STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT (this "Agreement") dated November 19, 2001,
is by and between United National Bancorp, a New Jersey corporation and
registered bank holding company ("United"), and Vista Bancorp, Inc., a New
Jersey corporation and registered bankholding company ("Vista").
BACKGROUND
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1. United, UnitedTrust Bank ("UTB"), Vista and Vista Bank, N.A. (the
"Bank"), as of the date hereof, have executed a definitive agreement and plan of
merger (the "Merger Agreement") pursuant to which United will acquire Vista
through a merger of Vista with and into United (the "Merger").
2. During the negotiation of the Merger Agreement, United and UTB
advised Vista that they would not execute the Merger Agreement unless Vista
executed this Agreement.
3. As an inducement to United to enter into the Merger Agreement and
in consideration for such entry, Vista has agreed to grant to United an option
to purchase authorized but unissued shares of common stock of Vista in an amount
and on the terms and conditions hereinafter set forth.
AGREEMENT
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In consideration of the foregoing and the mutual covenants and
agreements set forth herein and in the Merger Agreement, United and Vista,
intending to be legally bound hereby, agree:
1. Grant of Option. Vista hereby grants to United the option to
purchase 1,055,781 shares of the common stock, $.50 par value (the Common
Stock), of Vista at a price of $21.50 per share (the Option Price), on the terms
and conditions set forth herein (the Option).
2. Exercise of Option. This Option shall not be exercisable until the
occurrence of a Triggering Event (as such term is hereinafter defined). Upon or
after the occurrence of a Triggering Event (as such term is hereinafter
defined), United may exercise the Option, in whole or in part, at any time or
from time to time, subject to the termination provisions of Section 19 of this
Agreement.
The term "Triggering Event" means the occurrence of any of the
following events:
A person or group (as such terms are defined in the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder) other than United or an affiliate of United:
a. acquires beneficial ownership (as such term is defined in Rule
13d-3 as promulgated under the Exchange Act) of at least 20% of the then
outstanding shares of Common Stock;
b. enters into a letter of intent or an agreement, whether oral or
written, with Vista pursuant to which such person or any affiliate of such
person would (i) merge or consolidate, or enter into any similar transaction,
with Vista or the Bank, (ii) acquire all or a significant portion of the assets
or liabilities of Vista or the Bank, or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial ownership or to vote
securities representing 20% or more of the then outstanding shares of Common
Stock;
c. makes a filing with any bank or thrift regulatory authority or
publicly announces a bona fide proposal (a "Proposal") for (i) any merger,
consolidation or acquisition of all or a significant portion of all the assets
or liabilities of Vista or the Bank or any other business combination involving
Vista or the Bank, or (ii) a transaction involving the transfer of beneficial
ownership of securities representing, or the right to acquire beneficial
ownership or to vote securities representing, 20% or more of the outstanding
shares of Common Stock, and thereafter, if such Proposal has not been Publicly
Withdrawn (as such term is hereinafter defined) at least 15 days prior to the
meeting of stockholders of Vista called to vote on the Merger and Vista'
stockholders fail to approve the Merger by the vote required by applicable law
at the meeting of stockholders called for such purpose; or
d. makes a bona fide Proposal and thereafter, but before such
Proposal has been Publicly Withdrawn, Vista willfully takes any action in any
manner which would materially interfere with its ability to consummate the
Merger or materially reduce the value of the transaction to United.
The term "Triggering Event" also means the taking of any material
direct or indirect action by Vista or any of its directors, officers or agents,
with the formal or informal approval or acquiescence of the Vista Board of
Directors, with the intention of inviting, encouraging or soliciting any
proposal which has as its purpose a tender offer for the shares of Common Stock,
a merger, consolidation, plan of exchange, plan of acquisition or reorganization
of Vista, or a sale of a significant number of shares of Common Stock or any
significant portion of its assets or liabilities.
The term "significant portion" means 25% of the assets or liabilities
of Vista. The term "significant number" means 20% of the outstanding shares of
Vista.
"Publicly Withdrawn", for purposes of clauses (c) and (d) above, shall
mean an unconditional bona fide withdrawal of the Proposal coupled with a public
announcement of no further interest in pursuing such Proposal or in acquiring
any controlling influence over Vista or the Bank or in soliciting or inducing
any other person (other than United or any affiliate) to do so.
Notwithstanding the foregoing, the Option may not be exercised at any
time (i) in the absence of any required governmental or regulatory approval or
consent necessary for Vista to issue the shares of Common Stock covered by the
Option (the "Option Shares") or United to exercise the Option or prior to the
expiration or termination of any waiting period required by law, or (ii) so long
as any injunction or other order, decree or ruling issued by any federal or
state court of competent jurisdiction is in effect which prohibits the sale or
delivery of the Option Shares.
Vista shall notify United promptly in writing of the occurrence of any
Triggering Event known to it, it being understood that the giving of such notice
by Vista shall not be a condition to the right of United to exercise the Option.
Vista will not take any action which would have the effect of preventing or
disabling Vista from delivering the Option Shares to United upon exercise of the
Option or otherwise performing its obligations under this Agreement.
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In the event United wishes to exercise the Option after a Triggering
Event has occurred and prior to the termination of this Agreement, United shall
send a written notice to Vista (the date of which is hereinafter referred to as
the "Notice Date"), specifying the total number of Option Shares it wishes to
purchase and a place and date (not less than three days after such notice is
sent to Vista) for the closing of such a purchase (a "Closing"); provided,
however, that a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals and the expiration of any legally
required notice or waiting period, if any.
3. Payment and Delivery of Certificates. At any Closing hereunder (a)
United will make payment to Vista of the aggregate price for the Option Shares
so purchased by wire transfer of immediately available funds to an account
designated by Vista, (b) Vista will deliver to United a stock certificate or
certificates representing the number of Option Shares so purchased, free and
clear of all liens, claims, charges and encumbrances of any kind or nature
whatsoever created by or through Vista, registered in the name of United or its
designee, in such denominations as were specified by United in its notice of
exercise and, if necessary, bearing a legend as set forth below and (c) United
shall pay any transfer or other taxes required by reason of the issuance of the
Option Shares so purchased.
If required under applicable federal securities laws, a legend will be
placed on each stock certificate evidencing Option Shares issued pursuant to
this Agreement, which legend will read substantially as follows:
The shares of stock evidenced by this certificate have not
been registered for sale under the Securities Act of 1933 (the "1933
Act"). These shares may not be sold, transferred or otherwise disposed
of unless a registration statement with respect to the sale of such
shares has been filed under the 1933 Act and declared effective or, in
the opinion of counsel reasonably acceptable to Vista Bancorp Inc.,
said transfer would be exempt from registration under the provisions of
the 1933 Act and the regulations promulgated thereunder.
No such legend shall be required if a registration statement is filed and
declared effective under Section 4 hereof.
4. Registration Rights. Upon or after the occurrence of a Triggering
Event and upon receipt of a written request from United, Vista shall, if
necessary for the resale of the Option or the Option Shares by United, prepare
and file a registration statement with the Securities and Exchange Commission
and any state securities bureau covering the Option and such number of Option
Shares as United shall specify in its request, and Vista shall use its best
efforts to cause such registration statement to be declared effective in order
to permit the sale or other disposition of the Option and the Option Shares,
provided that United shall in no event have the right to have more than one such
registration statement become effective.
In connection with such filing, Vista shall use its best efforts to
cause to be delivered to United such certificates, opinions, accountant's
letters and other documents as United shall reasonably request and as are
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customarily provided in connection with registrations of securities under the
Securities Act of 1933, as amended. All expenses incurred by Vista in complying
with the provisions of this Section 4, including without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for Vista and blue sky fees and expenses shall be paid by Vista.
Underwriting discounts and commissions to brokers and dealers relating to the
Option Shares, fees and disbursements of counsel to United and any other
expenses incurred by United in connection with such registration shall be borne
by United. In connection with such filing, Vista shall indemnify and hold
harmless United against any losses, claims, damages or liabilities, joint or
several, to which United may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any preliminary or final registration statement or any amendment or
supplement thereto, or arise out of a material fact required to be stated
therein or necessary to make the statements therein not misleading; and Vista
will reimburse United for any legal or other expense reasonably incurred by
United in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Vista will not be liable in
any case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement of omission
or alleged omission made in such preliminary or final registration statement or
such amendment or supplement thereto in reliance upon and in conformity with
written information furnished by or on behalf of United specifically for use in
the preparation thereof. United will indemnify and hold harmless Vista to the
same extent as set forth in the immediately preceding sentence but only with
reference to written information specifically furnished by or on behalf of
United for use in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and United will reimburse
Vista for any legal or other expense reasonably incurred by Vista in connection
with investigating or defending any such loss, claim, damage, liability or
action.
5. Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, conversions, exchanges of shares or the like,
then the number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
In the event any capital reorganization or reclassification of the
Common Stock, or any consolidation, merger or similar transaction of Vista with
another entity, or in the event any sale of all or substantially all of the
assets of Vista shall be effected in such a way that the holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
(in form reasonably satisfactory to the holder hereof) shall be made whereby the
holder hereof shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified herein and in lieu of the
Common Stock immediately theretofore purchasable and receivable upon exercise of
the rights represented by this Option, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore purchasable and receivable
upon exercise of the rights represented by this Option had such reorganization,
reclassification, consolidation, merger or sale not taken place; provided,
however, that if such transaction results in the holders of Common Stock
receiving only cash, the holder hereof shall be paid the difference between the
Option Price and such cash consideration without the need to exercise the
Option.
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6. Filings and Consents. Each of United and Vista will use its best
efforts to make all filings with, and to obtain consents of, all third parties
and governmental authorities necessary to the consummation of the transactions
contemplated by this Agreement.
Exercise of the Option herein provided shall be subject to compliance
with all applicable laws including, in the event United is the holder hereof,
approval of the Board of Governors of the Federal Reserve System and Vista
agrees to cooperate with and furnish to the holder hereof such information and
documents as may be reasonably required to secure such approvals.
7. Representations and Warranties of Vista. Vista hereby represents
and warrants to United as follows:
a. Due Authorization. Vista has full corporate power and
authority to execute, deliver and perform this Agreement and all corporate
action necessary for the execution, delivery and performance of this Agreement
has been duly taken by Vista.
b. Authorized Shares. Vista has taken and, as long as the Option
is outstanding, will take all necessary corporate action to authorize and
reserve for issuance all shares of Common Stock that may be issued pursuant to
any exercise of the Option.
c. No Conflicts. Neither the execution and delivery of this
Agreement nor consummation of the transactions contemplated hereby (assuming all
appropriate regulatory approvals) will violate or result in any violation or
default of or be in conflict with or constitute a default under any term of the
certificate of incorporation or by-laws of Vista or any agreement, instrument,
judgment, decree, statute, rule or order applicable to Vista.
8. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement and that the
obligations of the parties hereto shall be specifically enforceable.
Notwithstanding the foregoing, United shall have the right to seek money damages
against Vista for a breach of this Agreement.
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof.
10. Assignment or Transfer. United may not sell, assign or otherwise
transfer its rights and obligations hereunder, in whole or in part, to any
person or group of persons other than to an affiliate of United, except after
the occurrence of a Triggering Event. United represents that it is acquiring the
Option for United's own account and not with a view to or for sale in connection
with any distribution of the Option or the Option Shares. United shall have the
right to assign this Agreement to any party it selects after the occurrence of a
Triggering Event.
11. Amendment of Agreement. By mutual consent of the parties hereto,
this Agreement may be amended in writing at any time, for the purpose of
facilitating performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any court or for any
other purpose.
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12. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
13. Notices. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally, by express service, cable, telegram
or telex, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
(a) If to United, to:
United National Bancorp
0000 Xxxxx 00 Xxxx, P.O. Box 6000
Bridgewater, New Jersey 08807-0010
Attn.: Xxxxxx X. Xxxxxx, Chairman,
President and Chief Executive Officer
With a copy to:
Bourne, Xxxx & Xxxxxx
Attn.: Xxxxxxx X. Xxxxxx, Esq.
000 Xxxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxx Xxxxxx 00000-0000
(b) If to Vista, to:
Vista Bancorp Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn.: Xxxxxxx Xxxxxxx, President
and Chief Executive Officer
With a copy to:
Xxxx Xxxxx, LLP
Attn: Xxxx X. Xxxxx, Esq.
0 Xxxxx 0xx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
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or such other addresses as shall be furnished in writing by any party, and any
such notice or communications shall be deemed to have been given as of the date
so delivered or telecopied and mailed.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
15. Captions. The captions in the Agreement are inserted for
convenience and reference purposes, and shall not limit or otherwise affect any
of the terms or provisions hereof.
16. Waivers and Extensions. The parties hereto may, by mutual consent,
extend the time for performance of any of the obligations or acts of either
party hereto. Each party may waive (i) compliance with any of the covenants of
the other party contained in this Agreement and/or (ii) the other party's
performance of any of its obligations set forth in this Agreement.
17. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement, except
as provided in Section 10 permitting United to assign its rights and obligations
hereunder.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
19. Termination. This Agreement shall terminate upon either the
termination of the Merger Agreement as provided therein or the consummation of
the transactions contemplated by the Merger Agreement; provided, however, that
if termination of the Merger Agreement occurs after the occurrence of a
Triggering Event (as defined in Section 2 hereof), this Agreement shall not
terminate until the later of 18 months following the date of the termination of
the Merger Agreement or the consummation of any proposed transactions which
constitute the Triggering Event.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to resolutions
adopted by its Board of Directors, has caused this Agreement to be executed by
its duly authorized officer, all as of the day and year first above written.
ATTEST: VISTA BANCORP, INC.
/s/ XXXX X. XXXXXXX By: /s/ XXXXXXX XXXXXXX
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Xxxx X. Xxxxxxx, Corporate Secretary Xxxxxxx Xxxxxxx, President
and Chief Executive Officer
ATTEST: UNITED NATIONAL BANCORP
/s/ XXXXX X. XXXXX, XX. By: /s/ XXXXXX X. XXXXXX
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Xxxxx X. Xxxxx, Xx., Secretary Xxxxxx X. Xxxxxx, Chairman,
President and Chief Executive
Officer
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