1
Exhibit 10.2
Xxxxx 0, 0000
X.X.X. Holding Co., Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
U.S.B. Holding Co., Inc. ("USB") and Tappan Zee Financial, Inc.
("Tappan Zee") desire to enter into an agreement dated March 6, 1998
("Agreement"), pursuant to which, subject to the terms and conditions set forth
therein, (a) Tappan Zee will merge with and into USB with USB surviving the
merger, and (b) shareholders of Tappan Zee will receive common stock of USB in
exchange for common stock of Tappan Zee outstanding on the closing date (the
foregoing, collectively, referred to herein as the "Merger").
The undersigned have been advised that as of the date of this letter
each may be deemed to be an "affiliate" of Tappan Zee, as the term "affiliate"
is defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations promulgated under the Securities Act of 1993, as amended (the
"Securities Act") by the Securities and Exchange Commission (the "Commission")
and as the term "affiliate" is used for purposes of the Commission's rules and
regulations applicable to the determination of whether a merger can be
accounted for as a "pooling-of-interests" as specified in the Commission's
Accounting Series Release 135, as amended by Staff Accounting Bulletins Nos. 65
and 76 ("ASR 135").
USB has required, as a condition to its execution and delivery to
Tappan Zee of the Agreement, that the undersigned, being directors and
executive officers of Tappan Zee, execute and deliver to USB this Letter
Agreement.
In consideration of the foregoing, each of the undersigned hereby
irrevocably:
(a) Agrees to be present (in person or by proxy) at all
meetings of shareholders of Tappan Zee called to vote for approval of the
Agreement and the Merger so that all shares of common stock of Tappan Zee then
owned by the undersigned will be counted for the purpose of determining the
presence of a quorum at such meetings and to vote or cause to be voted all such
shares other than any such shares owned through a Company Employee Plan (as
defined in the Agreement) (i) in favor of approval and adoption of the
Agreement and the transactions contemplated thereby (including any amendments
or modifications of the terms thereof approved by the Board of Directors of
Tappan Zee) and (ii) against approval or adoption of any other merger, business
combination, recapitalization, partial liquidation or similar transaction
involving Tappan Zee. Agrees to use reasonable best efforts to cause the
Merger to be consummated and, except as permitted by Section 5.7 of the
Agreement, not to solicit, initiate or engage in any
2
U.S.B. Holding Co., Inc.
March 6, 1998
Page 2
negotiations or discussions with any party other than USB with respect to any
offer, sale, transfer or other disposition of, any shares of common stock of
Tappan Zee now or hereafter owned by the undersigned;
(b) Agrees not to vote or execute any written consent to
rescind or amend in any manner any prior vote or written consent, as a
shareholder of Tappan Zee, to approve or adopt the Agreement;
(c) Agrees not to offer, sell, transfer or otherwise
dispose of any shares of common stock of USB received in the Merger, except (i)
at such time as a registration statement under the Securities Act covering
sales of such USB common stock is effective and a prospectus is made available
under the Securities Act, (ii) within the limits, and in accordance with the
applicable provisions of, Rule 145(d) under the Securities Act, or (iii) in a
transaction which, in the opinion of counsel satisfactory to USB or as
described in a "no-action" or interpretive letter from the staff of the
Commission , is not required to be registered under the Securities Act; and
acknowledges and agrees that USB is under no obligation to register the sale,
transfer or other disposition of USB common stock by the undersigned or on
behalf of the undersigned, or to take any other action necessary to make an
exemption from registration available;
(d) Agrees that during the period beginning on the date
hereof and ending 30 days prior to the consummation of the Merger, shall not
sell, transfer, reduce the risk of the undersigned with respect to or otherwise
dispose of any shares of common stock of Tappan Zee without notifying USB in
advance of the proposed transfer and giving USB a reasonable opportunity to
review the transfer before it is consummated. USB, if advised to do so by its
independent public accountants, may instruct the undersigned not to make or
permit the transfer because it may interfere with the "pooling-of-interests"
treatment of the Merger. The undersigned shall abide by any such instructions.
(e) Agrees not to enter into any transactions with
respect to any shares of USB common stock during the 20 consecutive AMEX
Trading Days (as defined in the Agreement) ending with and including the date
on which the last of the regulatory approvals (as discussed in Section 6.1(b)
of the Agreement) required for consummation of the Merger is obtained.
(f) Notwithstanding the foregoing, agrees not to sell, or
in any other way reduce the risk of the undersigned relative to, any shares of
common stock of Tappan Zee or of common stock of USB, during the period
commencing thirty days prior to the effective date of the Merger and ending on
the date on which financial results covering at least thirty days of
post-Merger combined operations of USB and Tappan Zee have been published
within the meaning of Section 201.01 of the Commission's Codification of
Financial Reporting Policies, provided, however, that excluded from the
foregoing undertaking shall be such sales, pledges, transfers or other
dispositions of shares of Tappan Zee common stock or shares of USB common stock
which, in USB's sole judgment, are individually and in the aggregate de minimis
within the meaning of Topic 2-E of the Staff Accounting Bulletin Series of the
SEC;
3
U.S.B. Holding Co., Inc.
March 6, 1998
Page 3
(g) Agrees that neither Tappan Zee nor USB shall be bound
by any attempted sale of any shares of Tappan Zee common stock or USB common
stock, respectively, and Tappan Zee's and USB's transfer agents shall be given
appropriate stop transfer orders and shall not be required to register any such
attempted sale, unless the sale has been effected in compliance with the terms
of this Letter Agreement; and further agrees that the certificate representing
shares of USB common stock owned by the undersigned will be endorsed with a
restrictive legend consistent with the terms of this Letter Agreement;
(h) Acknowledges and agrees that the provisions of
subparagraphs (c), (d), (e), (f) and (g) hereof also apply to shares of USB
common stock and Tappan Zee common stock owned by (i) his or her spouse, (ii)
any of his or her relatives or relatives of his or her spouse occupying his or
her home, (iii) any trust or estate in which he or she, his or her spouse, or
any such relative owns at least a 10% beneficial interest or of which any of
them serves as trustee, executor or in any similar capacity, and (iv) any
corporation or other organization in which the undersigned, any Affiliate of
the undersigned, his or her spouse, or any such relative owns at least 10% of
any class of equity securities or of the equity interest;
(i) Represents that the undersigned has no plan or
intention to sell, exchange, or otherwise dispose of any shares of common stock
of USB prior to expiration of the time period referred to in subparagraph (f)
hereof; and
(j) Represents that the undersigned has the capacity to
enter into this Letter Agreement and that it is a valid and binding obligation
enforceable against the undersigned in accordance with its terms, subject to
bankruptcy, insolvency and other laws affecting creditors' rights and general
equitable principles.
--------------------------
It is understood and agreed that the provisions of subparagraphs (a)
and (b) of this Letter Agreement relate solely to the capacity of the
undersigned as a shareholder or other beneficial owner of shares of Tappan Zee
common stock and is not in any way intended to affect the exercise by the
undersigned of the undersigned's responsibilities as a director or officer of
Tappan Zee. It is further understood and agreed that such subparagraphs of
this Letter Agreement are not in any way intended to affect the exercise by the
undersigned of any fiduciary responsibility which the undersigned may have in
respect of any shares of Tappan Zee common stock held by the undersigned as of
the date hereof.
-------------------------
The undersigned have carefully read this Letter Agreement and the
Agreement and discussed the requirements of such documents and other
applicable limitations upon transfer of shares of Tappan Zee common stock or
USB common stock to the extent that the undersigned deems necessary with
counsel of the undersigned's choice or counsel for Tappan Zee.
4
U.S.B. Holding Co., Inc.
March 6, 1998
Page 4
-------------------------
This Letter Agreement may be executed in two or more counterparts,
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same Letter Agreement.
-------------------------
This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms.
-------------------------
5
U.S.B. Holding Co., Inc.
March 6, 1998
Page 5
The undersigned intend to be legally bound hereby.
Sincerely,
Number of Shares of
Tappan Zee
Common Stock Owned*
------------------
/s/ Xxxxxx Xxxx 7,592
-----------------------------
Xxxxxx Xxxx
/s/ Xxxxxxx X. Xxxxxxx 33,745
-----------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx 10,240
-----------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx 7,740
-----------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx 24,723
-----------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx 9,340
-----------------------------
Xxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx 6,740
-----------------------------
Xxxx X. Xxxxxxxx
* Represents shares owned directly or indirectly and shares allocated to the
affiliates' ESOP and RRP accounts as of March 6, 1998. Does not include
shares underlying stock options that were not vested as of March 6, 1998.
