AGREEMENT
EXECUTION
COPY
AGREEMENT
(this “Agreement”), dated as of February 14, 2008, by and among First Niagara
Financial Group, Inc., a Delaware corporation (the “Company”), M. Xxxxx Xxxxx,
an individual residing at 000 Xxxxxx Xxxxx, Xxxxxx, XX 00000 (“Xxxxx”), Xxxx X.
Xxxxxx, an individual residing at 0 Xxxxx Xxxx, Xxxxxxxxxxx, XX 00000 (“Xxxxxx”)
and Xxxxxxx X. Xxxxxxx, an individual residing at 00 Xxxxxx Xxx Xxxx, Xxxxxx,
XX
00000 (“Xxxxxxx” and together with Xxxxx and Xxxxxx, the “Requesting
Stockholders”).
WHEREAS,
each Requesting Stockholder has requested that the Governance/Nominating
Committee (the “Governance/Nominating Committee”) of the Board of Directors of
the Company (the “Board”) nominate him for election as a director of the Company
at the Company’s 2008 Annual Meeting of Stockholders (the “2008 Annual Meeting”)
and that he be considered as a director of First Niagara Bank (the “Bank”);
and
WHEREAS,
the Board, on the recommendation of the Governance/Nominating Committee,
has
determined that it is advisable and in the best interests of the Company
and its
stockholders that Xxxxxx X. Xxxxx, G. Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxx
be
nominated for re-election to the Board at the 2008 Annual Meeting and that
the
size of the Board not be increased at this time; and
WHEREAS,
in light of the foregoing, the Board has determined not to nominate any of
the
Requesting Stockholders for election to the Board at the 2008 Annual Meeting;
and
WHEREAS,
the Company has determined that the interests of the Company and its
stockholders would be best served by, and each of the Requesting Stockholders
has determined that his interests would best be served by, (i) appointing
Xxxxxx
to the Board prior to the Company’s 2009 Annual Meeting of Stockholders (the
“2009 Annual Meeting”) and (ii) the receipt of the other agreements, covenants,
rights and benefits as provided herein.
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements and
representations set forth herein, intending to be legally bound hereby, the
parties hereby agree as follows:
1. Board
Representation; Nominations.
(a) The
Company agrees that, on or before the date of the Board’s regularly scheduled
meeting in January 2009, the Board shall take all necessary action to increase
the size of the Board by one and to contemporaneously fill such vacancy with
Xxxxxx (such that Xxxxxx will be able to participate as a director at such
meeting), who shall serve in the class of directors with a term expiring
at the
2009 Annual Meeting.
(b) The
Board
shall nominate Xxxxxx to stand for re-election to the Board at the 2009 Annual
Meeting for a term expiring at the Company’s 2012 Annual Meeting of Stockholders
(the “2012 Annual Meeting”). The Board shall recommend that the Company’s
stockholders vote for the election of Xxxxxx at the 2009 Annual
Meeting.
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(c) The
Company shall cause the Bank to appoint Xxxxxx to the Board of Directors
of the
Bank concurrently with his appointment to the Board.
(d) Through
the Termination Date, the Governance/Nominating Committee shall evaluate
director candidates in accordance with its Charter and the Policies and
Procedures for the Consideration of Board Candidates Submitted by Stockholders
and for Stockholder Communications with Directors, each as then in
effect.
2. Non-Solicitation
and Other Arrangements.
(a) Each
of
the Requesting Stockholders agrees that, during the period commencing on
the
date of the execution of this Agreement and ending on the Termination Date,
without the prior written consent of the Board as specifically expressed
in a
resolution adopted by a majority of the entire membership of the Board (other
than Xxxxxx), no Requesting Stockholder, nor any of their respective Affiliates
or Associates nor any Person acting at their direction or on their behalf
will,
directly or indirectly:
(i) with
respect to the Company or its Voting Securities, make, engage or in any way
participate in, directly or indirectly, any “solicitation” (as such term is used
in the proxy rules of the U.S. Securities and Exchange Commission (the “SEC”))
of proxies or consents (whether or not relating to the election or removal
of
directors); seek to advise, encourage or influence any Person with respect
to
the voting of any Voting Securities (other than Affiliates or Associates);
initiate, propose or otherwise “solicit” (as such term is used in the proxy
rules of the SEC) stockholders of the Company for the approval of stockholder
proposals, whether made pursuant to Rule 14a-8 or Rule 14a-4 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise,
or cause or encourage or attempt to cause or encourage any other Person to
initiate any such stockholder proposal; otherwise communicate with the Company’s
stockholders or others pursuant to Rule 14a-1(l)(2)(iv) under the Exchange
Act;
or participate in, or take any action pursuant to, any “shareholder access”
proposal which may be adopted by the SEC, whether in accordance with previously
proposed rules or otherwise;
(ii) seek,
propose, or make any statement with respect to any merger, consolidation,
business combination, tender or exchange offer, sale or purchase of assets,
sale
or purchase of securities, dissolution, liquidation, restructuring,
recapitalization or similar transactions of or involving the Company or any
of
its Affiliates or Associates;
(iii) acquire,
offer or propose to acquire, or agree to acquire (except by way of stock
dividends, stock splits, reverse stock splits or other distributions or
offerings made available to holders of any Voting Securities generally),
directly or indirectly, whether by purchase, tender or exchange offer, through
the acquisition of control of another Person, by joining a partnership, limited
partnership, syndicate or other “group” (within the meaning of Section 13(d)(3)
of the Exchange Act) or otherwise, any Voting Securities if as a result of
such
acquisition he and his Affiliates and Associates would beneficially own in
the
aggregate in excess of 4.9% of the Company’s Voting Securities; provided,
however,
that
Xxxxxx may receive Voting Securities as compensation for his service on the
Board in accordance with the Company’s policies applied to all
directors;
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(iv) form,
join or in any way participate in a “group” (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to any Voting
Securities;
(v) deposit
any Voting Securities in any voting trust or subject any Voting Securities
to
any arrangement or agreement with respect to the voting of any Voting
Securities;
(vi) act
alone
or in concert with others to control or seek to control, or influence or
seek to
influence, the Company’s management, the Board or the policies of the
Company;
(vii) make
any
demand or request for any list of the Company’s stockholders, or any related
material, or for the books and records of the Company or its
Affiliates;
(viii) except
as
specifically and expressly set forth in this Agreement, seek, alone or in
concert with others, election or appointment to or representation on, or
nominate or propose the nomination of any candidate to, the Board, or seek
the
removal of any member of the Board;
(ix) have
any
discussions or communications, or enter into any arrangements, understanding
or
agreements (whether written or oral) with, or advise, finance, assist or
encourage, any other Person in connection with any of the foregoing, or make
any
investment in or enter into any arrangement with any other Person (other
than a
passive investment not in excess of 5% of such Person’s outstanding equity
interests) that engages, or offers or proposes to engage, in any of the
foregoing;
(x) make
or
disclose any statement regarding any intent, purpose, plan or proposal with
respect to the Board, the Company, its management, policies or affairs or
any of
its securities or assets or this Agreement that is inconsistent with the
provisions of this Agreement, including any intent, purpose, plan or proposal
that is conditioned on, or would require waiver, amendment, nullification
or
invalidation of, any provision of this Agreement or take any action that
could
require the Company to make any public disclosure relating to any such intent,
purpose, plan, proposal or condition; or
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(xi) otherwise
take, or solicit, cause or encourage others to take, any action inconsistent
with any of the foregoing.
(b) Notwithstanding
any other provision of this Agreement, Xxxxxx, during the term of his service
as
a director of the Company, shall not be prohibited from acting as a director
and
complying with his fiduciary duties as a director of the Company.
3. Voting
Arrangements.
From
the date hereof until the Termination Date, each Requesting Stockholder shall,
and shall cause his Affiliates to, (a) be present, in person or by proxy,
at all
annual and special meetings of stockholders of the Company so that all Voting
Securities beneficially owned by him and his Affiliates and then entitled
to
vote may be counted for the purpose of determining the presence of a quorum
at
such meetings, (b) support each nominee on the slate of nominees proposed
by the
Board and vote all Voting Securities which he and his Affiliates are then
entitled to vote in favor of the election of each such nominee, and (c) vote
in
accordance with the Board’s recommendation on all stockholder proposals, whether
such proposals have been made pursuant to Rule 14a-8 under the Exchange Act
or
otherwise.
4. Representations
and Warranties of the Requesting Stockholders.
(a) Each
Requesting Stockholder represents and warrants on his own behalf that this
Agreement has been duly executed and delivered, constitutes his valid and
binding obligation, and is enforceable against him in accordance with its
terms.
(b) Xxxxx
represents and warrants that, as of the date of this Agreement, he is the
beneficial owner of 33,560 shares of the Company’s common stock, par value $0.01
per share (the “Common Stock”).
(c) Xxxxxx
represents and warrants that, as of the date of this Agreement, he is the
beneficial owner of 588,311 shares of Common Stock.
(d) Xxxxxxx
represents and warrants that, as of the date of this Agreement, he is the
beneficial owner of 38,706 shares of Common Stock.
5. Representations
and Warranties of the Company.
(a) The
Company represents and warrants that it has the corporate power and authority
to
execute, deliver and carry out the terms and provisions of this Agreement
and to
consummate the transactions contemplated hereby.
(b) The
Company represents and warrants that this Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes a valid
and
binding agreement of the Company, enforceable against it in accordance with
its
terms.
6. Expenses.
All
costs and expenses incurred in connection with this Agreement shall be paid
by
the party incurring such costs and expenses.
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7. Termination
Date.
The
date on which this Agreement shall terminate is referred to herein as the
“Termination Date.” The Termination Date shall be the earlier of (a) the
30th
day
immediately preceding the last day on which stockholders are permitted, under
the terms of the Company’s bylaws as then in effect, to nominate candidates to
stand for election to the Board at the 2012 Annual Meeting and (b) the
occurrence of a Change of Control of the Company. A “Change of Control” of the
Company shall be deemed to have occurred if either of the following events
shall
have occurred: (i) any Person is or becomes the beneficial owner, directly
or
indirectly, of 50% or more of the Company’s Voting Securities or (ii) there is
consummated a merger or consolidation of the Company with any other corporation
or other entity, other than a merger or consolidation which results in the
Company’s Voting Securities outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or
by
being converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the Company or such
surviving entity or any parent thereof outstanding immediately after such
merger
or consolidation.
8. Publicity.
Except
as otherwise required by law or by the rules of Nasdaq, neither the Company
nor
any Requesting Stockholder shall issue or cause the publication of any press
release or other public announcement with respect to, or otherwise make any
public statement concerning, this Agreement or the terms hereof without the
consent of the other party.
9. Specific
Performance.
The
Company, on the one hand, and the Requesting Stockholders, on the other hand,
acknowledge and agree that the other party would be irreparably injured by
a
breach of this Agreement by such party and that money damages are an inadequate
remedy for an actual or threatened breach of this Agreement because of the
difficulty of ascertaining the amount of damage that will be suffered in
the
event that this Agreement is breached. Accordingly, the Company and the
Requesting Stockholders agree to the granting of specific performance of
this
Agreement and injunctive or other equitable relief as a remedy for any such
breach, without proof of actual damages, and further agree to waive any
requirement for the securing or posting of any bond in connection with any
such
remedy. Such remedy shall not be deemed to be the exclusive remedy for a
breach
of this Agreement, but shall be in addition to all other remedies available
at
law or equity. In the event of litigation relating to this Agreement, if
a court
of competent jurisdiction determines in a final, nonappealable order that
this
Agreement has been breached by either party, then the breaching party will
reimburse the other party for its costs and expenses (including, without
limitation, reasonable legal fees and expenses) incurred in connection with
all
such litigation.
10. No
Waiver.
Any
waiver by any party hereto of a breach of any provision of this Agreement
shall
not operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Agreement. The
failure
of a party hereto to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that
party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
11. Certain
Definitions.
As used
in this Agreement, (a) the term “Person” as used herein shall be interpreted
broadly to include, among others, any individual, partnership, corporation,
limited liability company, joint venture, group, syndicate, trust, government
or
agency thereof, or any other association or entity; (b) the terms “Affiliates”
and “Associates” shall have the meanings set forth in Rule 12b-2 under the
Exchange Act and shall include persons who become Affiliates or Associates
of
any Person subsequent to the date hereof; (c) the term “Voting Securities” shall
mean the shares of Common Stock and any other securities of the Company entitled
to vote in the election of directors, or securities convertible into, or
exercisable or exchangeable for, such Common Stock or other securities, whether
or not subject to the passage of time or other contingencies; and (d) the
Company and the Requesting Stockholders will be referred to herein individually
as a “party” and collectively as “parties”.
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12. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. Upon such a determination, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent
of
the parties as closely as possible in an acceptable manner in order that
the
transactions contemplated hereby be consummated as originally contemplated
to
the fullest extent possible.
13. Successors
and Assigns.
All the
terms and provisions of this Agreement shall inure to the benefit of and
shall
be enforceable by the successor and assigns of the parties hereto.
14. Survival
of Representations.
All
representations, warranties and agreements made by the parties in this Agreement
or pursuant hereto shall survive the date hereof.
15. Entire
Agreement; Amendments.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to
the
subject matter hereof and is not intended to confer upon any person other
than
the parties hereto any rights or remedies hereunder. This Agreement may be
amended only by a written instrument duly executed by the parties hereto
or
their respective successors or assigns.
16. Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
17. Notices.
All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given (and shall be deemed to have been duly given
if so
given) by hand delivery, cable, facsimile (receipt confirmed), or by mail
(registered or certified, postage prepaid, return receipt requested) to the
respective parties hereto as follows:
If
to the
Company:
First
Niagara Financial Group, Inc.
0000
Xxxxx Xxxxxxx Xxxx
X.X.
Xxx
000
Xxxxxxxx,
XX 00000-0000
Attention:
Xxxx Xxxxx, General Counsel and Corporate Secretary
Fax:
(000) 000-0000
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with
a
copy to:
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx
Xxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Fax:
(000) 000-0000
If
to the
Requesting Stockholders:
M.
Xxxxx
Xxxxx
000
Xxxxxx Xxxxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
Xxxx
X.
Xxxxxx
0
Xxxxx
Xxxx
Xxxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Xxxxxxx
X. Xxxxxxx
00
Xxxxxx
Xxx Xxxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
with
a
copy to:
Silver
Xxxxxxxx & Xxxx, LLP
0000
X
Xxxxxx, X.X. Xxxxx 000
Xxxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxx Xxxxxxxx, Esq.
Fax:
(000) 000-0000
or
to
such other address as the person to whom notice is given may have previously
furnished to the others in writing in the manner set forth above.
18. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York applicable to contracts made and performed
in such
State, without giving effect to choice of law principles thereof that would
cause the application of the laws of any other jurisdiction; provided,
however,
that
any issue related to the duties (and compliance therewith) of any member
of the
Board as such shall be governed by the laws of the State of Delaware, including
the Delaware General Corporation Law. Nothing in this Agreement shall affect
the
obligation of any party to testify truthfully if called to testify under
oath.
19. Submission
to Jurisdiction.
Each of
the parties irrevocably submits to the exclusive jurisdiction and service
and
venue in any federal or state court sitting in the State of New York for
the
purposes of any action, suit or proceeding relating to this Agreement. Each
of
the parties irrevocably and unconditionally waives any objections to the
laying
of venue of any action, suit or proceeding relating to this Agreement in
any
federal or state court sitting in the State of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
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20. Rule
of Construction.
This
Agreement has been negotiated by all parties, and all parties have participated
in the drafting of the language of this Agreement. No rule of construction
of
contracts requiring that provisions be construed against the drafter of an
agreement shall be applied to this Agreement.
21. Counterparts;
Facsimile.
This
Agreement may be executed in any number of counterparts, including by facsimile,
each of which shall be an original, but each of which together shall constitute
one and the same Agreement.
22. Further
Actions.
Upon
and subject to the terms of this Agreement, each of the parties hereto agrees
to
use its or his reasonable best efforts to take or cause to be taken all actions,
and to do, or cause to be done, and to assist and cooperate with the other
party
in doing, all things necessary, proper or advisable to consummate or make
effective, in the most expeditious manner practicable, the matters contemplated
by this Agreement.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be
duly executed as of the day and year first written above.
FIRST
NIAGARA FINANCIAL GROUP, INC.
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By:
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Name:
Xxxx X. Xxxxxxx
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Title:
President & CEO
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M.
XXXXX XXXXX
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XXXX
X. XXXXXX
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XXXXXXX
X. XXXXXXX
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[Signature
Page to Agreement]
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