FIRST AMENDMENT TO MERGER AGREEMENT
EXHIBIT
2.2
FIRST
AMENDMENT TO MERGER AGREEMENT
THIS
FIRST AMENDMENT TO MERGER AGREEMENT (this “Amendment”), dated as of June
4, 2009, is by and between First Sentry Bancshares, Inc., a West Virginia
corporation (“First Sentry Bancshares”), and Guaranty Financial Services, Inc.,
a West Virginia corporation (“Guaranty Financial”), and amends the Agreement and
Plan of Merger (the “Merger Agreement”), dated as of August 22, 2008, by and
between First Sentry Bancshares and Guaranty Financial, pursuant to which
Guaranty Financial is to merge with and into First Sentry Bancshares (the
“Merger”). Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to them in the Merger
Agreement.
WHEREAS, the
Board of Directors of each of First Sentry Bancshares and Guaranty Financial has
determined that this Amendment is in the best interests of their respective
companies and stockholders and wish to proceed with the Merger in accordance
with the terms of the Merger Agreement, as amended
hereby.
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, First Sentry Bancshares and Guaranty Financial, intending to
be legally bound, agree as follows:
1. Amendment
to Section 1.1 of the Merger Agreement. Section 1.1 of the
Merger Agreement is revised to read as follows:
“Termination
Date” shall mean December 31, 2009.
“Material
Adverse Effect” shall mean, with respect to First Sentry Bancshares or Guaranty
Financial, respectively, any effect that (i) is material and adverse to the
financial condition, results of operations or business of First Sentry
Bancshares and its Subsidiaries taken as a whole, or Guaranty Financial and its
Subsidiaries taken as a whole, respectively, or (ii) does or would materially
impair the ability of either Guaranty Financial, on the one hand, or First
Sentry Bancshares, on the other hand, to perform its obligations under this
Agreement or otherwise materially threaten or materially impede the consummation
of the transactions contemplated by this Agreement; provided that “Material
Adverse Effect” shall not be deemed to include the impact of (a) changes in laws
and regulations affecting banks or thrift institutions or their holding
companies generally, or interpretations thereof by courts or governmental
agencies, (b) changes in GAAP or regulatory accounting principles generally
applicable to financial institutions and their holding companies, (c) actions
and omissions of a party hereto (or any of its Subsidiaries) taken with the
prior written consent of the other party, (d) the impact of the announcement of
this Agreement and the transactions contemplated hereby, and compliance with
this Agreement on the business, financial condition or results of operations of
the parties and their respective subsidiaries, including the expenses incurred
by the parties hereto in consummating the transactions contemplated by this
Agreement, (e) changes in national or international political or social
conditions including the engagement by the United States in hostilities, whether
or not pursuant to the declaration of a national emergency or war, or the
occurrence of any military or terrorist attack upon or within the United States,
or any of its territories, possessions or diplomatic or consular offices or upon
any military installation, equipment or personnel of the United States, unless
it uniquely affects either or both of the parties or any of their Subsidiaries
(f) any change in the value of the securities or loan portfolio, or any change
in the value of the deposits or borrowings, of First Sentry Bancshares or
Guaranty Financial, or any of their Subsidiaries, respectively, resulting from a
change in interest rates generally, or (g) any charge or reserve taken by
Guaranty Financial at the request of First Sentry Bancshares pursuant to Section
6.11 of this Agreement. A “Material Adverse Effect” as defined above will apply
only to events occurring after the date of this
Amendment.
2. Amendment
to Section 2.4 of the Merger Agreement. Section 2.4 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
2.4 Directors
and Officers of Surviving Corporation. The current directors
of First Sentry Bancshares and the directors of Guaranty Financial immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers
of First Sentry Bancshares immediately prior to the Effective Time shall be the
initial officers of Surviving Corporation, in each case until their respective
successors are duly elected or appointed and
qualified.
3. Amendment
to Section 3.1 of the Merger Agreement. Section 3.1.3 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
3.1.3 Subject
to the provisions of this Article III, each share of Guaranty Financial Common
Stock issued and outstanding immediately prior to the Effective Time (other than
Treasury Stock and Dissenting Shares) shall become and be converted into, as
provided in and subject to the limitations set forth in this Agreement, the
right to receive 1.0 (one) share (“the Exchange Ratio”) of First Sentry
Bancshares Common Stock (the “Merger Consideration”).
4. Amendment
to Section 3.3 of the Merger Agreement. Section 3.3.9 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
3.3.9 Treatment
of Guaranty Financial Options. GUARANTY FINANCIAL DISCLOSURE
SCHEDULE 4.3.1 sets forth all of the outstanding Guaranty Financial Options as
of the date hereof. Prior to and effective as of the Effective Time,
Guaranty Financial shall take all actions necessary to terminate the Guaranty
Financial Option Plans (and all other option plans listed in GUARANTY FINANCIAL
DISCLOSURE SCHEDULE 4.9.1). Holders of all unexercised Guaranty
Financial Options as of the Effective Time will receive, in cancellation of
their Guaranty Financial Options, a cash payment from Guaranty Financial
immediately prior to the Effective Time, in an amount equal to $30.00 per share
for each share underlying an option (the “Cash Option Payment”), which cash
payment shall be treated as compensation and shall be net of any applicable
federal or state withholding tax. Prior to the Effective Time,
Guaranty Financial shall use its reasonable best efforts to obtain the written
consent of each option holder to the cancellation of the Guaranty Financial
Options in exchange for the Cash Option Payment, provided that the failure to
obtain each consent shall not be a breach of this
agreement. Notwithstanding the foregoing, holders of all unexercised
Guaranty Financial Options that have expired in accordance with the terms of the
Guaranty Financial Option Plans prior to the Effective Time shall not be
entitled to the Cash Option Payment.
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5. Amendment
to Section 4.8 of the Merger Agreement. Section 4.8 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
4.8 No
Material Adverse Effect. Guaranty Financial has not suffered any Material
Adverse Effect since March 31, 2008 and no event has occurred or circumstance
arisen since that date which, in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect on Guaranty
Financial.
6. Amendment
to Section 4.23 of the Merger Agreement. Section 4.23 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
4.23 Fairness
Opinion. Guaranty Financial has received an opinion from Xxxx Xxxxxx
Hofer & Xxxxxx, Inc. to the effect that, subject to the terms, conditions
and qualifications set forth therein, as of the date of this first Amendment,
the Merger Consideration to be received by the stockholders of Guaranty
Financial pursuant to this Agreement is fair to such stockholders from a
financial point of view.
7. Amendment
to Section 5.8 of the Merger Agreement. Section 5.8 of the
Merger Agreement is revised and replaced in its entirety to read as
follows:
5.8 No
Material Adverse Effect. First Sentry Bancshares has not suffered any
Material Adverse Effect since March 31, 2008 and no event has occurred or
circumstance arisen since that date which, in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on First Sentry
Bancshares.
8. Amendment
to Section 7 of the Merger Agreement. Section 7 is hereby
amended to add Sections 7.8.4, 7.8.5, 7.8.6, and 7.8.7 to the Merger Agreement
to read in its entirety as follows:
7.8.4 Prior to the
Effective Time, all parties to Xxxx X. Xxxxxxx’x Acknowledgment Agreement dated
August 21, 2008 (“Acknowledgment Agreement”) shall enter into an amendment to
the Acknowledgment Agreement in the form attached to GUARANTY FINANCIAL
DISCLOSURE SCHEDULE 7.8.4, provided that such amendment to the Acknowledgment
Agreement shall not trigger an “excess parachute payment” as defined in Section
280G of the Code.
7.8.5 Employees as set
forth in GUARANTY FINANCIAL DISCLOSURE SCHEDULE 7.8.5(a) shall be eligible to
receive a retention bonus as set forth in GUARANTY FINANCIAL DISCLOSURE SCHEDULE
7.8.5(b) if the employees remain employed with Guaranty Financial through the
Effective Time.
7.8.6. As of the Effective
Time, or as soon as practicable thereafter, First Sentry Bancshares and Xxxxx X.
Xxxxxx shall enter into a one-year Retention Agreement, in the form set forth in
GUARANTY FINANCIAL DISCLOSURE SCHEDULE 7.8.6.
7.8.7 First Sentry
Bancshares shall enter into two-year Consulting Agreements with Xxxx X. Xxxxxxx
and Xxxxxxxx X. Xxxxxxxxxx, effective at the Effective Time, as set forth in
GUARANTY FINANCIAL DISCLOSURE SCHEDULE 7.8.7, provided that First Sentry
Bancshares shall not be in violation of this Section 7.8.7 if any of the
executives referenced in this Section 7.8.7 have not entered into their
Consulting Agreements.
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9. Remainder
Unaffected. The other terms and provisions of the Merger
Agreement shall not be affected by this Amendment, and the Merger Agreement
shall continue in full force and effect as amended
hereby.
10. Counterparts. This
Amendment may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same
instrument.
11. Governing
Law. Regardless of any conflict of law or choice of law
principles that might otherwise apply, the parties agree that this Amendment
shall be governed by and construed in all respects in accordance with the
internal laws and judicial decisions of the State of West
Virginia.
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IN WITNESS
WHEREOF, each of the parties has caused this Amendment to be executed on
its behalf by its duly authorized officer as of the day and year first above
written.
| First Sentry Bancshares, Inc. | |||
|
By:
|
/s/ Xxxxxxxx S, Xxxxxx | ||
| Name: |
Xxxxxxxx
X. Xxxxxx
|
||
| Title: |
President
and Chief Executive
Officer
|
||
| Guaranty Financial Services, Inc. | |||
| By: | /s/ Xxxx X. Xxxxxxx | ||
| Name: |
Xxxx
X. Xxxxxxx
|
||
| Title: |
President
and Chief Executive Officer
|
||
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