its Subsidiaries) shall have made, or publicly disclosed an
intention to make, a bona fide proposal to engage in an Acquisition
Transaction;
(iv) The Issuer Board (without having received Grantee's prior
written consent) shall have withdrawn or modified (or publicly announced
its intention to withdraw or modify) in any manner adverse in any respect
to Grantee its recommendation that the shareholders of Issuer approve the
transactions contemplated by the Merger Agreement, or Issuer or any Issuer
Subsidiary shall have authorized, recommended or proposed (or publicly
announced its intention to authorize, recommend or propose) an agreement
to engage in an Acquisition Transaction with any person other than Grantee
or a Grantee Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary shall
have filed with the SEC a registration statement or tender offer materials
with respect to a potential exchange or tender offer that would constitute
an Acquisition Transaction (or filed a preliminary proxy statement with
the SEC with respect to a potential vote by its shareholders to approve
the issuance of shares to be offered in such an exchange offer);
(vi) After an overture is made by a third party to Issuer to engage
in an Acquisition Transaction, Issuer shall have willfully breached any
covenant or obligation contained in the Merger Agreement, and such breach
(x) would entitle Grantee to terminate the Merger Agreement (whether
immediately or after the giving of notice or passage of time or both) and
(y) shall not have been cured prior to the Notice Date (as defined below);
or
(vii) Any person other than Grantee or any Grantee Subsidiary shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or other federal or
state bank regulatory or antitrust authority, which application or notice
has been accepted for processing, for approval to engage in an Acquisition
Transaction.
3
(c) The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 25% or more of the then outstanding
Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) of the second sentence thereof shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event") of which it has notice, it being understood that the giving
of such notice by Issuer shall not be a condition to the right of the Holder to
exercise the Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such exercise and (ii) a
place and date not earlier than three business days nor later than 60 business
days from the Notice Date for the closing of such purchase (the "Closing Date");
provided, that if prior notification to or approval of the Federal Reserve Board
or any other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, provided that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option .
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable hereunder, and the Holder
shall deliver to Issuer a copy of this Agreement and a letter agreeing that the
Holder will not offer to sell or otherwise dispose of such shares in violation
of applicable law or the provisions of this Agreement.
4
(h) Certificates for Common Stock delivered at a closing hereunder may be
endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement, dated as of February 18,
1998, between the registered holder hereof and Issuer and to resale
restrictions arising under the Securities Act of 1933, as amended. A copy
of such agreement is on file at the principal office of Issuer and will be
provided to the holder hereof without charge upon receipt by Issuer of a
written request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act") in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference in the opinion of Counsel to the Holder;
and (iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed, subject to the receipt of any necessary regulatory
approvals, to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of Issuer
shall then be closed or that certificates representing such shares of Common
Stock shall not then be actually delivered to the Holder. Issuer shall pay all
expenses, and any and all United States federal, state and local taxes and other
charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of the Holder or
its assignee, transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable pre-merger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), or the Change in Bank Control Act
of 1978, as amended, or any state or other federal banking law, prior approval
of or notice to the Federal Reserve Board or to any state or other federal
regulatory authority is necessary before the Option may be exercised,
5
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state or other
federal regulatory authority as they may require) in order to permit the Holder
to exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements providing
for Options of different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Stock Option
Agreements and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common Stock
that are purchasable upon exercise of the Option pursuant to Section 1 of this
Agreement, the number of shares of Common Stock purchasable upon the exercise of
the Option and the Option Price shall be subject to adjustment from time to time
as provided in this Section 5.
(a) In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are to be
issued or otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be adjusted so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option Price
shall be adjusted by multiplying the Option Price by a fraction, the numerator
of which shall be equal to the number of shares of Common Stock purchasable
prior to the adjustment and the denominator of which shall be equal to the
number of shares of Common Stock purchasable after the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs prior
to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within nine (9) months (or such later period as
6
provided in Section 10) of such Subsequent Triggering Event (whether on its own
behalf or on behalf of any subsequent holder of this Option (or part thereof) or
any of the shares of Common Stock issued pursuant hereto), promptly prepare,
file and keep current a registration statement under the 1933 Act covering any
shares issued and issuable pursuant to this Option and shall use its reasonable
best efforts to cause such registration statement to become effective and remain
current in order to permit the sale or other disposition of any shares of Common
Stock issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee. Issuer will use
its reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such registrations. The
Issuer shall bear the costs of such registrations (including, but not limited
to, Issuer's attorneys' fees, printing costs and filing fees, except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Xxxxxxx's counsel related thereto). The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offer and sale
of the Option Shares would interfere with the successful marketing of the shares
of Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced;
provided, however, that after any such required reduction the number of Option
Shares to be included in such offering for the account of the Holder shall
constitute at least 25% of the total number of shares to be sold by the Holder
and Issuer in the aggregate; and provided further, however, that if such
reduction occurs, then Issuer shall file a registration statement for the
balance as promptly as practicable thereafter as to which no reduction pursuant
to this Section 6 shall be permitted or occur. Each such Holder shall provide
all information reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder. If requested by any such Holder in connection
with such registration, Issuer shall become a party to any underwriting
agreement relating to the sale of such shares, but only to the extent of
obligating itself in respect of representations, warranties, indemnities and
other agreements customarily included in such underwriting agreements for
Issuer. Upon receiving any request under this Section 6 from any Holder, Issuer
agrees to send a copy thereof to any other person known to Issuer to be entitled
to registration rights under this Section 6, in each case by promptly mailing
the same, postage prepaid, to the address of record of the persons entitled to
receive such copies. Notwithstanding anything to the contrary contained herein,
in no event shall the number of registrations that Issuer is obligated to effect
be increased by reason of the fact that there shall be more than one Holder as a
result of any assignment or division of this Agreement.
7. (a) At any time after the occurrence of a Repurchase Event (as defined
below) (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
Market/Offer Price (as defined below) exceeds (B) the Option Price, multiplied
by the number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered within 135 days of such occurrence (or such later period as provided
in Section 10), Issuer (or any successor thereto) shall
7
repurchase such number of the Option Shares from the Owner as the Owner shall
designate at a price (the "Option Share Repurchase Price") equal to the
Market/Offer Price multiplied by the number of Option Shares so designated. The
term "Market/Offer Price" shall mean the highest of (i) the price per share of
Common Stock at which a tender or exchange offer therefor has been made, (ii)
the price per share of Common Stock to be paid by any third party pursuant to an
agreement with Issuer, (iii) the highest closing price for shares of Common
Stock within the six-month period immediately preceding the date the Holder
gives notice of the required repurchase of this Option or the Owner gives notice
of the required repurchase of Option Shares, as the case may be, or (iv) in the
event of a sale of all or any substantial part of Issuer's assets or deposits,
the sum of the net price paid in such sale for such assets or deposits and the
current market value of the remaining net assets of Issuer as determined by a
nationally recognized investment banking firm selected by the Holder or the
Owner, as the case may be, and reasonably acceptable to Issuer, divided by the
number of shares of Common Stock of Issuer outstanding at the time of such sale.
In determining the Market/Offer Price, the value of consideration other than
cash shall be determined by a nationally recognized investment banking firm
selected by the Holder or Owner, as the case may be, and reasonably acceptable
to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its right
to require Issuer to repurchase the Option and any Option Shares pursuant to
this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that the Holder
or the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within five business
days after the surrender of the Option and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto, Issuer shall
deliver or cause to be delivered to the Holder the Option Repurchase Price
and/or to the Owner the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law and regulation
from so delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall immediately so notify the
Holder and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to the Holder and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; provided, however, that if
Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 7 is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from delivering to the
Holder and/or the Owner, as appropriate, the Option Repurchase Price and the
Option Share Repurchase Price, respectively, in full (and Issuer hereby
undertakes to use its reasonable best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as practicable
in order to accomplish such repurchase), the Holder or Owner may revoke its
notice of repurchase of the Option and/or the Option Shares either in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer shall
promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Repurchase Price and/or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver, as appropriate,
either (A) to the Holder, a new Agreement evidencing the right of the Holder to
purchase that
8
number of shares of Common Stock obtained by multiplying the number of shares of
Common Stock for which the surrendered Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Option Repurchase Price less the portion thereof theretofore delivered to
the Holder and the denominator of which is the Option Repurchase Price, and/or
(B) to the Owner, a certificate for the Option Shares it is then so prohibited
from repurchasing.
(d) For purposes of this Section 7, a "Repurchase Event" shall be deemed
to have occurred upon the occurrence of any of the following events or
transactions after the date hereof:
(i) the acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 50% or more of the then outstanding
Common Stock; or
(ii) the consummation of any Acquisition Transaction described in
Section 2(b)(i) hereof, except that the percentage referred to in clause
(z) shall be 50%;
, provided that no such event shall constitute a Repurchase Event unless a
Subsequent Triggering Event shall have occurred.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or a Grantee Subsidiary, or engage in a plan of exchange with
any person, other than Grantee or a Grantee Subsidiary, and Issuer shall not be
the continuing or surviving corporation of such consolidation or merger or the
acquirer in such plan of exchange, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a plan
of exchange and Issuer shall be the continuing or surviving or acquiring
corporation, but, in connection with such merger or plan of exchange, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger or plan of
exchange represent less than 50% of the outstanding shares and share equivalents
of the merged or acquiring company, or (iii) to sell or otherwise transfer all
or a substantial part of its or the Issuer Subsidiary's assets or deposits to
any person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of the Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving person of a consolidation or merger with Issuer (if other than
Issuer), (ii) the acquiring person in a plan of exchange in which Issuer
is acquired, (iii) the Issuer in a merger or plan of exchange in which
Issuer is the continuing or surviving or acquiring person, and (iv) the
transferee of all or a substantial part of Issuer's assets or deposits (or
the assets or deposits of the Issuer Subsidiary).
9
(ii) "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the Market/Offer Price, as defined
in Section 7.
(iv) "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for the one year immediately preceding the
consolidation, merger, share exchange or sale in question, but in no event
higher than the closing price of the shares of Substitute Common Stock on
the day preceding such consolidation, merger, share exchange or sale;
provided that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of common stock
issued by the person merging into Issuer or by any company which controls
or is controlled by such person, as the Holder may elect.
(c) The Substitute Option shall have the same terms as the Option,
provided that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to the Holder. The issuer of the Substitute Option shall
also enter into an agreement with the then Holder or Holders of the Substitute
Option in substantially the same form as this Agreement (after giving effect for
such purpose to the provisions of Section 9), which agreement shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares
of Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
clause (e), the issuer of the Substitute Option (the "Substitute Option Issuer")
shall make a cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by the Holder and
reasonably acceptable to the Acquiring Corporation.
(f) Issuer shall not enter into any transaction described in subsection
(a) of this Section 8 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.
10
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option Issuer shall
repurchase the Substitute Option from the Substitute Option Holder at a price
(the "Substitute Option Repurchase Price") equal to the amount by which (i) the
Highest Closing Price (as hereinafter defined) exceeds (ii) the exercise price
of the Substitute Option, multiplied by the number of shares of Substitute
Common Stock for which the Substitute Option may then be exercised, and at the
request of the owner (the "Substitute Share Owner") of shares of Substitute
Common Stock (the "Substitute Shares"), the Substitute Option Issuer shall
repurchase the Substitute Shares at a price (the "Substitute Share Repurchase
Price") equal to the Highest Closing Price multiplied by the number of
Substitute Shares so designated. The term "Highest Closing Price" shall mean the
highest closing price for shares of Substitute Common Stock within the six-month
period immediately preceding the date the Substitute Option Holder gives notice
of the required repurchase of the Substitute Option or the Substitute Share
Owner gives notice of the required repurchase of the Substitute Shares, as
applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective rights to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, a copy of this Agreement) and/or certificates for
Substitute Shares accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable and in any event within five business days
after the surrender of the Substitute Option and/or certificates representing
Substitute Shares and the receipt of such notice or notices relating thereto,
the Substitute Option Issuer shall deliver or cause to be delivered to the
Substitute Option Holder the Substitute Option Repurchase Price and/or to the
Substitute Share Owner the Substitute Share Repurchase Price therefor or the
portion thereof which the Substitute Option Issuer is not then prohibited under
applicable law and regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
repurchasing the Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer following a request for repurchase pursuant
to this Section 9 shall immediately so notify the Substitute Option Holder
and/or the Substitute Share Owner and thereafter deliver or cause to be
delivered, from time to time, to the Substitute Option Holder and/or the
Substitute Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and/or the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within five (5) business days
after the date on which the Substitute Option Issuer is no longer so prohibited;
provided, however, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its reasonable best efforts to receive all
required regulatory and legal approvals as promptly as practicable in order to
accomplish such repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the
11
Substitute Option or the Substitute Shares either in whole or to the extent of
prohibition, whereupon, in the latter case, the Substitute Option Issuer shall
promptly (i) deliver to the Substitute Option Holder or Substitute Share Owner,
as appropriate, that portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price that the Substitute Option Issuer is not
prohibited from delivering; and (ii) deliver, as appropriate, either (A) to the
Substitute Option Holder, a new Substitute Option evidencing the right of the
Substitute Option Holder to purchase that number of shares of the Substitute
Common Stock obtained by multiplying the number of shares of the Substitute
Common Stock for which the surrendered Substitute Option was exercisable at the
time of delivery of the notice of repurchase by a fraction, the numerator of
which is the Substitute Option Repurchase Price less the portion thereof
theretofore delivered to the Substitute Option Holder and the denominator of
which is the Substitute Option Repurchase Price, and/or (B) to the Substitute
Share Owner, a certificate for the Substitute Option Shares it is then so
prohibited from repurchasing.
10. The 135-day, 6-month, 9-month or 14-month periods for exercise of
certain rights under Sections 2, 6, 7, 12 and 14 shall be extended: (i) to the
extent necessary to obtain all regulatory approvals for the exercise of such
rights (for so long as the Holder, Owner, Substitute Option Holder or Substitute
Share Owner, as the case may be, is using commercially reasonable efforts to
obtain such regulatory approvals), and for the expiration of all statutory
waiting periods; and (ii) to the extent necessary to avoid liability under
Section 16(b) of the 1934 Act by reason of such exercise, provided that any such
extension pursuant to this clause (ii) shall not exceed two months.
11. (a) Issuer hereby represents and warrants to Grantee as follows:
(i) Issuer has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Issuer Board prior to the date hereof and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
(ii) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
(b) Grantee hereby represents and warrants to Issuer that:
(i) Grantee has full corporate power and authority to execute and deliver
this Agreement and, subject to any approvals or consents referred to herein, to
consummate the transactions contemplated hereby. The
12
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Xxxxxxx.
(ii) The Option is not being, and any shares of Common Stock or other
securities acquired by Grantee upon exercise of the Option will not be, acquired
with a view to the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt from
registration under the Securities Act.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder within six (6) months
following such Subsequent Triggering Event (or such later period as is provided
in Section 10); provided, however, that until the date 15 days following the
date on which the Federal Reserve Board has approved an application by Grantee
to acquire the shares of Common Stock subject to the Option, Grantee may not
assign its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of Issuer, (iii) an assignment
to a single party (e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on Xxxxxxx's behalf or (iv)
any other manner approved by the Federal Reserve Board.
13. Each of Grantee and Issuer will use its reasonable best efforts to
make all filings with, and to obtain consents of, all third parties and
governmental authorities necessary to the consummation of the transactions
contemplated by this Agreement, including, without limitation, applying to the
Federal Reserve Board under the BHCA for approval to acquire the shares issuable
hereunder, but Grantee shall not be obligated to apply to state banking
authorities for approval to acquire the shares of Common Stock issuable
hereunder until such time, if ever, as it deems appropriate to do so.
14. (a) Grantee may, at any time following a Repurchase Event and prior to
the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price (as defined below); provided, however, that Grantee may
not exercise its rights pursuant to this Section 14 if Issuer has repurchased
the Option (or any portion thereof) or any Option Shares pursuant to Section 7.
The "Surrender Price" shall be equal to $4,000,000, (i) plus, if applicable,
Grantee's purchase price with respect to any Option Shares and (ii) minus, if
applicable, the sum of (A) the excess of (1) the net cash amounts, if any,
received by Grantee pursuant to the arms' length sale of Option Shares (or any
other securities into which such Option Shares were converted or exchanged) to
any unaffiliated party, over (2) Grantee's purchase price of such Option Shares
and (B) the net cash amounts, if any, received by Grantee pursuant to an arm's
length sale of a portion of the Option to an unaffiliated party.
13
(b) Grantee may exercise its right to relinquish the Option and any Option
Shares pursuant to this Section 14 by surrendering to Issuer, at its principal
office, a copy of this Agreement together with certificates for Option Shares,
if any, accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 14 and (ii) the Surrender Price. The Surrender Price
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify Grantee
and thereafter deliver or cause to be delivered, from time to time, to Grantee,
the portion of the Surrender Price that it is no longer prohibited from paying,
within five business days after the date on which Issuer is no longer so
prohibited; provided, however, that if Issuer at any time after delivery of a
notice of surrender pursuant to paragraph (b) of this Section 14 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full, (i) Issuer shall (A)
use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (B) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (c) keep Grantee advised of both the status of any
such request for regulatory and legal approvals, as well as any discussions with
any relevant regulatory or other third party reasonably related to the same and
(ii) Grantee may revoke such notice of surrender by delivery of a notice of
revocation to Issuer and, upon delivery of such notice of revocation, the
Exercise Termination Date shall be extended to a date six months from the date
on which the Exercise Termination Date would have occurred if not for the
provisions of this Section 14(c) (during which period Grantee may exercise any
of its rights hereunder, including any and all rights pursuant to this Section
14).
15. (a) Notwithstanding any other provision of this Agreement, in no event
shall the Grantee's Total Profit (as hereinafter defined) exceed $6,000,000 and,
if it otherwise would exceed such amount, the Grantee, at its sole election,
shall either (i) reduce the number of shares of Common Stock subject to this
Option, (ii) deliver to the Issuer for cancellation Option Shares previously
purchased by Grantee, (iii) pay cash to the Issuer or (iv) any combination
thereof, so that Xxxxxxx's actually realized Total Profit shall not exceed
$6,000,000 after taking into account the foregoing actions. As used herein, the
term "Total Profit" shall mean the aggregate amount (before taxes) of the
following: (i) the amount received by Grantee pursuant to Issuer's repurchase of
the Option (or any portion thereof) pursuant to Section 7 hereof, (ii) (x) the
amount received by Grantee pursuant to Issuer's repurchase of the Option Shares
pursuant to Section 7 hereof, less (y) the Grantee's purchase price for such
Option Shares, (iii)(x) the net cash amounts received by Grantee pursuant to the
sale of Option Shares (or any other securities into which such Option Shares are
converted or exchanged) to any unaffiliated party, less (y) the Grantee's
purchase price of such Option Shares, (iv) any amounts received by Grantee on
the transfer of the Option (or any portion thereof) to any unaffiliated party
and (v) any equivalent amount with respect to the Substitute Option.
(b) Notwithstanding any other provision of this Agreement, this Option may
not be exercised for a number of shares as would, as of the date of exercise,
result in a Notional Total Profit (as hereinafter defined)
14
of more than $6,000,000, provided that nothing in this sentence shall restrict
any exercise of the Option permitted hereby on any subsequent date. As used
herein, "Total Notional Profit" with respect to any number of shares as to which
Grantee may propose to exercise this Option shall be the Total Profit determined
as of the date of such proposed exercise assuming that this Option were
exercised on such date for such number of shares and assuming that such shares,
together with all other Option Shares held by Grantee and its affiliates as of
such date, were sold for cash at the closing market price for the Common Stock
as of the close of business on the preceding trading day (less customary
brokerage commissions).
16. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief. In connection therewith both
parties waive the posting of any bond or similar requirement.
17. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section l(a) hereof (as adjusted pursuant to Section l(b) or Section
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
18. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
19. This Agreement shall be governed by and construed in accordance with
the laws of the State of West Virginia, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the DGCL are applicable).
20. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
21. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
22. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and
15
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
23. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
FED ONE BANCORP, INC.
By
--------------------------
Name:
Title:
UNITED BANKSHARES, INC.
By
--------------------------
Name:
Title:
chs/147565
16
EXHIBIT B
FORM OF FED ONE AFFILIATE LETTER
____________, 1998
Fed One Bancorp, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention:
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx Xxxxxx
Chief Financial Officer
Ladies and Gentlemen:
I have been advised that I may be deemed to be, but do not admit that I
am, an "affiliate" of Fed One Bancorp, Inc., a Delaware corporation ("Fed One"),
as that term is defined in Rule 145 promulgated by the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act"), and/or SEC Accounting Series Releases 130 and 135. I
understand that pursuant to the terms of the Agreement and Plan of Merger, dated
as of February 18, 1998 (the "Merger Agreement"), by and between United
Bankshares, Inc., a West Virginia corporation ("United"), and Fed One, Fed One
plans to merge with and into a wholly owned subsidiary of United (the "Merger")
and that the Merger is intended to be accounted for under the
"pooling-of-interests" accounting method.
I further understand that as a result of the Merger, I may receive
shares of common stock, par value $2.50 per share, of United ("United Stock")
(i) in exchange for shares of common stock, par value $0.10 per share, of Fed
One ("Fed One Stock") or (ii) as a result of the exercise of Rights (as defined
in the Merger Agreement).
I have carefully read this letter and reviewed the Merger Agreement and
discussed their requirements and other applicable limitations upon my ability to
sell, transfer, or otherwise dispose of United Stock and Fed One Stock, to the
extent I felt necessary, with my counsel or counsel for Fed One.
I represent, warrant and covenant with and to United that in the event
I receive any United Stock as a result of the Merger:
1. I shall not make any sale, transfer, or other disposition of such
United Stock unless (i) such sale, transfer or other disposition
has been registered under the Securities Act, (ii) such sale,
transfer or other disposition is made in conformity with the
provisions of Rule 145 under the Securities Act (as such rule may
be amended from time to time), or (iii) in the opinion of counsel
in form and substance reasonably satisfactory to United, or under
a "no-action" letter obtained by me from the staff of the SEC,
such sale, transfer or other disposition will not violate or is
otherwise exempt from registration under the Securities Act.
2. I understand that United is under no obligation to register the
sale, transfer or other disposition of shares of United Stock by
me or on my behalf under the Securities Act or to take any other
action necessary in order to make compliance with an exemption
from such registration available.
3. I understand that stop transfer instructions will be given to
United's transfer agent with respect to shares of United Stock
issued to me as a result of the Merger and that there will be
placed on the certificates for such shares, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities
Act of 1933 applies. The shares represented by this
certificate may be transferred only in accordance with the
terms of a letter agreement, dated __, 199_, between the
registered holder hereof and United, a copy of which agreement
is on file at the principal offices of United."
4. I understand that, unless transfer by me of the United Stock
issued to me as a result of the Merger has been registered under
the Securities Act or such transfer is made in conformity with the
provisions of Rule 145(d) under the Securities Act, United
reserves the right, in its sole discretion, to place the following
legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired
from a person who received such shares in a transaction to
which Rule 145 under the Securities Act of 1933 applies. The
shares have been acquired by the holder not with a view to, or
for resale in connection with, any distribution thereof within
the meaning of the Securities Act of 1933 and may not be
offered, sold, pledged or otherwise transferred except in
accordance with an exemption from the registration
requirements of the Securities Act of 1933."
It is understood and agreed that the legends set forth in
paragraphs (3) and (4) above shall be removed by delivery of substitute
certificates without such legends if I shall have delivered to United (i)
a copy of a "no action" letter from the staff of the SEC, or an opinion of
counsel in form and substance reasonably satisfactory to United, to the effect
that such legend is not required for purposes of the Act, or (ii) evidence or
representations satisfactory to United that the United Stock represented by such
certificates is being or has been sold in conformity with the provisions of Rule
145(d).
I further represent, warrant and covenant with and to United that
I will not sell, transfer or otherwise dispose of, or reduce my risk relative
to, any shares of Fed One Stock or United Stock (whether or not acquired by me
in the Merger) during the period commencing 30 days prior to effective date of
the Merger and ending at such time as United notifies me that results covering
at least 30 days of combined operations of Fed One and United after the Merger
have been published by United. I understand that United is not obligated to
publish such combined financial results except in accordance with its normal
financial reporting practice.
I further understand and agree that this letter agreement shall
apply to all shares of Fed One Stock and United Stock that I am deemed to
beneficially own pursuant to applicable federal securities law.
I also understand that the Merger is intended to be treated as a
"pooling of Interests" for accounting purposes, and I agree that if Fed One or
United advises me in writing that additional restrictions apply to my ability to
sell, transfer, or otherwise dispose of Fed One Stock or United Stock in order
for United to be entitled to use the pooling of interests accounting method, I
will abide by such restrictions.
Very truly yours,
By _________________________
Name:
Accepted this ____ day of
___--____________, 1998.
Fed One Bancorp, Inc.
By ________________________
Name:
Title:
United Bankshares, Inc.
By ________________________
Name:
Title:
EXHIBIT C
FORM OF UNITED AFFILIATE LETTER
____________, 1998
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx Xxxxxx
Chief Financial Officer
Ladies and Gentlemen:
I have been advised that I may be deemed to be, but do not admit
that I am, an "affiliate" of United, a West Virginia corporation ("United"), as
that term is defined in the Securities and Exchange Commission's Accounting
Series Releases 130 and 135. I understand that pursuant to the terms of the
Agreement and Plan of Merger, dated as of February 18, 1998 (the "Merger
Agreement"), by and between United and Fed One Bancorp, Inc., a Delaware
corporation ("Fed One"), Fed One plans to merge with and into a wholly owned
subsidiary of United (the "Merger") and that the merger is intended to be
accounted for under the "pooling-of-interests" accounting method.
I have carefully read this letter and reviewed the Merger
Agreement and discussed their requirements and other applicable limitations upon
my ability to sell, transfer, or otherwise dispose of common stock of United and
Fed One, to the extent I felt necessary, with my counsel or counsel for United.
I hereby represent, warrant and covenant with and to United that:
1. I will not sell, transfer or otherwise dispose of, or reduce
my risk relative to, any shares of common stock of Fed One or
United(whether or not acquired by me in the Merger) during the
period commencing 30 days prior to the effective date of the
Merger and ending at such time as United notifies me that
results covering at least 30 days of combined operations of
Fed One and United after the Merger have been published by
United. I understand that United is not obligated to publish
such combined financial results except in accordance with its
normal financial reporting practice.
2. I further understand and agree that this letter agreement
shall apply to all shares of common stock of Fed One and
United that I am deemed to beneficially own pursuant to
applicable federal securities laws.
3. If United advises me in writing that additional restrictions
apply to my ability to sell, transfer, or otherwise dispose of
common stock of Fed One or United in order for United to be
entitled to use the "pooling-of-interests" accounting method,
I will abide by such restrictions.
Very truly yours,
By __________________________
Name:
Accepted this ____ day of
_________________, 1998.
United Bankshares, Inc.
By ________________________
Name:
Title:
ANNEX A
FORM OF SUPPLEMENT FOR MERGER SUB ACCESSION
TO MERGER AGREEMENT
SUPPLEMENT, dated as of the [ ] day of [ ], 1998 (this
"Supplement"), to the Agreement and Plan of Merger, dated as of February 18,
1998 (as amended from time to time in accordance with the terms thereof, the
"Merger Agreement"), by and between United Bankshares, Inc. ("United") and Fed
One Bancorp, Inc. ("Fed One") .
WHEREAS, terms used but not otherwise defined herein have the
meanings specified in the Merger Agreement; and
WHEREAS, pursuant to Section 2.01 of the Merger Agreement, United
has determined to consummate the Merger in part through the merger of Fed One
with and into [insert name(s) of Merger Sub(s)] ([each a][the] "Merger Sub").
NOW, THEREFORE, by its execution of this Supplement, as of the
date hereof, [each of] the undersigned (i) adopts and becomes a party to the
Acquisition Agreement, as required by Section 2.01 thereof and (ii) agrees to
perform all its obligations and agreements set forth therein.
IN WITNESS WHEREOF, this Supplement has been duly executed and
delivered by the undersigned, duly authorized thereunto as of the date first
hereinabove written.
[INSERT NAME OF MERGER SUB]
By: _____________________________
Name:
Title:
chs/147568
