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Exhibit 10.1
EXHIBIT B
OPTION AGREEMENT
This Option Agreement ("Option Agreement") is dated as of March 27,
2000, between Mid-Coast Bancorp, Inc., a Delaware corporation ("Mid-Coast") and
Union Bankshares Company. ("Union Bankshares"), a Maine corporation.
RECITALS
WHEREAS, the Boards of Directors of Mid-Coast and Union Bankshares have
approved an Agreement and Plan of Merger by and between Union Bankshares and
Mid-Coast ("Merger Agreement") dated as of the date hereof providing for the
merger of Mid-Coast into Union Bankshares;
WHEREAS, as a condition to Union Bankshares' entry into the Merger
Agreement and to induce such entry, Mid-Coast has agreed to grant to Union
Bankshares the option set forth herein to purchase authorized but unissued
shares of Mid-Coast Common Stock;
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions.
Capitalized terms defined in the Merger Agreement and used herein shall
have the same meanings as in the Merger Agreement.
2. Grant of Option.
Subject to the terms and conditions set forth herein, Mid-Coast hereby
grants to Union Bankshares an option ("Option") to purchase up to 149,960 shares
of Mid-Coast Common Stock, at a price of $6.00 per share payable in cash as
provided in Section 4 hereof; provided, however, that in the event Mid-Coast
issues or agrees to issue any shares of Mid-Coast Common Stock (other than as
permitted under the Merger Agreement) at a price less than $6.00 per share (as
adjusted pursuant to Section 6 hereof), the exercise price shall be equal to
such lesser price; in no event, however, shall the number of shares for which
the Option is exercisable exceed 19.9% of Mid-Coast's issued and outstanding
Common Stock without giving effect to any shares subject to or issued pursuant
to the Option.
3. Exercise of Option.
(a) Subject to compliance with applicable laws and regulations and
unless Union Bankshares shall have breached in any material respect and failed
to cure any material covenant or representation contained in the Merger
Agreement, Union Bankshares may exercise the Option, in whole or part, at any
time following the occurrence of a Purchase Event (as defined below).
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(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
i. Mid-Coast or any of its Subsidiaries (each an "Mid-Coast
Subsidiary"), without having received Union Bankshares' 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 Union Bankshares or any of its
Subsidiaries (each a "Union Bankshares Subsidiary") or the Board of
Directors of Mid-Coast shall have recommended that the stockholders of
Mid-Coast approve or accept any Acquisition Transaction or shall have
failed to publicly oppose an Acquisition Transaction, in each case with
any person other than Union Bankshares or a Union Bankshares
Subsidiary. For purposes of this Agreement, "Acquisition Transaction"
shall mean (w) a merger or consolidation, or any similar transaction,
involving Mid-Coast or any Significant Subsidiary (as defined in Rule
1-02(w) of Regulation S-X promulgated by the Securities and Exchange
Commission (the "SEC") of Mid-Coast, (x) a purchase, lease or other
acquisition of all or a substantial portion of the assets of Mid-Coast
or any Significant Subsidiary of Mid-Coast, (y) a purchase or other
acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 10% or more of the voting
power of Mid-Coast or any Significant Subsidiary of Mid-Coast, or (z)
any substantially similar transaction; provided, however, that in no
event shall any merger, consolidation, purchase, liquidation, dividend
in kind, reorganization or similar transaction involving only Mid-Coast
and one or more of its Subsidiaries or involving only any two or more
of such Subsidiaries, be deemed to be an Acquisition Transaction,
provided any such transaction is not entered into in violation of the
terms of the Merger Agreement;
ii. Mid-Coast or any Mid-Coast Subsidiary, without having received
Union Bankshares' prior written consent, shall have authorized,
recommended, proposed or publicly announced its intention to authorize,
recommend or propose, to engage in an Acquisition Transaction with any
person other than Union Bankshares or a Union Bankshares Subsidiary, or
the Board of Directors of Mid-Coast shall have publicly withdrawn or
modified, or publicly announced its intention to withdraw or modify, in
any manner adverse to Union Bankshares, its recommendation that the
stockholders of Mid-Coast approve the transactions contemplated by the
Merger Agreement;
iii. The shareholders of Mid-Coast shall have voted and failed to
approve and adopt 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), any person (other than the Union Bankshares or a Union
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Bankshares Subsidiary) shall have made a proposal to Mid-Coast or its
stockholders by public announcement or written communication that is or
becomes the subject of public disclosure to engage in an Acquisition
Transaction;
iv. Any person other than Union Bankshares, any Union Bankshares
Subsidiary or any Mid-Coast 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 Option Agreement having the meaning
assigned thereto in Section 13(d) of the 1934 Act, and the rules and
regulations thereunder);
v. Any person other than Union Bankshares or any Union Bankshares
Subsidiary shall have made a bona fide proposal to Mid-Coast or its
stockholders by public announcement or written communication that is or
becomes the subject of public disclosure to engage in an Acquisition
Transaction;
vi. After an overture is made by a third party to Mid-Coast or its
stockholders to engage in an Acquisition Transaction, Mid-Coast shall
have breached any covenant or obligation contained in the Merger
Agreement and such breach (x) would entitle Union Bankshares to
terminate the Merger Agreement and (y) shall not have been cured to the
satisfaction of Union Bankshares; or
vii. Any person other than Union Bankshares or any Union Bankshares
Subsidiary, other than in connection with a transaction to which Union
Bankshares has given its prior written consent, shall have filed an
application or notice with any Regulatory Authority, whether in draft
or final form, for approval to engage in an Acquisition Transaction.
(c) In the event Union Bankshares determines to exercise the Option, it
shall send to Mid-Coast a written notice (the date of which being herein
referred to as "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 (3) business days nor later than twenty (20) business days from the Notice
Date for the closing of such purchase ("Closing Date"); provided that if prior
notification to or approval of any Regulatory Authority is required in
connection with such purchase, Union Bankshares shall promptly file the required
notice or application for approval 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 period has expired or
been terminated or such approval has been obtained and any requisite waiting
period shall have passed.
(d) The Option shall expire and terminate to the extent not previously
exercised, upon the earliest to occur of the following (each a "Termination
Event"):
i. the Effective Date of the Merger; or
ii. eight (8) months after the occurrence of a Purchase Event; or
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iii. the Merger Agreement is terminated in accordance with its
terms except for any termination resulting from a material
breach by Mid-Coast of any of its representations, warranties
or covenants, or the failure of the stockholders of Mid-Coast
to approve the Merger Agreement; or
iv. (iv) December 31, 2000.
(e) Notwithstanding the termination of the Option, Union Bankshares
shall be entitled to purchase any shares with respect to which it has exercised
the Option in accordance with the terms hereof prior to the termination of the
Option. The termination of the Option shall not affect any rights hereunder
which by their terms extend beyond the date of such termination.
(f) Mid-Coast shall notify Union Bankshares promptly in writing of the
occurrence of any Purchase Event, it being understood that the giving of such
notice by Mid-Coast shall not be a condition to the right of Union Bankshares to
exercise the Option.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, Union Bankshares
shall pay to Mid-Coast the aggregate purchase price for the shares of Mid-Coast
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by a wire transfer to a bank account designated by Mid-Coast or
if no account has been designated in a manner determined to be reasonable by
Union Bankshares.
(b) At such closing, simultaneously with the delivery of cash as
provided in subsection (a), Mid-Coast shall deliver to Union Bankshares a
certificate or certificates representing the number of shares of Mid-Coast
Common Stock purchased by Union Bankshares and Union Bankshares shall deliver to
Mid-Coast a letter agreeing that Union Bankshares will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
5. Representations.
Mid-Coast hereby represents, warrants and covenants to Union Bankshares as
follows:
(a) Mid-Coast shall at all times maintain sufficient authorized but
unissued shares of Mid-Coast Common Stock so that the Option may be exercised
without authorization of additional shares of Mid-Coast Common Stock.
(b) The shares to be issued upon due exercise, in whole or in part, of
the Option, when paid for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable and will be delivered free and clear of all
claims, liens, encumbrances and security interests and not subject to any
preemptive rights.
(c) Mid-Coast will not, by amendment of its certificate of
incorporation 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 it; and will promptly take all
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action as may from time to time be required (including cooperating fully with
Union Bankshares in preparing applications or notices and providing information
with respect to regulatory approval) in order to permit Union Bankshares to
exercise the Option and Mid-Coast duly and effectively to issue shares of
Mid-Coast Common Stock pursuant hereto.
6. Adjustment Upon Changes in Capitalization.
If Mid-Coast should split or combine the Mid-Coast Common Stock, or pay
a stock dividend or other stock distribution in Mid-Coast Common Stock, or
otherwise change the Mid-Coast Common Stock into any other securities, or make
any other dividend or distribution in respect of the Mid-Coast Common Stock
(other than normal cash dividends), then the number of shares of Mid-Coast
Common Stock subject to the Option shall be adjusted so that, after such
issuance, it equals 19.9% of the number of shares of Mid-Coast Common Stock then
issued and outstanding without giving effect to any shares subject or issued
pursuant to the Option. Nothing contained in this Section 6 shall be deemed to
authorize Mid-Coast to breach any provisions of the Merger Agreement. Whenever
the number of shares of Mid-Coast Common Stock purchasable upon exercise hereof
is adjusted as provided in this Section 6, the Option exercise price shall be
adjusted by multiplying the Option exercise price by a fraction, the numerator
of which shall be equal to the number of shares of Mid-Coast Common Stock
purchasable prior to the adjustment and the denominator of which shall be equal
to the number of shares of Mid-Coast Common Stock purchasable after the
adjustment.
7. Registration Rights.
Mid-Coast shall, if requested by Union Bankshares, as expeditiously as
possible file a registration statement in order to permit the sale or other
disposition of this Option and/or the shares of Mid-Coast Common Stock acquired
upon exercise of the Option in accordance with the intended method of sale or
other disposition requested by Union Bankshares. Union Bankshares shall provide
all information reasonably requested by Mid-Coast for inclusion in any
registration statement to be filed hereunder. Mid-Coast will use its reasonable
best efforts to cause such registration statement first to become effective and
then to remain effective for such period not in excess of one year from the day
such registration statement first becomes effective as may be reasonably
necessary to effect such sales or other dispositions. The first registration
effected under this Section 7 shall be at Mid-Coast's expense except for
underwriting commissions and the fees and disbursements of Union Bankshares'
counsel attributable to the registration. A second registration may be requested
hereunder at Union Bankshares' expense. In no event shall Mid-Coast be required
to effect more than two registrations hereunder. If requested by Mid-Coast, in
connection with any such registration, Union Bankshares will 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 by a selling shareholder
in such underwriting agreements.
8. Certain Puts.
(a) Upon the occurrence of a Purchase Event that occurs prior to
termination of the Option, (i) at the request of Union Bankshares, delivered
while the Option (in whole or part) is exercisable, Mid-Coast shall repurchase
the Option from Union Bankshares at a price
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equal to (x) the amount by which (a) the market/offer price (as defined below)
exceeds (b) the Option exercise price, multiplied by (y) the number of shares
for which the Option may then be exercised; and (ii) at the request from time to
time of the owner of shares purchased pursuant to the Option, delivered while
the Option (in whole or part) is exercisable (or, if it has been fully
exercised, would have been exercisable had such exercise not been made),
Mid-Coast shall repurchase such number of the shares issued pursuant to the
Option from the owner as the owner shall designate at a price equal to the
market/offer price multiplied by the number of such shares so designated. The
term "market/offer price" shall mean the highest of (i) the price per share of
Mid-Coast Common Stock at which a tender offer or exchange offer therefor has
been made after the date hereof, (ii) the price per share of Mid-Coast Common
Stock to be paid by any third party pursuant to any merger, consolidation, share
exchange or other agreement with Mid-Coast entered into after the date hereof,
(iii) the average closing price for shares of Mid-Coast Common Stock within the
30-day period immediately preceding the date Union Bankshares gives notice of
the required repurchase of this Option or the owner gives notice of the required
repurchase of shares, as the case may be, or (iv) in the event of a sale of all
or substantially all of Mid-Coast's assets, the sum of the price paid in such
sale for such assets and the current market value of the remaining assets of
Mid-Coast as determined by a nationally recognized investment banking firm
selected by the parties (or by an arbitrator if they cannot agree) divided by
the number of shares of Mid-Coast Common Stock 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 parties (or by an arbitrator if they cannot agree), and such
determination shall be conclusive and binding on all parties.
(b) Union Bankshares or the owner, as the case may be, may exercise its
right to require Mid-Coast to repurchase the Option and any shares pursuant to
this Section 8 by surrendering for such purpose to Mid-Coast, at its principal
office, this Option Agreement or certificates for the shares, as applicable,
accompanied by a written notice or notices stating that Union Bankshares or the
owner, as the case may be, elects to require Mid-Coast to repurchase the Option
and/or the shares in accordance with the provisions of this Section 8. As
promptly as practicable, and in any event within five (5) business days after
the surrender of the Option and/or certificates representing shares and the
receipt of such notice or notices relating thereto, Mid-Coast shall deliver or
cause to be delivered to Union Bankshares or the owner of the shares, the
applicable repurchase price therefor or the portion thereof that Mid-Coast is
not then prohibited from so delivering under applicable law and regulation.
(c) Mid-Coast hereby undertakes to use its best efforts to obtain all
required regulatory and legal consents and to file any required notices in order
to accomplish any repurchase contemplated by this Section 8. To the extent that
Mid-Coast is prohibited under applicable law or regulation from repurchasing the
Option and/or the shares in full, Mid-Coast shall immediately so notify Union
Bankshares and the owner, if applicable, and thereafter deliver or cause to be
delivered, from time to time, the portion of the repurchase price that it is no
longer prohibited from delivering. If Mid-Coast at any time after delivery of a
notice of repurchase pursuant to Section 8 is prohibited under applicable law or
regulation from delivering the repurchase price in full (and Mid-Coast hereby
undertakes to use its 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), Union Bankshares and/or the owner may revoke its
notice of repurchase either in whole or to the extent of the prohibition.
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9. Total Profit. Notwithstanding any other provision of this Option
Agreement to the contrary, in no event shall Union Bankshares' Total Profit (as
defined below) exceed $800,000 and, if it otherwise would exceed such amount,
Union Bankshares, at its sole election, shall either (A) reduce any remaining
shares of Mid-Coast Common Stock subject to the Option, (B) deliver to Mid-Coast
for cancellation without consideration shares of Mid-Coast Common Stock
previously purchased by Union Bankshares pursuant to the exercise of the Option,
(C) pay cash to Mid-Coast, (D) increase the per share exercise price, or (E) any
combination of the foregoing, so that Union Bankshares' actually realized Total
Profit shall not exceed $800,000 after taking into account the foregoing
actions.
As used in this Option Agreement, the term "Total Profit" shall mean
the aggregate sum (prior to the payment of taxes) of the following: (i) any net
cash amounts received by Union Bankshares pursuant to the sale of shares of
Mid-Coast Common Stock received pursuant to the exercise of the Option (or any
other securities into which such shares shall be converted or exchanged) to any
unaffiliated person less Union Bankshares' purchase price of such shares, (ii)
any amount received by Union Bankshares pursuant to Mid-Coast's repurchase of
shares of Mid-Coast Common Stock received pursuant to the exercise of the Option
less Union Bankshares' purchase price of such shares, and (iii) any amount
received by Union Bankshares' pursuant to Mid-Coast's repurchase of the Option
(or any portion thereof).
10. Severability.
If any term, provision, covenant or restriction contained in this Option
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 Option
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 Option will not permit the holder to acquire the full
number of shares of Mid-Coast Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of Mid-Coast
to allow the holder to acquire or to require Mid-Coast to repurchase such lesser
number of shares as may be permissible, without any amendment or modification
hereof.
11. Miscellaneous.
(a) Extension. The period for exercise by Union Bankshares and its
assignees of any rights under this Option Agreement shall be extended (i) to the
extent necessary to obtain all regulatory approvals for the exercise of such
rights, 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.
(b) Consents. Each of Union Bankshares and Mid-Coast will use its best
efforts to make all filings with, and to obtain consents of, all third parties
and regulatory authorities necessary to the consummation of the transactions
contemplated by this Option Agreement, including without limitation applying to
the FRB and the Maine Bureau of Banking for approval to acquire the shares
issuable hereunder.
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(c) Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement 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.
(d) Entire Agreement. Except as otherwise expressly provided herein or
in the Merger Agreement, this Option Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and
supersedes all prior agreements or understandings with respect thereto, written
or oral. The terms and conditions of this Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Option Agreement, expressed or implied,
is intended to confer upon any party, other than the parties hereof, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Option Agreement, except as expressly
provided herein.
(e) Assignment. Neither of the parties hereto may assign any of its
rights or obligations under this Option Agreement or the Option created
hereunder to any other person, without the express written consent of the other
party.
(f) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by overnight express or by registered or certified mail, postage
prepaid, addressed as follows:
Mid-Coast
Mid-Coast Bancorp, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx
Fax Number: (000) 000-0000
Copy to: Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Fax Number: (000) 000-0000
Union Bankshares
Union Bankshares Co.
00 Xxxx Xxxxxx
X. X. Xxx 000
Xxxxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax Number: (000) 000-0000
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Copy to: Xxxxxxx X. Xxxxxxx, Esq.
Peabody & Xxxxxx, LLP
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax Number: (000) 000-0000
A party may change its address for notice purposes by written notice to the
other party hereto.
(g) Counterparts. This Option Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(h) Specific Performance. The parties agree that damages would be an
inadequate remedy for a breach of the provisions of this Option Agreement by
either party hereto and that this Option Agreement may be enforced by either
party hereto through injunctive or other equitable relief.
(i) Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of Maine applicable to
agreements made and entirely to be performed within such state, and such federal
laws as may be applicable.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
MID-COAST BANCORP, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Attest:
/s/ Xxxxx Xxxxxxxx
----------------------------
UNION BANKSHARES COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
Attest:
/s/ Xxxxxx Xxxxx
----------------------------
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