EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") dated as of September 28, 1995
between Banc One Kentucky Corporation, a Kentucky corporation ("BANC ONE
KENTUCKY") and Matewan BancShares, Inc., a Delaware corporation ("MATEWAN"), and
joined in by BANC ONE CORPORATION, an Ohio corporation ("BANC ONE").
WHEREAS, BANC ONE KENTUCKY owns all of the issued and outstanding capital
stock ("Stock") of Bank One, Pikeville, National Association (the "Bank"); and
WHEREAS, BANC ONE owns all of BANC ONE KENTUCKY's issued and outstanding
capital stock; and
WHEREAS, MATEWAN desires to purchase the Stock from BANC ONE KENTUCKY and
BANC ONE KENTUCKY desires to sell the Stock to MATEWAN upon the terms and
subject to the conditions hereinafter set forth (the "Acquisition"); and
WHEREAS, BANC ONE KENTUCKY, BANC ONE and MATEWAN desire to provide for
certain undertakings, conditions, representations, warranties and covenants in
connection with the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 "Bank Employees" shall mean all employees of the Bank together with any
person who works on Bank premises but who is technically an employee of
another affiliate of BANC ONE. A list of Bank Employees has been set forth
in Previously Disclosed.
1.2 "Bank Holding Company Act" shall mean the Bank Holding Company Act of 1956,
as amended.
1.3 "Book Value" shall mean the dollar amount of any asset or liability
reflected on the Books of the Bank as of the date in question on an
unconsolidated basis increased or decreased, as the case may be, by any
interest earned or accrued, but not collected or paid, if any, all as
reflected on such Books as of such date.
1.4 "Books" shall mean the general ledger of the Bank and any subsidiary ledger
of the Bank.
1.5 "Buyer Indemnified Parties" means MATEWAN, affiliates of MATEWAN (as of the
Closing Date) and (after the closing) the Bank.
1.6 "Call Reports" shall mean those periodic reports of condition filed with
the Office of the Comptroller of the Currency pursuant to 12 U.S.C. (S)
161, in each case as of December 31, 1993 and 1994 and June 30, 1995 and
for the periods then ended, and as of and for the periods ending after June
30, 1995.
1.7 "Closing" shall mean the purchase and sale of the Stock as described in
Section 2.3 hereof.
1.8 "Closing Date" shall mean the date specified pursuant to Section 2.3 hereof
as the date on which the parties hereto shall close the transactions
contemplated herein.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.10 "Commissioner" shall mean the Department of Financial Institutions of the
Commonwealth of Kentucky.
1.11 "Employee Benefit Plan(s)" means any one or more of the following in which
a Bank Employee or dependent of Bank Employee is a participant in or
benefits from as a result
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of his employment (whether current or past) with Bank, BANC ONE, and/or
BANC ONE KENTUCKY: (a) Employee Pension Benefit Plan, (b) Employee Welfare
Benefit Plan, or (c) any other deferred compensation plan, bonus plan,
incentive, disability or other group insurance plan, stock option plan,
employee stock purchase plan, vacation plan, severance plan, sick leave
plan or policy, holiday plan or policy, maternity leave plan or policy, or
any other benefit plan, program, agreement (including employment
agreements), arrangements or commitments of any kind, whether or not
subject to the requirements of ERISA.
1.12 "Employee Pension Benefit Plan" has the meaning set forth in ERISA
(S) 3(2).
1.13 "Employee Welfare Benefit Plan" has the meaning set forth in ERISA
(S) 3(1).
1.14 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
1.15 "Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
1.16 "Former Bank Employee" means an individual who worked for Bank, who is not
deemed actively at work on the Closing Date, and who is not Previously
Disclosed as a Bank Employee.
1.17 "Hazardous Substances" means, without limitation, any substance that is
toxic, ignitable, reactive, or corrosive and that is regulated by any local
government, state government, or the U.S. government. "Hazardous
Substances" also includes any and all material or substances that are
defined as "hazardous waste," "extremely hazardous waste," or a
"hazardous substance" pursuant to state, federal, or local governmental
law. "Hazardous Substances" also includes, but is not restricted to,
asbestos, polychlorobiphenyls (PCBs), and petroleum.
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1.18 "Loan Schedule" shall mean each of the schedules of certain Loans
Previously Disclosed to MATEWAN as contemplated by Section 3.17 hereof.
1.19 "Loans" is defined in Section 3.17 hereof.
1.20 "MATEWAN Common Stock" shall mean MATEWAN's common stock with par value of
$1.00 per share.
1.21 "OCC" shall mean the Office of the Comptroller of the Currency.
1.22 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.23 "Previously Disclosed" shall mean disclosed prior to the execution hereof
in a letter dated of even date herewith from the party making such
disclosure and delivered to the other party prior to the execution hereof.
1.24 "Purchase Price" shall mean the cash consideration to be paid by MATEWAN
for the Stock, which shall be in the amounts set forth in Section 2.2
hereof.
1.25 "Retained Litigation" shall mean that litigation currently pending in Pike
Circuit Court and consisting of cases styled The First National Bank of
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Pikeville v. Coalfields Reclamation, Inc., et al. (Civil Action 92-CI-573);
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The First National Bank of Pikeville v. Camp Fort Fuel Company, Inc., et
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al.
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(Civil Action 93-CI-1152); and In Re Xxxxxx Coal Company (Civil Action 89-
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20042).
1.26 "Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or
dispose of any of its capital stock.
1.27 "SEC Documents" shall mean all reports and registration statements filed,
or required to be filed, if any, by MATEWAN pursuant to the Securities
Laws.
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1.28 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.29 "Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939, as amended; and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
Other terms used herein are defined in the preamble and the recitals to the
Agreement or elsewhere in the Agreement.
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase by MATEWAN. Upon the terms and subject to the conditions set forth
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in this Agreement, MATEWAN agrees to purchase all of the Stock from BANC
ONE KENTUCKY and BANC ONE KENTUCKY agrees to sell all of the Stock to
MATEWAN.
2.2 Purchase Price. The Purchase Price shall be cash in the amount of
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$28,600,000.
2.3 Closing Date.
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(a) The sale and purchase of the Stock hereunder (the "Closing") shall
occur at the executive offices of MATEWAN in Williamson, West
Virginia, or at such other place as shall be mutually agreeable to the
parties, on the date designated by MATEWAN, which shall be not earlier
than the first business day following, or later than the 30th calendar
day of the month following the last to occur of (i) the date that
falls fifteen (15) days after the date of the order of the Federal
Reserve Board approving the Acquisition; (ii) as necessary, the
approval of the Commissioner; and (iii) any other required regulatory
approval and any related notice or waiting period; provided, however,
that the Closing shall occur not earlier than the day following the
date on which MATEWAN closes on the stock
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sale/financing referred to in Section 5.1(b) hereof (the date of the
Closing being referred to herein as the "Closing Date").
(b) On the Closing Date, the following actions shall be taken:
(i) MATEWAN shall pay the Purchase Price to BANC ONE KENTUCKY by
wire transfer of immediately available federal funds to such
bank account in the United States as BANC ONE KENTUCKY shall
designate;
(ii) BANC ONE KENTUCKY shall deliver certificates for the Stock to
MATEWAN, duly endorsed in blank or with stock powers duly
endorsed in blank, together with such other documents as MATEWAN
may reasonably request to evidence the transfer to MATEWAN of
good and marketable title in and to the Stock, free and clear of
any lien, security interest, pledge, charge, encumbrance or
restriction of any kind or nature; and
(iii) Each party shall take such other actions, and shall execute and
deliver such other instruments or documents as shall be required
under Section 5.6 and Article 6 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
BANC ONE KENTUCKY AND BANC ONE
BANC ONE KENTUCKY and BANC ONE represent and warrant to MATEWAN as follows,
except as may be set forth in Previously Disclosed:
3.1 Organization. Standing and Authority of BANC ONE KENTUCKY. BANC ONE
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KENTUCKY is a duly organized corporation, validly existing and in good
standing under the laws of the Commonwealth of Kentucky with full
corporate power and authority to
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carry on its business as now conducted. BANC ONE KENTUCKY is registered as
a bank holding company under the Bank Holding Company Act.
3.2 Organization. Standing and Authority of the Bank. Bank is a duly organized
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national banking association, validly existing and in good standing under
the laws of the United States. The Bank (i) has full power and authority
to carry on its business as now conducted and (ii) is duly qualified to
do business in the states of the United States and foreign jurisdictions
where its ownership or leasing of property or the conduct of its business
requires such qualification and where failure to so qualify would have a
material adverse affect on the financial condition or results of
operations of the Bank.
3.3 Authorized and Effective Agreement.
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(a) BANC ONE KENTUCKY has all requisite corporate power and authority to
enter into and perform all of its obligations under this Agreement.
The execution and delivery of this Agreement and consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of
BANC ONE KENTUCKY. This Agreement constitutes a legal, valid and
binding obligation of BANC ONE KENTUCKY, enforceable against BANC ONE
KENTUCKY in accordance with its terms subject, as to enforceability,
to bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors rights and to general equity
principles.
(b) Neither the execution and delivery of this Agreement nor consummation
of the transactions contemplated hereby nor compliance by BANC ONE
KENTUCKY with any of the provisions hereof shall (i) conflict with or
result in a breach of any provision of the certificate of
incorporation, articles of association or similar charter document or
by-laws of BANC ONE KENTUCKY or the Bank, (ii) constitute or result in
a breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation
or acceleration with respect to, or result in the creation of any
lien, charge or encumbrance upon any
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property or asset of BANC ONE KENTUCKY or the Bank pursuant to, any
note, bond, mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to BANC ONE
KENTUCKY or the Bank, excluding from the foregoing clauses (ii) and
(iii) violations, breaches and defaults which, either individually or
in the aggregate, would not have a material adverse effect on the
Bank.
3.4 Capital Structure of the Bank.
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(a) The authorized capital stock of the Bank at June 30, 1995 consisted of
500,000 shares of common stock, par value $10 per share. At June 30,
1995 and as of the date hereof, 225,000 shares of the Bank's common
stock are validly issued, fully paid and, subject to 12 U.S.C. (S) 55,
nonassessable. No other class of capital stock of the Bank is
authorized, issued, or outstanding.
(b) Except as Previously Disclosed, all of the shares of Stock are owned
by BANC ONE KENTUCKY free and clear of all liens, claims and
encumbrances. No Rights are authorized, issued or outstanding with
respect to the capital stock of the Bank and there are no agreements,
understandings or commitments relating to the right of BANC ONE
KENTUCKY to vote or to dispose of said shares. No share of capital
stock of the Bank has been issued in violation of the preemptive
rights of any person.
3.5 Subsidiaries. The Bank does not own, directly or indirectly, any capital
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stock or other voting securities of any corporation, bank or other
organization.
3.6 Call Reports. The Call Reports for the Bank comply in all material respects
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with the rules, regulations and instructions applicable to the preparation
thereof and accurately refect the financial position and results of
operations as of the dates and for the periods applicable thereto in
accordance with OCC guidelines.
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3.7 Material Adverse Change. Except as Previously Disclosed, the Bank has not
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suffered any material adverse change in its financial condition or results
of operations since June 30, 1995.
3.8 Allowance for Loan Losses. Except as Previously Disclosed, the allowance
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for loan losses reflected in the quarterly loan loss reserve report of the
Bank as of August 31, l995, a copy of which has been Previously Disclosed,
has been recorded on the books of account of the Bank and is adequate in
all material respects as of such date under the requirements of generally
accepted accounting principles and standard banking practices to provide
for reasonably anticipated losses on outstanding loans net of recoveries.
3.9 Legal Proceedings. Except as Previously Disclosed, there are no actions,
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suits or proceedings instituted, pending or, to the best knowledge of BANC
ONE KENTUCKY, threatened against BANC ONE KENTUCKY or the Bank or against
any asset, interest or right of the Bank that is reasonably expected to
have a material adverse effect on the financial condition or results of the
operations of the Bank. To the knowledge of BANC ONE KENTUCKY, there are no
actual or threatened actions, suits or proceedings which present a claim to
restrain or prohibit the transactions contemplated herein.
3.10 Compliance with Laws.
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(a) The Bank is in compliance in all material respects with all statutes
and regulations applicable to the conduct of its business, the
violation of which, either individually or in the aggregate, would
have a material adverse effect on its financial condition or results
of its operations, and neither BANC ONE KENTUCKY nor the Bank has
received notification from any agency or department of federal, state
or local government (i) asserting a violation of any such statute or
regulation by the Bank, (ii) threatening to revoke any license,
franchise, permit or government authorization previously granted to
the Bank or (iii) restricting or in any way limiting the operations of
the Bank. Except as Previously Disclosed, neither BANC ONE KENTUCKY
nor the Bank has received written notification of, nor, to the
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knowledge of BANC ONE KENTUCKY or the Bank, do there exist, any
violations of applicable federal, state or local health, environmental
or safety laws, rules, regulations or orders with regard to the
operation of any real estate owned or leased by the Bank, whether
utilized as banking offices or otherwise, which violations, either
individually or in the aggregate, would have a material adverse effect
on the financial condition or results of operations of the Bank.
(b) To the best of the knowledge, without investigation, of BANC ONE
KENTUCKY and the Bank, all real estate owned or leased by the Bank,
whether utilized as banking offices or otherwise, is not contaminated
with any Hazardous Substances or other pollutants as of the date of
this Agreement, and no Hazardous Substances or other pollutants have
been transported from any such real estate or other locations.
(c) To BANC ONE and BANC ONE KENTUCKY's knowledge, there are no pending or
threatened claims, actions, investigations, notices of non-compliance,
information requests or notices of potential responsibility or
proceedings involving the Bank relating to and there is no reasonable
basis for the assertion of any claims, actions, investigations,
notices or proceedings with respect to:
(1) an asserted liability of the Bank or any of its subsidiaries or
any prior owner, occupier or user of real estate under any
environmental law or the terms and conditions of any permit,
license, authority, settlement, agreement, decree or other
obligation arising under any environmental law;
(2) the handling, storage, use, transportation, removal or disposal
of Hazardous Substances;
(3) the actual or threatened discharge, release or emission of
Hazardous Substances from, on or under or within any such
property into the air, water, surface water, ground water, land
surface or subsurface strata; or
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(4) personal injuries or damage to property related to or arising
out of exposure to Hazardous Substances.
3.11 Brokers and Finders. None of BANC ONE, BANC ONE KENTUCKY, the Bank, nor any
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of their respective officers, directors, employees or agents has employed
any broker, finder or financial advisor or incurred any liability for any
fees or commissions in connection with the transactions contemplated
hereby.
3.12 Taxes.
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(a) Except as Previously Disclosed, the Bank has timely filed all federal,
state and local (and, if applicable, foreign) tax returns required by
applicable law to be filed by it (including without limitation,
estimated tax returns, income tax returns, information returns and
withholding and employment tax returns) and have paid, or where
payment is not required to have been made, in accordance with
generally accepted accounting principles, have set up an adequate
reserve or accrual for the payment of, all taxes and penalties, if
any, required to be paid in respect of the periods covered by such
returns.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by the Bank are complete and accurate in all material respects.
Except as Previously Disclosed, the Bank is not delinquent in the
payment of any tax, assessment or governmental charge, and has not
requested any extension of time within which to file any tax returns
in respect of any fiscal year or portion thereof which have not since
been filed. No deficiencies for any tax, assessment or governmental
charge have been proposed, asserted or assessed (tentatively or
otherwise) against the Bank which have not been settled and paid.
Except as Previously Disclosed, there are currently no agreements in
effect to extend the period of limitations for the assessment or
collection of any tax.
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3.13 Properties. The Bank has good and marketable title free and clear of all
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liens, encumbrances, charges, defaults or equities to all of the properties
and assets, real and personal, reflected on the statement of condition
included in its Call Report as of June 30, 1995 or acquired after such
date, except (i) liens for current taxes not yet due and payable or being
contested in good faith, (ii) pledges to secure deposits and other liens
incurred in the ordinary course of banking business, (iii) such
imperfections of title, easements and encumbrances, if any, as are not
material in character, amount or extent and (iv) dispositions and
encumbrances for adequate consideration in the ordinary course of business.
All material leases pursuant to which the Bank, as lessee, leases real or
personal property, are valid and enforceable in accordance with their
respective terms, subject, as to enforceability, to bankruptcy, insolvency
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
3.14 Certain Contracts.
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(a) Except as Previously Disclosed, the Bank is not a party to, bound or
affected by, and does not receive benefit under (i) any material
agreement, arrangement or commitment not made in the ordinary course
of business, (ii) any agreement, indenture or other instrument
relating to the borrowing of money by it or the guarantee by it of any
such obligation (other than instruments relating to transactions
entered into in the customary course of its banking business), (iii)
any agreement, arrangement or commitment relating to the employment of
a consultant or the employment, election or retention in office of any
present or former director or officer, or (iv) any contract, agreement
or understanding with a labor union.
(b) The Bank is not in default under any material order, writ, judgment,
decree, agreement, commitment, arrangement, lease, insurance policy,
or other instrument whether entered into in the ordinary course of
business or otherwise and whether written or oral, and there has not
occurred any event that, with the lapse of time or giving of notice or
both, would constitute such a default.
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(c) From June 30, 1995 to the date hereof, the Bank has not taken any
action that, if taken after the date hereof, would breach any of the
covenants contained in Section 5.5 hereof.
3.15 Employee Benefit Plans.
----------------------
(a) Each of the Employee Benefit Plans has been administered in all
material respects in compliance with the applicable requirements of
ERISA, the Code, other federal statute, applicable federal
regulations, applicable state law (including without limitation state
insurance law) and in accordance with its terms. Each of the Employee
Benefit Plans may be terminated as to Bank Employees or amended to
exclude Bank Employees from future participation under such Employee
Benefit Plans by either Bank or BANC ONE. All reports required by any
governmental agency with respect to each such Employee Benefit Plan
has been timely and properly filed and to the extent required,
furnished to the participants in such plan. Except as Previously
Disclosed, no lawsuits or written complaints have been filed with
respect to any Employee Benefit Plan in connection with any Bank
Employee or any participant in such plan who participates as a result
of their relationship with a Bank Employee. None of BANC ONE KENTUCKY,
BANC ONE or Bank has engaged in a transaction that would subject the
Bank to any tax, penalty or liability for prohibited transactions
imposed by ERISA or by (S) 4975 of the Code. Except as contemplated by
this Agreement, neither BANC ONE KENTUCKY, BANC ONE nor the Bank has
filed with the PBGC or furnished to any participant, a notice of
intent to amend or terminate an Employee Benefit Plan. Neither Bank,
BANC ONE KENTUCKY or BANC ONE nor any fiduciary of any Employee
Welfare Benefit Plan or any Employee Pension Benefit Plan has engaged
in any transaction in violation of (S) 406(a) or (S) 406(b) of ERISA
(for which no exemption exists under (S) 408 of ERISA).
(b) There has not been any (i) termination of any "defined benefit plan"
within the meaning of ERISA maintained by either Bank or any person,
firm or corporation
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("affiliate") which is under "common control" (within the meaning of
(S) 400(b) of ERISA) with Bank or (ii) commencement of any proceeding
to terminate any such plan pursuant to ERISA, or otherwise, or (iii)
written notice given to Bank or any affiliate of the intention to
commence or seek the commencement of any such proceeding.
(c) Neither Bank nor any member of a controlled group of corporations or
other entity of which Bank is a member (determined in accordance with
(S) 414 of the Code) is or was at any time obligated to contribute to
or is or was otherwise a party or subject to any Employee Welfare
Benefit Plan or Employee Pension Benefit Plan that is or was a
multiemployer plan within the meaning of (S) 3(37) of ERISA.
(d) With the exception of Employee Pension Benefit Plans, none of the
benefits provided under any of the Employee Benefit Plans are vested.
3.16 Insurance. The Bank currently maintains insurance in amounts which are
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reasonable and customary for the operations of the Bank as a subsidiary of
BANC ONE and, to the best knowledge of BANC ONE KENTUCKY, to be similar in
scope and coverage to that maintained by other banks similarly situated.
The Bank has no liability for unpaid premiums or premium adjustments not
properly reflected on the Call Reports. Except as Previously Disclosed,
upon consummation of the Acquisition, the Bank will be deleted from the
BANC ONE or BANC ONE KENTUCKY insurance policies currently covering the
Bank.
3.17 Certain Loans. Except as Previously Disclosed in a Loan Schedule, (i) as of
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August 31, 1995, the Bank is not a party as lender to any written or oral
loan agreement, note or borrowing arrangement, other than loans the unpaid
balance of which does not exceed $250,000 per loan (each such loan not so
excepted being referred to herein as a "Loan"), under the terms of which
the obligor is sixty (60) days delinquent in payment of principal or
interest or, to the best of BANC ONE KENTUCKY's knowledge, in default of
any other material provision as of the dates shown on the Loan Schedule;
(ii) as of August 31,
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1995, no Loan has been classified as "substandard", "doubtful", "loss",
"other loans especially mentioned" or any comparable classification by BANC
ONE, BANC ONE KENTUCKY, the Bank or a banking regulator; and (iii) as of
September 22, 1995, the Bank is not a party to any Loan, including any loan
guaranty, with any director, executive officer or 10% shareholder of BANC
ONE, BANC ONE KENTUCKY or any person, corporation or enterprise
controlling, controlled by or under common control with any of the
foregoing.
3.18 Copy of all Contracts, Leases, etc. BANC ONE KENTUCKY has furnished to
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MATEWAN complete copies of all material contracts, leases and other
agreements to which the Bank is a party or by which it is bound and all
employment, pension, retirement, stock option, employee stock option,
profit sharing, deferred compensation, consultant, bonus, group insurance
or similar plans with respect to any of the directors, officers or other
employees of the Bank.
3.19 Undisclosed Liabilities. Except as Previously Disclosed, the Bank has no
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material liabilities other than those liabilities disclosed on or provided
for in its Call Report as of June 30, 1995, and liabilities incurred since
such date in the ordinary course of business consistent with past
practices.
3.20 Absence of Regulatory Actions. The Bank is not a party to any cease and
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desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or subject to
any order or directed by, or as a recipient of any extraordinary
supervisory letter from, federal governmental authorities charged with the
supervision or regulation of the operations of it, nor has the Bank been
advised by any such governmental authority that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
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3.21 Derivatives Contracts; Structured Notes, etc. Except as Previously
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Disclosed, as of the Closing, neither the Bank nor any subsidiary will be a
party to or have agreed to enter into an exchange-traded or over-the-
counter equity, interest rate foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that is a
derivative contract (including various combinations thereof) (each a
"Derivative Contract") or will own securities that (i) are referred to
generically as "structured notes," "high risk mortgage derivatives,"
"capped floating rate notes," or "capped floating rate mortgage
derivatives," or (ii) are likely to have changes in value as of the result
of interest or exchange rate changes that significantly exceed normal
exchanges in value attributable to interest or exchange rate changes,
except for those Derivative Contracts and other instruments legally
purchased or entered into in the ordinary course of business, consistent
with safe and sound banking practices and regulatory guidance, and
specifically approved by MATEWAN prior to closing.
3.22 Accounting Controls. The Bank has devised and maintained systems of
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internal accounting controls sufficient to provide reasonable assurances
that (i) all material transactions are executed in accordance with Bank
management's general or specific authorization; (ii) all material
transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting
principles, consistently applied with respect to banking organizations or
any other criteria applicable to such statements; (iii) access to the
material properties and assets of Bank is permitted only in accordance with
Bank management's general or specific authorization; and (iv) all material
asset and liability accounts on the general ledger of the Bank are
reconciled to the respective detail ledger(s) at reasonable intervals and
appropriate action is taken with respect to any differences.
3.23 Absence of Certain Changes. Since June 30, 1995:
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(a) There has not been any damage, destruction or loss by reason of fire,
flood, accident or other casualty (whether insured or not insured)
materially and adversely affecting the assets, financial condition or
operations of the Bank;
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(b) Except as Previously Disclosed and except in the ordinary course of
business, the Bank has not disposed of, or agreed to dispose of, any
of its material property or assets, nor has it leased to others, or
agreed to so lease, any of such material properties or assets;
(c) There has not been any change in the authorized, issued or outstanding
capital stock of the Bank;
(d) Except as Previously Disclosed, no material change has occurred in the
personnel who are responsible for management of key operations of the
Bank, nor has there been any increase in the compensation or fees
payable by the Bank to its directors or officers other than increases
in the ordinary course of business in accordance with the personnel
policies of BANC ONE, or any material increase in any bonus,
insurance, pension or other employee benefit plan, payment or
arrangement for or with any of such directors or officers;
(e) The Bank has not made any material loan or advance other than in the
ordinary course of business;
(f) The Bank has not made any expenditure or major commitment for the
purchase, acquisition, construction or improvement of any material
asset or assets which in the aggregate would be material;
(g) The Bank has not entered into any other material transaction, contract
or lease or incurred any other material obligation or liability; and
(h) Except as Previously Disclosed, the Bank has not incurred any unusual
or extraordinary loan losses.
3.24 Consents. Except for approvals by governmental banking authorities, no
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consent of any third party is necessary or required for the transactions
contemplated by this Agreement.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF MATEWAN
MATEWAN represents and warrants to BANC ONE and BANC ONE KENTUCKY as follows:
4.1 Organization, Standing and Authority of MATEWAN. MATEWAN is a duly
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organized corporation, validly existing and in good standing under the laws
of the State of Delaware with full corporate power and authority to carry
on its business as now conducted and is duly qualified to do business in
the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires
such qualification. MATEWAN is registered as a bank holding company under
the Bank Holding Company Act.
4.2 Authorized and Effective Agreement.
----------------------------------
(a) MATEWAN has all requisite corporate power and authority to enter into
and perform its obligations under this Agreement. The execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of MATEWAN.
This Agreement constitutes the legal, valid and binding obligation of
MATEWAN enforceable against MATEWAN in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(b) Prior to the Closing Date, MATEWAN shall take all appropriate action
so that MATEWAN shall have all requisite corporate power and authority
to (i) issue additional shares of MATEWAN's capital stock and shall be
eligible to issue such capital stock either pursuant to a registration
statement to be filed by MATEWAN with the Securities and Exchange
Commission pursuant to the Securities Act or in a manner which shall
be exempt from registration pursuant to applicable provisions
-18-
of the Securities Act and (ii) obtain other sources of financing to
complete the transaction as contemplated herein. The issuance by
MATEWAN of additional shares of MATEWAN's capital stock shall be duly
and validly authorized by all necessary corporate action in respect
thereof on the part of MATEWAN. Any such issuance shall be manifested
in a stock offering pursuant to which MATEWAN contemplates receiving
consideration for such shares which, in combination with funds which
MATEWAN shall borrow and other available resources, shall enable
MATEWAN to pay the Purchase Price to BANC ONE KENTUCKY.
(c) Neither the execution and delivery of this Agreement nor consummation
of the transactions contemplated hereby, nor compliance by MATEWAN
with any of the provisions hereof shall (i) conflict with or result in
a breach of any provision of the articles of incorporation or by-laws
of MATEWAN, (ii) constitute or result in a breach of any term,
condition or provision of, or constitute a default under, or give rise
to any right of termination, cancellation or acceleration with respect
to, or result in the creation of any lien, charge or encumbrance upon
any property or asset of MATEWAN pursuant to any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation, or
(iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to MATEWAN.
4.3 Capital Structure of MATEWAN. The authorized capital stock of MATEWAN
----------------------------
consists of (i) 10,000,000 shares of MATEWAN Common Stock, of which
3,684,104 shares were issued and outstanding as of June 30, 1995 and (ii)
1,000,000 shares of MATEWAN preferred stock, with par value of $1.00 per
share, of which no shares were issued and outstanding as of June 30, 1995.
4.4 SEC Documents. MATEWAN has filed all SEC Documents, if any, required to be
-------------
filed by MATEWAN by the Securities Laws, with respect to MATEWAN, and such
SEC Documents complied in all material respects with the Securities Laws.
Without limiting the generality of the preceding sentence, the
representation and warranty contained in this
-19-
Section 4.4 shall, with respect to the provisions set forth in Section 6.3
of this Agreement, apply to MATEWAN's registration statements, if any, and
to the SEC Documents incorporated by reference therein filed in connection
with the offering of additional shares of MATEWAN capital stock.
4.5 Financial Statements. The financial statements of MATEWAN included in its
--------------------
SEC Documents, if any, or as set forth in annual and quarterly reports
filed by MATEWAN with the Federal Reserve Board and/or provided to its
shareholders, fairly present or will fairly present, as the case may be,
the consolidated financial position or cash flows for the periods then
ended in conformity with generally accepted accounting principles
applicable to financial institutions applied on a consistent basis.
4.6 Material Adverse Change. MATEWAN has not, on a consolidated basis, suffered
-----------------------
any material adverse change in its financial condition or results of
operations since June 30, 1995.
4.7 Legal Proceedings. There are no actions, suits or proceedings instituted,
-----------------
pending or, to the best knowledge of MATEWAN threatened against MATEWAN, or
Matewan National Bank, its subsidiaries, or against any asset, interest or
right of either of them that is reasonably expected to have a material
adverse effect on the financial condition or results of operations of
MATEWAN on a consolidated basis. To the knowledge of MATEWAN, there are no
actual or threatened actions, suits or proceedings which present a claim to
restrain or prohibit the transactions contemplated herein.
4.8 Brokers and Finders. Neither MATEWAN nor any of its officers, directors or
--------------------
employees has employed any broker, finder or financial advisor or incurred
any liability for any fees or commissions in connection with the
transactions contemplated herein except for fees payable to Wheat First
Securities, Inc.
-20-
ARTICLE 5
COVENANTS
5.1 Applications and Stock Offering.
-------------------------------
(a) As promptly as practicable after the date hereof, but in no event
later than forty-five (45) days from the date hereof, MATEWAN shall
submit an appropriate application for prior approval of the
transaction contemplated herein pursuant to the Bank Holding Company
Act to the Federal Reserve Board and, if applicable, shall submit an
appropriate application to the Commissioner and if applicable, with
the West Virginia Board of Banking and Financial Institutions.
MATEWAN, BANC ONE and BANC ONE KENTUCKY represent and warrant to the
others that all information concerning it and its directors, officers
and shareholders included (or submitted for inclusion) in any such
applications shall be true, correct and complete in all material
respects.
(b) As promptly as practicable after the date hereof, MATEWAN shall make
every reasonable, good faith effort to obtain, not later than the day
before the Closing Date, the funds necessary to pay the Purchase
Price, from, in MATEWAN's discretion, a combination of the public or
private sale of capital stock and the borrowing of funds. Such efforts
will include, but shall not be limited to, the sale of capital stock
and/or the borrowing of funds on terms which, as of the times thereof,
are commercially reasonable to MATEWAN, in its good faith reasonable
judgment, under the circumstances, recognizing, for such purposes, the
usual and prevailing terms on similar equity issuances and borrowings
applicable, at such times, to entities similar to MATEWAN.
5.2 Best Efforts. BANC ONE KENTUCKY and MATEWAN shall each use its reasonable
------------
best efforts in good faith to (i) furnish such information as may be
required in connection with the preparation of the documents referred to in
Section 5.1 above, and (ii) take or cause to be taken all action necessary
or desirable on its part so as to permit consummation of the Acquisition by
March 31, 1996, or as soon thereafter as possible, (including without
limitation using its best reasonable efforts to obtain, without incurring
-21-
any additional obligation or expense and without the payment of
consideration other than governmental filing or application fees, all
permits, authorizations, consents, waivers and approvals from third parties
or governmental authorities required for the consummation of the
transactions contemplated hereby). Neither BANC ONE KENTUCKY nor MATEWAN
shall take, or cause or to the best of its ability permit to be taken, any
action that would substantially impair the prospects of completing the
Acquisition pursuant to this Agreement.
5.3 Investigation and Confidentiality. BANC ONE, BANC ONE KENTUCKY and MATEWAN
---------------------------------
each will keep the others advised of all material developments relevant to
consummation of the Acquisition, and each may make or cause to be made such
investigation of the financial and legal condition of the other as such
party reasonably deems necessary or advisable in connection with the
transactions contemplated herein; provided, however, that such
investigation shall be reasonably related to such transactions and shall
not interfere unnecessarily with normal operations. BANC ONE, BANC ONE
KENTUCKY and MATEWAN agree to furnish the other and the other's advisors
with such financial data and other information with respect to its business
and properties as such other party shall from time to time reasonably
request related to the transactions contemplated by this Agreement. No
investigation pursuant to this Section 5.3 shall affect or be deemed to
modify any representation or warranty made by, or the conditions to the
obligations to consummate the Acquisition of, any party hereto. Each party
hereto shall, and shall cause its directors, officers, attorneys and
advisors to, maintain the confidentiality of all information obtained in
such investigation which is not otherwise publicly disclosed by the other
parties, said undertaking with respect to confidentiality to survive any
termination of this Agreement pursuant to Section 7.1 hereof. No party
hereto will use any information obtained pursuant to this Section 5.3 for
any purpose unrelated to the consummation of the transactions contemplated
by this Agreement.
5.4 Press Release. MATEWAN, BANC ONE KENTUCKY and BANC ONE shall agree as to
-------------
the form and substance of any press release related to this Agreement or
the transactions contemplated hereby, and consult with each other as to the
form and
-22-
substance of other public disclosures related thereto, provided, however,
that nothing contained herein shall prohibit either party from making any
disclosure which its counsel deems necessary.
5.5 Forbearance. Except with the prior written consent of MATEWAN or unless
-----------
otherwise permitted by this Agreement, between the date hereof and the
Closing Date BANC ONE KENTUCKY shall cause the Bank not to:
(a) carry on its business other than in the usual, regular and ordinary
course in substantially the same manner as hereinbefore conducted;
(b) declare, set aside, make or pay any dividend or other distribution in
respect of its capital stock, except for cash dividends which may not
exceed, on a quarterly basis, prorated in the quarter in which the
Closing shall occur, the lesser of (i) $325,000 and (ii) the amount of
allowable dividend which may be declared and paid by the Bank pursuant
to federal banking law and regulation without the consent of the OCC;
provided further, however, that the total dividends which may be
declared and paid by the Bank from the date of this Agreement to the
Closing date shall include any sums not declared or paid in a given
quarter as a result of a restriction or prohibition related to federal
banking law and regulation to the extent that any amounts not so paid
may lawfully be paid in a subsequent quarter or subsequent quarters
consistent with applicable law;
(c) issue, sell or deliver, or redeem, purchase or otherwise acquire, any
shares of their capital stock; or impose, or suffer the imposition, on
any share of Stock of any lien, charge, or encumbrance, or permit any
such lien to exist;
(d) issue, grant or authorize any Rights or effect any recapitalization,
reclassification, stock dividend, stock split or like change in
capitalization;
(e) amend its articles of association or by-laws;
-23-
(f) merge or consolidate with any other corporation or bank; acquire
control over any other firm, bank, corporation or organization or
create any subsidiary; liquidate, sell or otherwise dispose of any
assets or acquire any assets, other than in the ordinary course of its
business consistent with past practice (except that this exception
shall not permit any capital expenditure in excess of $25,000 in any
instance) and other than pursuant to arrangements Previously
Disclosed; or establish new branches or other similar facilities;
(g) fail to comply in any material respect with any laws, regulations,
ordinances, or governmental actions applicable to it and to the
conduct of its business;
(h) increase the rate of compensation of, pay or agree to pay any bonus
to, or provide any other employee benefit or incentive to, any of its
directors, officers or employees, except in the ordinary course of
business and consistent with past practices;
(i) enter into any employment contracts with any of its present or former
directors, officers or employees;
(j) enter into, substantially modify, create or sponsor (except as may be
required by applicable law or in connection with modifications
generally applicable to employees of BANC ONE and its subsidiaries)
any retirement, stock option, stock purchase, stock appreciation
right, savings, profit sharing, deferred compensation, consulting,
bonus, group insurance or other employee benefit, incentive or welfare
contract, plan or arrangement, or any trust agreement related thereto,
in respect of any of its directors, officers or other employees;
(k) solicit or encourage inquiries or proposals with respect to any
acquisition or purchase of all or a substantial portion of the assets
of, or a substantial equity interest in, the Bank or any business
combination with it other than as contemplated
-24-
by this Agreement; or authorize or permit any officer, director, agent
or affiliate of the Bank to do any of the above;
(l) change its lending, investment, liability management or other material
banking policies in any material respect;
(m) change its methods of accounting in effect at December 31, 1994,
except as required by changes in generally accepted accounting
principles concurred with by Coopers & Xxxxxxx and Xxxxx & Xxxxx, LLP,
or change any of its methods of reporting income and deductions for
federal income tax purposes from those employed in the preparation of
its federal income tax returns for the year ended December 31, 1994,
except as required by changes in law;
(n) pay any overhead allocation or management services fee to BANC ONE
KENTUCKY or BANC ONE (i) for each of the last four months of 1995 in
excess of $70,833 per month and (ii) for each month of 1996 an amount
per month in excess of the lessor of (x) that amount allocated by BANC
ONE and BANC ONE KENTUCKY consistent with past practices and (y)
$74,374 (with any such amount to be prorated for a partial month in
which the closing occurs, as appropriate);
(o) hire any permanent or part time employees, except in the ordinary
course of business and consistent with past practices;
(p) take any action materially and adversely affecting the transactions
contemplated hereby or this Agreement or the financial condition,
businesses, properties or results of operations of the Bank;
(q) take any other material action not in the ordinary course of business;
or
(r) agree to do any of the foregoing.
-25-
5.6 Employment and Employee Benefits After the Closing
--------------------------------------------------
(a) From and after the Closing Date, Bank Employees shall cease to be
active participants in, beneficiaries under, or entitled to any
benefits not earned as of the Closing Date from any Employee Benefit
Plan of Bank, BANC ONE KENTUCKY or BANC ONE in existence prior to the
Closing Date. Bank, BANC ONE KENTUCKY or BANC ONE shall by appropriate
corporate resolution coincident with the Closing Date cause each such
Employee Benefit Plan to be amended to this effect. BANC ONE KENTUCKY
and BANC ONE shall cause each Bank Employee to be deemed to be fully
vested with respect to all retirement and savings plan benefits
accrued as of the Closing Date under each such Employee Benefit Plan
which is an Employee Pension Benefit Plan and to cause such benefits
to be paid when due in accordance with the terms of the applicable
Employee Pension Benefit Plan and as if such employee had terminated
employment as of the Closing Date.
(b) From and after the Closing, MATEWAN shall (i) cause Bank to continue
to employ Bank Employees at their current rate of cash compensation;
(ii) cause Bank to provide to Bank Employees retirement, savings, life
and disability insurance, health, welfare, vacation and other fringe
benefits of the type and in the amounts provided to other similarly
situated employees of MATEWAN; and (iii) credit, for purposes of
vesting, eligibility and computation of non-pension benefits under the
types of benefit plans described in (ii) above afforded to MATEWAN's
employees, any service that had been credited under benefit plans
provided to Bank Employees as of the Closing Date. It is specifically
understood, notwithstanding any provision hereof to the contrary, that
Bank Employees shall not be entitled to any past service for benefit
accrual purposes under any Employee Pension Benefit Plan of MATEWAN.
It is further specifically understood that, notwithstanding any
provision hereof to the contrary, Bank Employees shall be employees at
will and that after Closing, Bank or MATEWAN may alter, amend, or
terminate any of their
-26-
benefit programs covering Bank Employees regardless of whether similar
changes are made to the benefit programs covering other employees of
MATEWAN.
(c) BANC ONE and/or BANC ONE KENTUCKY (and not Bank or MATEWAN) or plans
sponsored by them shall be responsible for any benefits promised under
any Employee Benefit Plan of any Former Bank Employee or any
individual claiming a benefit through any Former Bank Employee.
(d) BANC ONE and/or BANC ONE KENTUCKY or the Employee Benefit Plans (but
not Bank or MATEWAN) shall be responsible for all benefits due a Bank
Employee or an individual claiming a benefit through a Bank Employee
and which claim arose or benefit accrued prior to the Closing Date and
neither Bank nor MATEWAN shall be required to make any contributions
to any Employee Benefit Plans after the Closing Date. By way of
example, the applicable Employee Benefit Plan (or BANC ONE and BANC
ONE KENTUCKY) shall be liable for all covered medical expenses
incurred by a participant or beneficiary prior to closing, all
disability payments resulting from a disability which commenced prior
to Closing, life insurance payments due to a death prior to Closing
and all pension or retirement benefits accrued prior to Closing.
(e) Subject to and in accordance with Section 7.3(d) (but not otherwise
subject to the provisions of Section 7.3), BANC ONE KENTUCKY and BANC
ONE shall indemnify Buyer Indemnified Parties against any damages,
costs, benefits or other amounts that any Buyer Indemnified Party may
incur in connection with Bank Employee or Former Bank Employee and
which arises as a result of such employee's employment prior to the
Closing Date and their participation in an Employee Benefit Plan or
otherwise regardless of whether such claim is asserted by such Former
Bank Employee, their dependent, an Employee Benefit Plan or someone on
behalf of an Employee Benefit Plan.
-27-
5.7 Certain Transition Matters.
---------------------------
(a) From the date of this Agreement until the Closing Date, BANC ONE
KENTUCKY shall give or cause the Bank to give MATEWAN timely notice of
all meetings of the Board of Directors and all major committees
(including, without limitation, executive, loan, personnel, and audit
committees) of the Bank; provided, however, that if in attendance,
such MATEWAN representative shall excuse himself or herself when
matters relating to MATEWAN or its subsidiaries are entertained or
discussed. Prior to the Closing Date, BANC ONE KENTUCKY will promptly
advise MATEWAN in writing of all actions taken by the directors of the
Bank and will cause the Bank to furnish MATEWAN with copies of all
financial information of the Bank as it becomes available and advise
MATEWAN of all material developments concerning the business of the
Bank.
(b) On or before the Closing Date, the Bank shall pay to BANC ONE, BANC
ONE KENTUCKY and their affiliates the amounts reserved or accrued for
tax liabilities as contemplated by Section 3.12(a), that are
attributable to the Bank for periods ended on or before the Closing
Date and that remain unpaid by the Bank as of the Closing Date.
(c) After the execution of this Agreement and prior to the Closing Date,
BANC ONE and BANC ONE KENTUCKY will cause the Bank to cooperate, in a
manner that is not unduly burdensome to the Bank's continuing
operations, with MATEWAN to prepare for the conversion of the Bank's
banking products and services to reflect the terms, conditions,
pricing, and other attributes of banking products and services to be
offered by the Bank following the Acquisition. MATEWAN will be
responsible for all costs and expenses of such conversion.
(d) For a period of not less than seven years following the Closing Date,
MATEWAN will cause the Bank to retain their books, accounts, records
and files (including personnel files and employee health records) for
periods ended on or prior to the
-28-
Closing Date in accordance with MATEWAN's records retention policy in
effect on the date hereof, and will make available to BANC ONE or its
counsel and other representatives, at BANC ONE's expense, during
normal business hours (i) such books, accounts, records and files
(which may be copied by BANC ONE or its representatives) and (ii) the
officers and employees of the Bank (and any successors thereto).
(e) BANC ONE shall cause the name of the Bank to be changed effective upon
the Closing Date to a lawful name designated by MATEWAN that is not
confusingly similar to any name utilized by BANC ONE or BANC ONE
KENTUCKY or any of their affiliates. MATEWAN shall bear and pay the
costs of changing the name of the Bank on signage, stationery,
customer checks, and any and all other materials bearing the current
name of the Bank. From and after the Closing Date, the Bank shall not
have any right, title or interest in or to its present name or any
trademarks or service marks related to the names BANC ONE or Bank One.
Following the Closing, MATEWAN shall cause the Bank to take any action
reasonably requested by BANC ONE to implement the provisions of this
Section 5.7.
(f) Following the execution of this Agreement, BANC ONE KENTUCKY shall not
less frequently than monthly until the Closing Date review all
individual extensions of credit of $100,000 or more which have been
approved or closed by the Bank in the preceding month or applicable
shorter period to ensure that all such loans have been or will be made
pursuant to and consistent with BANC ONE policies and standards.
Following such reviews, and from time to time at MATEWAN's reasonable
request, BANC ONE KENTUCKY shall advise MATEWAN of matters related to
such new credits and to matters generally related to Bank's extensions
of credit.
(g) Prior to the Closing Date, BANC ONE and BANC ONE KENTUCKY shall cause
the derivatives portfolio of the Bank to be transferred to another
affiliate or other affiliates of BANC ONE or to be eliminated without
any cost, liability or expense
-29-
to the Bank, unless such cost, liability or expense is fully
recognized upon the financial statements of the Bank prior to the
Closing Date and MATEWAN is advised in writing of the amount of such
cost, liability or expense and consents to such elimination in its
discretion. BANC ONE shall reimburse Bank for expenses and/or losses
related to the instruments included in the derivatives portfolio from
the date of this Agreement to the earlier of (i) the date the
derivatives portfolio is removed in its entirety from the Bank and
(ii) the Closing Date.
(h) On or prior to the Closing Date BANC ONE and BANC ONE KENTUCKY shall
cause the Bank to transfer and pay over to BANC ONE all reserves
and/or accruals set up or established by the Bank for the payment of
all federal taxes for all periods prior to and through the Closing
Date (other than taxes arising from or attributable to any election
relating to the transactions contemplated hereby under Code Section
338 or under any similar or parallel provision of any applicable
state, local or other law). BANC ONE shall assume all responsibility
and obligation for federal taxes due and owing by the Bank for all
periods prior to and including the Closing Date and following the
Closing neither MATEWAN nor the Bank will have liability for any
federal taxes or penalties for periods on or prior to the Closing
Date.
(i) On or prior to the Closing Date, BANC ONE will pay to Bank a sum equal
to the balance (currently approximately $335,000) of the Bank's
prepaid pension account, general ledger account number 265168, as set
forth on the Books of the Bank at the time of such payment.
5.8 Asset Purchase Treatment; Transfer Taxes.
----------------------------------------
(a) MATEWAN and BANC ONE agree that, for federal income tax purposes, the
purchase and sale of the Stock pursuant to the Agreement shall be
treated as a purchase and sale of the assets of the Bank in accordance
with the provisions of Code Section 338. MATEWAN, at its expense,
shall retain the services of an
-30-
independent appraiser to make a determination of the fair market
values, as of the Closing Date, of all of the customer based and
similar intangible assets of the Bank and such other assets of the
Bank as MATEWAN may reasonably request. MATEWAN shall provide BANC ONE
with a copy of such appraisal promptly after receipt thereof and shall
be responsible for making the determination of the allocation of the
Purchase Price.
(b) MATEWAN and BANC ONE agree that, for state income tax purposes, the
purchase and sale of the Stock shall be treated as a purchase and sale
of the assets of the Bank to the greatest extent permitted by
applicable law. MATEWAN and BANC ONE agree to make timely all
elections necessary to carry out the provisions of this Section 5.8(b)
and to report the purchase and sale of the Stock consistent with the
preceding sentence and in accordance with the provisions of this
Agreement. In any state(s) where it is unclear whether applicable law
permits the purchase and sale of the Stock to be treated as a purchase
and sale of assets, MATEWAN and BANC ONE agree to treat the purchase
and sale of the Stock as a purchase and sale of assets.
Notwithstanding the preceding, MATEWAN agrees to cooperate with BANC
ONE to help minimize BANC ONE's state income tax liabilities arising
as a result of the provisions of this Section 5.8(b), provided that
any such cooperation does not have any adverse financial or economic
impact on MATEWAN or the Bank.
5.9 Audit Assistance/Amendment of Call Reports. BANC ONE KENTUCKY and the Bank
------------------------------------------
shall allow full access to personnel of, and independent accountants
designated by, MATEWAN and shall use their reasonable best efforts to
assist such personnel and accountants in the (i) preparation of and (ii)
conduct and completion of audits of the financial statements of the Bank
for such periods and as of such dates as such personnel and accountants
shall deem necessary or appropriate and to use their best efforts to assist
in the accumulation of all data necessary for presentation in a
registration statement filed under the Securities Act and any other
information necessary or desirable to carry out the
-31-
transactions contemplated hereby. The costs of such audits and accumulation
of information shall be borne by MATEWAN
5.10 Post-Closing Cooperation. Following Closing, BANC ONE and BANC ONE KENTUCKY
------------------------
shall cooperate with MATEWAN in the conversion of operations of the Bank as
an affiliate of BANC ONE to an affiliate of MATEWAN, and shall furnish such
services and advice as are reasonably requested by MATEWAN related thereto.
MATEWAN shall reimburse BANC ONE and its affiliates for the fair market
value of any services provided by BANC ONE and its affiliates with respect
to such conversion services at their fair market value. BANC ONE and BANC
ONE KENTUCKY will cooperate with MATEWAN to identify services presently
being provided to Bank by a BANC ONE affiliate. Subject to restrictions of
applicable law, systems limitations, third-party contracts and other
matters beyond the control of the parties, at MATEWAN's request BANC ONE
and BANC ONE KENTUCKY will endeavor to provide any such services to Bank
for a period of not to exceed six months following Closing at a cost to
Bank or MATEWAN which shall be consistent with prevailing industry charges
for similar services.
5.11 FIserv Contract. Bank and BANC ONE KENTUCKY, with assistance, as
---------------
appropriate from BANC ONE, other affiliates of BANC ONE and MATEWAN, will
make every reasonable good faith effort to cause Fiserve CIR, Inc. to
provide data processing and related services to the Bank on and after the
Closing Date on terms acceptable to MATEWAN.
5.12 Staffing. Until the Closing, BANC ONE KENTUCKY shall take all reasonable
--------
action to ensure that there are sufficient and qualified employees to staff
the operation of the Bank as such operations are currently being conducted.
-32-
ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions Precedent - All Parties. The respective obligations of each of
----------------------------------
the parties to effect the Acquisition shall be subject to satisfaction or
waiver of the following conditions at or prior to the Closing Date:
(a) The parties hereto shall have received all regulatory approvals
required in connection with the transactions contemplated by this
Agreement, and all notice periods and waiting periods required after
the granting of any such approvals shall have passed;
(b) No party shall be subject to any order, decree or injunction of a
court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by this Agreement;
(c) BANC ONE shall have delivered to MATEWAN and MATEWAN shall have
delivered to BANC ONE a completed Form 8023, Corporate Qualified Stock
Election, signed by an authorized officer of each not later than the
Closing Date. Such form shall include a joint election under Code
Section 338(h) (10) and should be filed by MATEWAN within the time
prescribed by the Code; and
(d) Neither MATEWAN nor BANC ONE shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which
enjoins or prohibits consummation of the transactions contemplated by
this Agreement.
6.2 Conditions Precedent - MATEWAN. The obligations of MATEWAN to effect the
------------------------------
Acquisition shall be subject to satisfaction of the following additional
conditions at or prior to the Closing Date unless waived by MATEWAN
pursuant to Section 7.4 hereof:
(a) The representations and warranties of BANC ONE KENTUCKY and BANC ONE
set forth in Article 3 hereof shall be true and correct in all
material respects as of
-33-
the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (or on the date when made in the case of
any representation and warranty which specifically relates to an
earlier date), except as otherwise contemplated by this Agreement or
consented to in writing by MATEWAN;
(b) BANC ONE KENTUCKY and BANC ONE shall have in all material respects
performed all obligations and complied with all covenants required by
this Agreement;
(c) BANC ONE KENTUCKY shall have delivered to MATEWAN a certificate, dated
the Closing Date and signed by its President, Chairman, or any Vice
President, to the effect that the conditions set forth in this section
have been satisfied to the best knowledge of the officer executing the
same;
(d) MATEWAN shall have received an opinion of counsel for BANC ONE
KENTUCKY, which may be in-house counsel, dated as of the Closing Date,
substantially to the effect set forth in Exhibit 6.2 hereto;
(e) MATEWAN shall have the funds necessary to pay the Purchase Price, from
a combination, as MATEWAN shall determine, of the public or private
sale of capital stock; the borrowing of funds; and
(f) MATEWAN shall have received the resignation of all directors of the
Bank prior to the Closing.
6.3 Conditions Precedent - BANC ONE and BANC ONE KENTUCKY. The obligations of
-----------------------------------------------------
BANC ONE and BANC ONE KENTUCKY to effect the Acquisition shall be subject
to satisfaction of the following additional conditions at or prior to the
Closing Date unless waived by BANC ONE pursuant to Section 7.4 hereof:
-34-
(a) The representations and warranties of MATEWAN set forth in Article 4
hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date (or on the date when made in the case of
any representation and warranty which specifically relates to an
earlier date), except as otherwise contemplated by this Agreement or
consented to in writing by BANC ONE;
(b) MATEWAN shall have in all material respects performed all obligations
and complied with all covenants required by this Agreement;
(c) MATEWAN shall have delivered to BANC ONE KENTUCKY and BANC ONE a
certificate, dated the Closing Date and signed by its President or
Executive Vice President, to the effect that the conditions set forth
in this section have been satisfied to the best knowledge of the
officer executing the same; and
(d) BANC ONE KENTUCKY and BANC ONE shall have received an opinion from the
law firm of Xxxxxxx & Xxxxx, dated as of the Closing Date,
substantially to the effect set forth in Exhibit 6.3 hereto.
ARTICLE 7
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination. This Agreement may be terminated:
-----------
(a) at any time on or prior to the Closing Date, by the mutual consent in
writing of the parties hereto;
(b) at any time on or prior to the Closing Date, by either BANC ONE or
MATEWAN in writing, if the other party has, in any material respect,
breached any representation, warranty, covenant or undertaking
contained herein and such breach has not been cured by the earlier of
thirty (30) days after the date on which written notice of such breach
is given to the party committing such breach or the Closing Date;
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(c) on the Closing Date, by either BANC ONE or MATEWAN in writing, if any
of the conditions precedent to the obligations of such party to
consummate the Acquisition have not been satisfied or fulfilled;
(d) at any time, by either BANC ONE or MATEWAN in writing, if any
application for prior approval referred to in Section 5.1 hereof is
denied, and the time period for appeal and request for reconsideration
has run; or
(e) by either BANC ONE or MATEWAN in writing, if the Closing Date has not
occurred by the close of business on August 1, 1996.
7.2 Effect of Termination/Failure to Close.
--------------------------------------
(a) In the event this Agreement is terminated pursuant to Section 7.1
hereof, this Agreement shall become void and have no effect, except
that (i) the provisions relating to confidentiality and expenses set
forth in Sections 5.3 and 8.1, respectively, shall survive any such
termination and (ii) a termination pursuant to Section 7.1(b) shall
not relieve the breaching party from liability for an uncured breach
of the representation, warranty, covenant or undertaking giving rise
to such termination.
(b) In the event that, pursuant to an applicable provision of Section 7.1,
hereof, this Agreement is terminated by reason of MATEWAN's failure,
for any reason, to have the funds necessary to pay the Purchase
Price, immediately following such termination MATEWAN shall pay the
sum of $250,000 to BANK ONE KENTUCKY (the "Termination Penalty") by
wire transfer of immediately available federal funds to such bank
account in the United States as BANC ONE KENTUCKY shall designate.
This payment represents a separately negotiated provision to, in
part, compensate BANC ONE KENTUCKY and BANC ONE for a failure to
consummate the Acquisition as a result of MATEWAN not having the
Purchase Price, whether or not such failure is related to any breach
of this
-36-
Agreement or fault by MATEWAN. The provisions of this Section 7.2(b)
and/or payment of the Termination Penalty shall not relieve MATEWAN,
as a breaching party, if applicable, pursuant to this Agreement, from
liability for an uncured breach of a representation, warranty,
covenant or undertaking giving rise to such termination or failure to
close for which BANC ONE and BANC ONE KENTUCKY may pursue all legal
and equitable remedies under this Agreement.
7.3 Survival of Representations. Warranties and Covenants; Indemnification;
-----------------------------------------------------------------------
Retained Litigation.
-------------------
(a) Except for the representations, warranties and covenants contained in
Sections 3.15 and 5.6, all representations, warranties and covenants
in this Agreement or in any instrument delivered pursuant hereto
(except covenants expressly relating to actions to be taken after the
Closing Date) shall expire on, and be terminated and extinguished at,
the third anniversary of the Closing Date, except as to matters
relating to federal, state or local income or other taxes, for which
warranties, representations and covenants will expire on the
expiration of the applicable statute of limitations.
(b) BANC ONE and BANC ONE KENTUCKY agree to indemnify MATEWAN against, and
MATEWAN agrees to indemnify BANC ONE and BANC ONE KENTUCKY against,
and each of them agrees to protect, to defend and to hold harmless
the other from all liability, damages, losses, fees, costs and
expenses (including attorneys' fees) arising out of or in connection
with any material inaccuracy in, failure to satisfy or comply with, or
breach of, any of the warranties, representations or covenants of each
of them contained herein; provided, except for the representations,
warranties, covenants and indemnities contained in Sections 3.15 and
5.6 hereof, no loss, liability, damage or expense incurred by either
BANC ONE and BANC ONE KENTUCKY, on one hand, or MATEWAN on the other
hand, as a result of any misrepresentation or breach of warranty
contained herein shall give rise to any claim for indemnification by
such other party
-37-
unless such losses, liabilities, damages and expenses aggregate more
than $100,000 and, at the time a claim for indemnification is made,
each component of said claim shall not have been terminated and/or
extinguished pursuant to the terms of Section 7.3(a), above.
(c) Notwithstanding any inconsistent provision of Section 7.3(d) of this
Agreement, BANC ONE shall retain exclusive control and defense of the
Retained Litigation and shall hold Bank and MATEWAN harmless from all
costs, expenses, fees, attorney fees, judgments and settlements with
respect thereto from and after the Closing Date. Following the
Closing, neither MATEWAN nor Bank shall have any financial obligations
or responsibility with respect to the Retained Litigation; provided,
however, that MATEWAN and Bank shall cooperate, and MATEWAN shall
require that Bank and any successors to Bank shall cooperate, fully
and timely with BANC ONE and BANC ONE KENTUCKY and their counsel in
the defense and/or settlement of the Retained Litigation including,
but not limited to, providing records and Bank Employee assistance in
defending and settling such Retained Litigation as requested by BANC
ONE.
(d) In any case under this Agreement where one party has indemnified the
other against any claim or legal action, indemnification shall be
conditioned on compliance with the procedure outlined below. Provided
that prompt notice is given of a claim or suit for which
indemnification might be claimed, the indemnifying party promptly will
defend, contest, or otherwise protect against any such claim or suit
at its own cost and expense. The indemnified party may, but will not
be obligated to, participate at its own expense in a defense thereof
by counsel of its own choosing, but the indemnifying party shall be
entitled to control the defense unless the indemnified party has
relieved the indemnifying party from liability with respect to the
particular matter. In the event the indemnifying party fails to timely
defend, contest, or otherwise protect against any such claim or suit,
the indemnified party may, but will not be obligated to, defend,
contest, or otherwise protect against the same, and make any
compromise or settlement thereof and recover the entire costs
-38-
thereof from the indemnifying party, including reasonable attorneys'
fees, disbursements and all amounts paid as a result of such claim or
suit or the compromise or settlement thereof; provided, however, that
if the indemnifying party undertakes the defense of such matter, the
indemnified party shall not be entitled to recover from the
indemnifying party for its costs incurred in the defense thereof other
than the reasonable costs of investigation undertaken by the
indemnified party and reasonable costs of providing assistance. The
indemnified party shall cooperate and provide such assistance as the
indemnifying party may reasonably request in connection with the
defense of the matter subject to indemnification.
7.4 Waiver. Except with respect to any required regulatory approval, BANC ONE
------
and MATEWAN, by written instrument signed by an executive officer of such
party, may at any time extend the time for the performance of any of the
obligations or other acts of such other party and may waive (i) any
inaccuracies of the other party in the representations or warranties
contained in this Agreement or any document delivered pursuant hereto, (ii)
compliance with any of the covenants, undertakings or agreements of the
other party, or satisfaction of any of the conditions precedent to its
obligations, contained herein or (iii) the performance by such other party
of any of its obligations set out herein.
7.5 Amendment or Supplement. This Agreement may be amended or supplemented at
-----------------------
any time by mutual written agreement of BANC ONE KENTUCKY, BANC ONE and
MATEWAN.
ARTICLE 8
MISCELLANEOUS
8.1 Expenses. Each party hereto shall bear and pay all costs and expenses
--------
incurred by it in connection with the transactions contemplated in this
Agreement, including fees and expenses of its own financial consultants,
accountants and counsel. MATEWAN shall bear and pay all costs and expenses
incurred in connection with the filing of all regulatory
-39-
applications, including SEC filings and matters related to its offering of
shares of MATEWAN capital stock.
8.2 Entire Agreement, Etc.
---------------------
(a) This Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereto, written or
oral, other than documents referred to herein and the Confidentiality
Agreement between MATEWAN and BANC ONE dated August 4, 1995. The
parties hereto in executing and delivering, and in carrying out the
provisions of, this Agreement are relying solely on the
representations, warranties and covenants contained in this Agreement
or in any writing delivered pursuant to provisions of this Agreement
or at the Closing contemplated by Section 2.3(a), and not upon any
representation, warranty, covenant, or information, written or oral,
made by any person other than as specifically set forth herein or
therein.
(b) The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective
successors. Nothing in this Agreement, expressed or implied, is
intended to confer rights, remedies, obligations or liabilities upon
any party other than the parties hereto and their respective
successors and permitted assigns.
(c) Any information disclosed by one party to the other hereunder for any
purpose hereunder shall be deemed to be disclosed for all purposes
hereunder. The inclusion of any matter in information Previously
Disclosed by BANC ONE and/or BANC ONE KENTUCKY shall not be deemed an
admission or otherwise to imply that any such matter is material for
purposes of this Agreement.
-40-
8.3 No Assignment. None of the parties hereto may assign any of its rights or
-------------
obligations under this Agreement to any other person, and any such
attempted assignment shall be void.
8.4 Notices. All notices or other communications which are required or
-------
permitted hereunder shall be in writing and sufficient if delivered
personally or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as follows:
If To MATEWAN:
Matewan BancShares, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Attn: Xxx X. Xxxxx
President
With a copy to:
Xxxxx X. Xxxxxxxxxx, XX, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx & Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
If To BANC ONE:
BANC ONE CORPORATION
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Senior Executive Vice President
If To Banc One Kentucky Corporation:
Banc One Kentucky Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
President
-41-
8.5 No Rule of Strict Construction. The parties acknowledge that the language
------------------------------
of this Agreement has been the subject of mutual negotiations and no rule
of strict construction shall apply thereto.
8.6 Captions. The captions contained in this Agreement are for reference
--------
purposes only and are not part of this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of counterparts,
------------
and each such counterpart shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
8.8 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of West Virginia except to the extent
Federal law may be applicable.
-42-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in counterparts by their duly authorized officers and their corporate seal to be
hereunto affixed and attested by their officers thereunto duly authorized, all
as of the day and year first above written.
Matewan BancShares, Inc.
Attest:
------------------------------------
By: Xxx X. Xxxxx
------------------------------------
Title: President
Banc One Kentucky Corporation
Attest:
------------------------------------
By: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: President
BANC ONE CORPORATION
Attest: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxx
------------------------------------
Assistant Secretary Title: Assistant Vice President
-43-
EXHIBIT 6.2
MATTERS TO BE ADDRESSED IN
OPINION OF COUNSEL OF
BANC ONE KENTUCKY
1. BANC ONE KENTUCKY is a duly organized corporation, validly existing and in
good standing under the laws of the Commonwealth of Kentucky with full
corporate power and authority to carry on its business as now conducted.
BANC ONE KENTUCKY is registered as a bank holding company under the Bank
Holding Company Act.
2. Bank One, Pikeville, National Association is a duly organized national
banking association, validly existing and in good standing under the laws of
the United States. The Bank (i) has full power and authority to carry on its
business as now conducted and (ii) is duly qualified to do business in the
states of the United States where its ownership or leasing of property or
the conduct of its business requires such qualification and where failure to
so qualify would have a material adverse effect on the financial condition
or results of operations of the Bank.
3. BANC ONE KENTUCKY has all requisite corporate power and authority to enter
into and perform all of its obligations under the Agreement. The execution
and delivery of the Agreement and consummation of the transactions
contemplated thereby have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of BANC ONE KENTUCKY. The
Agreement constitutes a legal, valid and binding obligation of BANC ONE
KENTUCKY, enforceable against BANC ONE KENTUCKY in accordance with its terms
subject, as to enforceability, to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
4. Neither the execution and delivery of the Agreement nor consummation of the
transactions contemplated thereby nor compliance by BANC ONE KENTUCKY with
any of the provisions thereof shall (i) conflict with or result in a breach
of any provision of the certificate of incorporation, articles of
association or similar charter document or by-laws of
BANC ONE KENTUCKY or the Bank, (ii) to our knowledge constitute or result in
a breach of any term, condition or provision of, or constitute a default
under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge
or encumbrance upon any property or asset of BANC ONE KENTUCKY or of the
Bank pursuant to, any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation, or (iii) to our knowledge violate any order,
writ, injunction, decree, statute, rule or regulation applicable to BANC ONE
KENTUCKY or the Bank, excluding from the foregoing clauses (ii) and (iii)
violations, breaches and defaults which, either individually or in the
aggregate, would not have a material adverse effect on the financial
condition or results of operations of the Bank.
5. All of the shares of Stock are owned by BANC ONE KENTUCKY free and clear of
all liens, claims and encumbrances. No Rights are authorized, issued or
outstanding with respect to the capital stock of the Bank and there are no
agreements, understandings or commitments relating to the right of BANC ONE
KENTUCKY to vote or to dispose of said shares. No share of capital stock of
the Bank has been issued in violation of the preemptive rights of any
person.
6. I do not know of (and have made no independent investigation to determine
the existence of) any material breach of any representation or warranty
contained in the Agreement on the part of BANC ONE or BANC ONE KENTUCKY or
of any material failure on the part of BANC ONE or BANC ONE KENTUCKY to
perform its obligations under the Agreement.
EXHIBIT 6.3
MATTERS TO BE ADDRESSED IN
OPINION OF COUNSEL OF
MATEWAN BANCSHARES, INC.
1. MATEWAN is a duly organized banking corporation, validly existing and in
good standing under the laws of the State of Delaware with full corporate
power and authority to carry on its business as now conducted and is duly
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of
its business requires such qualification. MATEWAN is registered as a bank
holding company under the Bank Holding Company Act.
2. MATEWAN has all requisite corporate power and authority to enter into and
perform all of its obligations under the Agreement. The execution and
delivery of the Agreement and consummation of the transactions contemplated
thereby have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of MATEWAN. The Agreement constitutes
a legal, valid and binding obligation of MATEWAN, enforceable against
MATEWAN in accordance with its terms subject, as to enforceability, to
bankruptcy, insolvency and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
3. Neither the execution and delivery of the Agreement nor consummation of the
transactions contemplated thereby nor compliance by MATEWAN with any of the
provisions thereof shall (i) conflict with or result in a breach of any
provision of the certificate of incorporation, articles of association or
similar charter document or by-laws of MATEWAN, (ii) to our knowledge
constitute or result in a breach of any term, condition or provision of, or
constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation of
any lien, charge or encumbrance upon any property or asset of MATEWAN
pursuant to, any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation, or (iii) to our knowledge violate any order,
writ, injunction, decree, statute, rule or regulation applicable to MATEWAN.
4. All requisite regulatory approvals of the transactions contemplated by the
Agreement have been received and are in full force and effect.
5. I do not know of (and have no independent investigation to determine the
existence of) any MATEWAN breach of any representation or warranty contained
in the Agreement on the part of MATEWAN or of any material failure to
perform its obligations under the Agreement.
