AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of September
27, 1996, amending and restating the Agreement and Plan of Merger dated as of
April 16, 1996 as amended and restated as of June 13, 1996 (as herein amended
and restated, this "AGREEMENT"), by and between R&G FINANCIAL CORPORATION, a
corporation organized under the laws of the Commonwealth of Puerto Rico
("FINANCIAL"), R-G PREMIER BANK OF PUERTO RICO, a commercial bank chartered
under the Puerto Rico Banking Law of 1933, as amended (the "BANKING LAW") (the
"BANK"), and R-G INTERIM PREMIER BANK ("INTERIM"), a Puerto Rico chartered
commercial bank organized for the sole purpose of consummating the transactions
provided for herein.
WITNESSETH:
WHEREAS, the Bank is organized under the Banking Law and has its principal
place of business at 280 Xxxxx X. Xxxxxx Avenue, Hato Rey, Puerto Rico, with an
authorized capital of 10,000,000 shares of common stock, par value $1.00 per
share (the "BANK COMMON SHARES"), of which 2,089,653 are issued and outstanding,
and 2,000,000 shares of preferred stock, of which 600,000 are issued and
outstanding (the "BANK PREFERRED SHARES");
WHEREAS, Financial is authorized to issue 10,000,000 shares of its Class A
Common Stock, par value $0.01 per share (the "CLASS A SHARES"), of which
5,122,377 are issued and outstanding, and 15,000,000 shares of its Class B
Common Stock, par value $0.01 per share (the "CLASS B SHARES", and with the
Class A Shares, the "FINANCIAL COMMON SHARES"), of which 2,435,000 are issued
and outstanding;
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WHEREAS, on July 19, 1996, Financial became the holding company of the Bank
(the "Reorganization"), pursuant to the approval of the Board of Governors of
the Federal Reserve Board (the "FRB") and the Office of the Commissioner of
Financial Institutions of the Commonwealth of Puerto Rico;
WHEREAS, in connection with the Reorganization, on July 19, 1996,
Xx. Xxxxxx X. Xxxxx contributed to Financial (a) his 100% ownership of the
outstanding common stock of R&G Mortgage Corp. and (b) all of his 1,840,982 Bank
Common Shares (the "XXXXX BANK SHARES") in exchange for 5,189,044 Class A
Shares, and Financial desires to acquire, in addition to the Xxxxx Bank Shares,
all of the remaining outstanding Bank Common Shares not owned by it (the
"REMAINING BANK SHARES") in exchange for a number of Class B Shares (the
"FINANCIAL EXCHANGE SHARES");
WHEREAS, on June 18, 1996, Financial filed a Registration Statement (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") with respect to the proposed issuance and sale (a) by Financial of Class
B Shares in a firm commitment initial public offering following the approval of
its bank holding company application and the consummation of the Reorganization,
(b) by Xxxxxx X. Xxxxx of Class B Shares received in exchange for certain or his
Class A Shares in the same public offering (collectively, the issuance and sale
of Class B Shares is referred to as the "Public Offering"), and (c) the exchange
by Financial of Class B Shares for the Remaining Bank Shares (the "EXCHANGE
TRANSACTION") (with the actual number of Class B Shares to be so issued pursuant
to the Exchange Transaction being determined in connection with the underwritten
public offering of Class B Shares);
WHEREAS, due to an unanticipated position of the SEC expressed during its
review of the Registration Statement, it became necessary to separate the
Exchange Transaction from the Public Offering; the Registration Statement
declared effective by
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the SEC (including an additional Registration Statement
filed on August 22, 1996 to register additional Class B Shares) solely related
the Class B Shares to be issued in the Public Offering (the "REGISTERED CLASS B
SHARES"), and the Public Offering was consummated on August 27, 1996, with the
issuance and sale to the public of the 2,415,000 Class B Shares;
WHEREAS, the parties have determined that it is in the best interest of
their respective shareholders that the Exchange Transaction be effected as
promptly as practicable, and to that end Financial intends to file a new
Registration Statement (the "EXCHANGE REGISTRATION STATEMENT") with respect to
Class B Shares to be issued in the Exchange Transaction;
WHEREAS, Financial caused Interim to be organized solely to facilitate the
Exchange Transaction, with its principal office at the same address as that of
the Bank, with all of the shares of capital stock of Interim to be issued prior
to the Merger to be held by Financial (except for any shares that may be
required to be held by the directors of Interim as Qualifying Shares prior to
the merger described herein); and
WHEREAS, upon the receipt of all applicable regulatory approvals, Interim
shall be merged with and into the Bank ("MERGER"), and the Exchange Transaction
shall be consummated;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, Financial, the Bank and Interim hereby agree that,
subject to the conditions hereinafter set forth, Interim shall be merged with
and into the Bank with the Bank as the Resulting Bank. The terms and conditions
of the Merger shall be as follows:
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1. REGULATORY APPROVALS.
(a) The Merger shall not become effective until receipt of all
requisite approvals of the Federal Deposit Insurance Corporation ("FDIC") and
the OCFI with respect to the Merger, and the expiration of all applicable
waiting periods.
(b) Financial, the Bank and Interim shall have obtained all other
consents, permissions and approvals and taken all actions required by law or
agreement, or deemed necessary by such parties prior to the consummation of the
Agreement.
2. CONDITIONS TO EFFECTIVENESS OF MERGER.
The Merger shall not become effective until the SEC and any applicable
state securities commission shall have declared effective the Exchange
Registration Statement with respect to the Financial Exchange Shares which are
the subject of the Exchange Transaction.
3. IDENTITY AND NAME OF RESULTING BANK.
The Bank shall be the Resulting Bank in the Merger, which shall
continue to operate under its present name.
4. OFFICES OF RESULTING BANK.
The home office of the Resulting Bank shall be the Bank's main office
located at 280 Xxxxx X. Xxxxxx Avenue, Hato Rey, San Xxxx, Puerto Rico.
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5. THE RESULTING BANK'S ARTICLES OF INCORPORATION AND BYLAWS.
The Articles of Incorporation and Bylaws of the Bank as in effect
immediately prior to the effectiveness of the Merger shall be the Articles of
Incorporation and Bylaws of the Resulting Bank, with no amendment being made as
part of the Merger.
6. EFFECTIVE DATE.
The effective date of the Merger ("Effective Date") shall be the date
as soon as practicable after the issuance by the FDIC and OCFI of all requisite
approvals, certificates and documents as may be required in order to cause the
Merger to become effective, the expiration of all applicable waiting periods and
the receipt of all requisite Bank stockholder approval required by Section 7
hereof. The Merger shall become effective at the time this Agreement is
properly perfected and filed in accordance with the Banking Law.
7. BANK STOCKHOLDER APPROVAL.
The affirmative vote of the holders of more than three-fourths of the
aggregate issued and outstanding Bank Common Shares and Bank Preferred Shares
shall be required to approve this Agreement. The Bank will take any action
necessary in accordance with applicable law and its Certificate of Incorporation
and Bylaws to convene a meeting of stockholders, or to take such other action as
is permitted by law, as promptly or practicable after the date hereof to
consider and vote upon the approval of this Agreement. Notice shall be given to
Bank stockholders of such meeting, of the transaction contemplated by this
Agreement, and of the intention of Financial to vote (a) all of the Xxxxx Bank
Shares which it acquired in connection with the
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Reorganization, which represent a controlling interest in the Bank's
capital stock, in favor of the transaction, and (b) all of the Bank
Preferred Shares, in favor of the transaction.
8. INTERIM STOCKHOLDER APPROVAL.
The approval of Financial, as the sole stockholder of Interim, shall
be required to approve this Agreement.
9. CONVERSION OF OUTSTANDING BANK COMMON STOCK.
(a) Upon the Effective Date:
(i) (A) Each Bank Common Share outstanding immediately prior to
the Effective Date shall, without any further action on the part of
the Bank or any other person, shall be treated in the following
manner:
(I) the Xxxxx Bank Shares heretofore acquired by Financial in
exchange for Class A Shares shall be unaffected by the Merger and
shall constitute and continue to be one share of common stock of
the Resulting Bank; and
(II) in the case of the Remaining Bank Shares, an obligation of
the Resulting Bank (an "OBLIGATION") to cause Financial to
deliver to the holder thereof the corresponding number of
Financial Exchange Shares for each Bank Common Share so
converted, as determined pursuant to subparagraph C below.
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(B) Such conversion and allocation of the Remaining Bank
Shares shall not in any way preclude or prevent any such holder from
exercising his statutory right to dissent from the Merger, to demand
appraisal for such holder's Remaining Bank Shares, and to receive from
the Resulting Bank payment of the value of his Remaining Bank Shares
and such other rights and benefits as are provided by law.
(C) Immediately after the treatment provided in
subparagraph (A) above, Financial shall, on behalf of the Resulting
Bank and as consideration for the benefits received by Financial
hereunder, issue to each recordholder of Obligations of the Resulting
Bank a number of Financial Exchange Shares which represents (i) the
number of particular Obligations allocated to such recordholder,
multiplied by (ii) 1.23 (the "Exchange Ratio"), and the Obligations
shall thereupon be cancelled.
(D) Each holder of a certificate that, immediately prior to
the Effective Date, represented Remaining Bank Shares that were
converted pursuant to this Section (a "Bank Stock Certificate") may,
at any time after the Effective Date, deliver to Financial (or to its
transfer agent, which may be the Resulting Bank) such Bank Stock
Certificate and the letter of transmittal which shall be provided by
Financial, in exchange for a certificate or certificates (as the
holder requests) representing the appropriate number of Financial
Exchange Shares, and the payment of cash in lieu of fractions,
dividends, and other distributions on said stock may be withheld until
the Bank Stock Certificate is surrendered for exchange to the transfer
agent for Financial Common Shares; and when such new certificates are
issued, the holders thereof shall be entitled to be paid the amount
(without any interest thereon) of all such withheld cash in
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lieu of fractions, dividends, or other distributions which have
theretofore become payable with respect to such Financial Common
Shares.
(E) After the Effective Date there will be no transfers on
the stock record books of the Resulting Bank of the Remaining Bank
Shares which were converted pursuant to this Section. If, after the
Effective Date, Bank Stock Certificates are presented to the Resulting
Bank, they shall be cancelled and exchanged for Financial Exchange
Shares as provided in this Section.
(F) As of the Effective Date, the holders of Remaining Bank
Shares shall cease to have any rights with respect to Remaining Bank
Shares and their sole rights on and following the Effective Date shall
be with respect to the Obligations and the Financial Exchange Shares
for which their Remaining Bank Shares shall have been exchanged as a
result of the Merger.
(ii) The Resulting Bank shall issue 248,671 shares of its common
stock to Financial (constituting all Bank Common Shares not owned by
Financial), and shall issue any directors' Qualifying Shares that may
be required by, and in accordance with, the Banking Law.
(b) Each Bank Preferred Share outstanding immediately prior to the
Effective Date shall be unaffected by the Merger and shall constitute and
continue to be an outstanding Bank Preferred Share of the Resulting Bank.
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(c) Each Bank Common Share held by Financial immediately prior to the
effective Date shall be unaffected by the Merger and shall constitute and
continue to be one share of common stock of the Resulting Bank.
(d) Notwithstanding any provision of this Agreement to the contrary,
if holders of the Remaining Bank Shares are entitled to demand appraisal
for their Remaining Bank Shares under the Banking Law, the following shall
apply:
(i) Any Remaining Bank Shares held by a holder who has demanded
appraisal of his Remaining Bank Shares and as of the Effective Date
has neither effectively withdrawn nor lost his right to such appraisal
(the "DISSENTING SHARES") shall not be converted in the manner set
forth in subsection (a) of this Section, but the holder thereof shall
only be entitled to such rights as are granted by the Banking Law.
(ii) Notwithstanding the provisions of paragraph (e)(i) above, if
any holder of Dissenting Shares shall effectively withdraw or lose
(through failure to perfect or otherwise) his right to appraisal, then
as of the Effective Date or the occurrence of such event, whichever
later occurs, such Dissenting Shares shall automatically be converted
as provided in paragraph (a)(i) of this Section.
10. STOCK OF INTERIM.
The issued and outstanding shares of common stock of Interim owned by
Financial on the Effective Date shall be converted into the right to receive an
amount in cash equal to the par value thereof, and shall thereupon be cancelled
upon consummation of the Merger.
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11. EFFECTS OF MERGER.
(a) All deposit accounts of the Bank shall be and will become
deposits in the Resulting Bank without change in their respective terms,
interest rates, maturities, minimum required balances or withdrawal values.
After the Effective Date, the Resulting Bank will continue to issue deposit
accounts on the same basis as immediately prior to the Effective Date.
(b) Upon the Effective Date, all assets and property (real, personal
and mixed, tangible and intangible, choses in action, rights and credits) then
owned by the Bank or Interim or which would inure to either of them, shall
immediately by operation of law and without any conveyance, transfer or further
action, become the property of the Resulting Bank, which shall have, hold and
enjoy them in its own right as fully and to the same extent as they were
possessed, held and enjoyed by the Bank and Interim immediately prior to the
Effective Date of the Merger. The Resulting Bank shall be deemed to be a
continuation of the entity of both the Bank and Interim and all of the rights
and obligations of the Bank and Interim shall remain unimpaired; and the
Resulting Bank, upon the Effective Date of the Merger, shall succeed to all
those rights and obligations and the duties and liabilities connected therewith.
(c) Upon the Effective Date, the Resulting Bank shall have
outstanding 2,089,653 shares of its common stock, and the 600,000 Bank Preferred
Shares.
12. DIRECTORS.
The Board of Directors of the Resulting Bank shall be comprised of
all of the current twelve (12) members of the Board of Directors of the
Bank, whose names and addresses are listed in Appendix I attached
hereto, immediately prior to the
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Effective Date, and each director shall serve for the term such director
is currently serving as director of the Bank or until a successor director is
elected.
13. OFFICERS.
The officers of the Bank shall be and will become the officers of the
Resulting Bank.
14. INCOME TAX MATTERS.
Prior to the Effective Date, the parties hereto shall have received an
opinion of counsel or tax ruling, satisfactory to them in form and substance,
with respect to the Puerto Rico income tax consequences of the Merger.
15. AMENDMENT OR TERMINATION OF THE AGREEMENT.
This Agreement may be modified at any time or terminated by mutual
written agreement of the Boards of Directors of Financial, the Bank or Interim.
Any of the terms or conditions of this Agreement which may be legally
waived may be waived at any time by any party hereto which is entitled to the
benefit thereof, by actions taken or authorized by the Board of Directors of
such party.
16. GOVERNING LAW.
This Agreement is made pursuant to, and shall be construed and be
governed by, the laws of the Commonwealth of Puerto Rico.
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17. ALL TERMS INCLUDED.
This Agreement sets forth all terms, conditions, agreements and
understandings of the parties hereto with respect to the Merger.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on its behalf by its officers thereunto duly authorized, all as of
the date first above written.
R&G FINANCIAL CORP.
By: /S/ XXXXXX X. XXXXX
_____________________________
Xxxxxx X. Xxxxx
President
Chief Executive Officer
and Chairman of the Board
R-G PREMIER BANK OF PUERTO RICO
By: /S/ XXXXXX X. XXXXX
_____________________________
Xxxxxx X. Xxxxx
President
Chief Executive Officer
and Chairman of the Board
R-G PREMIER INTERIM BANK
By: /S/ XXXXXX X. XXXXX
_____________________________
Xxxxxx X. Xxxxx
President
APPENDIX I
Xxx X. Xxxxxxxxxx Xxxxxxx XxXxxxxxx
Condominio Hato Rey Xxxxx Xxx Xxxxxx, Xxxxx 0 Xx. 0
Xxxxxxxxx 4-E Alturas de Torrimar
Hato Rey, PR 00918 Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxx-Xxxxxxx Xxxxx Xxxxx
Condominio The Falls Paseo Alto Xx. 00
Xxxxxxxxx X-0 Xxx 000 Xxx Xxxxxx
Xxxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Xxxxx Xxxxxxx-Xxxxxxx Xxxxxxx Xxxxxxxx-Xxxxxx
Romany Park A-6 0 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000 Xxxxx Xxxxxxxx
Xxx Xxxxxxx, XX 00000
Xxxx X. Xxxx Xxxxxxxx Xxxxxx-Xxxxxxx
A-22 Alborada Street X-00 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xxxxxxxx Xxxxx-Xxxxxx Xxxxxxx X. Xxxxxxxxx
0-X Xxxx xx Xxx Xxxxxx XX-00 Xxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx
M-2 Xxxxxx Street
Parque de Santa Xxxxx
Xxx Xxxxxxx, XX 00000
Xxxxxx Xxxxxx
Condominio Laguna
000 X'Xxxx Xxxxxx and
Baldorioty de Xxxxxx Xxxxxx
Xxxxxxx
Xxx Xxxx, XX 00000
