SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of December 17, 2004 (this "Agreement"),
between Center Bancorp, Inc. ("Buyer") and the individuals and entities whose
names and addresses are set forth on the signature pages hereto (collectively,
the "Shareholders", and each, individually, a "Shareholder").
RECITALS
A. Concurrently with the execution and delivery of this Agreement, Buyer
and its wholly owned subsidiary, Union Center National Bank, a national bank
("Buyer Subsidiary Bank"), have executed and delivered an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), a copy of which is
annexed hereto as Annex A, with Red Oak Bank, a commercial bank chartered under
the laws of the State of New Jersey (the "Company"), which provides, among other
things, that the Company will merge with and into the Buyer Subsidiary Bank
pursuant to a merger contemplated by the Merger Agreement (the "Merger").
B. As of the date hereof, each Shareholder holds of record and
beneficially owns the number of shares of common stock, par value $5.00 per
share, of the Company (the "Company Common Stock") set forth opposite his, her
or its name on the signature pages hereto. In the aggregate, the shares of
Company Common Stock held of record and beneficially by the Shareholders
represents approximately 28% of the shares of Company Common Stock outstanding
on the date hereof.
C. Buyer has advised the Company that it would not enter into the Merger
Agreement unless each Shareholder agreed to enter into this Agreement, governing
(i) the voting of all of the shares of Company Common Stock that are now held of
record or beneficially owned by such Shareholder (collectively, the "Shares")
and all of the New Shares (as defined in Section 7) held or owned by such
Shareholder.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, and covenants and agreements contained herein and
in the above-mentioned Merger Agreement, the parties hereto hereby agree as
follows:
1. Definitions. Capitalized terms used herein but not defined herein have the
respective meanings ascribed to such terms in the Merger Agreement.
2. Agreement to Vote Shares. During the term of this Agreement, each
Shareholder agrees that it shall (a) consent to, approve, authorize and direct
the voting of all Shares and any New Shares held or owned by such Shareholder,
and agrees to cause all Shares and any New Shares held or owned by such
Shareholder to be voted, at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment thereof or in
connection with any written consent of the shareholders of the Company related
to such matters, in favor of the adoption of the Merger Agreement and the
consummation of the Merger and the other transactions contemplated by the Merger
Agreement (collectively, the "Merger Transaction") and against any Acquisition
Proposal (as defined in the Merger Agreement) and (b) if directed by Buyer, to
take or cause to be taken such actions under the by-laws of the Company as are
required to call a special meeting of the shareholders of the Company in order
to vote on the Merger Transaction. Each Shareholder agrees to deliver to Buyer
promptly upon the request therefor a proxy in the form attached hereto as
Exhibit A, which proxy is coupled with an interest and shall be irrevocable
during the term of this Agreement to the fullest extent permitted under New
Jersey law. The proxy granted by each Shareholder shall be revoked upon the
termination of this Agreement in accordance with its terms.
3. No Voting Trusts or Agreements. Each Shareholder agrees that such
Shareholder will not, and will not permit any entity under such Shareholder's
control to, deposit any of the Shares or New Shares held or owned by such
Shareholder in any voting trust, grant any proxies or powers of attorney with
respect to the voting of such Shares or New Shares or subject any such Shares or
New Shares to any agreement, instrument or arrangement with respect to the
voting of such Shares or New Shares other than this Agreement.
4. No Proxy Solicitations. Each Shareholder agrees that it will not, and
will not permit any entity under its control to, (a) solicit proxies in
opposition to the consummation of the Merger Transaction or, subject to Section
5.1(d) of the Merger Agreement, otherwise knowingly encourage or assist any
party in taking or planning any action which would impede, interfere with or
attempt to discourage the Merger Transaction or inhibit the timely consummation
of the Merger Transaction, (b) directly or indirectly knowingly encourage,
initiate or cooperate in a shareholders' vote or action by consent of the
Company's shareholders in opposition to the consummation of the Merger
Transaction, or (c) become a member of a "group" (as such term is used in
Section 13(d) of the Exchange Act) with respect to any voting securities of the
Company for the purpose of opposing the consummation of the Merger Transaction.
5. Transfer and Encumbrance. Each Shareholder agrees not to voluntarily
transfer, sell, offer, tender, pledge or otherwise dispose of or encumber
("Transfer") any of the Shares or New Shares held or owned by such Shareholder
prior to the earlier of (a) the Effective Time or (b) the date this Agreement
shall be terminated in accordance with its terms, except that each Shareholder
shall be permitted to Transfer any such Shares or New Shares to a family member
of such Shareholder, provided that such family member agrees in writing (in a
form acceptable to Buyer) to be bound by the terms of this Agreement with
respect to such Shares or New Shares. No such family member shall have the right
to effect a further Transfer of the Shares or New Shares prior to the earlier of
(a) the Effective Time or (b) the date this Agreement shall be terminated in
accordance with its terms.
6. Additional Purchases or Acquisitions. Each Shareholder agrees that any
shares of Company Common Stock or other capital stock of the Company of which
such Shareholder becomes the record holder or acquires beneficial ownership
following the execution and delivery of this Agreement ("New Shares") shall be
subject to the terms of this Agreement to the same extent as if they constituted
Shares held or owned by such Shareholder on the date of this Agreement.
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7. Additional Shares. Each Shareholder agrees, while this Agreement is in
effect, to promptly notify Buyer of the number of any New Shares acquired by
such Shareholder, if any, after the date hereof. In the event that, between the
date of this Agreement and the Closing, the Shares held or owned by any
Shareholder shall have been affected or changed into a different number of
shares or a different class of shares as a result of a share split, reverse
share split, share distribution, spin-off, recapitalization, reclassification or
other similar transaction, the term "Shares" shall be deemed to refer to and
include the Shares as well as any securities into which or for which any or all
of the Shares may be converted or exchanged.
8. Non-Interference. Each Shareholder agrees not to knowingly take any
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling any Shareholder from performing its obligations under this Agreement.
9. Share Transaction Proposals. Each Shareholder shall immediately cease
and terminate any existing activities, discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition or exchange of
all or any material portion of such Shareholder's Shares (a "Share
Transaction"), other than the Merger. Each Shareholder shall not, directly or
indirectly, knowingly encourage, solicit, participate in or initiate discussions
or negotiations with, or provide any information or data to, or have any
discussions with, any corporation, partnership, person or other entity or group
(other than Buyer) with respect to any inquiries or the making of any offer or
proposal (including, without limitation, any offer or proposal to the
shareholders of the Company) concerning a Share Transaction (a "Share
Transaction Proposal") or otherwise facilitate any effort or attempt to make or
implement a Share Transaction Proposal.
10. No Limitation on Discretion as Director. Nothing in this Agreement
shall be deemed to apply to, or to limit in any manner, the discretion of any
Shareholder with respect to any action to be taken (or omitted) by such
Shareholder in such Shareholder's fiduciary capacity as a director of the
Company and solely with respect to actions or omissions of such director in his
or her capacity as a director; provided, however, it is agreed and understood by
the parties hereto that the obligations, covenants and agreements of such
Shareholder contained in this Agreement are separate and apart from such
Shareholder's fiduciary duties as a director of the Company and no fiduciary
obligations that such Shareholder may have as a director of the Company shall
countermand the obligations, covenants and agreements of such Shareholder, as a
shareholder of the Company, contained in this Agreement.
11. Representations and Warranties of the Shareholders. Each Shareholder
hereby severally represents and warrants to Buyer as follows:
(a) Authority Relative to this Agreement. Such Shareholder has all
necessary power and authority to execute and deliver this Agreement, to perform
such Shareholder's obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by such
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of such Shareholder. This Agreement has been duly and validly
executed and delivered by such Shareholder and constitutes a legal, valid and
binding obligation of such Shareholder, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
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(b) No Conflict. The execution and delivery of this Agreement by such
Shareholder does not, and the performance of this Agreement by such Shareholder
will not, (i) require any consent, approval, authorization or permit of, or
filing with or notification to (other than pursuant to the Exchange Act), any
governmental or regulatory authority, domestic or foreign by or with respect to
such Shareholder, (ii) if applicable, conflict with or violate the articles of
incorporation, by-laws or other organizational documents of such Shareholder,
(iii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to such Shareholder or by which such Shareholder's Shares or
New Shares are bound, or (iv) result in any breach of or constitute a default
(or any event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance of any
nature whatsoever on such Shareholder's Shares or New Shares pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which such Shareholder is a party
or by which such Shareholder or such Shareholder's Shares or New Shares may be
bound, except, in the case of clauses (iii) and (iv), for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent or
materially delay the performance by such Shareholder of its obligations
hereunder.
(c) Title to the Shares. As of the date of this Agreement, such
Shareholder does not beneficially own any shares of capital stock of the Company
other than the number of Shares set forth opposite such Shareholder's name on
one of the signature pages hereto and does not have any options, warrants or
other rights to acquire any additional shares of capital stock of the Company or
any security exercisable for or convertible into shares of capital stock of the
Company, other than as set forth in the Company Disclosure Schedule. Such
Shareholder owns all such Shares free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements, charges,
security interests and other encumbrances of any nature whatsoever, and there
are no limitations on such Shareholder's voting rights with respect to any of
the Shares beneficially owned by such Shareholder and such Shareholder has not
appointed or granted any proxy with respect to voting, which appointment or
grant is still effective, with respect to the Shares. There are no agreements,
arrangements or commitments of any character to which such Shareholder is a
party relating to the pledge or disposition of any Shares or any other shares of
capital stock of the Company and, except for this Agreement, there are no voting
trusts or voting agreements to which such Shareholder is a party with respect to
any shares of capital stock of the Company.
12. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver,
or cause to be executed and delivered, such additional consents, documents and
other instruments and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the Merger Transaction and the other transactions contemplated by
this Agreement.
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13. Termination. With the exception of Sections 14 through 21 inclusive of
this Agreement (the "Later Termination Provisions"), this Agreement shall
terminate upon the earlier to occur of (i) the Effective Time and (ii) the date
on which the Merger Agreement terminates. The Later Termination Provisions shall
terminate upon the third anniversary of the date of this Agreement. In all
instances, however, any claim brought under this Agreement prior to the
termination of this Agreement shall not be affected by such termination.
14. Assignment; Third Party Beneficiaries. This Agreement and all of the
provisions hereof shall be binding and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests and obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties. Any purported assignment made in violation of this Agreement
shall be null and void. This Agreement is not intended to confer any rights or
remedies hereunder upon any person except the parties hereto.
15. Modification or Amendment. Subject to the provisions of the applicable
law, the parties hereto may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective parties.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
17. Governing Law and Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL
BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
The parties hereby irrevocably submit to the jurisdiction of the courts of the
State of New Jersey and the Federal courts of the United States of America
located in the State of New Jersey solely in respect of the interpretation and
enforcement of the provisions of this Agreement and of the proxies referred to
in Section 2 and in respect of the transactions contemplated hereby and thereby,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any such proxy may not be enforced
in or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a New Jersey State or Federal court. The parties hereby consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
18 or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.
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(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT OR THE PROXIES REFERRED TO IN SECTION 2 IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 17.
18. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
overnight courier or facsimile:
if to Buyer, to the address set forth in Section 9.4 of the Merger
Agreement
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
if to any Shareholder, to:
the address set forth opposite such Shareholder's name on one of the
signature pages of this Agreement.
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
19. Entire Agreement. This Agreement (including the proxies granted
pursuant hereto) constitutes the entire agreement, and supersedes all other
prior agreements, understandings, representations and warranties both written
and oral, among the parties, with respect to the subject matter hereof.
20. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
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21. Equitable Relief. Each Shareholders acknowledges and agrees that any
breach of the covenants and agreements contained in this Agreement would
irreparably injure Buyer and that Buyer's remedies at law for a breach or
threatened breach of any of the provisions of this Agreement would be
inadequate. Accordingly, without prejudice to the rights of Buyer also to seek
such damages or other remedies available to it, Buyer may seek, and the
Shareholders shall not contest the appropriateness of the availability of,
injunctive or other equitable relief in any proceeding that Buyer may bring to
enforce the covenants and agreements contained in this Agreement in its express
and explicit terms. No waiver of any breach of the covenants and agreements
contained in this Agreement shall be implied from forbearance or failure of
Buyer to take action in respect thereof.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties hereto as of the date hereof.
CENTER BANCORP, INC.
By: Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: President and
Chief Executive Officer
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(Signature Pages to Voting Agreement)
NAME AND ADDRESS NUMBER OF SHARES
OF THE SHAREHOLDER BENEFICIALLY OWNED
------------------ ------------------
/s/ X. Xxxxxxx Xxxxxx 14,884
-----------------------------------
Name: X. Xxxxxxx Xxxxxx
Address:
/s/ Xxxx X. Xxxxxxxxxxx 13,258
-----------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Address:
/s/ Xxxxxx X. Xxxxx 56,587
-----------------------------------
Name: Xxxxxx X. Xxxxx
Address:
/s/ Xxxxxxx X. Xxxxxxxx, Xx. 32,083
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Address:
/s/ S. Xxxxxx Xxxxxxx, Xx. 17,089
-----------------------------------
Name: S. Xxxxxx Xxxxxxx, Xx.
Address:
/s/ Xxxxxx X. Xxxxxx 11,196
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Address:
/s/ Xxxxxxx X. Emr 23,208
-----------------------------------
Name: Xxxxxxx X. Emr
Address:
/s/ Xxxxxxx X. Xxxxx 110,250
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Address:
/s/ Xxxxxx X. Xxxxxxxx 220
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Address:
/s/ W. Xxxxxx Xxxxxxxx 68,022
-----------------------------------
Name: W. Xxxxxx Xxxxxxxx
Address:
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NAME AND ADDRESS NUMBER OF SHARES
OF THE SHAREHOLDER BENEFICIALLY OWNED
------------------ ------------------
/s/ C. Xxxxxx XxXxxxxxx 116,526
-----------------------------------
Name: C. Xxxxxx XxXxxxxxx
Address:
/s/ Xxxx X. Xxxxxx 33,974
-----------------------------------
Name: Xxxx X. Xxxxxx
Address:
/s/ Xxxxxxx. X. Xxxxxxxx 42,892
-----------------------------------
Name: Xxxxxxx. X. Xxxxxxxx
Address:
/s/ Xxxxxxx X. Xxxxxxxxx 34,146
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Address:
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EXHIBIT A
FORM OF PROXY
The undersigned, for consideration received, hereby appoints _____ , and
and each of them [my][its] proxies, with power of substitution and
resubstitution, to vote all shares of common stock, par value $5.00 per share,
of [_____________], a commercial bank chartered under the laws of the State of
New Jersey (the "Company"), [and [insert any New Shares (as defined in the
Voting Agreement) or other shares of capital stock of the Company owned by the
Shareholder (as defined in the Voting Agreement)]] owned by the undersigned at
the [special] meeting of shareholders of the Company to be held [insert date,
time and place] and at any adjournment thereof IN FAVOR OF adoption of the
Agreement and Plan of Merger, dated as of December __, 2004 (the "Merger
Agreement"), by and among the Company, [_______] Bancorp, Inc. and [________]
National Bank, IN FAVOR OF consummation of the transactions contemplated by the
Merger Agreement, and AGAINST any Acquisition Proposal (as defined in the Merger
Agreement) at any meeting of shareholders of the Company and at any adjournment
thereof at which any Acquisition Proposal is considered. This proxy is coupled
with an interest, revokes all prior proxies granted by the undersigned and is
irrevocable until such time as the Shareholders' Agreement, dated as of December
__, 2004, between the undersigned, other shareholders of the Company and Buyer
(the "Shareholders' Agreement") terminates in accordance with its terms. This
proxy shall be revoked upon termination of the Shareholders'Agreement.
Dated:
-----------------------------
[SHAREHOLDER]
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