EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of September 15, 2000, by and between Friendship Community Bank
("Bank"), a financial institution organized and existing under the laws of the
State of Florida, with its principal office located in Ocala, Florida and PAB
Bankshares, Inc. ("PAB"), a corporation organized and existing under the laws of
the State of Georgia, with its principal office located in Valdosta, Georgia, to
be joined in by FCB Interim Bank ("Interim"), a financial institution to be
chartered under the laws of the State of Florida and to become a wholly-owned
subsidiary of PAB.
PREAMBLE
The Boards of Directors of Bank, PAB and, once it is chartered, Interim,
are each of the opinion that the transaction described herein is in the best
interest of the parties and their respective shareholders. This Agreement
provides for the merger of Interim with and into Bank (the "Merger"). At the
effective time of the Merger, the outstanding shares of the capital stock of
Bank shall be exchanged for cash totaling $7,511,712 and all the outstanding
options having rights to convert to 9,000 shares of Bank's capital stock will
either (i) be exercised by the holders in accordance with their terms and
exchanged for cash totaling $166,680 or (ii) terminated in accordance with their
terms, such amounts totaling in the aggregate $7,678,392 assuming exercise of
the options' The transaction described in this Agreement is subject to the
approvals of the shareholders of Bank, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Florida
Department of Banking and Finance and the Department of Banking and Finance of
the State of Georgia, and the satisfaction of certain other conditions described
in this Agreement.
Immediately following the Closing of the Merger, Bank will remain in
existence under its Articles of Incorporation and Bylaws, as in effect
immediately prior to the Effective Time, as a wholly-owned subsidiary of PAB.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants and agreements set forth herein, the parties agree as
follows:
ARTICLE 1
TRANSACTION AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, Interim shall be merged with and into Bank in accordance
with the provisions of Sections 658.41 and 658.42 of the FFIC and with the
effect provided in Section 658.45 of the FFIC. Bank shall be the Surviving
Corporation resulting from the Merger, and the separate existence of Interim
shall cease. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of PAB, Interim and Bank and will be approved by the Board of
Directors of Interim upon its formation. The name and location of the main
office and each branch office of PAB and Bank, along with the name and address
of the main office of the Surviving Corporation and each existing and proposed
branch office as well as the name and address of each director and executive
officer, and a copy of the complete articles of incorporation of the Surviving
Corporation are attached as Exhibit A to this Agreement. Exhibit A further
includes the amount of the Surviving Corporation's surplus fund and retained
earnings at June 30, 2000.
1.2 Time and Place of Closing. The Closing will take place at 9:30
a.m., local time, on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:30 a.m.), or at such other
time as the Parties, acting through their Chief Executive Officers, may mutually
agree. The place of Closing shall be at the offices of Xxxxxxxx Xxxxxxx LLP,
Atlanta, Georgia, or such other place as may be mutually agreed upon by the
Parties.
1.3 Effective Time. The Merger contemplated by this Agreement shall
become effective on the date and at the time set forth in the certificate of
merger (the "Certificate of Merger") issued by the Florida Department of Banking
and Finance (the "Effective Time"). Subject to the terms and conditions hereof,
unless otherwise mutually agreed upon in writing by the Chief Executive Officers
of each Party, the Parties shall use their reasonable efforts to cause the
Effective Time to occur on the last business day of the month in which occurs
the last to occur of (i) the effective date (including expiration of any
applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, (ii) the
date on which the shareholders of Bank approve this Agreement, or (iii) such
later date as may be mutually agreed upon in writing by the Chief Executive
Officers of each Party.
1.4 Execution of support and Non Competition Agreements. Immediately
prior to the execution of this Agreement and as a condition hereto, each of the
directors of Bank is executing and delivering to PAB a Support Agreement and Non
Competition Agreement in substantially the form as attached hereto as Exhibit B.
ARTICLE 2
TERMS OF MERGER
2.1 Articles of Incorporation. The Articles of Incorporation of Bank
in effect prior to the Effective Time shall be the Articles of Incorporation of
the Surviving Corporation until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Bank in effect prior to the Effective Time
shall be the Bylaws of the Surviving Corporation until otherwise amended or
repealed.
2.3 Directors of Bank. The directors of Bank in office prior to the
Effective Time, together with such additional persons as may thereafter be
elected, anticipate serving as directors of Bank for at least one year after the
Effective Time.
2.4 Officers of Bank. The officers of Bank in office prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of Bank from and after the Effective Time
in accordance with the Bylaws of Bank.
ARTICLE 3
MANNER OF CONVERTING SHARES AND OPTIONS
3.1 Conversion of Shares. Subject to the provisions of this Article
3, at the Effective Time, by virtue of the Merger and without any action on the
part of PAB, Interim or Bank, or the shareholders of any of the foregoing, the
shares of the constituent corporations shall be converted as follows:
(a) Each share of PAB Common Stock issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding from and after
the Effective Time;
(b) Subject to adjustment as outlined below and the conditions set
forth herein, all shares of Bank Common Stock issued and outstanding at the
Effective Time shall be exchanged for cash totaling $7,511,712 and all of the
outstanding options having rights to convert, in the aggregate, to 9,000 shares
of Bank's Common Stock (the "Bank Options") will either (i) be exercised by the
holders in accordance with their terms and exchanged for cash totaling $166,680
or (ii) terminated in accordance with their terms, such amounts totaling in the
aggregate the sum of $7,678,392 (the "Merger Consideration");
(c) Each share of Bank Common Stock (excluding shares held by PAB or
any of its Subsidiaries or by Bank, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, and excluding shares
held by Bank shareholders who perfect their dissenters' rights of appraisal as
provided in Section 3.4 of this Agreement) issued and outstanding at the
Effective Time shall cease to be outstanding. Each share of Bank Common Stock
and each share subject to the Options shall be converted into and exchanged for
the right to receive $18.52 (the "Per Share Cash Consideration"). The Per Share
Cash Consideration shall be paid to Bank's shareholders by PAB for each share of
Bank Common Stock; and
(d) In the event the costs and expenses incurred by Bank or on its
behalf in connection with the transactions contemplated hereunder, including
filing, registration and application fees, printing fees and fees and expenses
of its own consultants, accountants, and counsel, (but excluding amounts payable
under change of control provisions in certain Bank employment agreements, if
any, and as a result of the termination of the Fiserv Solutions, Inc. Data
Processing Agreement dated August 5, 1999 following the Closing) exceed
$100,000, the Merger Consideration shall be reduced by the amount of such costs
and expenses in excess of $100,000 (the "Excess Amount") and the Per Share Cash
Consideration shall be reduced by the amount equal to the quotient obtained by
dividing the Excess Amount by 414,600.
3.2 Anti-Dilution Provisions. In the event Bank changes the number of
shares of Bank Common Stock, issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date therefor (in the case of a stock split or
similar recapitalization) shall be prior to the Effective Time, the Merger
Consideration and the Per Share Cash Consideration shall be proportionately
adjusted.
3.3 Shares Held by Bank or PAB. Each of the shares of Bank Common
Stock held by Bank or by any PAB Companies, in each case other than in a
fiduciary capacity or as a result of debts previously contracted, shall be
canceled and retired at the Effective Time, and no consideration shall be issued
in exchange therefor.
3.4 Dissenting Shareholders. Any holder of shares of Bank Common
Stock who perfects his dissenters' rights of appraisal in accordance with and as
contemplated by Sections 658.44 et seq. of the FFIC shall be entitled to receive
the value of such shares in cash as determined pursuant to such provision of
Law; provided, however, that no such payment shall be made to any dissenting
shareholder unless and until such dissenting shareholder has complied with the
applicable provisions of the FFIC and surrendered to Bank the certificate or
certificates representing the shares for which payment is being made. In the
event that after the Effective Time a dissenting shareholder of Bank fails to
perfect, or effectively withdraws or loses, his right to appraisal and of
payment for his shares, Bank shall issue and deliver the consideration to which
such holder of shares of Bank Common Stock is entitled under this Article 3
(without interest) upon surrender by such holder of the certificate or
certificates representing the shares of Bank Common Stock held by him.
3.5 Stock Options. At the Effective Time, all rights with respect to
Bank Common Stock pursuant to the Bank Options granted by Bank under the Bank
Stock Option Plan (the "Bank Option Plan"), which are outstanding at the
Effective Time, whether or not exercisable, shall be either (i) exercised by the
holders thereof in accordance with their terms and become rights with respect to
Bank Common Stock, and Bank shall issue 9,000 shares of Bank Common Stock which
stock shall then be exchanged with PAB for cash totaling $166,680, or (ii)
terminated in accordance with their terms, and the Bank Option Plan shall then
terminate. Bank shall take all necessary steps to effectuate the foregoing
provisions of this Section 3.5.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Within five days after the Effective Time,
PAB shall, as exchange agent, mail to the former shareholders of Bank
appropriate transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of Bank Common Stock shall pass, only upon proper delivery
of such certificates to PAB). After the Effective Time, each holder of shares
of Bank Common Stock (other than shares to be canceled pursuant to Section 3.3
of this Agreement or as to which dissenters' rights of appraisal have been
perfected as provided in Section 3.4 of this Agreement) issued and outstanding
at the Effective Time shall surrender the certificate or certificates
representing such shares to PAB and shall within five days after surrender
thereof receive in exchange therefor the consideration provided in Section 3.1
of this Agreement, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2 of
this Agreement. PAB shall not be obligated to deliver the consideration to
which any former holder of Bank Common Stock is entitled as a result of the
Merger until such holder surrenders his certificate or certificates representing
the shares of Bank Common Stock for exchange as provided in this Section 4.1.
The certificate or certificates of Bank Common Stock so surrendered shall be
duly endorsed as PAB may require. Any other provision of this Agreement
notwithstanding, PAB shall not be liable to a holder of Bank Common Stock for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former Shareholders. At the Effective Time, the stock
transfer books of Bank shall be closed as to holders of Bank Common Stock
immediately prior to the Effective Time, and no transfer of Bank Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of Bank Common Stock (other
than shares to be canceled pursuant to Sections 3.3 and 3.4 of this Agreement)
shall from and after the Effective Time represent for all purposes only the
right to receive the Per Share Cash Consideration in exchange therefor. Upon
surrender of such Bank Common Stock certificate, the Per Share Cash
Consideration shall be delivered and paid by PAB with respect to each share
represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BANK
Bank hereby represents and warrants to PAB and to Interim as follows:
5.1 Organization, Standing and Power. Bank is a financial institution
duly organized, validly existing and in active status under the laws of the
State of Florida. Bank has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Assets. Bank does
not own any property or conduct any business outside of the State of Florida
which would require it to be qualified as a foreign corporation in any
jurisdiction and where the failure to be so qualified will have a Material
Adverse Effect on Bank.
5.2 Authority; No Breach By Agreement.
(a) Bank has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Bank, subject to the approval
of this Agreement by the holders of at least a majority of the outstanding
shares of Bank Common Stock, which is the only shareholder vote required for
approval of this Agreement and consummation of the Merger by Bank. Subject to
such requisite shareholder approval and Consents of Regulatory Authorities, this
Agreement represents a legal, valid and binding obligation of Bank, enforceable
against Bank in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Except as Previously Disclosed, neither the execution and delivery
of this Agreement by Bank nor the consummation by Bank of the transactions
contemplated hereby, nor compliance by Bank with any of the provisions hereof,
will (i) conflict with or result in a breach of any provision of Bank's Articles
of Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on Bank
under, any Contract or Permit of Bank, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Bank, or (iii) subject to receipt of
the requisite approvals referred to in Section 9.1(a) and (b) of this Agreement,
violate any Law or Order applicable to Bank or any of its Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws and other than
Consents required from Regulatory Authorities, and other than notices to or
filings with the IRS or the Pension Benefit Guaranty Corporation with respect to
any employee benefit plans, or other than Consents, filings or notifications
which, if not obtained or made, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Bank no notice to, filing with
or Consent of, any public body or authority is necessary for the consummation by
Bank of the Merger and the other transactions contemplated in this Agreement.
5.3 Capital Stock and Other Securities.
(a) The authorized capital stock of Bank consists of 1,000,000 shares
of Bank Common Stock. As of the date of this Agreement, there are (i) 405,600
shares of Bank Common Stock issued and outstanding and (ii) 9,000 shares of Bank
Common Stock reserved for issuance upon the exercise of issued and outstanding
stock options under the Bank Option Plan. No more than 414,600 shares of Bank
Common Stock (assuming that the Bank Options are exercised prior to the
Effective Time) and no Bank Options will be issued and outstanding at the
Effective Time. All of the issued and outstanding shares of capital stock of
Bank are duly and validly issued and outstanding and are fully paid and
nonassessable under the FFIC. None of the outstanding shares of capital stock
of Bank has been issued in violation of any preemptive rights of the current or
past shareholders of Bank.
(b) Except as set forth in Section 5.3(a) of this Agreement or
provided pursuant to the Bank Options as Previously Disclosed, there are no
shares of capital stock or other equity securities of Bank outstanding and no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of Bank or
contracts, commitments, understandings or arrangements by which Bank is or may
be bound to issue additional shares of its capital stock or options, warrants or
rights to purchase or acquire any additional shares of its capital stock.
5.4 Bank's Subsidiaries. Bank has no subsidiaries.
5.5 Regulatory Filings; Financial Statements.
(a) Bank has filed and made available to PAB all forms, reports and
documents required to be filed by Bank with the Federal Reserve since December
31, 1994 (collectively, the "Bank Federal Reserve Reports"). The Bank Federal
Reserve Reports did not at the time they were filed (or if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a Material fact or omit to state a
Material fact required to be stated in such Bank Federal Reserve Reports or
necessary in order to make the statements in such Bank Federal Reserve Reports,
in light of the circumstances under which they were made, not misleading. Other
than the Federal Reserve, Bank is not required to file any forms, reports or
other documents with any federal regulatory agency. Bank securities are not
subject to registration under Section 12(b) or 12(g) of the Securities Laws, and
Bank is not required to make reports to the Federal Reserve pursuant to 12 CFR
Part 335;
(b) Bank has Previously Disclosed, and delivered to PAB prior to the
execution of this Agreement, copies of all Bank Financial Statements for periods
ended prior to the date hereof and will deliver to PAB copies of all Bank
Financial Statements prepared subsequent to the date hereof. The Bank Financial
Statements (as of the dates thereof and for the periods covered thereby) (i) are
or will be, if dated after the date of this Agreement, in accordance with the
books and records of Bank, which are or will be, materially complete and correct
and which have been or will have been maintained in accordance with good
business practices, and (ii) present or will present fairly the financial
position of Bank as of the dates indicated and the results of operations,
changes in shareholders' equity and cash flows of Bank for the periods
indicated, in accordance with GAAP (subject to any exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the case of
interim financial statements, to normal recurring year-end adjustments that are
not Material).
5.6 Absence of Undisclosed Liabilities. Bank has no Liabilities that
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Bank, except Liabilities which are accrued or reserved against
in the balance sheets of Bank as of December 31, 1999 and June 30, 2000 included
in the Bank Financial Statements or reflected in the notes thereto. Bank has
not incurred or paid any Liability since June 30, 2000, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Bank.
5.7 Absence of Certain Changes or Events. Since June 30, 2000, (i)
there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank, (ii) Bank has not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a Material breach
or violation of any of the covenants and agreements of Bank provided in Article
7 of this Agreement, and (iii) Bank has conducted its business in the ordinary
and usual course (excluding the incurrence of expenses in connection with this
Agreement and the transactions contemplated hereby).
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of Bank have
been timely filed or requests for extensions have been timely filed, granted and
have not expired for periods ended on or before December 31, 1999, and on or
before the date of the most recent fiscal year end immediately preceding the
Effective Time, except to the extent that all such failures to file, taken
together, are not reasonably likely to have a Material Adverse Effect on Bank,
and all returns filed are complete and accurate in all Material respects to the
Knowledge of Bank. All Taxes shown on filed returns have been paid as of the
date of this Agreement, and there is no audit, examination, deficiency, or
refund Litigation with respect to any Taxes that is reasonably likely to result
in a determination that would have, individually or in the aggregate, a Material
Adverse Effect on Bank, except as reserved against in the Bank Financial
Statements delivered prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) Bank has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due that is currently in
effect, and no unpaid tax deficiency has been asserted in writing against or
with respect to Bank, which deficiency is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank.
(c) Adequate provision for any Taxes due or to become due by Bank for
the period or periods through and including the date of the respective Bank
Financial Statements has been made and is reflected on such Bank Financial
Statements.
(d) Deferred Taxes of Bank have been provided for in accordance with
GAAP. Effective January 1, 1993, Bank adopted Financial Accounting Standards
Board Statement 109, "Accounting for Income Taxes."
(e) Bank is in compliance with, and its records contain all
information and documents (including, without limitation, properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
Tax withholding requirements under federal, state and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank.
(f) Bank has not made any payments, is not obligated to make any
payments or is not a party to any contract, agreement or other arrangement that
could obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
(g) There are no Material Liens with respect to Taxes upon any of the
Assets of Bank.
(h) There has not been an ownership change, as defined in Internal
Revenue Code Section 382(g), of Bank that occurred during or after any Taxable
Period in which Bank incurred a net operating loss that carries over to any
Taxable Period ending after December 31, 1996.
(i) Bank has not filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
(j) After the date of this Agreement, no Material election with
respect to Taxes will be made without the prior consent of PAB, which consent
will not be unreasonably withheld.
(k) Bank does not currently have and has never had a permanent
establishment in any foreign country, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
5.9 Allowance. The Allowance shown on the balance sheets of Bank
included in the most recent Bank Financial Statements dated prior to the date of
this Agreement was, and the Allowance shown on the balance sheets of Bank
included in the Bank Financial Statements as of dates subsequent to the
execution of this Agreement will be, as of the dates thereof, adequate (within
the meaning of GAAP and applicable regulatory requirements or guidelines) to
provide for losses relating to or inherent in the loan and lease portfolios
(including accrued interest receivables) of Bank and other extensions of credit
(including letters of credit and commitments to make loans or extend credit) by
Bank as of the dates thereof, except where the failure of such Allowance to be
so adequate is not reasonably likely to have a Material Adverse Effect on Bank.
5.10 Assets. Except as Previously Disclosed or as disclosed or
reserved against in the Bank Financial Statements, Bank has good and marketable
title, free and clear of all Liens, to all of its Assets. All Material tangible
properties used in the business of Bank are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business consistent
with Bank's past practices. All Assets which are Material to Bank's business
held under leases or subleases by Bank, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other Laws affecting the enforcement of creditors' rights Generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
Bank has Previously Disclosed copies of the policies of fire, theft, liability
and other insurance maintained with respect to the Assets or business of Bank
and the fidelity and blanket bonds in effect as to which Bank is a named
insured. Bank has not received notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated or (ii) premium costs with respect to such policies of insurance will
be substantially increased. The Assets of Bank include all assets required to
operate the business of Bank as presently conducted.
5.11 Environmental Matters.
(a) To the Knowledge of Bank and except as Previously Disclosed, its
Participation Facilities and Loan Properties are, and have been, in full
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank.
(b) There is no Litigation pending or, to the Knowledge of Bank,
pending or threatened before any court, governmental agency, board, authority or
other forum in which Bank or any of its Participation Facilities and Loan
Properties has been or, with respect to threatened Litigation, may be named as a
defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under or involving a site owned, leased or operated by Bank or
any of their respective Participation Facilities and Loan Properties, except for
such Litigation pending or threatened which is not likely to have, individually
or in the aggregate, a Material Adverse Effect on Bank or on Bank.
(c) To the Knowledge of Bank, there is no reasonable basis for any
Litigation of a type described in subsection (b), except such as is not likely
to have, individually or in the aggregate, a Material Adverse Effect on Bank.
(d) To the Knowledge of Bank, there have been no releases, spills or
discharges of Hazardous Material or other conditions involving Hazardous
Materials in, on, under or affecting any Participation Facility or Loan
Property, except such as are not likely to have, individually or in the
aggregate, a Material Adverse Effect on Bank.
5.12 Compliance with Laws. Bank is duly registered as a capital stock
financial institution under the FFIC. Bank has in effect all Permits necessary
for it to own, lease or operate its Assets and to carry on its business as now
conducted, except for those Permits the absence of which are not likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank, and there
has occurred no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank. Bank:
(a) is not in violation of any Laws, Environmental Laws, Orders or
Permits applicable to its business or employees conducting its business, except
for violations which are not likely to have, individually or in the aggregate, a
Material Adverse Effect on Bank; and
(b) except as Previously Disclosed, has not received any notification
or communication from any agency or department of federal, state or local
government or any Regulatory Authority or the staff thereof (i) asserting that
Bank is not in compliance with any of the Laws, Environmental Laws or Orders
which such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Bank, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Bank, or (iii) requiring Bank to enter
into or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of its
businesses, or in any manner relates to its capital adequacy, credit or reserve
policies, management or the payment of dividends.
5.13 Labor Relations. Bank is not the subject of any Litigation
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
Bank to bargain with any labor organization as to wages or conditions of
employment, nor is Bank a party to or bound by any collective bargaining
agreement, Contract or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving
either of them, pending or threatened, nor to its Knowledge, is there any
activity involving Bank's employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.
5.14 Employee Benefit Plans.
(a) Bank has Previously Disclosed, and delivered or made available to
PAB prior to the execution of this Agreement, correct and complete copies in
each case of all pension, retirement, profit-sharing, deferred compensation,
stock option, employee stock ownership, severance pay, vacation, bonus or other
incentive plans, all other written employee programs, arrangements or
agreements, all medical, vision, dental or other health plans, all life
insurance plans and all other employee benefit plans or fringe benefit plans,
including, without limitation, "employee benefit plans" as that term is defined
in Section 3(3) of ERISA currently adopted, maintained by, sponsored in whole or
in part by, or contributed to by Bank or any Affiliate thereof for the benefit
of employees, retirees, dependents, spouses, directors, independent contractors
or other beneficiaries and under which such persons are eligible to participate
(collectively, the "Bank Benefit Plans"). Any of the Bank Benefit Plans which is
an "employee welfare benefit plan," as that term is defined in Section 3(1) of
ERISA, or an "employee pension benefit plan," as that term is defined in Section
3(2) of ERISA, is referred to herein as a "Bank ERISA Plan." Each Bank ERISA
Plan which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code or Section 3(35) of ERISA) is referred to herein as a
"Bank Pension Plan". No Bank Pension Plan is or has been a "multi-employer
plan" within the meaning of Section 3(37) of ERISA. Bank does not, and may not
ever, participate in either a multi-employer plan or a multiple employer plan.
(b) Bank has delivered or made available to PAB prior to the execution
of this Agreement correct and complete copies of the following documents: (i)
all trust agreements or other funding arrangements for such Bank Benefit Plans
(including insurance contracts), and all amendments thereto, (ii) with respect
to any such Bank Benefit Plans or amendments, all determination letters,
Material rulings, Material opinion letters, Material information letters or
Material advisory opinions issued by the IRS, the United States Department of
Labor or the Pension Benefit Guaranty Corporation after December 31, 1994, (iii)
annual reports or returns, audited or unaudited financial statements, actuarial
valuations and reports and summary annual reports prepared for any Bank Benefit
Plan with respect to the most recent plan year, and (iv) the most recent summary
plan descriptions and any Material modifications thereto.
(c) All Bank Benefit Plans are in compliance with the applicable terms
of ERISA, the Internal Revenue Code, and any other applicable Laws, the breach
or violation of which are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Bank. Each Bank ERISA Plan which is
intended to be qualified under Section 401 (a) of the Internal Revenue Code has
received a favorable determination letter from the IRS, and Bank is not aware of
any circumstances which will or could reasonably result in revocation of any
such favorable determination letter or failure of a Bank ERISA Plan intended to
satisfy Internal Revenue Code Section 401 or to satisfy the Tax qualification
provisions of the Internal Revenue Code applicable thereto. Bank has not
engaged in a transaction with respect to any Bank Benefit Plan that, assuming
the Taxable Period of such transaction expired as of the date hereof, would
subject Bank to a Material Tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Bank.
(d) No Bank Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, based on actuarial assumptions
set forth for such plan's most recent actuarial valuation, and the fair market
value of the assets of any such plan exceeds the plan's "benefit liabilities,"
as that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance with all
applicable legal requirements. Since the date of the most recent actuarial
valuation, there has been (i) no Material change in the financial position or
funded status of any Bank Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Bank Pension Plan, and (iii) no increase in
benefits under any Bank Pension Plan as a result of plan amendments or changes
in applicable Law, any of which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Bank or materially affect the
funding status of any such plan. Neither any Bank Pension Plan nor any
"single-employer plan," within the meaning of Section 4001 (a)(15) of ERISA,
currently or formerly maintained by Bank, or the single-employer plan of any
entity which is considered one employer with Bank under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate") has an "accumulated funding deficiency" within
the meaning of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
which is reasonably likely to have a Material Adverse Effect on Bank. Bank has
not provided, and is not required to provide, security to a Bank Pension Plan or
to any single-employer plan of an ERISA Affiliate pursuant to Section 401
(a)(29) of the Internal Revenue Code. All premiums required to be paid under
ERISA Section 4006 have been timely paid by Bank, except to the extent any
failure to do so would not have a Material Adverse Effect on Bank.
(e) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by Bank with respect to any ongoing, frozen or terminated
single-employer plan or the single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on Bank.
Except as Previously Disclosed, Bank has not incurred any withdrawal Liability
with respect to a multi-employer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate), which
Liability is reasonably likely to have a Material Adverse Effect on Bank. 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 Bank Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(f) Except as required under Title 1, Part 6 of ERISA and Internal
Revenue Code Section 4980 B, Bank has no obligations to provide health and life
benefits under any of the Bank Benefit Plans to former employees, and there are
no restrictions on the rights of Bank to amend or terminate any such plan
without incurring any Liability thereunder, which Liability is reasonably likely
to have a Material Adverse Effect on Bank.
(g) Except as Previously Disclosed, neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to any
officer, director or any employee of Bank from Bank under any Bank Benefit Plan
or otherwise, (ii) increase any benefits otherwise payable under any Bank
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit.
(h) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of Bank and its beneficiaries, other than entitlements accrued
pursuant to funded retirement plans subject to the provisions of Section 412 of
the Internal Revenue Code or Section 302 of ERISA, have been fully reflected on
the Bank Financial Statements to the extent required by and in accordance with
GAAP.
5.15 Material Contracts. Except as Previously Disclosed or otherwise
reflected in the Bank Financial Statements, neither Bank nor any of its Assets,
businesses or operations, is a party to, or is bound or affected by, or receives
benefits under, (i) any employment, severance, termination, consulting or
retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $50,000, (ii) any Contract relating to the borrowing
of money by Bank or the guarantee by Bank of any such obligation (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, trade payables and Contracts relating to
borrowings or guarantees made in the ordinary course of business), and (iii) any
other Material Contract or amendment thereto as of the date of this Agreement
(together with all Contracts referred to in Sections 5.10 and 5.14(a) of this
Agreement, the "Bank Contracts"). With respect to each Bank Contract, (i) the
Contract is in full force and effect, (ii) Bank is not in Default thereunder,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Bank, (iii) Bank has not repudiated
or waived any material provision of any such Contract, and (iv) no other party
to any such Contract is, to the knowledge of Bank, in Default in any respect,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Bank, or has repudiated or waived
any Material provision thereunder. Except as Previously Disclosed, all of the
indebtedness of Bank for money borrowed is prepayable at any time by Bank or
Bank without penalty or premium.
5.16 Legal Proceedings. There is no Litigation pending, or, to the
Knowledge of Bank, threatened against Bank, or against any of its Assets,
employee benefit plans, interests or rights that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank, nor are
there any Orders of any Regulatory Authorities, other governmental authorities
or arbitrators outstanding against Bank, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank.
5.17 Reports. Bank has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that they
were required to file with Regulatory Authorities and any applicable state
securities or banking authorities, except failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied in all material respects with all applicable Laws. As of their
respective dates, each such report and document did 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 made therein, in light of the
circumstances under which they were made, not misleading.
5.18 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by Bank or any
Affiliate thereof to PAB pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of Material fact or will omit to state a Material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by
Bank or any Affiliate thereof for inclusion in the Proxy Statement to be mailed
to Bank's shareholders in connection with the Bank Meeting, and any other
documents to be filed by Bank or any Affiliate thereof with the Federal Reserve
or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the shareholders of
Bank, be false or misleading with respect to any Material fact, or omit to state
any Material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Bank Meeting be false or misleading with respect to any Material fact, or
omit to state any Material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the Bank
Meeting. All documents that Bank or any Affiliate thereof is responsible for
filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all Material respects with the
provisions of applicable Law.
5.19 Accounting, Tax and Regulatory Matters. Neither Bank nor any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or restriction of the type
referred to in the second sentence of such Section. To the Knowledge of Bank,
there exists no fact, circumstance or reason why the requisite Consents referred
to in Section 9.1(b) of this Agreement cannot be received in a timely manner
without the imposition of any condition or restriction of the type described in
the second sentence of such Section 9.1(b) other than with respect to anti-trust
or competitive effects issues.
5.20 State Takeover Laws. Bank has taken all necessary action to
exempt the transactions contemplated by this Agreement from any applicable
"moratorium," "control share," "fair price," "business combination" or other
state takeover Law.
5.21 Articles of Incorporation Provisions. Bank has taken all actions
so that the entering into of this Agreement and the consummation of the Merger
contemplated hereby do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws or other governing
instruments of Bank (other than voting, dissenters' rights of appraisal or other
similar rights) or restrict or impair the ability of PAB or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of Bank Common Stock that may be acquired or controlled by
it.
5.22 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts and other similar risk management
arrangements, whether entered into for Bank's own account, or for the account of
its customers, were entered into (i) in accordance with prudent business
practices and all applicable Laws, and (ii) with counterparties believed to be
financially responsible.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PAB
PAB hereby represents and warrants to Bank as follows:
6.1 Organization, Standing and Power. PAB is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Georgia and is duly registered as a bank holding company under the BHC Act. PAB
has the corporate power and authority to carry on its business as now conducted
and to own, lease and operate its Assets. PAB is duly qualified or licensed to
transact business as a foreign corporation in good standing in the states of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on PAB.
6.2 Authority, No Breach By Agreement.
(a) PAB has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of PAB. Subject to the Consents
of Regulatory Authorities, this Agreement represents a legal, valid, and binding
obligation of PAB, enforceable against PAB in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by PAB, nor
the consummation by PAB of the transactions contemplated hereby, nor compliance
by PAB with any of the provisions hereof, will (i) conflict with or result in a
breach of any provision of PAB's Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any PAB Companies under, any
Contract or Permit of any PAB Companies, where such Default or Lien, or any
failure to obtain such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on PAB, or (iii) subject to receipt of
the requisite approvals referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any PAB Companies or any of their respective
Assets.
(c) No notice to, filing with or Consent of any public body or
authority is necessary for the consummation by PAB of the Merger and the other
transactions contemplated in this Agreement other than (i) in connection or
compliance with the provisions of the Securities Laws, applicable state
corporate and securities Laws and rules of the NASD, (ii) Consents required from
Regulatory Authorities, (iii) notices to or filings with the IRS or the Pension
Benefit Guaranty Corporation with respect to any employee benefit plans, and
(iv) Consents, filings or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on PAB.
6.3 Compliance with Laws. PAB is duly registered as a bank holding
company under the BHC Act. Each of the PAB Companies has in effect all permits
necessary to own, lease or operate their Assets and to carry on their business
as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on PAB, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PAB.
6.4 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by any PAB Companies or
any Affiliate thereof to Bank pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of Material fact or will omit to state a Material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by any
PAB Companies or any Affiliate thereof for inclusion in the Proxy Statement to
be mailed to Bank shareholders in connection with the Bank Meeting, and any
other documents to be filed by any PAB Companies or any Affiliate thereof with
the FDIC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the shareholders of
Bank, be false or misleading with respect to any Material fact, or omit to state
any Material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Bank Meeting, be false or misleading with respect to any Material fact, or
omit to state any Material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the Bank
Meeting. All documents that any PAB Companies or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all Material respects
with the provisions of applicable Law.
6.5 Legal Proceedings. There is no Litigation pending, or, to the
Knowledge of PAB threatened, against PAB or its Subsidiaries which, if adversely
determined would materially adversely affect the ability of PAB to consummate
the transactions contemplated hereby nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
PAB or any of its Subsidiaries that would have, individually or in the
aggregate, a Material Adverse Effect on PAB.
6.6 Financing. PAB will have at the Effective Time funds in an amount
sufficient to enable it to carry out its obligations under this Agreement.
Regulatory Matters. Except as specifically contemplated by this
Agreement, neither PAB nor any of its Subsidiaries has taken any action, or
agreed to take any action, or has any Knowledge of any fact or circumstance
regarding PAB that is reasonably likely to materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement. To the Knowledge of PAB, there exists no fact, circumstance, or
reason regarding PAB why the requisite Consents referred to in Section 9.1(b) of
this Agreement cannot be received in a timely manner without the imposition of
any condition described in the second sentence of such Section 9.1(b).
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Bank. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement
unless the prior written consent of PAB shall have been obtained, and except as
otherwise contemplated herein, Bank agrees: (i) to operate its business in the
usual, regular and ordinary course; (ii) to preserve intact its business
organizations and Assets and maintain its rights and franchises; (iii) to use
its reasonable efforts to cause its representations and warranties to be correct
at all times; and (iv) to take no action which would (a) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this Agreement or (b)
adversely affect in any Material respect the ability of either Party to perform
its covenants and agreements under this Agreement.
7.2 Negative Covenants of Bank. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Bank
covenants and agrees that it will not do or agree or commit to do, any of the
following without the prior written consent of the Chief Executive Officer of
PAB:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of Bank; or
(b) incur any additional debt obligation or other obligation for
borrowed money in excess of an aggregate of $50,000 except in the ordinary
course of the business of Bank consistent with past practices (which shall
include creation of deposit liabilities, purchases of federal funds and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any share of stock of Bank
held by Bank of any Lien or permit any such Lien to exist; or
(c) repurchase, redeem or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of Bank, or declare or pay any dividend or make any other
distribution in respect of Bank capital stock; or
(d) except for this Agreement, or as Previously Disclosed, or in
connection with the exercise of any Bank Options, issue or sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue, sell,
pledge, encumber or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Bank Common Stock, or any stock
appreciation rights, or any option, warrant, conversion or other right to
acquire any such stock; or
(e) adjust, split, combine or reclassify any capital stock of Bank or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of Bank's Stock or sell, lease, mortgage or otherwise
dispose of or otherwise encumber any Asset having a book value in excess of
$25,000 other than in the ordinary course of business for reasonable and
adequate consideration; or
(f) acquire direct or indirect control over any real property, other
than in connection with (i) foreclosures in the ordinary course of business, or
(ii) acquisitions of control by Bank in its fiduciary capacity; or
(g) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of five years
or less, purchase of investment grade bonds issued by municipalities located
within the State of Florida with a maturity of five years or less, purchase any
securities or make any Material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers or purchase of any Assets,
in any Person other than Bank, or otherwise acquire direct or indirect control
over any Person, other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a depository institution
Subsidiary in its fiduciary capacity, or (iii) except as Previously Disclosed,
the creation of new, wholly-owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(h) grant any increase in compensation or benefits to the employees or
officers of Bank (including such discretionary increases as may be contemplated
by existing employment agreements) exceeding 5% individually or in the aggregate
on an annual basis, except in accordance with past practice Previously Disclosed
or as required by Law, pay any bonus except in accordance with past practice
Previously Disclosed or the provisions of any applicable program or plan adopted
by its Board of Directors prior to the date of this Agreement, enter into or
amend any severance agreements with officers of Bank, grant any increase in fees
or other increases in compensation or other benefits to directors of Bank except
in accordance with past practice Previously Disclosed; or
(i) enter into or amend any employment Contract between Bank and any
Person (unless such amendment is required by Law) that Bank does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(j) adopt any new employee benefit plan of Bank or make any Material
change in or to any existing employee benefit plans of Bank other than any such
change that is required by Law or that, in the opinion of counsel, is necessary
or advisable to maintain the tax qualified status of any such plan; or
(k) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in regulatory accounting requirements or GAAP; or
(l) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Bank for money
damages in excess of $25,000 or Material restrictions upon the operations of
Bank; or
(m) except in the ordinary course of business, modify, amend or
terminate any Material Contract or waive, release, compromise or assign any
Material rights or claims.
7.3 Covenants of PAB. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of Bank shall have been obtained, PAB covenants and agrees
that it shall (i) use its reasonable efforts to cause its representations and
warranties to be correct at all times, and (ii) take no action which would (a)
adversely affect the ability of any Party to obtain any Consents required for
the transaction contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b) of
this Agreement, or (b) adversely affect in any Material respect the ability of
either Party to perform its covenants and agreements under this Agreement.
7.4 Adverse Changes in Condition. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it, or (ii) is reasonably likely to
cause or constitute a Material breach of any of its representations, warranties
or covenants contained herein and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the Federal Reserve or the SEC, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
Material). As of their respective dates, such reports filed with the Federal
Reserve or the SEC will comply in all Material respects with the Securities Laws
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 in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Any financial statements contained in any other reports to
another Regulatory Authority shall be prepared in accordance with Laws
applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Shareholder Approval. Bank shall take, in accordance with
applicable law and its Articles of Incorporation and Bylaws, all action
necessary to convene the Bank Meeting to consider and vote upon the approval of
this Agreement and any other matters required to be approved by Bank
shareholders for consummation of the Merger (including any adjournment), as
promptly as practicable. The Board of Directors of Bank shall (subject to
compliance with its fiduciary duties as advised by counsel) recommend such
approval, and Bank (subject to the direction of the Bank Board acting in
compliance with its fiduciary duties as advised by counsel) shall take all
reasonable lawful action to solicit such approval by its shareholders.
8.2 Proxy Statement.
(a) Each of PAB and Bank agrees to cooperate in the preparation of a
Proxy Statement as promptly as practicable, but in no event later than 60 days
after the date of this Agreement. Bank agrees to furnish PAB all information
concerning Bank and its officers, directors and shareholders as may be
reasonably requested in connection with the foregoing.
(b) Each of Bank and PAB 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 the Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to Bank shareholders and at the
time of the Bank Meeting, 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 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 Bank and PAB further agrees that if it shall become aware
prior to the Effective Date of any information 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 promptly inform the other Party
thereof and to take the necessary steps to correct the Proxy Statement.
(c) Nothing in this Section 8.2 or elsewhere in this Agreement shall
prohibit accurate disclosure by Bank of information that is required to be
disclosed in the Proxy Statement or in any other document required to be filed
with Regulatory Authorities.
8.3 Applications. PAB shall promptly prepare and file and Bank shall
cooperate in the preparation and, where appropriate, filing of, applications
with all Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents necessary to
consummate the transactions contemplated by this Agreement. PAB shall permit
Bank to review (and approve with respect to information relating to Bank) such
applications prior to filing same. PAB shall promptly deliver to the Bank two
copies of all filings with all Regulatory Authorities in connection with the
transactions contemplated by this Agreement, and also shall promptly deliver to
the Bank copies of all correspondence forwarded to and received from the
Regulatory Authorities in connection with such filings and the transactions
contemplated by this Agreement.
8.4 Filings with State Office. Upon the terms and subject to the
conditions of this Agreement, PAB and Interim shall execute and file the
Application or Notification to Merge with the Florida Department of Banking and
Finance with the Secretary of State of the State of Florida in connection with
the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use its reasonable efforts to
take all actions, and to do all things necessary, proper or advisable under
applicable Laws, as promptly as practicable so as to permit consummation of the
Merger at the earliest possible date and to otherwise enable consummation of the
transactions contemplated hereby and shall cooperate fully with the other Party
hereto to that end (it being understood that any resolicitation of proxies as a
consequence of an acquisition agreement by PAB or any of its Subsidiaries shall
not violate this covenant), including, without limitation, using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied the
conditions referred to in Article 9 of this Agreement; provided, that nothing
herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party will keep the other Party
advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transaction contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
any other Party concerning its and its Subsidiaries' businesses, operations and
financial condition except in furtherance of the transactions contemplated by
this Agreement. In the event that a Party is required by applicable Law or valid
court process to disclose any such confidential information, then such Party
shall provide the other Party with prompt written notice of any such requirement
so that the other Party may seek a protective order or other appropriate remedy
and/or waive compliance with this Section 8.6. If in the absence of a protective
order or other remedy or the receipt of a waiver by the other Party, a Party is
nonetheless, in the written opinion of counsel, legally compelled to disclose
any such confidential information to any tribunal or else stand liable for
contempt or suffer other censure or penalty, a Party may, without liability
hereunder, disclose to such tribunal only that portion of the confidential
information which such counsel advises such Party is legally required to be
disclosed; provided that such disclosing Party use its best efforts to preserve
the confidentiality of such confidential information, including without
limitation, by cooperating with the other Party to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded such confidential information by such tribunal. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly return all
documents and copies thereof and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a Material
breach of any representation, warranty, covenant or agreement of the other Party
or which has had or is reasonably likely to have a Material Adverse Effect on
the other Party.
(d) Neither Party nor any of their respective Subsidiaries shall be
required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of its customers, jeopardize
the attorney-client or similar privilege with respect to such information or
contravene any Law, rule, regulation, Order, judgment, decree, fiduciary duty or
agreement entered into prior to the date of this Agreement. The Parties will use
their reasonable efforts to make appropriate substitute disclosure arrangements,
to the extent practicable, in circumstances in which the restrictions of the
preceding sentence apply.
8.7 Press Releases. Prior to the Effective Time, Bank and PAB shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, neither Bank nor any Affiliate thereof nor any
investment banker, attorney, accountant or other representative (collectively,
the "Representatives") retained by Bank shall directly or indirectly solicit or
engage in negotiations concerning any Acquisition Proposal by any Person, or
provide any confidential information or assistance to, or have any discussions
with, any Person with respect to an Acquisition Proposal. Except to the extent
necessary to comply with the fiduciary duties of Bank Board of Directors as
determined by the Bank Board of Directors after consulting with and considering
the advice of counsel, neither Bank nor any Affiliate or Representative thereof
shall furnish any non-public information that it is not legally obligated to
furnish, negotiate with respect to, or enter into any Contract with respect to,
any Acquisition Proposal, but Bank may communicate information about such an
Acquisition Proposal to its shareholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
counsel; provided that Bank shall promptly advise PAB orally and in writing
following the receipt of any Acquisition Proposal and the Material details
thereof. Bank shall (i) immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any of the foregoing and (ii) direct and use its
reasonable efforts to cause all of its Representatives not to engage in any of
the foregoing.
8.9 State Takeover Laws. Bank shall take all reasonable steps to
exempt the transactions contemplated by this Agreement from any applicable state
takeover Law.
8.10 Articles of Incorporation Provisions. Bank shall take all necessary
action to ensure that the entering into of this Agreement and the consummation
of the Merger does not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws or other governing
instruments of Bank (other than voting, dissenters' rights of appraisal or other
similar rights) or restrict or impair the ability of PAB or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of Bank that may be acquired or controlled by it.
8.11 Employee Benefits and Contracts. Following the Effective Time, PAB
shall provide generally to officers and employees of Bank, who at or after the
Effective Time become employees of a PAB Company, employee benefits under
employee benefit plans (other than stock option or other plans involving the
potential issuance of PAB Common Stock except as set forth in this Section 8.11)
on terms and conditions which when taken as a whole are substantially similar to
those currently provided by the PAB Companies to their similarly situated
officers and employees; provided, that, for a period of 12 months after the
Effective Time, PAB shall provide generally to officers and employees of Bank
severance benefits in accordance with the policies of either (i) Bank as
Previously Disclosed pursuant to this Section 8.11, or (ii) PAB, whichever of
(i) or (ii) will provide the greater benefit to the officer or employee. PAB
shall waive any waiting period and pre-existing condition exclusion under any
employee health plan for which any employees and/or officers and dependents
covered by Bank Benefit Plans as of Closing shall become eligible by virtue of
the preceding sentence, to the extent (i) such pre-existing condition was
covered under the Bank Benefit Plans and (ii) the individual affected by the
pre-existing condition was covered by the Bank Entity's corresponding plan on
the date which immediately precedes the Effective Time. For purposes of
participation, vesting and benefit accrual under all benefit plans, the service
of the employees of Bank prior to the Effective Time shall be treated as service
with the PAB Companies participating in all benefit plans. In addition, if the
Effective Time falls within an annual period of coverage under any group health
plan of the PAB Companies, each Bank employee shall be given credit for covered
expenses paid by that employee under comparable Bank Benefit Plans during the
applicable coverage period through the Effective Time towards satisfaction of
any annual deductible limitation and out-of-pocket maximum that may apply under
such group health plan of the PAB Companies. PAB will provide a severance
payment to each Bank employee whose employment with Bank is terminated by PAB
within six months after the Effective Time (unless such termination is for
cause) in an amount equal to the greater of (i) one month's salary then earned
by employee, less applicable withholdings, or (ii) the product of each fall year
employee was employed by Bank multiplied times two weeks' salary then earned by
employee, less applicable withholdings.
8.12 D&O Coverage. At the Effective Time, PAB will provide directors and
officers insurance coverage for Bank's directors and officers either, at PAB's
election, (i) by purchasing continuation coverage under Bank's current policy
for directors and officers for a period not less than three years after the
Effective Time, or (ii) obtain coverage under PAB's current directors' and
officers' policy to provide coverage for Bank's directors and officers on a
prior acts basis for a period not less than three years prior to the Effective
Time.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and to consummate the Merger
are subject to the satisfaction of the following conditions, unless waived by
both Parties pursuant to Section 11.6 of this Agreement:
(a) Shareholder Approval. The shareholders of Bank shall have approved
--------------------
this Agreement and the consummation of the Merger as and to the extent required
by Law and by the provisions of any of its governing instruments and by the
rules of any Regulatory Authority.
(b) Regulatory Approvals. All Consents of, filings and registrations
---------------------
with, and notifications to, all Regulatory Authorities required for consummation
of the Merger shall have been obtained or made and shall be in full force and
effect and all waiting periods required by Law shall have expired. No Consent
obtained from any Regulatory Authority which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
(including, without limitation, requirements relating to the raising of
additional capital or the disposition of Assets or deposits) which in the
reasonable judgment of the Board of Directors of PAB would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement so as to render inadvisable the consummation of
the Merger.
(c) Consents and Approvals. Each Party shall have obtained any and all
----------------------
Consents required for consummation of the Merger (other than those referred to
in Section 9.1 (b) of this Agreement) or for the preventing of any Default under
any Contract or Permit of such Party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on such Party. No Consent obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
which in the reasonable judgment of the Board of Directors of PAB would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(d) Legal Proceedings. No court or governmental or Regulatory
------------------
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
9.2 Conditions to Obligations of PAB. The obligations of PAB to
perform this Agreement and to consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by PAB pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Bank set forth or referred to in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and as of the Effective
Time with the same effect as though all such representations and warranties had
been made on and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of such
date), except (i) as expressly contemplated by this Agreement, or (ii) for
representations and warranties the inaccuracies of which relate to matters that
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Bank.
(b) Performance of Agreements and Covenants. Each and all of the
-------------------------------------------
agreements and covenants of Bank to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all Material
respects.
(c) Certificates. Bank shall have delivered to PAB (i) a certificate,
------------
dated as of the Effective Time and signed on its behalf by its Chief Executive
Officer and Chief Financial Officer, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted by the Bank
Board of Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all in
such reasonable detail as PAB and its counsel shall request.
(d) Accountant's Letters. PAB shall have received from Xxxxxxx, Xxxxxx
--------------------
& Xxxxxxx, P.C. letters dated not more than five days prior to (i) the date of
the Proxy Statement and (ii) the Effective Time, with respect to certain
financial information regarding Bank, in form and substance reasonably
satisfactory to PAB, which letters shall be based upon customary specified
procedures undertaken by such firm.
(e) Support Agreements. Each of the directors of Bank (other than Xxxx
------------------
X. Xxxxxx) shall have executed and delivered to PAB a Support Agreement in
substantially the form attached hereto as Exhibit B.
9.3 Conditions to Obligations of Bank. The obligations of Bank to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Bank pursuant to Section 11.6(b) of this Agreement:
(a) Representations and Warranties. The representations and warranties
------------------------------
of PAB set forth or referred to in this Agreement shall be true and correct in
all Material respects as of the date of this Agreement and as of the Effective
Time with the same effect as though all such representations and warranties had
been made on and as of the Effective Time (provided that representations and
warranties which are confined to a specified date shall speak only as of such
date), except (i) as expressly contemplated by this Agreement, or (ii) for
representations and warranties the inaccuracies of which relate to matters that
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on PAB.
(b) Performance of Agreements and Covenants. Each and all of the
-------------------------------------------
agreements and covenants of PAB to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all Material
respects.
(c) Certificates. PAB shall have delivered to Bank (i) a certificate,
------------
dated as of the Effective Time and signed on its behalf by its Chief Executive
Officer and its Chief Financial Officer, to the effect that the conditions of
its obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by PAB's
Board of Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Bank and its counsel shall request.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Bank, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of the respective Boards of Directors of PAB and
Bank; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in Material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) in the event
of a breach by the other Party of any representation or warranty contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach and which breach
would provide the non-breaching party the ability to refuse to consummate the
Merger under the standard set forth in Section 9.2(a) of this Agreement in the
case of PAB and Section 9.3(a) of this Agreement in the case of Bank; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in Material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) in the event
any Consent of any Regulatory Authority required for consummation of the Merger
shall have been denied by final nonappealable action of such authority or if any
action taken by such authority is not appealed within the time limit for appeal;
or
(d) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by December 31, 2000, but only if the
failure to consummate the transactions contemplated hereby on or before such
date is not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(d); or
(e) By the Board of Directors of either Party (provided that the
terminating Party is not then in Material breach of any representation,
warranty, covenant or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date specified in
Section 10.1 (d) of this Agreement; or
(f) By PAB in the event that the Board of Directors of Bank shall have
failed to reaffirm, following a written request by PAB for such reaffirmation
after Bank shall have received any inquiry or proposal with respect to an
Acquisition Proposal, its approval of the Merger (to the exclusion of any other
Acquisition Proposal), or shall have resolved not to reaffirm the Merger.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a termination pursuant to
Sections 10.1(b) or 10.1(e) of this Agreement shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant or agreement giving rise to such termination; provided that
such Liability shall be determined solely in accordance with the effect of
Section I 1.2(b) of this Agreement.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants and agreements of the
Parties shall not survive the Effective Time except for this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.11 and 8.12 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. Except as otherwise provided herein, the
capitalized terms set forth below (in their singular and plural forms as
applicable) shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender offer
or exchange offer or any proposal for a merger, acquisition of all of the stock
or Assets of, or other business combination involving such Party or any of its
Subsidiaries or the acquisition of a substantial equity interest in, or a
substantial portion of the Assets of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person, (ii) any officer, director, partner,
employer or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ALLOWANCE" shall mean the allowance for possible loan or credit losses for
the periods set forth in Section 5.9 of this Agreement.
"ASSETS" of a Person shall mean all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"BANK" shall have the meaning set forth in the Preamble of this Agreement.
"BANK BENEFIT PLANS" shall have the meaning set forth in Section 5.14 of
this Agreement.
"BANK COMMON STOCK" shall mean the $5.00 par value common stock of Bank.
"BANK ERISA PLAN" shall have the meaning provided in Section 5.14 of this
Agreement.
"BANK FINANCIAL STATEMENTS" shall mean (i) the balance sheets (including
related notes and schedules, if any) of Bank as of June 30, 2000, and as of
December 31, 1999, 1998, 1997 and 1996, and the related statements of income,
changes in shareholders' equity and cash flows (including related notes and
schedules, if any) for the six months ended June 30, 2000, and for each of the
four fiscal years ended December 31, 1999, 1998, 1997 and 1996, and (ii) the
balance sheets of Bank (including related notes and schedules, if any) and
related statements of income, changes in shareholders' equity and cash flows
(including related notes and schedules, if any) with respect to periods ended
subsequent to June 30, 2000, with related prior year comparable financial
statements.
"BANK MEETING" shall mean the special meeting of the shareholders of Bank
or any adjournment thereof to vote on the matters set forth in the Proxy
Statement.
"BANK OPTIONS" shall mean those options issued under the Bank Option Plan.
"BANK OPTION PLAN" shall mean the Bank Stock Option Plan.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CLOSING" shall mean the closing of the transaction contemplated hereby, as
described in Section 1.2 of this Agreement.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver or similar affirmation by any Person pursuant to any Contract,
Law, Order or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding or undertaking of any kind or
character or other document to which any Person is a party or that is binding on
any Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default under any
Contract, Order or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of control or both would constitute a breach or
violation of or default under any Contract, Order or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase or impose any Liability
under, any Contract, Order or Permit.
"EFFECTIVE TIME" shall have the meaning set forth in Section 1.3 of this
Agreement.
"ENVIRONMENTAL LAWS" shall mean all federal, state, municipal and local
laws, statutes, orders, regulations, decrees, resolutions, proclamations,
permits, licenses, approvals, authorizations, consents, judgments, judicial
decisions and other governmental requirements, limitations and standards
relating to the environment, health and safety issues, including, without
limitation, the manufacture, generation, use, processing, treatment, recycling,
storage, handling, "Release" (as hereinafter defined), investigation, removal,
remediation and cleanup of or other corrective action for "Hazardous Materials"
(as hereinafter defined), exposure to Hazardous Materials and personal injury,
natural resource damage, property damage and interference with the use of
property caused by or resulting from Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" shall have the meaning provided in Section 5.14 of this
Agreement.
"EXHIBITS" shall mean the Exhibits so marked, copies of which are attached
to this Agreement. Such Exhibits are hereby incorporated by reference herein and
made a part hereof, and may be referred to in this Agreement and any other
related instrument or document without being attached hereto.
"FEDERAL RESERVE" shall mean the Board of Governors of the Federal Reserve
System.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FFIC" shall mean the Financial Institutions Code of Florida.
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"HAZARDOUS MATERIALS" shall mean all hazardous, toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic and
volatile substances, materials, compounds, chemicals and waste, and all other
industrial waste, sanitary waste, pollutants and contaminants, and all
constituents thereof, including, without limitation, petroleum hydrocarbons,
asbestos-containing materials, lead-based paints and all substances, materials,
wastes, chemicals, compounds, contaminants and pollutants regulated or addressed
by Environmental Laws.
"IRS" shall mean the Internal Revenue Service.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person shall mean the knowledge,
after all appropriate due inquiry, of the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, General Counsel, any
Assistant or Deputy General Counsel or any Senior or Executive Vice President or
Manager of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule or statute and all Environmental Laws applicable to
a Person or its Assets, Liabilities or business, including, without limitation,
those promulgated, interpreted or enforced by any of the Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including,
without limitation, costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than endorsements
of notes, bills, checks and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge or claim
of any nature whatsoever of, on or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due and
payable, (ii) for depository institution Subsidiaries of a Party, pledges to
secure deposits and other Liens incurred in the ordinary course of the banking
business, (iii) Liens which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on a Party; and (iv) Liens which
have been Previously Disclosed.
"LITIGATION" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, request for information, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any Person
alleging potential Liability or requesting information relating to or affecting
a Party, its business, its Assets (including, without limitation, Contracts
related to it) or the transactions contemplated by this Agreement, but shall not
include regular, periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased or operated by the
Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security or other interest (including an interest in a
fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality in
that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, condition
or occurrence which has a Material adverse impact on (i) the financial position,
business or results of operations of such Party and its Subsidiaries, taken as a
whole, or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions contemplated by
this Agreement; provided that "Material Adverse Effect" shall not be deemed to
include the impact of (x) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental authorities
and (y) changes in GAAP or regulatory accounting principles generally applicable
to banks and their holding companies.
"MERGER" shall mean the merger of Interim with and into Bank referred to in
the Preamble of this Agreement.
"MERGER CONSIDERATION" shall mean the aggregate consideration to be
received for all of the shares of Bank Common Stock and Bank Options.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling or writ of
any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Regulatory Authority.
"PAB COMMON STOCK" shall mean the no par value common stock of PAB.
"PAB COMPANIES" shall mean, collectively, PAB and all PAB Subsidiaries.
"PAB SUBSIDIARIES" shall mean the subsidiaries of PAB.
"PARTICIPATION FACILITY" shall mean any facility or property in which the
Party in question or any of its Subsidiaries participates in the management
(including, but not limited to, any property or facility held in a joint
venture) and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such facility or
property.
"PARTY" shall mean either Bank, Interim or PAB, and "PARTIES" shall mean
Bank, Interim and PAB.
"PERMIT" shall mean any federal, state, local and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its capital stock, Assets,
Liabilities or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert or any person acting in a
representative capacity.
"PREVIOUSLY DISCLOSED" shall mean information delivered in writing prior to
the date specified in Section 10.1(d) of this Agreement in the manner and to the
Party or counsel or both described in Section 11.8 of this Agreement and
entitled "Previously Disclosed Information Delivered Pursuant to the Agreement
and Plan of Merger" describing in reasonable detail the matters contained
therein or identifying the information disclosed; provided that in the case of
Subsidiaries acquired after the date of this Agreement such information may be
so delivered by the acquiring Party to the other Party prior to the date of such
acquisition.
"PROXY STATEMENT" shall mean the proxy statement used by Bank to solicit
the approval of its shareholders of the transactions contemplated by this
Agreement and shall include the prospectus of PAB relating to shares of PAB
Common Stock to be issued to the shareholders of Bank and other proxy
solicitation materials of Bank consisting of a part thereof.
"REGULATORY AUTHORITIES" shall mean, collectively, the United States
Department of Justice, the Board of Governors of the Federal Reserve System, the
FDIC, the SEC, all state regulatory agencies having jurisdiction over the
Parties and their subsidiaries and the NASD.
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, abandonment or
disposing into or migration within the environment.
"REPRESENTATIVES" shall have the meaning set forth in Section 8.8.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES LAWS" shall mean the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust Indenture Act of 1939, as
amended, and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SUBSIDIARIES" shall mean all those corporations, banks, association, or
other entities of which the entity in question owns or controls 5% or more of
the outstanding equity securities either directly or through an unbroken chain
of entities as to each of which 5% or more of the outstanding equity securities
is owned directly or indirectly by its parent; provided, however, there shall
not be included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary capacity.
"SURVIVING CORPORATION" shall mean Bank as the surviving corporation
resulting from the Merger with Interim.
"TAX" OR "TAXES" shall mean all federal, state, county, local and foreign
taxes, charges, fees, levies, imposts, duties or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
the United States or any state, local, or foreign government or subdivision or
agency thereof, including interest and penalties thereon or additions with
respect thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any governmental
authority, including the United States or any state, local or foreign government
or subdivision or agency thereof for which a Tax Return required to be filed or
Tax is required to be paid.
"TAX RETURN" shall mean any report, return or other information required to
be supplied to a taxing authority in connection with Taxes, including any return
of an affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
11.2 Expenses.
(a) General. Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel except that PAB shall bear and pay the filing fees
payable in connection with the Proxy Statement and one-half of the printing
costs incurred in connection with the printing of the Proxy Statement.
(b) Breach by either Party. In addition to the foregoing, if prior to
-----------------------
the Effective Time, this Agreement is terminated by either Party as a result of
the other Party's breach of such party's representations, warranties or
agreements set forth herein of this Agreement, such breaching Party shall pay to
the non-breaching Party as its sole and exclusive remedy resulting from such
termination, an amount in cash equal to the sum of:
(i) the reasonable direct costs and expenses incurred by or on
behalf of the non-breaching Party in connection with the
transactions contemplated by this Agreement, plus
----
(ii) the sum of $100,000,
which sum represents compensation for the non-breaching Party's loss as the
result of the transactions contemplated by this Agreement not being
consummated.
11.3 Brokers and Finders. Bank represents and warrants that neither
it nor any of its officers, directors, employees or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In the
event of a claim by any broker or finder based upon his or its representing or
being retained by or allegedly representing or being retained by Bank, Bank
shall indemnify and hold PAB harmless of and from any Liability in respect of
any such claim and reduce the Merger Consideration by an amount equal to such
claim as determined by PAB.
11.4 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transaction contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; whether before or after
shareholder approval of the Merger has been obtained provided, however, that
after any such approval by the holders of Bank Common Stock, there shall be made
no amendment decreasing the consideration to be received by Bank shareholders
without the further approval of such shareholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, PAB, acting through its Board
of Directors, Chief Executive Officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Bank, to waive or extend the time for the compliance or fulfillment by Bank
of any and all of its obligations under this Agreement and to waive any or all
of the conditions precedent to the obligations of PAB under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of PAB.
(b) Prior to or at the Effective Time, Bank, acting through its Board
of Directors, shall have the right to waive any Default in the performance of
any term of this Agreement by PAB, to waive or extend the time for the
compliance or fulfillment by PAB of any and all of its obligations under this
Agreement and to waive any or all of the conditions precedent to the obligations
of Bank under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of Bank.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
PAB and Interim: PAB Bankshares, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
912/000-0000 - FAX
Attn: R. Xxxxxxxx Xxxxxxxx, President
Copy to Counsel: Coleman, Talley, Newbem, Xxxxxx, Xxxxxxx & Holland
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
912/000-0000 - FAX
Attn: Xxxxxxxx Xxxxxx, Jr., Esquire
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
404/000-0000 - FAX
Attn: Xxxxxx X. Xxxxxx, Esquire
Bank: Friendship Community Bank
0000 Xxxxxxxxx Xxxxx Xxxx, 000
Xxxxx, Xxxxxxx 00000-0000
352/000-0000 - FAX
Attn: Xxxxxxx X. Xxxxx, Chairman
Copy to Counsel: Smith, Mackinnon, Greeley, Bowdoin, Edwards,
Xxxxxxxx & Marks, P.A.
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
407/000-0000 - FAX
Attn: Xxxx X. Xxxxxxx, Esquire
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.14 Interpretation of Agreement. The Parties hereto acknowledge and agree
that each Party has participated in the drafting of this Agreement and that this
document has been reviewed, negotiated and accepted by all parties and their
respective counsel, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be applied
to the interpretation of this Agreement. No inference in favor, or against, any
party shall be drawn from the fact that one party has drafted any portion
hereof.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: "BANK"
FRIENDSHIP COMMUNITY BANK
/s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxx
------------------------------- ----------------------------------------
Xxxx X. Xxxxxx, President & CEO Xxxxxxx X. Xxxxx, Chairman and Secretary
(BANK SEAL)
ATTEST: "PAB"
PAB BANKSHARES, INC.
/s/ Xxxxxx XxXxxxxx /s/ R. Xxxxxxxx Xxxxxxxx
------------------------------- ----------------------------------------
Xxxxxx XxXxxxxx, Secretary R. Xxxxxxxx Xxxxxxxx, President
and Chief Executive Officer
(CORPORATE SEAL)
FCB Interim Bank hereby joins in the foregoing Agreement, undertakes that
it will be bound thereby and that it will duly perform all the acts and things
therein referred to or provided to be done by it.
IN WITNESS WHEREOF, FCB Interim Bank has caused this undertaking to be
made in counterparts by its fully authorized officers and its corporate seal to
be hereunto affixed as of this 15th day of September 2000.
ATTEST: "INTERIM"
FCB INTERIM BANK
/s/ Xxxxxx XxXxxxxx /s/ R. Xxxxxxxx Xxxxxxxx
------------------------------- ----------------------------------------
Xxxxxx XxXxxxxx, Secretary R. Xxxxxxxx Xxxxxxxx, President
and Chief Executive Officer
(CORPORATE SEAL)
