EXHIBIT 3
STOCK OPTION AGREEMENT
Stock Option Agreement, dated as of October 25, 1995 (the
"Agreement"), by and between Bank of New Hampshire Corporation,
a New Hampshire corporation ("Issuer"), and Peoples Heritage
Financial Group, Inc., a Maine corporation ("Grantee").
WITNESSETH:
WHEREAS, Issuer, Grantee and First Coastal Banks, Inc., a
wholly-owned subsidiary of Grantee, have entered into an
Agreement and Plan of Merger, dated as of October 25, 1995 (the
"Plan"), providing for, among other things, the merger of First
Coastal Banks, Inc. with and into Issuer (the "Merger"), with
Issuer as the surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's
execution of the Plan and Grantee's agreement referred to in
the next WHEREAS clause, Grantee has required that Issuer
agree, and Issuer has agreed, to grant to Grantee the Option
(as hereinafter defined); and
WHEREAS, as a condition and inducement to Issuer's
execution of the Plan and this Agreement, Grantee has agreed to
grant an option to Issuer on terms and conditions which are
substantially identical to those of the Option and this
Agreement with respect to 9.9% of the common stock of Grantee;
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and
agreements set forth herein and in the Plan, and intending to
be legally bound hereby, Issuer and Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but
not defined herein shall have the meanings ascribed to such
terms in the Plan.
2. Grant of Option. Subject to the terms and conditions
set forth herein, Issuer hereby grants to Grantee an
irrevocable option (the "Option") to purchase up to 808,767
shares (as adjusted as set forth herein) (the "Option Shares,"
which shall include the Option Shares before and after any
transfer of such Option Shares) of Common Stock, no par value
and stated value of $2.50 per share ("Issuer Common Stock"), of
Issuer at a purchase price per Option Share (the "Purchase
Price") of $33.50, provided, however, that in no event shall
the number of Option Shares for which the Option is exercisable
exceed 19.9% of the issued and outstanding shares of Issuer
Common Stock without giving effect to any shares subject to or
issued pursuant to the Option.
3. Exercise of Option.
(a) Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the
agreements or covenants contained in this Agreement or the
Plan, and (ii) no preliminary or permanent injunction or other
order against the delivery of shares covered by the Option
issued by any court of competent jurisdiction in the United
States shall be in effect, Grantee may exercise the Option, in
whole or in part, at any time and from time to time following
the occurrence of a Purchase Event (as hereinafter defined);
provided that the Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the
Effective Time of the Merger, (B) termination of the Plan in
accordance with the terms thereof prior to the occurrence of a
Purchase Event or a Preliminary Purchase Event, other than a
termination of the Plan by Grantee pursuant to Section
7.1(b)(i) (a "Default Termination"), (C) 12 months after the
termination of the Plan by Grantee pursuant to a Default
Termination, and (D) 12 months after termination of the Plan
(other than pursuant to a Default Termination) following the
occurrence of a Purchase Event or a Preliminary Purchase Event;
and provided, further, that any purchase of shares upon
exercise of the Option shall be subject to compliance with
applicable laws, including without limitation the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). The term
"Holder" shall mean the holder or holders of the Option from
time to time, and which is initially Grantee. The rights set
forth in Section 8 hereof shall terminate when the right to
exercise the Option terminates (other than as a result of a
complete exercise of the Option) as set forth above.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Without Grantee's prior written consent, Issuer
shall have authorized, recommended or publicly-proposed,
or publicly announced an intention to authorize, recommend
or propose, or entered into an agreement with any person
(other than Grantee or any subsidiary of Grantee) to
effect (A) a merger, consolidation or similar transaction
involving Issuer or any of its subsidiaries, (B) the
disposition, by sale, lease, exchange or otherwise, of
assets of Issuer or any of its subsidiaries representing
in either case 20% or more of the consolidated assets of
Issuer and its subsidiaries, or (C) the issuance, sale or
other disposition of (including by way of merger,
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consolidation, share exchange or any similar transaction)
securities representing 20% or more of the voting power of
Issuer or any of its subsidiaries (any of the foregoing an
"Acquisition Transaction"); or
(ii) any person (other than Grantee or any subsidiary
of Grantee) shall have acquired beneficial ownership (as
such term is defined in Rule 13d-3 promulgated under the
Exchange Act) of or the right to acquire beneficial
ownership of, or any "group" (as such term is defined in
Section 13(d)(3) of the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire
beneficial ownership of, 25% or more of the then
outstanding shares of Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means
any of the following events:
(i) any person (other than Grantee or any subsidiary
of Grantee) shall have commenced (as such term is defined
in Rule 14d-2 under the Exchange Act), or shall have filed
a registration statement under the Securities Act with
respect to, a tender offer or exchange offer to purchase
any shares of Issuer Common Stock such that, upon con-
summation of such offer, such person would own or control
10% or more of the then outstanding shares of Issuer
Common Stock (such an offer being referred to herein as a
"Tender Offer" and an "Exchange Offer," respectively); or
(ii) (A) the holders of Issuer Common Stock shall not
have approved the Plan at the meeting of such stockholders
held for the purpose of voting on the Plan, (B) such
meeting shall not have been held or shall have been
canceled prior to termination of the Plan, (C) Issuer's
Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's
Board of Directors with respect to the Plan or (D) Issuer
shall have terminated the Plan pursuant to Section 7.1(g)
thereof, in each case after it shall have been publicly
announced that any person (other than Grantee or any
subsidiary of Grantee) shall have (x) made, or disclosed
an intention to make, a proposal to engage in an
Acquisition Transaction, (y) commenced a Tender Offer or
filed a registration statement under the Securities Act
with respect to an Exchange Offer, or (z) filed an
application (or given notice), whether in draft or final
form, under the BHC Act, the Bank Merger Act, as amended,
or the Change in Bank Control Act of 1978, as amended, for
approval to engage in an Acquisition Transaction; or
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(iii) (A) Issuer shall have breached any
representation, warranty, covenant or obligation contained
in the Plan and such breach would entitle Grantee to
terminate the Plan under Section 7.1(b) thereof (without
regard to the cure period provided for therein unless such
cure is promptly effected without jeopardizing
consummation of the Merger pursuant to the terms of the
Plan) or (B) Issuer shall have terminated the Plan
pursuant to Section 7.1(g) thereof, in each case after (x)
a bona fide proposal is made by any person (other than
Grantee or any subsidiary of Grantee) to Issuer or its
stockholders to engage in an Acquisition Transaction, (y)
any person (other than Grantee or any subsidiary of
Grantee) states its intention to Issuer or its
stockholders to make a proposal to engage in an
Acquisition Transaction if the Plan terminates, or (z) any
person (other than Grantee or any subsidiary of Grantee)
shall have filed an application or notice with any Govern-
mental Entity to engage in an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of
the occurrence of any Preliminary Purchase Event or Purchase
Event, it being understood that the giving of such notice by
Issuer shall not be a condition to the right of Holder to
exercise the Option.
(e) In the event Holder wishes to exercise the Option, it
shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the
total number of Option Shares it intends to purchase pursuant
to such exercise, and (ii) a place and date not earlier than
three business days nor later than 15 business days from the
Notice Date for the closing (the "Closing") of such purchase
(the "Closing Date"). If prior notification to or approval of
the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") or any other Governmental Entity is
required in connection with such purchase, Issuer shall
cooperate with Grantee in the filing of the required notice of
application for approval and the obtaining of such approval and
the Closing shall occur immediately following such regulatory
approvals (and any mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank
account designated by Issuer, an amount equal to the Purchase
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Price multiplied by the number of Option Shares to be purchased
on such Closing Date, and (ii) present and surrender this
Agreement to Issuer at the address of Issuer specified in
Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall deliver to Holder
(A) a certificate or certificates representing the Option
Shares to be purchased at such Closing, which Option Shares
shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever and subject to no
preemptive rights, and (B) if the Option is exercised in part
only, an executed new agreement with the same terms as this
Agreement evidencing the right to purchase the balance of the
shares of Issuer Common Stock purchasable hereunder, and (ii)
Holder shall deliver to Issuer a letter agreeing that Holder
shall not offer to sell or otherwise dispose of such Option
Shares in violation of applicable federal and state law or of
the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at
each Closing shall be endorsed with a restrictive legend which
shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS ARISING UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF
OCTOBER 25, 1995. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be
removed by delivery of substitute certificate(s) without such
legend if Holder shall have delivered to Issuer a copy of a
letter from the staff of the Commission, or an opinion of
counsel in form and substance reasonably satisfactory to Issuer
and its counsel, to the effect that such legend is not required
for purposes of the Securities Act.
(d) Upon the giving by Holder to Issuer of the written
notice of exercise of the Option provided for under Section
3(e), the tender of the applicable purchase price in
immediately available funds and the tender of this Agreement to
Issuer, Holder shall be deemed to be the holder of record of
the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall
then be closed or that certificates representing such shares of
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Issuer Common Stock shall not then be actually delivered to
Holder.
(e) Issuer agrees (i) that it shall at all times
maintain, free from preemptive rights, sufficient authorized
but unissued or treasury shares of Issuer Common Stock so that
the Option may be exercised without additional authorization of
Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase
Issuer Common Stock, (ii) that it will not, by charter
amendment or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act,
avoid or seek to avoid the observance or performance of any of
the covenants, stipulations or conditions to be observed or
performed hereunder by Issuer, (iii) promptly to take all
action as may from time to time be required (including (A)
complying with all premerger notification, reporting and
waiting period requirements and (B) in the event prior approval
of or notice to any Governmental Entity is necessary before the
Option may be exercised, cooperating fully with Holder in
preparing such applications or notices and providing such
information to such Governmental Entity as it may require) in
order to permit Holder to exercise the Option and Issuer duly
and effectively to issue shares of Issuer Common Stock pursuant
hereto, and (iv) promptly to take all action provided herein to
protect the rights of Holder against dilution.
5. Representations and Warranties of Issuer. Issuer
hereby represents and warrants to Grantee (and Holder, if
different than Grantee) as follows:
(a) Due Authorization. Issuer has all requisite
corporate power and authority to enter into this Agreement, and
subject to any approvals referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer, and this Agreement has
been duly executed and delivered by Issuer.
(b) No Violations. The execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby and compliance by Issuer with any of the provisions
hereof will not (i) conflict with or result in a breach of any
provision of its Articles of Agreement or Bylaws or a default
(or give rise to any right of termination, cancellation or ac-
celeration) under any of the terms, conditions or provisions of
any note, bond, debenture, mortgage, indenture, license,
material agreement or other material instrument or obligation
to which Issuer is a party, or by which it or any of its
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properties or assets may be bound, or (ii) violate any order,
writ, injunction, decree, statute, rule or regulation
applicable to Issuer or any of its properties or assets.
(c) Authorized Stock. Issuer has taken all necessary
corporate and other action to authorize and reserve and to
permit it to issue, and at all times from the date hereof until
the obligation to deliver Issuer Common Stock upon the exercise
of the Option terminates, will have reserved for issuance upon
exercise of the Option that number of shares of Issuer Common
Stock equal to the maximum number of shares of Issuer Common
Stock at any time and from time to time purchasable upon
exercise of the Option, and all such shares, upon issuance
pursuant to the Option, will be duly and validly issued, fully
paid and nonassessable, and will be delivered free and clear of
all liens, claims, charges and encumbrances of any kind or
nature whatsoever and not subject to any preemptive rights.
6. Representations and Warranties of Grantee. Grantee
hereby represents and warrants to Issuer that Grantee has all
requisite corporate power and authority to enter into this
Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the con-
summation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part
of Grantee, and this Agreement has been duly executed and
delivered by Grantee.
7. Adjustment upon Changes in Issuer Capitalization,
etc.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up,
recapitalization, combination, exchange of shares or similar
transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall
be adjusted appropriately, and proper provision shall be made
in the agreements governing such transactions so that Holder
shall receive, upon exercise of the Option, the number and
class of shares or other securities or property that Holder
would have received in respect of Issuer Common Stock if the
Option had been exercised immediately prior to such event, or
the record date therefor, as applicable. If any additional
shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a)), the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance, it, together with any shares of
Issuer Common Stock previously issued pursuant hereto, equals
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19.9% of the number of shares of Issuer Common Stock then
issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter in an agreement:
(i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and shall not be the con-
tinuing or surviving corporation of such consolidation or
merger, (ii) to permit any person, other than Grantee or one of
its subsidiaries, to merge into Issuer and Issuer shall be the
continuing or surviving corporation, but, in connection with
such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for stock or other
securities of Issuer or any other person or cash or any other
property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share
equivalents of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to
any person, other than Grantee or one of its subsidiaries,
then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option
shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into,
or exchanged for, an option (the "Substitute Option"), at the
election of Holder, of any of (x) the Acquiring Corporation (as
hereinafter defined), (y) any person that controls the
Acquiring Corporation or (z) in the case of a merger described
in clause (ii), Issuer (such person being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option, provided that, if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option,
such terms shall be as similar as possible and in no event less
advantageous to Holder. Substitute Option Issuer also shall
enter into an agreement with Holder in substantially the same
form as this Agreement, which shall be applicable to the
Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock (as hereinafter
defined) as is equal to the Assigned Value (as hereinafter de-
fined) multiplied by the number of shares of Issuer Common
Stock for which the Option was theretofore exercisable, divided
by the Average Price (as hereinafter defined). The exercise
price of Substitute Option per share of Substitute Common Stock
(the "Substitute Option Price") shall then be equal to the
Purchase Price multiplied by a fraction in which the numerator
is the number of shares of Issuer Common Stock for which the
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Option was theretofore exercisable and the denominator is the
number of shares of the Substitute Common Stock for which the
Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or
merger with Issuer (if other than Issuer), (ii) Issuer in
a merger in which Issuer is the continuing or surviving
person, or (iii) the transferee of all or substantially
all of Issuer's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(2) "Substitute Common Stock" shall mean the shares
of capital stock (or similar equity interest) with the
greatest voting power in respect of the election of direc-
tors (or persons similarly responsible for the direction
of the business and affairs) of the Substitute Option
Issuer.
(3) "Assigned Value" shall mean the highest of (w)
the price per share of Issuer Common Stock at which a
Tender Offer or an Exchange Offer therefor has been made,
(x) the price per share of Issuer Common Stock to be paid
by any third party pursuant to an agreement with Issuer,
(y) the highest closing price for shares of Issuer Common
Stock within the six-month period immediately preceding
the consolidation, merger or sale in question and (z) in
the event of a sale of all or substantially all of
Issuer's assets or deposits, an amount equal to (i) the
sum of the price paid in such sale for such assets (and/or
deposits) and the current market value of the remaining
assets of Issuer, as determined by a nationally-recognized
investment banking firm selected by Holder, divided by
(ii) the number of shares of Issuer Common Stock
outstanding at such time. In the event that a Tender
Offer or an Exchange Offer is made for Issuer Common Stock
or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the
value of the securities or other property issuable or
deliverable in exchange for Issuer Common Stock shall be
determined by a nationally-recognized investment banking
firm selected by Holder.
(4) "Average Price" shall mean the average closing
price of a share of Substitute Common Stock for the one
year immediately preceding the consolidation, merger or
sale in question, but in no event higher than the closing
price of the shares of Substitute Common Stock on the day
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preceding such consolidation, merger or sale; provided
that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of
common stock issued by Issuer, the person merging into
Issuer or by any company which controls such person, as
Holder may elect.
(f) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more
than 19.9% of the aggregate of the shares of Substitute Common
Stock outstanding prior to exercise of the Substitute Option.
In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for the limitation in the first
sentence of this Section 7(f), Substitute Option Issuer shall
make a cash payment to Holder equal to the excess of (i) the
value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 7(f) over (ii)
the value of the Substitute Option after giving effect to the
limitation in the first sentence of this Section 7(f). This
difference in value shall be determined by a nationally-
recognized investment banking firm selected by Holder.
(g) Issuer shall not enter into any transaction described
in Section 7(b) unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all
the obligations of Issuer hereunder and take all other actions
that may be necessary so that the provisions of this Section 7
are given full force and effect (including, without limitation,
any action that may be necessary so that the holders of the
other shares of common stock issued by Substitute Option Issuer
are not entitled to exercise any rights by reason of the
issuance or exercise of the Substitute Option and the shares of
Substitute Common Stock are otherwise in no way distinguishable
from or have lesser economic value (other than any diminution
in value resulting from the fact that the shares of Substitute
Common Stock are restricted securities, as defined in Rule 144
under the Securities Act or any successor provision) than other
shares of common stock issued by Substitute Option Issuer).
8. Repurchase at the Option of Holder.
(a) Subject to the last sentence of Section 3(a), at the
request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d))
and ending 12 months immediately thereafter, Issuer shall
repurchase from Holder (i) the Option and (ii) all shares of
Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The
date on which Holder exercises its rights under this Section 8
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is referred to as the "Request Date." Such repurchase shall be
at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for
any shares of Issuer Common Stock acquired pursuant to the
Option with respect to which Holder then has beneficial
ownership;
(ii) the excess, if any, of (x) the Applicable Price
(as defined below) for each share of Issuer Common Stock
over (y) the Purchase Price (subject to adjustment pursu-
ant to Section 7), multiplied by the number of shares of
Issuer Common Stock with respect to which the Option has
not been exercised; and
(iii) the excess, if any, of the Applicable Price over
the Purchase Price (subject to adjustment pursuant to
Section 7) paid (or, in the case of Option Shares with
respect to which the Option has been exercised but the
Closing Date has not occurred, payable) by Holder for each
share of Issuer Common Stock with respect to which the
Option has been exercised and with respect to which Holder
then has beneficial ownership, multiplied by the number of
such shares.
(b) If Holder exercises its rights under this Section 8,
Issuer shall, within 10 business days after the Request Date,
pay the Section 8 Repurchase Consideration to Holder in im-
mediately available funds, and contemporaneously with such
payment Holder shall surrender to Issuer the Option and the
certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Holder then has
beneficial ownership, and shall warrant that it has sole record
and beneficial ownership of such shares and that the same are
then free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever. Notwithstanding the
foregoing, to the extent that prior notification to or approval
of the Federal Reserve Board or any other Governmental Entity
is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall
have the ongoing option to revoke its request for repurchase
pursuant to Section 8, in whole or in part, or to require that
Issuer deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for
approval and expeditiously process the same (and each party
shall cooperate with the other in the filing of any such notice
or application and the obtaining of any such approval). If the
Federal Reserve Board or any other Governmental Entity
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disapproves of any part of Issuer's proposed repurchase
pursuant to this Section 8, Issuer shall promptly give notice
of such fact to Holder. If the Federal Reserve Board or any
other Governmental Entity prohibits the repurchase in part but
not in whole, then Holder shall have the right (i) to revoke
the repurchase request or (ii) to the extent permitted by the
Federal Reserve Board or other Governmental Entity, determine
whether the repurchase should apply to the Option and/or Option
Shares and to what extent to each, and Holder shall thereupon
have the right to exercise the Option as to the number of
Option Shares for which the Option was exercisable at the
Request Date less the sum of the number of shares covered by
the Option in respect of which payment has been made pursuant
to Section 8(a)(ii) and the number of shares covered by the
portion of the Option (if any) that has been repurchased.
Holder shall notify Issuer of its determination under the
preceding sentence within five business days of receipt of
notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of
Grantee's rights under this Section 8 shall terminate on the
date of termination of the Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of
Issuer Common Stock paid for any such share by the person or
groups described in Section 8(d)(i), (ii) the price per share
of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii)
or 7(b)(iii), or (iii) the highest closing sales price per
share of Issuer Common Stock quoted on the Nasdaq Stock
Market's National Market ("NASDAQ/NMS") (or if Issuer Common
Stock is not quoted on NASDAQ/NMS, the highest bid price per
share as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a
recognized source chosen by Holder during the 60 business days
preceding the Request Date); provided, however, that in the
event of a sale of less than all of Issuer's assets, the
Applicable Price shall be the sum of the price paid in such
sale for such assets and the current market value of the
remaining assets of Issuer as determined by a nationally-
recognized investment banking firm selected by Holder, divided
by the number of shares of Issuer Common Stock outstanding at
the time of such sale. If the consideration to be offered,
paid or received pursuant to either of the foregoing clauses
(i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an
independent nationally-recognized investment banking firm
selected by Holder and reasonably acceptable to Issuer, which
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determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, a "Repurchase Event" shall occur if
(i) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership of (as such
term is defined in Rule 13d-3 promulgated under the Exchange
Act), or the right to acquire beneficial ownership of, or any
"group" (as such term is defined in Section 13(d)(3) of the
Exchange Act) shall have been formed which beneficially owns or
has the right to acquire beneficial ownership of, 50% or more
of the then outstanding shares of Issuer Common Stock, or (ii)
any of the transactions described in Section 7(b)(i), Section
7(b)(ii) or Section 7(b)(iii) shall be consummated.
9. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to
the conditions of Section 9(c), if requested by any Holder, as
expeditiously as possible prepare and file a registration
statement under the Securities Act if such registration is
necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities
that have been acquired by or are issuable to Holder upon
exercise of the Option in accordance with the intended method
of sale or other disposition stated by Holder in such request,
including without limitation a "shelf" registration statement
under Rule 415 under the Securities Act or any successor
provision, and Issuer shall use its best efforts to qualify
such shares or other securities for sale under any applicable
state securities laws.
(b) Additional Registration Rights. If Issuer at any
time after the exercise of the Option proposes to register any
shares of Issuer Common Stock under the Securities Act in
connection with an underwritten public offering of such Issuer
Common Stock, Issuer will promptly give written notice to
Holder of its intention to do so and, upon the written request
of Holder given within 30 days after receipt of any such notice
(which request shall specify the number of shares of Issuer
Common Stock intended to be included in such underwritten
public offering by Holder), Issuer will cause all such shares
for which a Holder shall have requested participation in such
registration to be so registered and included in such
underwritten public offering; provided, however, that Issuer
may elect to not cause any such shares to be so registered (i)
if the underwriters in good faith object for valid business
reasons, or (ii) in the case of a registration solely to
implement an employee benefit plan or a registration filed on
Form S-4 under the Securities Act or any successor form;
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provided, further, however, that such election pursuant to
clause (i) may only be made one time. If some but not all the
shares of Issuer Common Stock with respect to which Issuer
shall have received requests for registration pursuant to this
Section 9(b) shall be excluded from such registration, Issuer
shall make appropriate allocation of shares to be registered
among Holders permitted to register their shares of Issuer Com-
mon Stock in connection with such registration pro rata in the
proportion that the number of shares requested to be registered
by each such Holder bears to the total number of shares re-
quested to be registered by all such Holders then desiring to
have Issuer Common Stock registered for sale.
(c) Conditions to Required Registration. Issuer shall
use all reasonable efforts to cause each registration statement
referred to in Section 9(a) to become effective and to obtain
all consents or waivers of other parties which are required
therefor and to keep such registration statement effective;
provided, however, that Issuer may delay any registration of
Option Shares required pursuant to Section 9(a) for a period
not exceeding 90 days if Issuer shall in good faith determine
that any such registration would adversely affect an offering
or contemplated offering of other securities by Issuer, and
Issuer shall not be required to register Option Shares under
the Securities Act pursuant to Section 9(a):
(i) prior to the earliest of (A) termination of the
Plan pursuant to Article VII thereof, and (B) a Purchase
Event or a Preliminary Purchase Event;
(ii) on more than one occasion during any calendar
year;
(iii) within 90 days after the effective date of a
registration referred to in Section 9(b) pursuant to which
the Holder or Holders concerned were afforded the opportu-
nity to register such shares under the Securities Act and
such shares were registered as requested; and
(iv) unless a request therefor is made to Issuer by
the Holder or Holders of at least 25% or more of the
aggregate number of Option Shares (including shares of
Issuer Common Stock issuable upon exercise of the Option)
then outstanding.
In addition to the foregoing, Issuer shall not be required
to maintain the effectiveness of any registration statement
after the expiration of nine months from the effective date of
such registration statement. Issuer shall use all reasonable
efforts to make any filings, and take all steps, under all
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applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so
registered in accordance with the intended method of distri-
bution for such shares, provided, however, that Issuer shall
not be required to consent to general jurisdiction or to
qualify to do business in any state where it is not otherwise
required to so consent to such jurisdiction or to so qualify to
do business.
(d) Expenses. Issuer will pay all expenses (including
without limitation registration fees, qualification fees, blue
sky fees and expenses, accounting expenses, legal expenses and
printing expenses incurred by it) in connection with each
registration pursuant to Section 9(a) or (b) and all other
qualifications, notifications or exemptions pursuant to Section
9(a) or (b). Underwriting discounts and commissions relating
to Option Shares, fees and disbursements of counsel to the
Holder(s) of Option Shares being registered and any other
expenses incurred by such Holder(s) in connection with any such
registration shall be borne by such Holder(s).
(e) Indemnification. In connection with any registration
under Section 9(a) or (b), Issuer hereby indemnifies each
Holder, and each underwriter thereof, including each person, if
any, who controls such Holder or underwriter within the meaning
of Section 15 of the Securities Act, against all expenses,
losses, claims, damages and liabilities caused by any untrue,
or alleged untrue, statement of a material fact contained in
any registration statement or prospectus or notification or
offering circular (including any amendments or supplements
thereto) or any preliminary prospectus, or caused by any
omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged
untrue statement that was included by Issuer in any such
registration statement or prospectus or notification or
offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information
furnished in writing to Issuer by such indemnified party
expressly for use therein, and Issuer and each officer,
director and controlling person of Issuer shall be indemnified
by such Holder, or by such underwriter, as the case may be, for
all such expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement that was
included by Issuer in any such registration statement or
prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to Issuer by
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such Holder or such underwriter, as the case may be, expressly
for such use.
Promptly upon receipt by a party indemnified under this
Section 9(e) of notice of the commencement of any action
against such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party
under this Section 9(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such
action, but, except to the extent of any actual prejudice to
the indemnifying party, the failure so to notify the
indemnifying party shall not relieve it of any liability which
it may otherwise have to any indemnified party under this
Section 9(e). In case notice of commencement of any such
action shall be given to the indemnifying party as above
provided, the indemnifying party shall be entitled to
participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the
defense of such action at its own expense, with counsel chosen
by it and reasonably satisfactory to such indemnified party.
The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the
indemnified party unless (i) the indemnifying party agrees to
pay the same, (ii) the indemnifying party fails to assume the
defense of such action with counsel reasonably satisfactory to
the indemnified party, or (iii) the indemnified party has been
advised by counsel that one or more legal defenses may be
available to the indemnifying party that may be contrary to the
interest of the indemnified party, in which case the
indemnifying party shall be entitled to assume the defense of
such action notwithstanding its obligation to bear fees and
expenses of such counsel. No indemnifying party shall be
liable for any settlement entered into without its consent,
which consent may not be unreasonably withheld.
If the indemnification provided for in this Section 9(e)
is unavailable to a party otherwise entitled to be indemnified
in respect of any expenses, losses, claims, damages or
liabilities referred to herein, then the indemnifying party, in
lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by
such party to be indemnified as a result of such expenses,
losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative benefits received by
Issuer, the selling Holders and the underwriters from the
offering of the securities and also the relative fault of
Issuer, the selling Holders and the underwriters in connection
with the statement or omissions which results in such expenses,
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losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable
by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action
or claim; provided, however, that in no case shall the selling
Holders be responsible, in the aggregate, for any amount in
excess of the net offering proceeds attributable to its Option
Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(g) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any Holder to indemnify
shall be several and not joint with other Holders.
In connection with any registration pursuant to Section
9(a) or (b) above, Issuer and each selling Holder (other than
Grantee) shall enter into an agreement containing the
indemnification provisions of this Section 9(e).
(f) Miscellaneous Reporting. Issuer shall comply with
all reporting requirements and will do all such other things as
may be necessary to permit the expeditious sale at any time of
any Option Shares by the Holder(s) in accordance with and to
the extent permitted by any rule or regulation permitting
nonregistered sales of securities promulgated by the Commission
from time to time, including, without limitation, Rule 144A.
Issuer shall at its expense provide the Holder with any
information necessary in connection with the completion and
filing of any reports or forms required to be filed by them
under the Securities Act or the Exchange Act, or required
pursuant to any state securities laws or the rules of any stock
exchange.
(g) Issue Taxes. Issuer will pay all stamp taxes in
connection with the issuance and the sale of the Option Shares
and in connection with the exercise of the Option, and will
save any Holder harmless, without limitation as to time,
against any and all liabilities, with respect to all such
taxes.
10. Quotation; Listing. If Issuer Common Stock or any
other securities to be acquired upon exercise of the Option are
then authorized for quotation or trading or listing on NASDAQ/
NMS or any securities exchange, Issuer, upon the request of
Holder, will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of
Issuer Common Stock or other securities to be acquired upon
exercise of the Option on NASDAQ/NMS or such other securities
- 17 -
exchange and will use its best efforts to obtain approval, if
required, of such quotation or listing as soon as practicable.
11. Division of Option. Upon the occurrence of a
Purchase Event or a Preliminary Purchase Event, this Agreement
(and the Option granted hereby) are exchangeable, without
expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of the
Issuer for other Agreements providing for Options of different
denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Issuer Common Stock
purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any other Agreements and related Options
for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft
or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if
mutilated, Issuer will execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation
on the part of Issuer, whether or not the Agreement so lost,
stolen, destroyed or mutilated shall at any time be enforceable
by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9,
each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) Waiver and Amendment. Any provision of this
Agreement may be waived at any time by the party that is
entitled to the benefits of such provision. This Agreement may
not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by
the parties hereto.
(c) Entire Agreement; No Third Party Beneficiaries;
Severability. This Agreement, together with the Plan and the
other documents and instruments referred to herein and therein,
between Grantee and Issuer (i) constitutes the entire agreement
and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the
subject matter hereof, and (ii) is not intended to confer upon
any person other than the parties hereto (other than the
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indemnified parties under Section 9(e) and any transferee of
the Option Shares or any permitted transferee of this Agreement
pursuant to Section 12(h)) any rights or remedies hereunder.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a
federal or state regulatory agency to be invalid, void or unen-
forceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency
determines that the Option does not permit Holder to acquire,
or does not require Issuer to repurchase, the full number of
shares of Issuer Common Stock as provided in Sections 3 and 8
(as adjusted pursuant to Section 7), it is the express
intention of Issuer to allow Holder to acquire or to require
Issuer to repurchase such lesser number of shares as may be
permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Maine
without regard to any applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings
contained herein are for convenience of reference only and
shall not affect in any way the meaning or interpretation of
this Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation) or sent by
overnight mail service or mailed by registered or certified
mail (return receipt requested) postage prepaid, to the parties
at the following address (or at such other address for a party
as shall be specified by like notice):
If to Grantee:
Peoples Heritage Financial Group, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxx
Chairman, President and Chief Executive Officer
Fax: 000-000-0000
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With a required copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
If to Issuer:
Bank of New Hampshire Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Chairman and President
Fax: 000-000-0000
With a required copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
Fax: 000-000-0000
and
Sheehan, Phinney, Bass & Green, P.A.
0000 Xxx Xxxxxx
P.O. Box 3701
Manchester, New Hampshire 03105-3701
Attn: Xxxxxx X. Field, Jr.
Fax: 000-000-0000
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall
be considered one and the same agreement and shall become
effective when both counterparts have been signed, it being
understood that both parties need not sign the same
counterpart.
(h) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option
shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written
consent of the other party, except that Holder may assign this
Agreement to a wholly-owned subsidiary of Holder and Holder may
assign its rights hereunder in whole or in part after the
occurrence of a Purchase Event. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the
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benefit of and be enforceable by the parties and their
respective successors and assigns.
(i) Further Assurances. In the event of any exercise of
the Option by Holder, Issuer and Holder shall execute and
deliver all other documents and instruments and take all other
action that may be reasonably necessary in order to consummate
the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that
this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief.
Both parties further agree to waive any requirement for the
securing or posting of any bond in connection with the
obtaining of any such equitable relief and that this provision
is without prejudice to any other rights that the parties
hereto may have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Stock Option Agreement to be signed by their respective
officers thereunto duly authorized, all as of the day and year
first written above.
PEOPLES HERITAGE
FINANCIAL GROUP, INC.
Attest:
/s/ Xxxxx X. Xxxxxxx By:/s/ Xxxxxxx X. Xxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxx
Title: Executive Vice President Title: Chairman, President
and Chief Executive
Officer
BANK OF NEW HAMPSHIRE
Attest: CORPORATION
/s/ Xxxx X. Xxxx By:/s/ Xxxxx X. Xxxxxxx
Name: Xxxx X. Xxxx Name: Xxxxx X. Xxxxxxx
Title: Senior Executive Title: Chairman and President
Vice President
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