AGREEMENT AND PLAN OF MERGER
EXHIBIT 2
PLAN OF ACQUISITION
AGREEMENT AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into this 8th day of August 2003, by and among FIRST COMMONWEALTH
FINANCIAL CORPORATION, a Pennsylvania corporation ("First
Commonwealth"), FIRST COMMONWEALTH BANK, a Pennsylvania-chartered banking
corporation and wholly-owned subsidiary of First Commonwealth
("FCB"), PITTSBURGH FINANCIAL CORP., a Pennsylvania corporation
("Pittsburgh Financial"), and PITTSBURGH SAVINGS BANK, d/b/a
"BankPittsburgh," a Pennsylvania-chartered stock savings bank and
wholly-owned subsidiary of Pittsburgh Financial ("BankPittsburgh").
Recitals
A. The
respective Boards of Directors of First Commonwealth and Pittsburgh Financial
have determined that the merger of Pittsburgh Financial with and into First
Commonwealth (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement and the plan of merger attached hereto
as Exhibit
A (the "Holding Company Plan of Merger"), would be
advisable and in the best interests of their respective shareholders, and have
approved the Holding Company Plan of Merger and the Merger, pursuant to which
each outstanding share of the common stock, $0.01 par value, of Pittsburgh
Financial ("Pittsburgh Financial Common Stock"), will be converted,
at the election of each Pittsburgh Financial shareholder, into cash or shares
of the common stock, $1.00 par value, of First Commonwealth ("First
Commonwealth Common Stock") as provided herein. First Commonwealth will be the surviving corporation (the
"Surviving Corporation").
B. After
the Effective Time, BankPittsburgh will be merged with and into FCB (the
"Bank Merger") pursuant to the Plan of Merger (the "Bank Plan of
Merger") attached hereto as Exhibit B. FCB will be the surviving financial institution following the
Bank Merger.
C. Under
Pennsylvania law, the Holding Company Plan of Merger must be approved by the
shareholders of Pittsburgh Financial.
The Board of Directors of Pittsburgh Financial has resolved to recommend
that the shareholders of Pittsburgh Financial approve this Agreement and the
Merger and the consummation of the transactions contemplated hereby upon the
terms and subject to the conditions set forth herein.
D. Concurrently
with the execution and delivery of this Agreement, and as an inducement to
First Commonwealth's willingness to enter into this Agreement, each director
and executive officer of Pittsburgh Financial has entered into an agreement
with First Commonwealth pursuant to which, among other things, they have agreed
to vote in favor of approval of the transactions contemplated by this Agreement
at the Pittsburgh Financial Shareholders' Meeting.
E. In
furtherance thereof, the Boards of Directors of First Commonwealth and
Pittsburgh Financial have approved this Agreement and the Merger in accordance
with Pennsylvania law and upon the terms and subject to the conditions set forth
herein.
F. The
Merger is intended to qualify as a tax-free reorganization within the meaning
of the provisions of Section 368 of the Code.
Agreement
In consideration of
the premises and the mutual covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows (capitalized terms in this
Agreement shall have the meanings set forth on Exhibit C):
ARTICLE 1
BASIC TRANSACTION
1.1 Merger. At the Effective Time, Pittsburgh Financial
shall be merged with and into First Commonwealth pursuant to the terms and
conditions set forth herein and in the Holding Company Plan of Merger and
pursuant to the Pennsylvania Business Corporation Law ("PBCL"). Upon
consummation of the Merger, the separate existence of Pittsburgh Financial
shall cease and First Commonwealth shall continue as the Surviving
Corporation. The Articles of
Incorporation and Bylaws of First Commonwealth, as in effect immediately prior
to the Effective Time, shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation. The effects of the Merger shall be as provided in
Section 1929 of the PBCL.
1.2 Bank
Merger. At the time selected by First Commonwealth after the Effective
Time, BankPittsburgh shall be merged into FCB pursuant to the terms and
conditions set forth herein and in the Bank Plan of Merger and pursuant to the Pennsylvania
Banking Code of 1965, as amended ("PBC"). Upon consummation of the
Bank Merger, the separate existence of BankPittsburgh shall cease and FCB shall
continue as the surviving financial institution. The Articles of Incorporation and Bylaws of FCB, in effect
immediately prior to the consummation of the Bank Merger, shall be the Articles
of Incorporation and Bylaws of the surviving financial institution. The effects
of the Merger shall be as provided in Section 1601 et. seq. of the PBC. By signing this Agreement, First
Commonwealth and Pittsburgh Financial consent to and approve the Bank Merger in
their capacities as the sole shareholders of FCB and BankPittsburgh, subject to
the consummation of the Merger.
1.3 Effective
Time. As soon
as practicable after each of the conditions set forth in Article 6hereof
have been satisfied or waived, First Commonwealth and Pittsburgh Financial will
file, or cause to be filed, with the Secretary of State of the Commonwealth of
Pennsylvania Articles of Merger in the form required by and executed in
accordance with the applicable provisions of the PBCL. The Merger shall become
effective upon filing the Articles of Merger with the Pennsylvania Secretary of
State (the "Effective Time").
1.4 Conversion
of Pittsburgh Financial Common Stock. At
the Effective Time:
(a) Subject
to the allocation procedures set forth in Section 1.10(d),and except as provided in
Section 1.5, each share of Pittsburgh Financial Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into the right to receive from First Commonwealth, at the election of the
holder thereof, either:
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(i) cash
in an amount equal to $20.00 per share (the "Per Share Cash
Consideration"); or
(ii) a
number of shares of First Commonwealth Common Stock which is equal to the
Exchange Ratio.
(b) The
holders of certificates representing shares of Pittsburgh Financial Common
Stock shall cease to have any rights as stockholders of Pittsburgh Financial,
except such rights, if any, as they may have pursuant to the PBCL. Except as
provided above, until certificates representing shares of Pittsburgh Financial
Common Stock are surrendered for exchange, each certificate shall, after the
Effective Time, represent for all purposes only the right to receive the amount
and type of consideration into which the shares of Pittsburgh Financial Common
Stock represented thereby shall have been converted by the Merger as provided
above.
(c) The
stock transfer books of Pittsburgh Financial shall be closed and no transfer of
shares of Pittsburgh Financial Common Stock shall be made thereafter.
1.5 PFC
Treasury Stock; Shares owned by First Commonwealth. Notwithstanding
any other provision of this Agreement, any shares of Pittsburgh Financial
Common Stock issued and outstanding immediately prior to the Effective Time
which are then owned beneficially or of record (a) by Pittsburgh Financial or
by any Pittsburgh Financial Subsidiary or (b) by First Commonwealth or any
First Commonwealth Subsidiary, in each case other than in a fiduciary capacity
or as a result of debts previously contracted, shall, by virtue of the Merger,
be canceled without payment of any consideration therefor and without any
conversion thereof.
1.6 First
Commonwealth Common Stock.
The shares of First Commonwealth Common Stock issued and outstanding
immediately prior to the Effective Time shall, on and after the Effective Time,
remain issued and outstanding as shares of First Commonwealth Common Stock.
1.7 Fractional
Shares. Notwithstanding any other provision
hereof, no fractional shares of First Commonwealth Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof, will be
issued in the Merger. In lieu of
fractional shares, First Commonwealth shall pay to each Pittsburgh Financial
Shareholder who would otherwise be entitled to a fractional share an amount in
cash determined by multiplying such fraction by the Average Closing Price.
1.8 Anti-Dilution. In the event First Commonwealth changes the
number of shares of First Commonwealth Common Stock issued and outstanding
between the date hereof and the Effective Time as a result of a stock split,
stock dividend or recapitalization with respect to the outstanding First
Commonwealth Common Stock and the record date therefor shall be prior to the
Effective Date of the Merger, the Exchange Ratio shall be proportionately
adjusted.
1.9 Pittsburgh
Financial Options.
(a) At
the Effective Time, each option granted by Pittsburgh Financial to purchase
shares of Pittsburgh Financial Common Stock (each, a "Pittsburgh Financial
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Option") pursuant to the Pittsburgh Financial Stock Option Plans which is
outstanding and unexercised immediately prior thereto, whether or not then
vested or exercisable, will, at the election of the individual holders of the
Pittsburgh Financial Options, be either:
(i) cancelled
and all rights thereunder be extinguished ("Cancelled Option
Holder"), in consideration for which Pittsburgh Financial shall make
payment immediately prior to the Effective Time in an amount determined by
multiplying (A) the number of shares of Pittsburgh Financial Common Stock
underlying such Pittsburgh Financial Option by (B) an amount equal to the
excess (if any) of (1) the Per Share Cash Consideration, over (2) the exercise
price per share of such Pittsburgh Financial Option; or
(ii) converted
automatically into a fully vested option to purchase shares of First
Commonwealth Common Stock ("Continuing Option Holder") in an amount,
for a term and at an exercise price determined as provided below (and otherwise
subject to the terms of the particular Pittsburgh Financial Option Plan
pursuant to which each such Pittsburgh Financial Option was issued, the
agreements evidencing grants thereunder and any other agreements between
Pittsburgh Financial and an optionee regarding Pittsburgh Financial Options
which have been delivered to First Commonwealth prior to or as of the date of
this Agreement):
(A) the
number of shares to be subject to the new option shall be equal to the product
of the number of shares of Pittsburgh Financial Common Stock subject to the
Pittsburgh Financial Option immediately prior to the Effective Time and the
Exchange Ratio, provided that any fractional shares of First Commonwealth
Common Stock resulting from such multiplication shall be rounded down to the
nearest whole share;
(B) the
exercise price per share of First Commonwealth Common Stock under the new
option shall be equal to the exercise price per share of the Pittsburgh
Financial Common Stock under the Pittsburgh Financial Option divided by the
Exchange Ratio, provided that such exercise price shall be rounded to the
nearest cent; and
(C) the
term or duration of the new option shall be the same as that of the Pittsburgh
Financial Option.
The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code)
shall be and is intended to be effected in a manner which is consistent with
Section 424(a) of the Code and, to the extent it is not so consistent, Section
424(a) shall override anything to the contrary contained herein. The duration and other terms of the new
option shall be the same as the original option except as provided for above
and all references to Pittsburgh Financial shall be deemed to be references to
First Commonwealth.
(b) In
order for any Continuing Option Holder to have his or her Pittsburgh Financial
Options converted into an option to purchase First Commonwealth Common Stock as
set forth in Section 1.9(a) or for a Cancelled Option Holder to have his or her
Pittsburgh Financial Option converted into the right to receive cash, such
Continuing Option Holder or Cancelled Option Holder shall have executed a
written election with respect to such conversion or cancellation no later than
the Election Deadline, which written election shall be in
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such form as shall be prescribed by First Commonwealth and reasonably
satisfactory to Pittsburgh Financial.
No payment shall be made to a Cancelled Option Holder unless and until
such holder has executed and delivered the foregoing written election. In the event any holder of a Pittsburgh
Financial Option fails to make an election within the time frame set forth
herein, the Pittsburgh Financial Option held thereby shall automatically be
converted at the Effective Time into an option to purchase First Commonwealth
Common Stock in the amount and at the exercise price as calculated pursuant to
Section 1.9(a)(ii) hereof.
(c) Prior
to the Effective Time, First Commonwealth shall reserve for issuance the number
of shares of First Commonwealth Common Stock necessary to satisfy First
Commonwealth's obligations under Section 1.9(a) hereof. Promptly after the Effective Time (but no
event later than twenty business days thereafter), First Commonwealth shall
file a registration statement on Form S-8 with respect to the shares of First
Commonwealth Common Stock issued pursuant to Section 1.9(a) hereof, and shall
maintain the current status of the prospectus contained therein, as well as
comply with applicable state securities or "blue sky" laws, for so
long as such options remain outstanding.
(d) Prior
to the Effective Time, Pittsburgh Financial shall take or cause to be taken all
actions required under the Pittsburgh Financial Option Plans to provide for the
foregoing.
1.10 Election
and Exchange Procedures.
(a) First
Commonwealth shall designate The Bank of New York (or another bank selected by
First Commonwealth and reasonably acceptable to Pittsburgh Financial) as agent
(the "Exchange Agent") for purposes of conducting the election procedure
and the exchange procedure as described in this Section 1.10. First
Commonwealth shall use reasonable commercial efforts to cause the Exchange
Agent, no later than three (3) business days following the Effective Time, to
mail or otherwise make available to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented issued
and outstanding shares of Pittsburgh Financial Common Stock (i) a notice and
letter of transmittal (which shall specify that delivery shall be effected and
risk of loss of the certificates formerly representing shares of Pittsburgh
Financial Common Stock shall pass only upon proper delivery of such
certificates to the Exchange Agent) advising such holder of the effectiveness
of the Merger and the procedure for surrendering to the Exchange Agent such
certificate or certificates in exchange for the consideration set forth in
Section 1.4 and (ii) an election form ("Election Form") which shall
permit each holder (or in the case of nominee record holders, the beneficial
owner through proper instructions and documentation) (A) to elect to receive
First Commonwealth Common Stock with respect to all of such holder's Pittsburgh
Financial Common Stock as provided in Section 1.4(a)(ii) ("Stock Election
Shares"), (B) to elect to receive cash with respect to all of such
holder's Pittsburgh Financial Common Stock as provided in Section 1.4(a)(i)("Cash
Election Shares"), or (C) to indicate that such holder makes no such
election with respect to such holder's shares of Pittsburgh Financial Common
Stock ("No-Election Shares").
Nominee record holders who hold Pittsburgh Financial Common Stock on
behalf of multiple beneficial owners shall indicate how many of the shares held
by them are Stock Election Shares, Cash Election Shares and No-Election
Shares. Any shares of Pittsburgh
Financial Common Stock with respect to which the holder thereof shall not, as
of the Election
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Deadline (as defined below), have made such an election by submission
to the Exchange Agent of an effective, properly completed Election Form shall
be deemed to be No-Election Shares.
(b) The
term "Election Deadline" shall mean 5:00 p.m., Eastern Time, twenty
(20) business days following but not including the date of mailing of the
Election Form.
(c) Any
election to receive First Commonwealth Common Stock or cash shall have been
properly made only if the Exchange Agent shall have actually received a
properly completed Election Form by the Election Deadline. An Election Form will be properly completed
only if all information called for by the Election Form is provided and only if
accompanied by a certificate or certificates representing all shares of
Pittsburgh Financial Common Stock covered thereby, subject to the provisions of
subsection (h) of this Section 1.10. Any Election Form may be revoked or
changed by the person submitting such Election Form to the Exchange Agent by
written notice to the Exchange Agent only if such notice is actually received
by the Exchange Agent at or prior to the Election Deadline. The Exchange Agent
shall have reasonable discretion to determine when any election, modification
or revocation is received and whether any such election, modification or
revocation has been properly made.
(d) Within
five (5) business days after the Election Deadline, the Exchange Agent shall
effect the allocation among Pittsburgh Financial Shareholders of rights to
receive First Commonwealth Common Stock or cash in the Merger as follows:
(i) If
the number of Cash Election Shares times the Per Share Cash Consideration is
less than the Aggregate Cash Consideration, then:
(A) No-Election
Shares shall be deemed to be Cash Election Shares to the extent necessary to
cause the total number of Cash Election Shares times the Per Share Cash
Consideration to equal the Aggregate Cash Consideration. If less than all of
the No-Election Shares need to be treated as Cash Election Shares in order to
accomplish that result, then the Exchange Agent shall select which No-Election
Shares shall be treated as Cash Election Shares in such manner as the Exchange
Agent shall determine, and all remaining No-Election Shares shall be treated as
Stock Election Shares.
(B) If
all of the No-Election Shares are treated as Cash Election Shares under the
preceding subsection and the total number of Cash Election Shares times the Per
Share Cash Consideration is still less than the Aggregate Cash Consideration,
then the Exchange Agent shall convert on a pro rata basis (subject to rounding
to avoid the conversion of fractional shares) a sufficient number of Stock
Election Shares into Cash Election Shares to cause the total number of Cash
Election Shares after such conversion times the Per Share Cash Consideration to
equal the Aggregate Cash Consideration.
Notwithstanding the foregoing, if the number of Cash Election Shares times the
Per Share Cash Consideration is less than the Aggregate Cash Consideration,
First Commonwealth may, in its sole discretion, elect to reduce the Aggregate
Cash Consideration to an amount not less than the product of the Cash Election
Shares times the Per Share Cash Consideration and apply the foregoing
allocation procedure (if necessary) using the Aggregate Cash Consideration as
so reduced.
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(ii) If
the number of Cash Election Shares times the Per Share Cash Consideration is
greater than the Aggregate Cash Consideration, then:
(A) All
No-Election Shares shall be deemed to be Stock Election Shares.
(B) The
Exchange Agent shall convert on a pro rata basis (subject to rounding to avoid
the conversion of fractional shares) a sufficient number of Cash Election
Shares into Stock Election Shares to cause the number of remaining Cash
Election Shares times the Per Share Cash Consideration to equal the Aggregate
Cash Consideration.
(e) Following
any reallocation (if necessary) under subsection (d) of this Section 1.10, all
Stock Election Shares and all No-Election Shares will be converted into the
right to receive First Commonwealth Common Stock and all Cash Election Shares
shall be converted into the right to receive the Per Share Cash Consideration.
(f) At
the Effective Time, First Commonwealth shall deliver to the Exchange Agent the
number of shares of First Commonwealth Common Stock issuable and the amount of
cash payable in the Merger (which shall be held by the Exchange Agent in trust
for the holders of Pittsburgh Financial Common Stock). Pending payment, the cash so delivered shall
be invested only in deposit accounts of an FDIC-insured institution, direct
obligations of the U.S. Government or obligations issued or guaranteed by an
agency thereof which carry the full faith and credit of the United States, and
all interest earned on such cash shall be paid to First Commonwealth. The
Exchange Agent shall use its reasonable commercial efforts to distribute First
Commonwealth Common Stock and cash as provided herein, not later than ten (10)
business days after the Election Deadline to the former shareholders of Pittsburgh
Financial who submitted a properly completed letter of transmittal and Election
Form prior to the Election Deadline.
The Exchange Agent shall not be entitled to vote or exercise any rights
of ownership with respect to the shares of First Commonwealth Common Stock held
by it from time to time hereunder, except that it shall receive and hold all
dividends or other distributions paid or distributed with respect to such
shares for the account of the persons entitled thereto.
(g) After
the completion of the foregoing allocation, each holder of an outstanding
certificate or certificates which prior thereto represented shares of
Pittsburgh Financial Common Stock who surrenders such certificate or
certificates to the Exchange Agent will, upon acceptance thereof by the
Exchange Agent, be entitled to a certificate or certificates representing the
number of full shares of First Commonwealth Common Stock and/or the amount of
cash into which the aggregate number of shares of Pittsburgh Financial Common
Stock previously represented by such certificate or certificates surrendered
shall have been converted pursuant to this Agreement and, if such holder's
shares of Pittsburgh Financial Common Stock have been converted into First
Commonwealth Common Stock, cash in lieu of fractional shares, and any
distribution previously paid with respect to First Commonwealth Common Stock
issuable in the Merger for which the record date was on or after the Effective
Date, in each case without interest. The Exchange Agent shall accept such
certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. Each outstanding certificate which prior to the
Effective Time represented Pittsburgh Financial
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Common Stock and which is not surrendered to the Exchange Agent in
accordance with the procedures provided for herein shall, except as otherwise
herein provided, until duly surrendered to the Exchange Agent, be deemed to
evidence ownership of the number of shares of First Commonwealth Common Stock
or the right to receive the amount of cash into which such Pittsburgh Financial
Common Stock shall have been converted. No dividends which have been declared
will be remitted to any person entitled to receive shares of First Commonwealth
Common Stock under this Section 1.10 until such person surrenders the
certificate or certificates representing Pittsburgh Financial Common Stock, at
which time such dividends shall be remitted to such person without interest.
(h) First
Commonwealth shall not be obligated to deliver cash and/or a certificate or
certificates representing shares of First Commonwealth Common Stock to which a
Pittsburgh Financial Shareholder would otherwise be entitled as a result of the
Merger until such holder surrenders the certificate or certificates
representing the shares of Pittsburgh Financial Common Stock for exchange as
provided in this Section 1.10, or, in default thereof, an appropriate affidavit
of loss and indemnity agreement and/or a bond as may be required by the
Exchange Agent. If any certificates evidencing shares of First Commonwealth
Common Stock are to be issued in a name other than that in which the
certificate evidencing Pittsburgh Financial Common Stock surrendered in
exchange therefor is registered, it shall be a condition of the issuance
thereof that the certificate so surrendered shall be properly endorsed or
accompanied by an executed form of assignment separate from the certificate,
with all signatures guaranteed, and otherwise in proper form for transfer and
that the person requesting such exchange pay to the Exchange Agent any transfer
or other tax required by reason of the issuance of a certificate for shares of
First Commonwealth Common Stock in any name other than that of the registered
holder of the certificate surrendered or otherwise establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(i) Any
portion of the shares of First Commonwealth Common Stock and cash delivered to
the Exchange Agent by First Commonwealth pursuant to Section 1.10(f) that
remains unclaimed by the Pittsburgh Financial Shareholders for six months after
the Effective Time (as well as any proceeds from any investment thereof) shall
be delivered by the Exchange Agent to First Commonwealth. Any Pittsburgh
Financial Shareholders who have not complied with Section 1.10(g) before the
expiration of such six month period shall thereafter look only to First
Commonwealth for the consideration deliverable to such shareholder in the
Merger as determined pursuant to this Agreement, without any interest thereon.
If outstanding certificates for shares of Pittsburgh Financial Common Stock are
not surrendered or the payment for them is not claimed prior to the date on
which such shares of First Commonwealth Common Stock or cash would otherwise
escheat to or become the property of any governmental unit or agency, the
unclaimed items shall, to the extent permitted by abandoned property and any
other applicable law, become the property of First Commonwealth (and to the
extent not in its possession shall be delivered to it), free and clear of all
claims or interest of any person previously entitled to such property. Neither
the Exchange Agent nor any party to this Agreement shall be liable to any
holder of stock represented by any certificate for any consideration paid to a
public official pursuant to applicable abandoned property, escheat or similar
laws. First Commonwealth and the Exchange Agent shall be entitled to rely upon
the stock transfer books of Pittsburgh Financial to establish the identity of
those persons entitled to receive consideration specified in this Agreement,
which books shall be conclusive with respect
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thereto. In the event of a dispute with respect to ownership of stock
represented by any certificate, First Commonwealth and the Exchange Agent shall
be entitled to deposit any consideration represented thereby in escrow with an
independent third party and thereafter be relieved with respect to any claims
thereto.
1.11 Withholding
Rights. First
Commonwealth (through the Exchange Agent, if applicable) shall be entitled to
deduct and withhold from any amounts otherwise payable pursuant to this
Agreement to any Pittsburgh Financial Shareholder such amounts as First
Commonwealth is required under the Code or any provision of state, local or
foreign tax law to deduct and withhold with respect to the making of such
payment. Any amounts so withheld shall
be treated for all purposes of this Agreement as having been paid to the
Pittsburgh Financial Shareholder in respect of which such deduction and
withholding was made by First Commonwealth.
1.12 Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place as soon as
practicable after the satisfaction or waiver of all of the conditions to
Closing, and shall be on such date, time and location as First Commonwealth and
Pittsburgh Financial shall mutually agree. If all conditions to the obligations
of each of the parties shall have been satisfied or waived by the party entitled
to the benefits thereof, the parties shall, at the Closing, duly execute the
Articles of Merger for filing with the Pennsylvania Secretary of State and
promptly thereafter shall take all steps necessary or desirable to consummate
the Merger in accordance with all applicable laws, rules and regulations and
the Holding Company Plan of Merger. The
date on which the Closing actually occurs is herein referred to as the
"Closing Date." The Bank Merger will be consummated after the Merger
at a time selected by First Commonwealth and pursuant to the terms of the Bank
Plan of Merger.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF FIRST COMMONWEALTH AND FCB
To induce
Pittsburgh Financial to enter into this Agreement, First Commonwealth and FCB
represent and warrant as follows, which representations and warranties are
being made as of the date of this Agreement and shall be deemed to be made
again as of the Closing:
2.1 Organization
and Corporate Authority of First Commonwealth. First Commonwealth is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. First Commonwealth is registered with the Board
of Governors of the Federal Reserve System (the "FRB") as a bank holding
company under the Bank Holding Company Act of 1956, as amended
("BHCA"), and engages only in activities permitted by the BHCA and
the rules and regulations promulgated by the Federal Reserve Board thereunder.
First Commonwealth (i) has the requisite corporate power and authority to own,
operate and lease its material properties and carry on its businesses as they
are currently being conducted and (ii) is in good standing and is duly
qualified to do business in each jurisdiction where such qualification is
necessary and where the failure to so qualify would individually or in the
aggregate have a Material Adverse Effect on First Commonwealth. Each First
Commonwealth Subsidiary is duly organized, validly existing and in good
standing under the laws of the state or jurisdiction of its organization and
(a) has the requisite corporate power and
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authority to own, operate and lease its material properties and to
carry on its business as it is currently being conducted and (b) is in good
standing and is duly qualified to do business in each jurisdiction where such
qualification is necessary and where the failure to so qualify would
individually or in the aggregate have a Material Adverse Effect on First
Commonwealth.
2.2 Organization
and Qualification of FCB.
FCB is a Pennsylvania-chartered banking corporation, duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and engages only in activities (and holds properties only of the
types) permitted by the Commonwealth of Pennsylvania and the rules and
regulations promulgated thereunder by the Pennsylvania Department of Banking
(the "PDB") and the Federal Deposit Insurance Corporation (the
"FDIC") for insured depository institutions. FCB's deposit accounts
are insured by the FDIC to the fullest extent permitted under applicable law.
2.3 Authority.
(a) Subject
to obtaining the consents and approvals set forth in Section 2.5, First Commonwealth and FCB each have full
power and authority to make, execute and perform this Agreement and to
consummate the transactions contemplated hereby, and no further action is
necessary on the part of First Commonwealth or FCB to authorize the consummation
of the transactions contemplated hereby.
This Agreement constitutes a valid and binding obligation of First
Commonwealth and FCB and is enforceable against each of First Commonwealth and
FCB in accordance with its terms, except as limited by laws affecting
creditors' rights generally and subject to general principles of equity.
(b) Subject
to obtaining the consents and approvals set forth in Section 2.5, the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby will not, with or without the giving of notice or the
passage of time, or both, (a) violate any provision of any law or regulation
applicable to First Commonwealth or FCB; (b) violate any provision of the
respective articles of incorporation, charter, or bylaws of First Commonwealth
or FCB; (c) conflict with or result in a breach of any provision of, or
termination of, or constitute a default under any instrument, license,
agreement or commitment to which either First Commonwealth or FCB is a party;
or (d) constitute a violation of any order, judgment or decree to which either
First Commonwealth or any First Commonwealth Subsidiary is a party, or by which
either First Commonwealth, any First Commonwealth Subsidiary, or any of their
respective assets or properties are bound, except, with respect to (a), (c) and
(d) above, such as individually or in the aggregate will not have a Material
Adverse Effect on First Commonwealth and the First Commonwealth Subsidiaries
taken as a whole and which will not prevent or delay the consummation of the
transactions contemplated hereby.
2.4 No
Legal Bar. Neither
First Commonwealth nor any First Commonwealth Subsidiary is a party to, subject
to or bound by any agreement, judgment, order, letter of understanding, writ,
prohibition, injunction or decree of any court or other governmental authority
or body of competent jurisdiction or any law which would prevent the execution
of this Agreement by First Commonwealth or FCB, its delivery thereof to
Pittsburgh Financial and BankPittsburgh or (upon receipt of the consents and
approvals set forth in Section 2.5) the consummation of the transactions
contemplated hereby, and no action or proceeding is pending or, to the
Knowledge of First Commonwealth, threatened against First Commonwealth or any
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First Commonwealth Subsidiary in which the validity of this Agreement,
any of the transactions contemplated hereby, or any action which has been taken
by any of the Parties in connection herewith or in connection with any of the
transactions contemplated hereby is at issue.
2.5 Approvals,
Consents and Filings.
Except for the approval of the Merger by the FRB, the approval of the
Bank Merger by the FDIC and the PDB, the declaration of effectiveness of the
Registration Statement and approval of the Proxy Statement by the SEC, the
approval of First Commonwealth's additional listing application for the listing
of the First Commonwealth Common Stock to be issued in the Merger on the NYSE
and the filing of the Articles of Merger with the Pennsylvania Secretary of
State, neither the execution and delivery of this Agreement by First
Commonwealth or FCB nor the consummation of the transactions contemplated hereby,
requires any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority or other third party.
2.6 Financial
Statements. First
Commonwealth has filed all forms, reports and documents with the SEC required
to be filed by it pursuant to the Securities Act or the Exchange Act since
January 1, 2000 (the "First Commonwealth Filings"), all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act.
None of the First Commonwealth Filings, including, without limitation,
any financial statements or schedules included therein, at the time filed,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited and
unaudited consolidated financial statements of First Commonwealth included in
the First Commonwealth Filings have been prepared in accordance with GAAP
applied on a consistent basis (except as stated in such financial statements
and except as permitted by applicable SEC regulations) and fairly present the
financial position of First Commonwealth as of the dates thereof and the
results of operations for the periods presented therein, subject, in the case
of unaudited financial statements, to normal year-end audit adjustments.
2.7 No
Material Adverse Change.
Since December 31, 2002 there has not been any Material Adverse Change
in First Commonwealth or FCB.
2.8 Capitalization
of First Commonwealth.
The authorized capital stock of First Commonwealth consists of
100,000,000 shares of First Commonwealth Common Stock and 3,000,000 shares of
preferred stock, $1.00 par value per share. As of June 30, 2003, 59,071,871
shares of First Commonwealth Common Stock were issued and outstanding,
3,453,537 shares of First Commonwealth Common Stock were held by First
Commonwealth as treasury stock and no shares of the preferred stock were issued
and outstanding. All of the outstanding First Commonwealth Common Stock is duly
authorized, validly issued, fully paid and nonassessable and has not been issued
in violation of any preemptive rights of any First Commonwealth shareholder. The
shares of First Commonwealth Common Stock to be issued in the Merger, when
delivered as specified in this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and registered pursuant to the effective
Registration Statement under the Securities Act.
2.9 Capitalization
of FCB. The
authorized capital stock of FCB consists of 100,000,000 shares of common stock
having a par value of $1.00 per share. As of the date of this
11
Agreement, 44,098,000 shares of FCB's common stock were issued and
outstanding, and no shares of FCB's common stock were held by FCB as treasury
stock. All of the outstanding common stock of FCB is held beneficially and of
record by First Commonwealth, free and clear of any lien, claim, security
interest, encumbrance, charge, restriction or right of any third party of any
kind whatsoever. All of the outstanding shares of FCB common stock are validly
issued, fully-paid and nonassessable and have not been issued in violation of
any preemptive rights of any shareholder of FCB. There are no outstanding
securities or other obligations which are convertible into FCB common stock or
into any other equity or debt security of FCB, and there are no outstanding
options, warrants, rights, scrip, rights to subscribe to, calls or other
commitments of any nature which would entitle the holder, upon exercise
thereof, to be issued FCB common stock or any other equity or debt security of
FCB.
2.10 Disclosure. The representations or warranties made by
First Commonwealth and FCB as set forth in this Agreement, or in any document,
statement, certificate or other writing furnished or to be furnished by First
Commonwealth and FCB to Pittsburgh Financial pursuant to the transactions
contemplated by this Agreement, do not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein which is necessary to make the statements and facts
contained herein or therein, in light of the circumstances under which they
were or are made, not false or misleading.
ARTICLE 3
REPRESENTATIONS AND
WARRANTIES OF PITTSBURGH FINANCIAL AND BANKPITTSBURGH
To induce First
Commonwealth and FCB to enter into this Agreement, Pittsburgh Financial and
BankPittsburgh represent and warrant as follows (which representations and
warranties are being made as of the date of this Agreement and shall be deemed
to be made again as of the Closing), except as set forth in the disclosure
schedule attached hereto as Exhibit D (the "Pittsburgh
Financial Disclosure Schedule"), the section numbers of which are numbered
to correspond to the sections of this Agreement to which they refer:
3.1 Organization
and Qualification of Pittsburgh Financial and Subsidiaries. Pittsburgh Financial is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Pittsburgh Financial is registered with the FRB
as a financial holding company under the BHCA, and engages only in activities
permitted by the BHCA and the rules and regulations promulgated by the Federal
Reserve Board thereunder. Pittsburgh Financial (i) has the requisite corporate
power and authority to own, operate and lease its material properties and carry
on its businesses as they are currently being conducted and (ii) is in good
standing and is duly qualified to do business in each jurisdiction where such
qualification is necessary and where the failure to so qualify would
individually or in the aggregate have a Material Adverse Effect on Pittsburgh
Financial and the Pittsburgh Financial Subsidiaries taken as a whole. Each
Pittsburgh Financial Subsidiary is duly organized, validly existing and in good
standing under the laws of the state or jurisdiction of its organization and
(a) has the requisite corporate power and authority to own, operate and lease
its material properties and to carry on its business as it is currently being
conducted and (b) is in good standing and is duly qualified to do business in
each jurisdiction where such qualification is necessary and where
12
the failure to so qualify would individually or in the aggregate have a
Material Adverse Effect on Pittsburgh Financial and the Pittsburgh Financial
Subsidiaries taken as a whole.
3.2 Organization
and Qualification of BankPittsburgh. BankPittsburgh is a Pennsylvania-chartered
stock savings bank, duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania and engages only in activities
(and holds properties only of the types) permitted by the PDB or the FDIC for
insured depository institutions. BankPittsburgh's
deposit accounts are insured by the FDIC to the fullest extent permitted under
applicable law.
3.3 Authority.
(a) Subject
to obtaining the consents and approvals set forth in Section 3.5,
Pittsburgh Financial and BankPittsburgh have full power and authority to make,
execute and perform this Agreement and to consummate the transactions
contemplated hereby, and no further action is necessary on the part of
Pittsburgh Financial or BankPittsburgh to authorize the consummation of the
transactions contemplated hereby. This
Agreement constitutes a valid and binding obligation of Pittsburgh Financial
and of BankPittsburgh and is enforceable against each of Pittsburgh Financial
and BankPittsburgh in accordance with its terms, except as limited by the laws
affecting creditors' rights generally and subject to general principles of
equity.
(b) Subject
to obtaining the consents and approvals set forth in Section 3.5, the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby will not, with or without the giving of notice or the
passage of time, or both, (a) violate any provision of any law or regulation
applicable to Pittsburgh Financial or any Pittsburgh Financial Subsidiary; (b)
violate any provision of the articles of incorporation, charter or bylaws of
Pittsburgh Financial or of any Pittsburgh Financial Subsidiary; (c) conflict
with or result in a breach of any provision of, or termination of, or
constitute a default under any instrument, license, agreement or commitment to
which Pittsburgh Financial or any Pittsburgh Financial Subsidiary is a party;
or (d) constitute a violation of any order, judgment or decree to which
Pittsburgh Financial or any Pittsburgh Financial Subsidiary is a party or by
which Pittsburgh Financial, or any Pittsburgh Financial Subsidiary, or any of
their assets or properties are bound, except, with respect to (a), (c) and (d)
above, such as individually or in the aggregate will not have a Material
Adverse Effect on Pittsburgh Financial and the Pittsburgh Financial
Subsidiaries taken as a whole and which will not prevent or delay the
consummation of the transactions contemplated hereby.
3.4 No
Legal Bar. Neither
Pittsburgh Financial nor any Pittsburgh Financial Subsidiary is a party to,
subject to, or bound by, any agreement, judgment, order, letter of
understanding, writ, prohibition, injunction or decree of any court or other
governmental authority or body of competent jurisdiction, or any law which
would prevent the execution of this Agreement by Pittsburgh Financial or
BankPittsburgh, the delivery thereof to First Commonwealth, or (upon receipt of
the consents and approvals set forth in Section 3.5) the consummation of the
transactions contemplated hereby, and no action or proceeding is pending or, to
the Knowledge of Pittsburgh Financial, threatened against Pittsburgh Financial
or any Pittsburgh Financial Subsidiary in which the validity of this Agreement,
the transactions
13
contemplated hereby or any action which has been taken by any of the
Parties in connection herewith or in connection with the transactions
contemplated hereby is at issue.
3.5 Approvals,
Consents and Filings.
Except for the approval of the Merger by the FRB, the approval of the
Bank Merger by the FDIC and the PDB, the approval of the Merger by the
Pittsburgh Financial shareholders and the filing of the Articles of Merger and
articles of merger relating to the Bank Merger with the Pennsylvania Secretary
of State, neither the execution and delivery of this Agreement by Pittsburgh
Financial or BankPittsburgh nor the consummation of the transactions
contemplated hereby requires any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority or
other third party.
3.6 Financial
Statements.
Pittsburgh Financial has delivered to First Commonwealth true, correct
and complete copies of (i) the audited consolidated financial statements of
Pittsburgh Financial for the years ended September 30, 2000, 2001 and 2002,
including balance sheets, statements of income, statements of shareholders'
equity and statement of cash flows and (ii) unaudited consolidated financial
statements of Pittsburgh Financial, including a balance sheet, statement of
income, statement of shareholders' equity and statement of cash flows for the
nine months ended June 30, 2003. All
such financial statements have been prepared in accordance with GAAP
consistently applied and fairly present the financial condition of Pittsburgh
Financial and the Pittsburgh Financial Subsidiaries as of the dates thereof and
the results of their operations for the periods presented therein, subject, in
the case of unaudited financial statements, to normal year-end audit
adjustments.
3.7 Undisclosed
Liabilities. Neither
Pittsburgh Financial nor any Pittsburgh Financial Subsidiary has any material
debt, liability or obligation of any kind, whether accrued, absolute, known,
unknown, contingent or otherwise except (i) those reflected in the most recent
audited balance sheet provided by Pittsburgh Financial to First Commonwealth or
(ii) those incurred in the Ordinary Course of Business since September 30,
2002, none of which arises from any breach of contract, tort or violation of
law.
3.8 Regulatory
Reports. Pittsburgh
Financial and each Pittsburgh Financial Subsidiary has filed all reports,
registrations and other documents, together with any amendments required to be
made with respect thereto since January 1, 2000 (the "Pittsburgh Financial
Filings"), that were required to be filed with the FRB, the FDIC, the PDB
or the SEC and any other governmental entity having jurisdiction over any of
them. No administrative actions have
been taken or orders issued in connection with such Pittsburgh Financial
Filings. As of their respective dates,
each Pittsburgh Financial Filing (i) complied in all material respects with all
laws and regulations promulgated by the governmental entity with which it was
filed; and (ii) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Pittsburgh
Financial has furnished or made available to First Commonwealth true and
correct copies of all Pittsburgh Financial Filings.
3.9 Books
and Records. The
stock records and minute books of Pittsburgh Financial and each Pittsburgh
Financial Subsidiary (previously furnished to First Commonwealth) fully
14
and accurately reflect all issuances, transfers and redemptions of the
capital stock of Pittsburgh Financial or such Pittsburgh Financial Subsidiary,
correctly show the record addresses of the shareholders and the number and
class of shares of capital stock held by each shareholder, correctly show all
corporate action taken by the directors (or any committee) and shareholders of
Pittsburgh Financial or such Pittsburgh Financial Subsidiary (including actions
taken by consent without a meeting), and contain true and correct copies or
originals of the articles of incorporation and bylaws of Pittsburgh Financial
or such Pittsburgh Financial Subsidiary, in each case as amended and currently
in force, and the minutes of all meetings or consent actions of its directors
and shareholders. No resolutions have
been adopted by the directors or shareholders of Pittsburgh Financial or any
Pittsburgh Financial Subsidiary except those contained in the minute
books. All corporate records of
Pittsburgh Financial and each Pittsburgh Financial Subsidiary have been maintained
in accordance with all applicable statutory and regulatory requirements.
3.10 Tax
Matters. Pittsburgh
Financial and each Pittsburgh Financial Subsidiary has duly filed when due
(including applicable extensions granted without penalty) (i) all required
federal and state tax returns and reports, and (ii) all required returns and
reports of other governmental agencies having jurisdiction with respect to
taxes imposed upon the income, properties, revenues, operations or other assets
of Pittsburgh Financial or such Pittsburgh Financial Subsidiary or taxes
imposed which might create a lien or encumbrance on any such assets. Such returns or reports are true, complete
and correct, and Pittsburgh Financial and each Pittsburgh Financial Subsidiary
has paid, to the extent such taxes or other governmental charges have become
due, all taxes and other governmental charges including all applicable interest
and penalties set forth in such returns or reports. There are no liens on the assets of Pittsburgh Financial or any
Pittsburgh Financial Subsidiary relating to or attributable to any taxes. Neither Pittsburgh Financial nor any
Pittsburgh Financial Subsidiary is currently the beneficiary of any extension
of time within which to file any such written return or report. All federal, state and local taxes and other
governmental charges payable by Pittsburgh Financial or any Pittsburgh
Financial Subsidiary have been paid or have been adequately accrued or reserved
for on such entity's books in accordance with GAAP and banking regulations
applied on a consistent basis. Until
the Effective Time, Pittsburgh Financial and each Pittsburgh Financial
Subsidiary shall continue to reserve sufficient funds for the payment of
expected tax liabilities in accordance with GAAP and banking regulations
applied on a consistent basis. Neither
Pittsburgh Financial nor any Pittsburgh Financial Subsidiary has received any
notice of a tax deficiency or assessment of additional taxes of any kind and,
to the Knowledge of Pittsburgh Financial, there is no threatened claim against
Pittsburgh Financial or any Pittsburgh Financial Subsidiary or any basis for
any such claim, for payment of any additional federal, state or local taxes for
any period prior to the date of this Agreement in excess of the accruals or
reserves with respect to any such claim shown in the most recent audited
financial statements provided by Pittsburgh Financial to First Commonwealth.
Neither Pittsburgh Financial nor any Pittsburgh Financial Subsidiary has
constituted a "distributing corporation" or a "controlled
corporation" in a distribution of stock qualifying for tax-free treatment
under Section 355 of the Code (x) in the two years prior to the date of this
Agreement or (y) in a distribution which could otherwise constitute part of a
"plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) that includes the Merger. Proper and
accurate amounts have been withheld by Pittsburgh Financial and each Pittsburgh
Financial Subsidiary from its employees for all periods in full and complete
compliance with the tax withholding provisions of applicable federal, state and
local tax laws, and proper and accurate federal, state and local tax returns
have been filed by Xxxxxxxxxx
00
Financial and each Pittsburgh Financial Subsidiary for all periods for
which returns were due with respect to withholding, social security and
unemployment taxes and the amounts shown thereon to be due and payable have
been paid in full.
3.11 Litigation
and Proceedings.
There are no actions, decrees, suits, counterclaims, claims, proceedings
or governmental actions or investigations pending or, to the Knowledge of
Pittsburgh Financial, threatened against Pittsburgh Financial or any Pittsburgh
Financial Subsidiary in any court or before any arbitrator or governmental
agency. Neither Pittsburgh Financial
nor any Pittsburgh Financial Subsidiary is a party to any judgment, award,
order or decree.
3.12 Business
Operations.
(a) Permits,
Compliance with Law. Pittsburgh
Financial and each Pittsburgh Financial Subsidiary has all permits, licenses,
approvals, authorizations and registrations under all federal, state and local
laws required for it to carry on its business as presently conducted and the
absence of which could have a Material Adverse Effect on Pittsburgh Financial
and the Pittsburgh Financial Subsidiaries taken as a whole, all such permits,
licenses, approvals, authorizations and registrations are in full force and
effect and no suspension or cancellation of any of them is pending or, to the
Knowledge of Pittsburgh Financial, threatened.
Pittsburgh Financial and each Pittsburgh Financial Subsidiary has
complied in all material respects with all laws, regulations, and orders
applicable to it or its business. No
notice from any governmental authority with respect to any failure or alleged
failure of Pittsburgh Financial to comply in any material respect with any law,
regulation or order has been received by Pittsburgh Financial or any Pittsburgh
Financial Subsidiary, nor to the Knowledge of Pittsburgh Financial, is any such
notice threatened.
(b) Insurance. Section 3.12(b) of the Pittsburgh Financial
Disclosure Schedule contains a complete list and description of all policies of
insurance and bonds presently maintained by Pittsburgh Financial or any
Pittsburgh Financial Subsidiary providing coverage for either of them, their assets,
or any of their officers, directors and employees, all of which are in full
force and effect, together with a complete list of all pending claims under any
such policies or bonds. Each material
term, obligation and provision of each such policy and bond has been complied
with, all premiums due thereon have been paid and no notice of cancellation
with respect thereto has been received by Pittsburgh Financial or
BankPittsburgh, as the case may be.
Such policies and bonds provide adequate coverage to insure the
properties and business of Pittsburgh Financial and the activities of its
officers, directors and employees against such risks and in such amounts as are
prudent and customary. Pittsburgh
Financial has no liability for premiums with respect to such policies. Pittsburgh Financial has previously made
available to First Commonwealth a true, correct and complete copy of each such
insurance policy and bond.
(c) Material
Contracts. Section 3.12(c) of the Pittsburgh
Financial Disclosure Schedule contains a complete list of all Material
Contracts. Each Material Contract is in
full force and effect, is valid and enforceable in accordance with its terms
(subject to any bankruptcy or other laws applicable to creditors' rights
generally), constitutes a legal and binding obligation of Pittsburgh Financial
or a Pittsburgh Financial Subsidiary, as the case may be, and, to the Knowledge
of Pittsburgh Financial, each other party thereto, and is not the subject of any
16
notice of default, termination or partial termination or of any
ongoing, pending, completed or, to the Knowledge of Pittsburgh Financial,
threatened investigation, inquiry or other proceeding or action that may give
rise to any notice of default, termination or partial termination by any party
thereto. Pittsburgh Financial or such
Pittsburgh Financial Subsidiary has complied in all material respects with the
provisions of each Material Contract. A
true and complete copy of each Material Contract has been made available to
First Commonwealth for examination.
(d) Intellectual
Property. Section 3.12(d) of the
Pittsburgh Financial Disclosure Schedule sets forth all (i) trademarks, trade
names, service marks or other trade rights, whether or not registered, and all
pending applications for any such registrations, (ii) copyrights,
copyrightable materials or pending applications therefor, (iii) trade secrets,
(iv) inventions, discoveries, designs, and drawings, (v) computer software
(including all source and object codes and manuals), and (vi) patents and
patent applications owned, licensed or otherwise used by Pittsburgh Financial
or any Pittsburgh Financial Subsidiary (collectively, the "Intellectual Property
Rights"). The Intellectual
Property Rights are all those necessary for the conduct of the business of
Pittsburgh Financial and each Pittsburgh Financial Subsidiary as presently
conducted. Neither Pittsburgh Financial
nor any Pittsburgh Financial Subsidiary has any obligation to compensate any
person for the use of any of the Intellectual Property Rights and Pittsburgh
Financial has not granted to any person any license, option or other rights to
use in any manner any of the Intellectual Property Rights, whether requiring
the payment of royalties or not. The
Intellectual Property Rights will not cease to be rights of Pittsburgh
Financial or be impaired by reason of the performance of this Agreement or the
consummation of the transactions contemplated hereby. No other person (i) has notified Pittsburgh Financial that such
person claims any ownership of or right to use any Intellectual Property Rights
or (ii) to the Knowledge of Pittsburgh Financial, is infringing upon any
Intellectual Property Rights. To the
Knowledge of Pittsburgh Financial, Pittsburgh Financial's use of the
Intellectual Property Rights does not conflict with, infringe upon or otherwise
violate the valid rights of any third party anywhere where the business of
Pittsburgh Financial is currently conducted or is currently proposed to be
conducted by Pittsburgh Financial. No
written notice has been received and not fully resolved and no action has been
instituted or, to the Knowledge of Pittsburgh Financial, threatened against
Pittsburgh Financial alleging that Pittsburgh Financial's use of the
Intellectual Property Rights infringes upon or otherwise violates any rights of
a third party.
(e) Personal
Property. Pittsburgh Financial and
the Pittsburgh Financial Subsidiaries have good and marketable title to all of
their personal property, free and clear of all encumbrances, liens or charges
of any kind or character except liens for taxes not due and payable. The personal property owned and leased by
Pittsburgh Financial or any Pittsburgh Financial Subsidiary is in good
operating order (ordinary wear and tear excepted), usable in the Ordinary
Course of Business, and is sufficient and adequate to carry on the business of
Pittsburgh Financial as currently conducted.
(f) Leases. Section 3.12(f) of the Pittsburgh Financial
Disclosure Schedule sets forth a list of all leases pursuant to which
Pittsburgh Financial or any Pittsburgh Financial Subsidiary is either lessor or
lessee of any real or personal property, other than leases that are required to
be capitalized under GAAP (the "Leases"). All Leases are valid and enforceable in accordance with their
terms, there is not under any Lease any default or any event which with notice
or lapse of time, or both, would constitute a default by Pittsburgh Financial
or
17
such Pittsburgh Financial Subsidiary, or, to the knowledge of
Pittsburgh Financial, by any other party thereto. There are no contractual obligations, agreements in principle or
present plans for Pittsburgh Financial or any Pittsburgh Financial Subsidiary
to enter into new leases or to renew or amend existing Leases prior to the
Closing. The copies of the Leases and
any amendments thereto provided by Pittsburgh Financial to First Commonwealth
are true, correct and complete, and the Leases have not been modified in any
respect other than pursuant to such amendments.
(g) Real
Property. Section 3.12(g) of the Pittsburgh
Financial Disclosure Schedule lists all real property (other than security
interests) owned by Pittsburgh Financial or any Pittsburgh Financial Subsidiary
(the "Real Property").
Pittsburgh Financial or such Pittsburgh Financial Subsidiary has good
and marketable title to each parcel of Real Property and the title to each
parcel of Real Property is covered by a title insurance policy providing
coverage in the amount of the original purchase price. The interests of
Pittsburgh Financial or such Pittsburgh Financial Subsidiary in each parcel of
the Real Property are free and clear of any and all liens and encumbrances,
except for liens for current taxes not yet due, and are not subject to any
pending or, to the Knowledge of Pittsburgh Financial, threatened claim,
contest, dispute, action at law or in equity. The present and past use of, and
improvements upon, each parcel of Real Property and all real properties leased
by Pittsburgh Financial or such Pittsburgh Financial Subsidiary (the
"Leased Property") are in material compliance with all applicable
building, fire, zoning and other applicable laws, ordinances and regulations,
including the Americans with Disabilities Act, and deed restrictions of record
and no notice of any violation or alleged violation thereof has been received.
To the Knowledge of Pittsburgh Financial, there is no proposed or pending
change in the zoning of, or any proposed or pending condemnation proceeding
with respect to, any parcel of Real Property or Leased Property. The buildings
and structures owned, leased or used by Pittsburgh Financial are, taken as a
whole, in good operating order (ordinary wear and tear excepted), usable in the
Ordinary Course of Business and are sufficient and adequate to carry on the
business of Pittsburgh Financial as presently conducted.
(h) Offices
and ATMs. Section 3.12(h) of the
Pittsburgh Financial Disclosure Schedule lists the headquarters of Pittsburgh
Financial and BankPittsburgh (identified as such) and each of the offices and
ATMs maintained and operated by BankPittsburgh and the location thereof. BankPittsburgh does not maintain any other
office or ATM or conduct business at any other location, and BankPittsburgh has
not applied for or received permission to open or close any additional branch
or operate at any other location.
(i) Environmental. Pittsburgh Financial and each Pittsburgh
Financial Subsidiary is in compliance in all material respects with all
Environmental Regulations. There are no Hazardous Materials on, below or above
the surface of, or migrating to or from any parcel of Real Property or Leased
Property which requires remediation under any federal, state, or local statute,
regulation, ordinance, order, action, policy, or common law. To the Knowledge
of Pittsburgh Financial, neither Pittsburgh Financial nor any Pittsburgh
Financial Subsidiary has any outstanding loans secured by real property that is
not in compliance with Environmental Regulations, upon which there are
Hazardous Materials or from or to which Hazardous Materials have migrated or
are migrating. There is no claim, action, suit, proceeding or notice thereof
before any governmental entity pending, or, to the Knowledge of Pittsburgh
Financial, threatened, against Pittsburgh Financial or any Pittsburgh Financial
Subsidiary or, to the
18
Knowledge of Pittsburgh Financial, concerning any real property
securing BankPittsburgh loans and there is no outstanding judgment, order,
writ, injunction, decree, or award against Pittsburgh Financial or any
Pittsburgh Financial Subsidiary or any real property securing BankPittsburgh
loans relating to Environmental Regulations or Hazardous Materials. Pittsburgh Financial has provided to First
Commonwealth phase I environmental assessments with respect to each piece of
Real Property and Leased Property as to which such a phase I environmental
investigation has been prepared by or on behalf of Pittsburgh Financial or any
Pittsburgh Financial Subsidiary.
3.13 Absence
of Changes; Operation in the Ordinary Course. Since September 30, 2002 (the "Balance
Sheet Date") (a) there has not been any Material Adverse Change in
Pittsburgh Financial or any Pittsburgh Financial Subsidiary, and (b) neither
Pittsburgh Financial nor any Pittsburgh Financial Subsidiary has taken any
action which, if it had been taken after the date of this Agreement, would
require the consent of First Commonwealth under Section 5.3 hereof.
3.14 Employees
and Benefits.
(a) Compensation. Section 3.14(a) of the Pittsburgh Financial
Disclosure Schedule contains a list of (i) the names, titles, responsibilities
and compensation arrangements of each officer and director of Pittsburgh
Financial and each Pittsburgh Financial Subsidiary and of each employee of
Pittsburgh Financial or any Pittsburgh Financial Subsidiary whose compensation
(including, without limitation, all salary, wages, bonuses and fringe benefits,
other than those fringe benefits made available to all employees on a
non-discriminatory basis), from Pittsburgh Financial or such Pittsburgh
Financial Subsidiary for the current fiscal year will exceed $50,000; and (ii)
all written agreements currently in effect which have been provided to such
employees relating to such person's employment or compensation. There are no controversies pending or, to
the Knowledge of Pittsburgh Financial, threatened between Pittsburgh Financial
or any Pittsburgh Financial Subsidiary and any of its directors, officers or
employees.
(b) Directors
or Officers of Other Corporations.
No director, officer, or employee of Pittsburgh Financial or any
Pittsburgh Financial Subsidiary serves, or in the past five years has served,
as a director or officer of any other corporation or entity (other than of a
Pittsburgh Financial Subsidiary) on behalf of or as a designee of Pittsburgh
Financial or any Pittsburgh Financial Subsidiary.
(c) Employee
Benefits. Section 3.14(c) of the
Pittsburgh Financial Disclosure Schedule lists (a) each pension plan, profit
sharing plan, group or individual health, dental, medical or life insurance
plan, employee welfare benefit plan (as such term is defined in Section 3(l) of
ERISA), severance plan, bonus plan, stock option plan or other equity plan,
deferred compensation plan, incentive compensation plan, or other similar plan
which is or has been maintained by Pittsburgh Financial or any Pittsburgh
Financial Subsidiary or its ERISA Affiliates for any of its current or former
employees; and (b) each "employee benefit plan" as defined in Section
3(3) of ERISA, maintained by or on behalf of Pittsburgh Financial or any Pittsburgh
Financial Subsidiary or its ERISA Affiliates (including any plans which are
"multiemployer plans" under Section 3(37)(A) of ERISA
("Multiemployer Plans") and any defined benefit plan (as defined in
Section 3(35) of ERISA) terminated within the five plan-years
19
ending immediately before the Closing) which covers or covered any
employees of Pittsburgh Financial or any Pittsburgh Financial Subsidiary or its
ERISA Affiliates (each a "Plan").
Copies of all Plans, summary Plan descriptions, actuarial reports,
valuations, annual reports (and attachments thereto) on Form 5500, 5500-C or
5500-R, as the case may be (if required pursuant to ERISA), with respect to the
Plans, IRS determination letters and any other related documents have been
provided by Pittsburgh Financial to First Commonwealth. With respect to each Plan, no litigation or
administrative or other proceeding is pending or, to the Knowledge of
Pittsburgh Financial, threatened, except for claims for benefits in the
ordinary course of operations of the Plan.
All the Plans that are intended to be qualified under Section 401(a) of
the Code have received determination letters from the IRS to the effect that
such Plans are qualified and the plans and the trusts related thereto are
exempt from federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, no such determination letter has been revoked and
revocation has not been threatened, and no such Plan has been amended or
operated since the date of its most recent determination letter or application
therefor in any respect, and no act or omission has occurred, that would
adversely affect its qualification.
Each Plan that is required to satisfy Section 401(k)(3) or Section
401(m)(2) of the Code has been tested for compliance with, and satisfies the
requirements of, Section 401(k)(3) and Section 401(m)(2) of the Code for each
plan year ending prior to the Closing Date. Neither the Plan nor any trustee,
administrator or fiduciary thereof has at any time been involved in any transaction
relating to the Plan which would constitute a breach of fiduciary duty under
ERISA or a "prohibited transaction" within the meaning of Section 406
of ERISA or Section 4975 of the Code, unless such transaction is specifically
permitted under Sections 407 or 408 of ERISA, Section 4975 of the Code or a
class or administrative exemption issued by the Department of Labor. Each Plan has been administered in
compliance in all material respects with applicable law and the terms of such
Plan. No Post-Termination Payment will be nondeductible under Section 280G of
the Internal Revenue Code or result in any excise tax payment liability under
Section 4999 of the Internal Revenue Code. At no time has Pittsburgh Financial
or any ERISA Affiliate been obligated to contribute to any Multiemployer
Plan. Each Plan that is subject to the
provisions of Title IV of ERISA is referred to herein as a "Pension
Plan." As of the most recent
valuation date for each Pension Plan, the fair market value of the assets of
each Pension Plan (including for these purposes any accrued but unpaid
contributions) exceeded the present value of all benefit liabilities, as
defined in ERISA Section 4001(a)(16), under each Pension Plan determined on a
termination basis using the assumptions that would be applied by the PBGC for a
plan terminating as of the date of this Agreement. No "accumulated funding deficiency" (as defined in Code
Section 412), has been incurred with respect to any Pension Plan whether or not
waived. Quarterly contributions under
Code Section 412(m) have been made as required for each Pension Plan and no
notice to the PBGC has been required under Code Section 412(n). No "reportable event" (as defined
in ERISA Section 4043), and no event described in ERISA Section 4062, 4063 or
4041 has occurred in connection with any Pension Plan, other than a
"reportable event" for which the 30-day advance notice requirement
has been waived under regulations published by the PBGC. No condition exists and no event has
occurred that could constitute grounds for the termination of any Pension Plan
under ERISA Section 4042. Neither
Pittsburgh Financial nor any ERISA Affiliate has incurred any liability under
Title IV of ERISA arising in connection with the termination of any plan
covered or previously covered by Title IV of ERISA.
(d) Labor
Relations. Neither Pittsburgh
Financial nor any Pittsburgh Financial Subsidiary has been a party to any
collective bargaining agreement or agreement of
20
any kind with any union or labor organization with respect to its
employees and none of its employees is represented by a labor union. Pittsburgh Financial and each Pittsburgh
Financial Subsidiary has complied in all material respects with all obligations
under the National Labor Relations Act, as amended, the Age Discrimination in
Employment Act, as amended, and all other federal, state and local labor laws
and regulations applicable to employees.
There are no unfair labor practice charges pending or, to the Knowledge
of Pittsburgh Financial, threatened against Pittsburgh Financial or any
Pittsburgh Financial Subsidiary.
3.15 Certain
Agreements. Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee, officer or director of Pittsburgh Financial or any Pittsburgh
Financial Subsidiary under any Plan, agreement or otherwise, including payments
that would become due as a result of such transactions upon termination of
employment following such transactions, other than payments of the merger
consideration, (ii) increase any benefits otherwise payable to any of their
employees, officers or directors under any Plan or agreement, or (iii) result
in the acceleration of the time of payment or vesting of any such benefits.
3.16 Capitalization
of Pittsburgh Financial. The authorized
capital stock of Pittsburgh Financial consists of 10,000,000 shares of
Pittsburgh Financial Common Stock and 5,000,000 shares of preferred stock,
$0.01 par value per share. As of the date of this Agreement, 1,424,881 shares
of Pittsburgh Financial Common Stock were issued and outstanding, 757,244
shares of Pittsburgh Financial Common Stock were held by Pittsburgh Financial
as treasury stock and no shares of preferred stock were issued and outstanding.
All of the outstanding Pittsburgh Financial Common Stock is validly issued,
fully paid and nonassessable and has not been issued in violation of any
preemptive rights of any Pittsburgh Financial shareholder. Section 3.16 of the
Pittsburgh Financial Disclosure contains a complete list of all outstanding options, warrants,
rights, and outstanding securities or other obligations which are
convertible into, or which would entitled the holder, upon exercise thereof, to
be issued shares of Pittsburgh Financial Common Stock or any other equity or
debt security of Pittsburgh Financial, whether or not exercisable.
3.17 Capitalization
of BankPittsburgh.
The authorized capital stock of BankPittsburgh consists of 100 shares of
common stock having a par value of $0.01 per share (the "Bank Common
Stock") and 100 shares of preferred stock having no par value. As of the
date of this Agreement, 100 shares of Bank Common Stock were issued and
outstanding, no shares of Bank Common Stock were held by BankPittsburgh as
treasury stock and no shares of preferred stock were issued and outstanding.
All of the outstanding Bank Common Stock is held beneficially and of record by
Pittsburgh Financial, free and clear of any lien, claim, security interest,
encumbrance, charge, restriction or right of any third party of any kind
whatsoever. All of the outstanding Bank Common Stock is validly issued,
fully-paid and nonassessable and has not been issued in violation of any
preemptive rights of any shareholder of BankPittsburgh. There are no
outstanding securities or other obligations which are convertible into Bank
Common Stock or into any other equity or debt security of BankPittsburgh, and
there are no outstanding options, warrants, rights, scrip, rights to subscribe
to, calls or other commitments of any nature which would entitle the holder,
upon exercise thereof, to be issued Bank Common Stock or any other equity or
debt security of BankPittsburgh.
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3.18 Pittsburgh Financial Subsidiaries.
(a) Section
3.18 of the Pittsburgh Financial Disclosure Schedule sets forth each Pittsburgh
Financial Subsidiary and the jurisdiction in which each is formed. Each Pittsburgh Financial Subsidiary is duly
formed, validly existing and in good standing under the laws of the
jurisdiction in which it is formed and is qualified or otherwise authorized to
transact business as a foreign corporation or other entity in all jurisdictions
in which such qualification or authorization is required by law and where the
failure to so qualify would individually or in the aggregate have a Material
Adverse Effect on Pittsburgh Financial and the Pittsburgh Financial
Subsidiaries taken as a whole. All
issued and outstanding shares or other equity interests of each Pittsburgh
Financial Subsidiary are owned directly or indirectly by Pittsburgh Financial
as set forth on Section 3.18 of the Pittsburgh Financial Disclosure Schedule,
free and clear of any charges, liens, encumbrances, security interests or
adverse claims.
(b) There
are no subscriptions, options, conversion or exchange rights, warrants,
repurchase or redemption agreements, or other agreements obligating Pittsburgh
Financial or any Pittsburgh Financial Subsidiary to issue, transfer, sell,
repurchase or redeem, or cause to be issued, transferred, sold, repurchased or
redeemed, shares of the capital stock or other securities of any Pittsburgh
Financial Subsidiary or obligating Pittsburgh Financial or any Pittsburgh
Financial Subsidiary to vote the capital stock of any Pittsburgh Financial
Subsidiary in a particular manner or entitling any other party to vote the
capital stock of any Pittsburgh Financial Subsidiary.
(c) Except
for the stock or other interests in the Pittsburgh Financial Subsidiaries,
neither Pittsburgh Financial nor any Pittsburgh Financial Subsidiary owns any
stock or other equity interest in any other Person, except in a fiduciary
capacity.
3.19 Allowance
for Loan Losses. The allowance for loan losses shown
on the Pittsburgh Financial's consolidated financial statements is (with
respect to periods ended on or before June 30, 2003) or will be (with respect
to periods ending subsequent to June 30, 2003), in the reasonable opinion of
management of Pittsburgh Financial, adequate in all material respects as of the
dates thereof under the requirements of GAAP. Section 3.18 of the Pittsburgh
Financial Disclosure Schedule lists, as of the date thereof, each loan of
BankPittsburgh which has been criticized or classified by Pittsburgh Financial
or bank examiners representing any Regulatory Authority as
"Substandard," "Doubtful" or "Loss" or as a
"Potential Problem Loan."
3.20 Absence
of Brokers. Other
than Sandler X'Xxxxx & Partners, L.P., no broker or finder has acted on behalf
of Pittsburgh Financial in connection with this Agreement or the transactions
contemplated hereby.
3.21 Representations
and Warranties. No
representation or warranty contained in this Article 3 or in any other written
instrument, document or agreement delivered by Pittsburgh Financial or any
Pittsburgh Financial Subsidiary to First Commonwealth or any First Commonwealth
Subsidiary pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state any material fact required to be stated herein or therein or necessary to
make the statements made herein or therein not misleading.
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ARTICLE 4
COVENANTS OF FIRST
COMMONWEALTH
4.1 Regulatory
Approvals.
Within sixty (60) daysafter execution of this Agreement, First
Commonwealth, in cooperation with Pittsburgh Financial, shall file all
necessary applications with the appropriate government Regulatory Authorities
in order to obtain the Government Approvals and shall take such other actions
as may be reasonably required to consummate the transactions contemplated in
this Agreement and the Plans of Merger with reasonable promptness. First Commonwealth shall pay all fees and
expenses arising in connection with such applications for regulatory approval.
Counsel to Pittsburgh Financial shall be provided with a draft of all
Regulatory Applications, other than the confidential portions of the Regulatory
Applications, prior to their submission and shall have a reasonable opportunity
to review and comment on such applications and with respect to all
correspondence with Regulatory Authorities.
First Commonwealth agrees to provide the appropriate Regulatory
Authorities with the information required by such authorities in connection
with First Commonwealth's applications for regulatory approval and First
Commonwealth agrees to use reasonable commercial efforts to obtain such
regulatory approvals, and any other approvals and consents as may be required
for the Closing, as promptly as practicable; provided, however, that nothing in
this Section 4.1 shall be construed to obligate First Commonwealth to take any
action to meet any condition required to obtain prior regulatory approval if
any such condition materially differs from conditions customarily imposed by
such Regulatory Authorities in orders approving acquisitions of the type
contemplated by this Agreement, constitutes a significant impediment upon First
Commonwealth's ability to carry on its business or acquisition programs (as may
be determined in the sole discretion of First Commonwealth) or requires First
Commonwealth to increase FCB's capital ratios to amounts in excess of the
FDIC's minimum capital ratio guidelines which may be in effect from time to
time.
4.2 Preparation
of Registration Statement.
First Commonwealth, in cooperation with Pittsburgh Financial, shall
prepare and file with the SEC a Registration Statement on Form S-4 with respect
to the shares of First Commonwealth Common Stock to be issued in the Merger
("Registration Statement"). The Registration Statement shall contain
a Proxy Statement/ Prospectus which shall serve as the proxy statement of
Pittsburgh Financial for the Pittsburgh Financial Shareholders' Meeting and as
the prospectus of First Commonwealth for the shares of First Commonwealth
Common Stock to be issued in the Merger.
First Commonwealth shall use reasonable commercial efforts to cause the
Registration Statement to become effective.
4.3 Registration
Statement Effectiveness.
First Commonwealth will advise Pittsburgh Financial, promptly after
First Commonwealth receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has been filed,
of the issuance of any stop order or the suspension of the qualification of the
First Commonwealth Common Stock for offering or sale in any jurisdiction, of
the initiation or threat of any proceeding for any such purpose, or of any request
by the SEC for the amendment or supplement of the Registration Statement or for
additional information.
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4.4 Employees and Employee Benefits.
(a) Upon
consummation of the Merger and the Bank Merger, all employees of Pittsburgh
Financial and BankPittsburgh shall be deemed to be at-will employees of First
Commonwealth and FCB, respectively, and all employees of Pinnacle shall
continue to be at-will employees of Pinnacle, except for those employees, if
any, who are parties to a written employment agreement.
(b) At
the discretion of First Commonwealth, as of the Effective Time, and subject to
Sections 4.4(d), (e) and (f) hereof, all employee benefit plans (within the
meaning of Section 3(3) of ERISA) sponsored or maintained by Pittsburgh
Financial and BankPittsburgh shall be terminated. Employees of Pittsburgh
Financial, BankPittsburgh and/or Pinnacle who continue as employees of First
Commonwealth, FCB and/or Pinnacle ("Continuing Employees") shall be
entitled to participate on an equitable basis in the same benefit plans,
programs or policies as are generally available to employees of First
Commonwealth or FCB, as the case may be, of similar rank and status. For
purposes of eligibility, vesting, benefit accrual (but not for accrual of
pension benefits) and determination of the level of benefits under any employee
benefit plans, arrangements or policies (including but not limited to severance,
vacation, sick and other leave policies) maintained by First Commonwealth or
FCB, employees of Pittsburgh Financial, BankPittsburgh and/or Pinnacle who
continue as employees of First Commonwealth, FCB and/or Pinnacle, as the case
may be, will be credited with prior years of service with Pittsburgh Financial,
BankPittsburgh and Pinnacle, and there shall be no exclusion from coverage
under First Commonwealth's and FCB's health insurance plan as a result of
pre-existing conditions to the extent such conditions were covered under any
health insurance plan maintained by Pittsburgh Financial, BankPittsburgh and/or
Pinnacle prior to the Effective Time.
(c) No
Continuing Employee shall be subject to any waiting period under any welfare
benefit plan of First Commonwealth or FCB, as applicable, to the extent that
such period is longer than the period, if any, to which such Continuing
Employee was subject under the applicable welfare benefit plan of Pittsburgh
Financial, BankPittsburgh and/or Pinnacle. Continuing Employees shall not be
subject to any waiting period under a welfare benefit plan of First
Commonwealth or FCB if the applicable waiting period under the corresponding
Pittsburgh Financial or BankPittsburgh plan had been satisfied as of the
Effective Time. To the extent that the initial period of coverage for
Continuing Employees under any plan of First Commonwealth or FCB, whichever is
applicable, that is an "employee welfare benefit plan" as defined in
Section 3(1) of ERISA is not a full twelve (12) month period of coverage,
Continuing Employees shall be given full credit under the applicable welfare
plan for any deductibles and co-insurance payments made by such Continuing
Employees under the corresponding welfare plan of Pittsburgh Financial,
BankPittsburgh and/or Pinnacle during the balance of such twelve (12) month
period of coverage. Nothing contained herein shall obligate First Commonwealth
or FCB to provide or cause to be provided any duplicative benefits. Nothing
herein shall alter the power of First Commonwealth or FCB to amend or terminate
any of its benefit or welfare plans. Moreover, this Section 4.4(c) shall not
constitute a contract of employment or create any rights to be retained in
employment at First Commonwealth or FCB.
(d) The
Pittsburgh Financial Employee Stock Ownership Plan ("ESOP") shall be
terminated as of the Effective Time.
The Board of Directors of Xxxxxxxxxx
00
Financial shall use reasonable commercial efforts to cause the trustees
of the ESOP, to the extent consistent with the fiduciary duties of the trustees
under ERISA, to make such elections under Article 1 of this Agreement with
respect to unallocated shares of Pittsburgh Financial Common Stock held by the
ESOP as are necessary to obtain a sufficient amount of cash to repay in full
the then outstanding ESOP indebtedness.
The Merger consideration received by the ESOP trustees with respect to
the unallocated shares of Pittsburgh Financial Common Stock held by the ESOP
shall be first applied by the ESOP trustees to the full repayment of the ESOP
loan. The remaining shares of First
Commonwealth Common Stock and cash received by the ESOP shall be allocated to
the ESOP participants in accordance with the terms of the ESOP and applicable
laws and regulations as soon as practicable after the Effective Time. In connection with the termination of the
ESOP, Pittsburgh Financial shall promptly apply to the IRS for a favorable
determination letter on the tax-qualified status of the ESOP on termination and
any amendments made to the ESOP in connection with its termination or
otherwise, if such amendments have not previously received a favorable
determination letter from the IRS with respect to their qualification under
Code Section 401(a). Any amendments to
the ESOP requested by the IRS prior to the Effective Time shall be adopted by
Pittsburgh Financial and BankPittsburgh, and any amendments requested by the
IRS after the Effective Time shall be promptly adopted by First Commonwealth
and FCB. Any and all distributions from
the ESOP after its termination shall be made consistent with the aforementioned
determination letter from the IRS.
Prior to the Effective Time, Pittsburgh Financial and BankPittsburgh
shall make contributions to, and payments on the loan of, the ESOP consistent
with past practices on regularly scheduled payment dates.
(e) Prior
to the Effective Time, the Board of Directors of Pittsburgh Financial shall
take all necessary action to cause the Pittsburgh Financial 401(k) Plan (the
"401(k) Plan") to be terminated immediately prior to the Effective
Time. As soon as practicable after the date hereof, Pittsburgh Financial shall
file or cause to be filed all necessary documents with the IRS for a
determination that the termination of the 401(k) Plan will not affect its
qualified status. As soon as practicable after receipt of the favorable
determination letter for termination from the IRS, the account balances in the
401(k) Plan shall be distributed to participants and beneficiaries in
accordance with applicable law and the 401(k) Plan documents. From the date
hereof through the Closing Date, Pittsburgh Financial shall be permitted to
make contributions to the 401(k) Plan on a periodic monthly basis, consistent
with past practices. Participants in the 401(k) Plan who become employees of
First Commonwealth will be permitted, subject to the terms of the First
Commonwealth 401(k) Plan, to transfer their accounts in the 401(k) Plan to the
First Commonwealth 401(k) Plan in a direct rollover distribution.
(f) Prior
to the Effective Time, in accordance with the relevant plan documents and
applicable law, the Board of Directors of Pittsburgh Financial, in consultation
with First Commonwealth and its legal counsel, shall take all necessary action
to cause the Pittsburgh Financial Pension Plan to be terminated in accordance
with its terms and the assets thereof will be disposed of pursuant to the terms
of such Plan and applicable law as soon as possible thereafter.
(g) First
Commonwealth agrees to honor the terms of the Pittsburgh Financial severance,
employment and deferred compensation agreements, as well as the Group Term
Carve-Out Plan and the Director Split Dollar Agreement set forth in the
Xxxxxxxxxx
00
Financial Disclosure Schedule (collectively referred to as the
"Post-Termination Payments"). Without limiting the foregoing, First
Commonwealth agrees to use reasonable efforts for a period of one year after
the Effective Time to find a position for Messrs. Xxxxxx, Xxxxx, Xxxx and
Xxxxxxx within the First Commonwealth (or FCB) organization that is mutually
agreeable to First Commonwealth and such individual. First Commonwealth and FCB
acknowledge and agree that the consummation of the Merger shall constitute a
"Change in Control" of Pittsburgh Financial for purposes of each of
the severance, employment, deferred compensation and SERP agreements (as
defined below), as well as the Group Term Carve-Out Plan and the Director Split
Dollar Agreement, set forth in the Pittsburgh Financial Disclosure
Schedule. First Commonwealth and FCB further
acknowledge and agree that each of the officers covered by employment
agreements with Pittsburgh Financial and BankPittsburgh would be entitled to
terminate their employment for "Good Reason" as defined in the
employment agreements upon consummation of the Merger, and that none of the
payments to such officers shall be subject to mitigation under the terms of
those agreements. In the event that the employment of Xx. Xxxxxx, Xx. Xxxxx,
Xx. Xxxx or Xx. Xxxxxxx is terminated by First Commonwealth, FCB or the officer
as of the Effective Time or within one year thereafter, such officer shall be
entitled to receive from First Commonwealth and FCB cash severance and fringe
benefits under Section 5(c) of the employment agreement as if the remaining
term of employment was 36 months (24 months for Xx. Xxxxxxx), subject to the
limit in Section 6 of the employment agreement. If the employment of Xx. Xxxxxx, Xx. Xxxxx, Xx. Xxxx or Xx.
Xxxxxxx is terminated by First Commonwealth, FCB or the officer subsequent to
the one-year anniversary of the Effective Time, the amount of cash severance
and fringe benefits that the officer shall be entitled to receive from First
Commonwealth and FCB shall be reduced by one week for each full week that he
was employed by First Commonwealth and its Subsidiaries following the one-year
anniversary of the Effective Time. First Commonwealth and FCB agree not to
amend or terminate the Group Term Carve-Out Plan or the Director Split Dollar
Agreement at or after the Effective Time in any manner that would be adverse to
the participants in such plans unless required to comply with applicable laws.
(h) It
is the intention of First Commonwealth and FCB that each employee of Pittsburgh
Financial and BankPittsburgh at the Effective Time will continue as an employee
of First Commonwealth or FCB, as the case may be, following the Effective
Time. Any employee of Pittsburgh
Financial or any of its Subsidiaries whose employment is actually terminated
within one year after the Effective Time for other than cause by First
Commonwealth or its Subsidiaries at or following the Effective Time, other than
the employees entitled to severance or other termination benefits pursuant to
existing employment agreements, change in control agreements or severance agreements,
or whose primary location of employment after the Effective Time would be more
than 25 miles from their primary employment location as of the Effective Time,
shall receive, upon termination of employment, a severance payment from First
Commonwealth or its Subsidiaries based on the terms of the general severance
policy covering the employees of First Commonwealth and the First Commonwealth
Subsidiaries.
(i) Section
4.4(i) of the Pittsburgh Financial Disclosure Schedule sets forth the accrued
but unpaid vacation pay for employees of Pittsburgh Financial and its
Subsidiaries as of June 30, 2003. If
the employment of any employee of Pittsburgh Financial or any of its
Subsidiaries identified on Section 4.4(i) of the Pittsburgh Financial
Disclosure Schedule is terminated within twelve (12) months following the
Effective Time, then any
26
vacation pay accrued and expensed based on such employee's employment
prior to the Effective Time shall be paid to the employee to the extent not
used prior to the termination of employment.
(j) Notwithstanding
any other provision of this Section 4.4, the parties agree that the vesting of
benefits under the supplemental executive retirement plan ("SERP")
agreements shall be suspended as of the Effective Time. First Commonwealth and FCB agree that each
of the officers who has a SERP agreement shall be entitled to receive SERP benefits
upon termination of his employment based upon the second amount shown under the
heading "Change in Control Annual Benefit" in Schedule A of his SERP
agreement, subject to the limit in Section 5.1 of the SERP agreements. First Commonwealth and FCB shall pay the
SERP benefits in a single lump sum, with the lump sum discounted to present
value using the IRS discount rates for the month in which the Effective Time
occurs. The amount of the SERP benefits
for each officer is set forth in Section 4.4(h) of the Pittsburgh Financial
Disclosure Schedule.
4.5 Reasonable
Efforts to Close.
Subject to the terms and conditions of this Agreement, First
Commonwealth agrees to use reasonable commercial efforts to take, or to cause
to be taken, all actions, and to do, or to cause to be done, all things
necessary, proper, or advisable under applicable laws and regulations to
satisfy the conditions to closing contained herein and to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, using reasonable commercial efforts to lift or rescind any
injunction or restraining or other order adversely affecting the ability of the
Parties to consummate the transaction contemplated by this Agreement. First
Commonwealth shall use, and shall cause each of its Subsidiaries to use,
reasonable commercial efforts to obtain consents of all third parties and
Regulatory Authorities necessary or desirable for the consummation of each of
the transactions contemplated by this Agreement.
4.6 Access. Upon notice of at least 48 hours, subject to
the terms of the Confidentiality and Non-Disclosure Agreement dated July 18,
2003 between First Commonwealth and Pittsburgh Financial, First Commonwealth
shall afford Pittsburgh Financial and its representatives reasonable access,
during normal business hours throughout the period up to the Effective Time, to
all of the properties, books and records of First Commonwealth and FCB.
4.7 NYSE. First Commonwealth shall use reasonable
commercial efforts to have the shares of First Commonwealth Common Stock which
are to be issued in exchange for the Stock Election Shares approved for listing
on the NYSE.
4.8 Updating
of Representations. At all times to and including, and as of, the
Closing, First Commonwealth shall inform Pittsburgh Financial in writing of any
and all facts necessary to amend or supplement the representations and
warranties made herein so that the representations and warranties remain true
and correct in all respects; provided, however, that before such amendment,
supplement or update may be deemed to be a part of this Agreement, Pittsburgh
Financial shall have agreed in writing to each amendment, supplement or update
made subsequent to the date of this Agreement as an amendment to this
Agreement.
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4.9 Indemnification. From and after the Effective Time, First
Commonwealth shall indemnify and hold harmless each present and former
director, officer and employee of Pittsburgh Financial and BankPittsburgh
determined as of the Effective Time (the "Indemnified Parties")
against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time (collectively, "Claims"), to the fullest extent to which such
Indemnified Parties were entitled under Pennsylvania law, the Articles of
Incorporation, Charter and Bylaws of Pittsburgh Financial and BankPittsburgh as
in effect on the date hereof, provided, however, that all rights to
indemnification in respect to any claim asserted or made within such period
shall continue until the final disposition of such claim.
Any Indemnified
Party wishing to claim indemnification under this Section 4.9, upon learning of
any such claim, action, suit, proceeding or investigation, shall promptly
notify First Commonwealth, but the failure to so notify shall not relieve First
Commonwealth of any liability it may have to such Indemnified Party if such
failure does not materially prejudice First Commonwealth. In the event of any such claim, action,
suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) First Commonwealth shall have the right to assume the
defense thereof and First Commonwealth shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if First Commonwealth elects not to assume such
defense or counsel for the Indemnified Parties advises that there are issues
which raise conflicts of interest between First Commonwealth and the
Indemnified Parties, the Indemnified Parties may retain counsel which is
reasonably satisfactory to First Commonwealth, and First Commonwealth shall
pay, promptly as statements therefor are received, the reasonable fees and
expenses of such counsel for the Indemnified Parties (which may not exceed one
firm in any jurisdiction unless the use of one counsel for such Indemnified
Parties would present such counsel with a conflict of interest), (ii) the
Indemnified Parties will cooperate in the defense of any such matter, and (iii)
First Commonwealth shall not be liable for any settlement effected without its
prior written consent, which consent shall not be withheld unreasonably.
In the event that
First Commonwealth or any of its respective successors or assigns transfers all
or substantially all of its properties and assets to any person, then, and in
each such case, the successors and assigns of such entity shall assume the
obligations set forth in this Section 4.9.
4.10 Insurance. First Commonwealth shall maintain a
directors' and officers' liability insurance policy covering the Indemnified
Parties' Costs in connection with any Claims for a period of three (3) years
after the Effective Time at annual premiums no greater than 150% of the annual
premium of the directors' and officers' liability insurance maintained by
Pittsburgh Financial and BankPittsburgh as of the date hereof. With the prior written consent of First
Commonwealth, such insurance policy may be acquired by Pittsburgh Financial
prior to the Effective Time.
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ARTICLE 5
COVENANTS OF PITTSBURGH FINANCIAL
5.1 Shareholders'
Meeting.
Pittsburgh Financial shall call a special meeting of the Pittsburgh
Financial Shareholders to be held as soon as practicable after the
effectiveness of the Registration Statement for purposes of voting upon the
transactions contemplated hereby and Pittsburgh Financial shall use reasonable
commercial efforts to solicit and obtain the votes of the Pittsburgh Financial
Shareholders in favor of the transactions contemplated hereby and, subject to
the provisions of Section 5.4, the Board of Directors of Pittsburgh Financial
shall recommend approval of such transactions by such holders. In connection
with the Pittsburgh Financial Shareholders' Meeting, First Commonwealth and
Pittsburgh Financial shall cooperate in the preparation of the Proxy
Statement/Prospectus and, with the approval of each of First Commonwealth and
Pittsburgh Financial, which approvals will not be unreasonably withheld, the
Proxy Statement/Prospectus will be mailed to the Pittsburgh Financial
Shareholders.
5.2 Conduct
of Business -- Affirmative Covenants. Unless the prior written consent of First
Commonwealth shall have been obtained, and, except as otherwise contemplated
herein:
(a) Pittsburgh
Financial and each Pittsburgh Financial Subsidiary shall:
(i) Operate
its business only in the Ordinary Course of Business;
(ii) Use
reasonable commercial efforts to preserve intact its business organizations and
assets and to maintain its rights and franchises;
(iii) Take
no action, unless otherwise required by law, rule or regulation, that would (A)
materially adversely affect the ability of any of them or First Commonwealth to
obtain any necessary approvals of Regulatory Authorities required to consummate
the transactions contemplated by this Agreement, or (B) adversely affect the
ability of such Party to perform its covenants and agreements under this
Agreement;
(iv) Except
as they may terminate in accordance with their terms, keep in full force and
effect, and not default in any of their obligations under, all Material
Contracts;
(v) Keep
in full force and effect insurance coverage with responsible insurance carriers
which is reasonably adequate in coverage and amount for companies the size of
the Pittsburgh Financial, or any Pittsburgh Financial Subsidiary and for the
businesses and properties owned by each and in which each is engaged, to the
extent that such insurance is reasonably available;
(vi) Use
commercially reasonable efforts to retain the customer base of Pittsburgh
Financial and each Pittsburgh Financial Subsidiary and to facilitate the
retention of such customers after the Effective Time; and
29
(vii) Maintain,
renew, keep in full force and effect, and preserve its business organization
and material rights and franchises, permits and licenses, and to use reasonable
commercial efforts to maintain positive relations with its present employees so
that such employees will continue to perform effectively and will be available
to Pittsburgh Financial and the Pittsburgh Financial Subsidiaries or First
Commonwealth and the First Commonwealth Subsidiaries at and after the Effective
Time, and to use reasonable commercial efforts to maintain its existing, or
substantially equivalent, credit arrangements with banks and other financial
institutions and to assure the continuance of the customer relationships of
Pittsburgh Financial and each Pittsburgh Financial Subsidiary.
(b) Pittsburgh
Financial agrees to use reasonable commercial efforts to assist First
Commonwealth in obtaining the Government Approvals necessary to complete the
transactions contemplated hereby, and Pittsburgh Financial shall provide to
First Commonwealth or to the appropriate governmental authorities all
information reasonably required to be submitted in connection with obtaining
such approvals;
(c) Each
of Pittsburgh Financial and the Pittsburgh Financial Subsidiaries, at its own
cost and expense, shall use reasonable commercial efforts to secure all
consents and releases, if any, of third parties necessary or desirable with
respect to Pittsburgh Financial or such Pittsburgh Financial Subsidiary for the
consummation of the transactions contemplated by this Agreement and shall
comply with all applicable laws, regulations and rulings in connection with
this Agreement and the consummation of the transactions contemplated hereby;
(d) At
all times to and including, and as of, the Closing, Pittsburgh Financial shall
inform First Commonwealth in writing of any and all facts necessary to amend or
supplement the representations and warranties made herein and the Pittsburgh
Financial Disclosure Schedules attached hereto as necessary so that the
representations and warranties and information provided in the schedules remain
true and correct in all respects; provided, however, that any such updates to
the Pittsburgh Financial Disclosure Schedules shall be required prior to the
Closing only with respect to matters which represent material changes to the
Pittsburgh Financial Disclosure Schedules and the information contained
therein; and provided further, that before such amendment, supplement or update
may be deemed to be a part of this Agreement, First Commonwealth shall have
agreed in writing to each amendment, supplement or update to the Pittsburgh
Financial Disclosure Schedules made subsequent to the date of this Agreement as
an amendment to this Agreement;
(e) Between
the date of this Agreement and the Closing Date, (i) Pittsburgh Financial shall
afford First Commonwealth and its authorized agents and representatives
reasonable access during normal business hours to the properties, operations,
books, records, contracts, documents, loan files and other information of, or relating
to Pittsburgh Financial and the Pittsburgh Financial Subsidiaries. Pittsburgh
Financial shall provide reasonable assistance to First Commonwealth in its
investigation of matters relating to Pittsburgh Financial and the Pittsburgh
Financial Subsidiaries; and (ii) subject to the provisions of applicable law
and regulation, Pittsburgh Financial shall furnish promptly to First
Commonwealth (A) a copy of each material report, schedule and other document
filed by Pittsburgh Financial and the Pittsburgh Financial Subsidiaries with
any Regulatory Authority and
30
(B) all other information concerning the business, interest rate risk,
properties and personnel of Pittsburgh Financial and the Pittsburgh Financial
Subsidiaries as First Commonwealth may reasonably request (other than documents
or other materials relating to the transaction contemplated herein), provided
that no investigation pursuant to this Section 5.2 shall affect or be deemed to
modify or waive any representation or warranty made by Pittsburgh Financial in
this Agreement or the conditions to the obligations of Pittsburgh Financial to
consummate the transactions contemplated by this Agreement;
(f) Pittsburgh
Financial has taken or will take all steps necessary to exempt the transactions
contemplated by this Agreement from any applicable state takeover or similar
law or takeover or similar provision in the charter documents or bylaws of
Pittsburgh Financial and the Pittsburgh Financial Subsidiaries, including
without limitation any provisions of the Articles of Incorporation of
Pittsburgh Financial restricting the ownership or acquisition of Pittsburgh
Financial's capital stock or imposing any "fair price" or
supermajority director or stockholder vote requirements; and
(g) Subject
to the terms and conditions of this Agreement, Pittsburgh Financial agrees to
use reasonable commercial efforts and to take, or to cause to be taken, all
actions, and to do, or to cause to be done, all things necessary, proper, or
advisable under applicable laws and regulations to satisfy the conditions to
Closing contained herein and to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining or other order
adversely affecting the ability of the Parties to consummate the transaction
contemplated by this Agreement.
5.3 Conduct
of Business -- Negative Covenants. From the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, Pittsburgh Financial
covenants and agrees it will neither do, nor agree or commit to do, nor permit
any Pittsburgh Financial Subsidiary to do or commit or agree to do, any of the
following without the prior written consent of the chief executive officer or
chief financial officer of First Commonwealth:
(a) Except
as expressly contemplated by this Agreement or the Plans of Merger, amend its
Articles of Incorporation or Bylaws; or
(b) (i)
Repurchase, redeem, or otherwise acquire or exchange, directly or indirectly,
any shares of its capital stock or other equity securities or any securities or
instruments convertible into any shares of its capital stock, or any rights or
options to acquire any shares of its capital stock or other equity securities;
or (ii) split or otherwise subdivide its capital stock; or (iii) recapitalize
in any way; or (iv) declare a stock dividend on the Pittsburgh Financial Common
Stock; or (v) pay or declare a cash dividend or make or declare any other type
of distribution on the Pittsburgh Financial Common Stock (except that
Pittsburgh Financial may pay the regular quarterly cash dividend in an amount
consistent with past practice and not exceeding $0.095 per share); or
(c) Acquire
direct or indirect control over any corporation, association, firm,
organization or other entity, other than in connection with (i) internal
reorganizations or consolidations involving existing Pittsburgh Financial
Subsidiaries, (ii) foreclosures in the
31
Ordinary Course of Business and not knowingly exposing it to liability
by reason of Hazardous Materials, or (iii) acquisitions of control in its
fiduciary capacity; or
(d) Except
in connection with the exercise of the Pittsburgh Financial Options listed on
the Pittsburgh Financial Disclosure Schedule or as expressly permitted by this
Agreement or the Plans of Merger, (i) issue, sell, agree to sell, or otherwise
dispose of or otherwise permit to become outstanding any additional shares of
Pittsburgh Financial Common Stock or any other capital stock of Pittsburgh
Financial or of any Pittsburgh Financial Subsidiary, or any stock appreciation
rights, or any option, warrant, conversion, call, scrip, or other right to
acquire any such stock, or any security convertible into any such stock, or
(ii) sell, agree to sell, or otherwise dispose of any substantial part of the
assets or earning power of Pittsburgh Financial or of any Pittsburgh Financial
Subsidiary; or (iii) sell, agree to sell, or otherwise dispose of any asset of
Pittsburgh Financial or any Pittsburgh Financial Subsidiary other than in the
Ordinary Course of Business for reasonable and adequate consideration; or (iv)
buy, agree to buy or otherwise acquire a substantial part of the assets or
earning power of any other Person or entity; or
(e) Incur,
or permit any Pittsburgh Financial Subsidiary to incur, any additional debt
obligation or other obligation for borrowed money except in the Ordinary Course
of Business; or
(f) Grant
any increase in compensation or benefits to any of its employees or officers
except for routine annual salary increases not to exceed 4% of such employee's
or officer's annual salary for the current fiscal year; pay any bonus; enter
into any severance agreements with any of its officers or employees; grant any
increase in fees or other increases in compensation or other benefits to any
director of Pittsburgh Financial or of any Pittsburgh Financial Subsidiary; or
effect any change in retirement benefits for any class of its employees or
officers, unless such change is required by applicable law; or
(g) Hire
a new employee with an annual compensation in excess of Fifty Thousand Dollars
($50,000), amend any existing employment contract between it and any person
(unless such amendment is required by law); enter into or amend any
indemnification agreement with any person; or enter into any new employment
contract with any person that Pittsburgh Financial or any Pittsburgh Financial
Subsidiary (or its successors) does not have the unconditional right to
terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time; or
(h) Adopt
any new employee benefit plan or terminate or make any material change in or to
any existing employee benefit plan other than any change that is required by
law or that, in the opinion of counsel, is necessary or advisable to maintain
the tax-qualified status of any such plan; or
(i) Enter
into any new service contracts with an annual expense in excess of Fifteen
Thousand Dollars ($15,000), other than contracts contemplated by this
Agreement, purchase or sale agreements or lease agreements that are material to
Pittsburgh Financial or any Pittsburgh Financial Subsidiary; or
32
(j) Make
any capital expenditure except for ordinary purchases, repairs, renewals or
replacements in an amount less than Fifteen Thousand Dollars ($15,000) per
individual expenditure; or
(k) Other
than in the Ordinary Course of Business, sell, transfer, mortgage, encumber or
otherwise dispose of any of its properties, leases or assets to any person, or
cancel, release or assign any indebtedness of any person, except pursuant to
contracts or agreements in force at the date of this Agreement; or
(l) Other
than as contemplated by this Agreement, enter into, renew, amend or terminate
any Material Contract or material lease of real or personal property; or
(m) Settle
any claim, action or proceeding involving any liability of Pittsburgh Financial
or any Pittsburgh Financial Subsidiaries for money damages in excess of
Twenty-Five Thousand Dollars ($25,000) or agree in connection with any such
settlement to material restrictions upon the operations of Pittsburgh Financial
or any Pittsburgh Financial Subsidiaries; or
(n) Change
its method of accounting in effect at September 30, 2002, except as required by
changes in GAAP as recommended or approved by Pittsburgh Financial's
independent auditors or as required by regulatory accounting principles or
regulatory requirements; or
(o) Enter
into any new activities or lines of business, or cease to conduct any material
activities or lines of business that it conducts on the date hereof, or conduct
any material business activity not consistent with past practice; or
(p) Make,
renegotiate, renew, increase, extend or purchase any loan, lease (credit
equivalent), advance, credit enhancement or other extension of credit, or make
any commitment in respect of any of the foregoing, except in the Ordinary
Course of Business consistent with past practices, and in individual loan
amounts of less than Five Hundred Thousand Dollars ($500,000) or aggregate
amounts of less than One Million Dollars ($1,000,000), as determined under
applicable regulatory loan to one borrower requirements; or
(q) Enter
into, renew or purchase any investments in derivatives contracts; or engage in
any forward commitment, futures transaction, financial option transaction,
hedging or arbitrage transaction or covered asset trading activities; or
(r) Purchase
any investment securities or make any deposits other than in the Ordinary
Course of Business; or
(s) Enter
into any material transactions other than in the Ordinary Course of Business;
or
(t) Grant
or commit to grant any new extension of credit to any officer, director or
holder of two percent (2%) or more of the outstanding Pittsburgh Financial
Common Stock, or to any corporation, partnership, trust or other entity
controlled by any such person, if such extension of credit, together with all
other credits then outstanding to the same
33
borrower and all affiliated persons of such borrower, would exceed two
percent (2%) of the capital of BankPittsburgh or amend the terms of any such
credit outstanding on the date hereof; or grant or commit to grant any new
extension of credit to any employee at below market interest rates; or
(u) Sell,
purchase, enter into a material lease, relocate, open or close any office, or
file an application pertaining to such action with any government entity; or
(v) Settle
or compromise any material tax liability or agree to an extension of the
statute of limitations with respect to the assessment or determination of any
taxes, except in the Ordinary Course of Business; or
(w) Agree
in writing or otherwise to take any of the foregoing actions.
5.4 Acquisition
Proposals. From the
date hereof until the Closing or the termination hereof, Pittsburgh Financial
shall not, nor shall Pittsburgh Financial authorize or permit any officers,
directors, employees, representatives or other agents of Pittsburgh Financial
or any Pittsburgh Financial Subsidiary to, directly or indirectly, (i) take any
action to solicit, initiate or encourage any Acquisition Proposal or (ii)
engage in negotiations with, or disclose any nonpublic information relating to
Pittsburgh Financial or any Pittsburgh Financial Subsidiary or afford access to
the properties, books or records of Pittsburgh Financial or any Pittsburgh
Financial Subsidiary to, any Person that may be considering making, or has
made, an Acquisition Proposal; provided, however, that nothing contained in
this Agreement shall prevent Pittsburgh Financial or the Board of Directors of
Pittsburgh Financial at any time prior to the
consummation of the Merger from:
(a) furnishing
nonpublic information to, or affording access to the properties, books or
records of Pittsburgh Financial or any Pittsburgh Financial Subsidiary to, or
entering into negotiations with, any Person in connection with an unsolicited
Acquisition Proposal by such Person, if (a) Pittsburgh Financial's Board of
Directors determines in good faith that such action is necessary to comply with
their fiduciary duties to the shareholders of Pittsburgh Financial under
applicable law; (b) prior to furnishing any such nonpublic information to, or
entering into discussions or negotiations with, such Person, Pittsburgh
Financial's Board of Directors receives from such Person an executed
confidentiality agreement with customary terms and (c) Pittsburgh Financial's
Board of Directors concludes in the exercise of its fiduciary duties that the
Acquisition Proposal is a Superior Proposal;
(b) taking
and disclosing to Pittsburgh Financial's shareholders any position, and making
any related filings with the SEC, as required by Rules 14e-2 and 14d-9 under
the Exchange Act, with respect to any Alternative Transaction that is a tender
offer; provided, that Pittsburgh Financial's Board of Directors shall not
recommend that the shareholders of Pittsburgh Financial tender their shares of
Pittsburgh Financial Common Stock in connection with any such tender offer
unless the Board shall have determined in good faith that such action is
necessary to comply with its fiduciary duties under applicable law; or
(c) if
an unsolicited Acquisition Proposal is received, informing the shareholders of
Pittsburgh Financial that it no longer believes that the Merger is advisable
and no
34
longer recommends approval of the Merger (a "Subsequent
Determination"), approving or recommending an Alternative Transaction
based on that unsolicited Acquisition Proposal or entering into an Acquisition
Agreement with respect to such an Alternative Transaction if (i) Pittsburgh
Financial's Board of Directors determines in good faith that such action is
necessary to comply with its fiduciary duties under applicable law and (ii) Pittsburgh
Financial's Board of Directors concludes in good faith that the Acquisition
Proposal is a Superior Proposal.
Pittsburgh Financial will promptly notify First Commonwealth after receipt of
any Acquisition Proposal or any request for nonpublic information relating to
Pittsburgh Financial or any Pittsburgh Financial Subsidiary or for access to
the properties, books or records of Pittsburgh Financial or any Pittsburgh
Financial Subsidiary by any Person that has made an Acquisition Proposal and
will keep First Commonwealth fully informed of the status and details of any
such Acquisition Proposal, indication or request. Such written notice shall specify the material terms and
conditions of the Acquisition Proposal, identify the Person making the Superior
Proposal, and state whether or not the Board of Directors of Pittsburgh
Financial intends to make a Subsequent Determination. For a period of three business days following such notice,
Pittsburgh Financial shall not take any action with respect to the Acquisition
Proposal and shall provide an opportunity for First Commonwealth to propose
such adjustments to the terms and conditions of this Agreement as would enable
the Board of Directors of Pittsburgh Financial to proceed with the transactions
contemplated herein on such adjusted terms.
5.5 Accruals
and Reserves. At the
request of First Commonwealth, Pittsburgh Financial shall establish such
additional accruals and reserves as may be necessary to conform Pittsburgh
Financial's accounting and credit loss reserve practices and methods to those
of First Commonwealth; provided, however, that Pittsburgh Financial shall not
be required to take such action prior to the satisfaction or waiver of all
conditions to Closing set forth in Article 6 (other than those conditions
relating to the delivery of certificates, opinions and other instruments and
documents at the Closing); provided further, however, that no such additional
accruals and reserves will be required to be made more than two (2) business
days prior to the Closing Date. No such additional accruals or reserves made by
Pittsburgh Financial pursuant to this Section 5.5 shall constitute or be deemed
to be a breach, violation of or failure to satisfy any representation,
warranty, covenant, agreement, condition or other provision of this Agreement
or otherwise be considered in determining whether any such breach, violation or
failure to satisfy shall have occurred. The recording of any such adjustments
shall not be deemed to imply any misstatement of previously furnished financial
statements or information and shall not be construed as concurrence of
Pittsburgh Financial or its management with any such adjustments.
5.6 Affiliate
Agreements.
Pittsburgh Financial will use reasonable commercial efforts to cause
each person who is an Affiliate of Pittsburgh Financial for purposes of Rule
145 under the Securities Act to execute and deliver to First Commonwealth on or
before the mailing of the Proxy Statement/Prospectus for the Pittsburgh
Financial Shareholders' Meeting an agreement in such form as First Commonwealth
may reasonably request restricting the disposition of the shares of First
Commonwealth Common Stock to be received by such person in exchange for such
person's shares of Pittsburgh Financial Common Stock.
35
ARTICLE
6
CONDITIONS TO CLOSING
6.1 Conditions
to the Obligations of Pittsburgh Financial. Unless waived in writing by Pittsburgh
Financial, all of the obligations of Pittsburgh Financial under this Agreement
are subject to the fulfillment prior to or at the Closing of each of the
following conditions:
(a) Representations
and Warranties. The representations and warranties of First Commonwealth contained
in Section 3, if qualified by a reference to materiality, shall be true, and if
not so qualified, shall be true in all material respects, as of the date of
this Agreement and as of the Effective Time with the same effect as though made
at the Effective Time (except that representations and warranties that by their
terms speak specifically as of the date of this Agreement or some other date
shall be true and correct as of such date);
(b) Performance
of Agreements and Covenants. First Commonwealth shall have performed and
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Effective Time;
(c) Documents.
In addition to the other deliveries of First Commonwealth described elsewhere
in this Agreement, Pittsburgh Financial shall have received the following
documents and instruments:
(i) a
certificate signed by the Secretary or an assistant secretary of First
Commonwealth dated as of the Closing Date certifying that:
(A) First
Commonwealth's Board of Directors has duly adopted resolutions (copies of which
shall be attached to such certificate) approving this Agreement (including the
Holding Company Plan of Merger) and authorizing the consummation of the
transactions contemplated by this Agreement and certifying that such
resolutions have not been amended or modified and remain in full force and
effect;
(B) each
person executing this Agreement on behalf of First Commonwealth is an officer
of First Commonwealth holding the office or offices specified therein, with
full power and authority to execute this Agreement and any and all other
documents in connection with the Merger, and that the signature of each person
set forth on such certificate is his or her genuine signature; and
(C) the
charter documents of First Commonwealth attached to such certificate remain in
full force and effect.
(ii) a
certificate signed by a duly authorized officer of First Commonwealth stating
that the conditions set forth in Section 6.1(a) and Section 6.1(b) of this
Agreement have been fulfilled; and
36
(d) Tax
Opinion. Pittsburgh Financial shall
have been furnished with an opinion of counsel to First Commonwealth, dated as
of the Closing Date, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code.
6.2 Conditions
to the Obligations of First Commonwealth. Unless waived in writing by First
Commonwealth, all of the obligations of First Commonwealth under this Agreement
are subject to the fulfillment prior to or at the Closing of each of the
following conditions:
(a) Representations
and Warranties. The representations and warranties of Pittsburgh Financial
contained in Section 4, if qualified by a reference to materiality, shall be
true, and if not so qualified, shall be true in all material respects, as of
the date of this Agreement and as of the Effective Time with the same effect as
though made at the Effective Time (except that representations and warranties
that by their terms speak specifically as of the date of this Agreement or some
other date shall be true and correct as of such date);
(b) Performance
of Agreements and Covenants. Pittsburgh Financial shall have performed and
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Effective Time;
(c) Documents.
In addition to the documents described elsewhere in this Agreement, First
Commonwealth shall have received the following documents and instruments:
(i) a
certificate signed by the Secretary or an assistant secretary of Pittsburgh
Financial dated as of the Closing Date certifying that:
(A) Pittsburgh
Financial's Board of Directors and the Pittsburgh Financial Shareholders have
duly adopted resolutions (copies of which shall be attached to such
certificate) approving this Agreement (including the Holding Company Plan of
Merger) and authorizing the consummation of the transactions contemplated by
this Agreement and certifying that such resolutions have not been amended or
modified and remain in full force and effect;
(B) each
person executing this Agreement on behalf of Pittsburgh Financial is an Officer
of Pittsburgh Financial, as the case may be, holding the office or offices
specified therein, with full power and authority to execute this Agreement and
any and all other documents in connection with the Merger, and that the
signature of each person set forth on such certificate is his or her genuine signature;
and
(C) the
charter documents of Pittsburgh Financial attached to such certificate remain
in full force and effect; and
(ii) a
certificate signed by a duly authorized officer of Pittsburgh Financial stating
that the conditions set forth in Sections 6.2(a), (b) and (d) of this Agreement
have been satisfied;
37
(d) Accruals
and Reserves. Pittsburgh Financial shall have established any accruals and
reserves described in Section 5.5.
6.3 Conditions
to Obligations of All Parties. The obligation of each party to effect the transactions
contemplated hereby shall be subject to the fulfillment, at or prior to the
Closing, of the following conditions:
(a) No
Pending or Threatened Claims. That no claim, action, suit, investigation or
other proceeding shall be pending or threatened before any court or
governmental agency which presents a substantial risk of the restraint or
prohibition of the transactions contemplated by this Agreement or the obtaining
of material damages or other relief in connection therewith;
(b) Government
Approvals. The Parties hereto shall have received all applicable Government
Approvals for the consummation of the transactions contemplated herein and all
waiting periods incidental to such approvals or notices given shall have
expired;
(c) Effective
Registration Statement. The Registration Statement shall have become
effective and no stop order or other order suspending the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been initiated or threatened by the SEC or any other Regulatory Authority;
(d) Shareholder
Vote. The Pittsburgh Financial Shareholders shall have approved of the transactions
contemplated hereby by the applicable requisite vote; and
(e) NYSE
Listing. The shares of First
Commonwealth Common Stock that shall be issued to the stockholders of
Pittsburgh Financial upon consummation of the Merger shall have been authorized
for listing on the NYSE, subject to official notice of issuance.
ARTICLE 7
TERMINATION
7.1 Termination. This
Agreement and the Plans of Merger may be terminated at any time prior to the
Closing, as follows:
(a) By
mutual consent in writing of the Parties;
(b) By
First Commonwealth or Pittsburgh Financial:
(i) In
the event the Closing shall not have occurred by March 31, 2004, unless the
failure of the Closing to occur shall be due to the failure of the party
seeking to terminate this Agreement to perform its obligations hereunder in a
timely manner; provided, however, that, if First Commonwealth and FCB shall
have filed any and all applications to obtain the requisite Government
Approvals within sixty (60) days of the date hereof, and if the Closing shall
not have occurred solely because of a delay in the approval of any such
application, then First Commonwealth may, by written notice to Pittsburgh
Financial, extend the date referenced in the first sentence of this Section
7.1(b) to June 30, 2004;
38
(ii) Upon
denial of any Government Approval necessary for the consummation of the Merger
or the Bank Merger (or should such approval be conditioned upon a substantial
deviation from the transactions contemplated); provided, however, that either
First Commonwealth or Pittsburgh Financial may, upon written notice to the
other, extend the term of this Agreement for only one sixty (60) day period to
appeal such denial or condition(s), provided that such appeal has been made
within ten (10) business days of the receipt thereof; provided, further, that
no party shall have the right to terminate this Agreement pursuant to this
Section 7.1(b)(ii) if such denial shall be due to the failure of that party to
perform or observe the covenants and agreements of such party set forth herein;
or
(iii) If
the Pittsburgh Financial Shareholders do not approve this Agreement and the
Merger at the Pittsburgh Financial Shareholders' Meeting or any adjournment
thereof.
(c) By
First Commonwealth:
(i) if
Pittsburgh Financial's Board of Directors shall have (a) failed to include in
the Proxy Statement its recommendation without modification or qualification
that the shareholders of Pittsburgh Financial approve this Agreement and the
Merger, (b) approved or recommended or entered into any agreement with respect
to any other Acquisition Proposal, (c) withdrawn, modified or qualified its
recommendation of this Agreement or the Merger in a manner adverse to the
interests of First Commonwealth or (d) resolved to do any of the foregoing; or
(ii) If
Pittsburgh Financial has breached any representation, warranty or covenant
contained in this Agreement, which breach would result in the nonfulfillment of
one or more of the conditions to the obligations of First Commonwealth set
forth in Section 6.2, First Commonwealth has notified Pittsburgh Financial of
the breach, and either such breach is incapable of being cured or, if capable
of being cured, has not been cured within 15 days after the notice of breach.
(d) By
Pittsburgh Financial:
(i) If
First Commonwealth has breached any representation, warranty or covenant
contained in this Agreement, which breach would result in the nonfulfillment of
one or more of the conditions to the obligations of Pittsburgh Financial set
forth in Section 6.1, Pittsburgh Financial has notified First Commonwealth of
the breach, and either such breach is incapable of being cured or, if capable
of being cured, has not been cured within 15 days after the notice of breach;
or
(ii) if,
after it has received a Superior Proposal in compliance with Section 5.4 and
otherwise complied with all of its obligations under Section 5.4, Pittsburgh
Financial's Board of Directors determines in good faith to terminate this
Agreement, after concluding that such action is necessary to comply with its
fiduciary duties to the shareholders of Pittsburgh Financial under applicable
law.
7.2 Effect
of Termination. In the event that this Agreement
should be terminated pursuant to Section 7.1 hereof, all further obligations of
the parties under this Agreement, other
39
than the provisions of Section 7.3, shall terminate without further
liability of any party to another; provided, however, that a termination under
Section 7.1 hereof shall not relieve any party of any liability for a breach of
this Agreement or for any misstatement or misrepresentation made hereunder
prior to such termination, or be deemed to constitute a waiver of any available
remedy for any such breach, misstatement or misrepresentation.
7.3 Termination
Fee.
(a) Upon
Termination. If (i) First
Commonwealth shall terminate this Agreement pursuant to clause (i) of Section
7.1(c) or (ii) Pittsburgh Financial shall terminate this Agreement pursuant to
clause (ii) of Section 7.1(d), then, in either case, Pittsburgh Financial shall
pay to First Commonwealth, within five Business Days of such termination, a
fee, in cash, in an amount equal to 4% of the product of the number of shares
of outstanding Pittsburgh Financial Common Stock as of the date of termination
times the Per Share Cash Consideration (the "Termination Fee").
(b) Upon
Subsequent Transaction. If (i) this
Agreement is terminated by either party pursuant to clause (iii) of Section
7.1(b), (ii) an Acquisition Proposal (other than by First Commonwealth) is
pending at the time of the Pittsburgh Financial Shareholders' Meeting and (iii)
with 12 months after the date of the Pittsburgh Financial Shareholders'
Meeting, Pittsburgh Financial shall consummate an Alternative Transaction, then
Pittsburgh Financial shall pay to First Commonwealth on demand an amount in
cash equal to the Termination Fee; provided that no such amount shall be
payable if the Termination Fee was paid under Section 7.3(a).
ARTICLE
8
MISCELLANEOUS
8.1 Survival. The
representations, warranties, covenants and agreements made in this Agreement or
in any instrument, agreement, certificate or other document delivered pursuant
to this Agreement shall not survive the Closing or any termination of this
Agreement except that (i) the provisions of Sections 1.10 and 1.11 shall
survive the Closing, (ii) Section 7.2 and Section 7.3 shall survive any
termination of this Agreement, (iii) the provisions of this Article 8 shall
survive the Closing and any termination of this Agreement; and (iv) covenants
that by their terms are to be performed after the Effective Time, including,
without limitation, the covenants set forth in Section 4.4, shall surviving the
Closing.
8.2 Notices. All
notices and other communications required or permitted hereunder shall be in
writing and shall be sent by facsimile, hand delivery or reputable overnight
courier. The facsimile numbers and
addresses of the parties set forth below shall be used for the delivery of
notices unless and until a party changes its facsimile number or address for
such purposes by notice to the other parties.
Each such notice or other communication shall be effective (i) if given
by facsimile, when transmission of the facsimile is confirmed by the sender's
facsimile machine, (ii) if given by reputable overnight courier, one business
day after being delivered to the courier or (iii) if given by any other means,
when actually received.
40
If to Pittsburgh
Financial: Pittsburgh
Financial Corporation
0000
Xxxxxxx Xxx Xxxx
Xxxxxxx,
XX 00000
Fax: (000)
000-0000
Attn: J.
Ardie "Xxxxx" Xxxxxx
With a copy
to: Elias,
Matz, Xxxxxxx & Xxxxxxx L.L.P.
000
00xx Xxxxxx, X.X.
00xx
Xxxxx
Xxxxxxxxxx,
XX 00000
Fax: (000)
000-0000
Attn: Xxxxx
X. Xxxxxxxx
If to First Commonwealth: First
Commonwealth Financial Corporation
00
Xxxxx Xxxxx Xxxxxx
Xxxxxxx,
XX 00000
Fax: (000)
000-0000
Attn: Xxxx.
X. Xxxxx
With a copy
to: Xxxxxxx
& Xxxxxx L.L.C.
000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Fax: (000)
000-0000
Attn: Xxxxxx
X. Xxxxx, Xx.
or to such other address as any party hereto may hereafter designate to the
other parties in writing.
8.3 Jurisdiction;
Venue. Each of the parties hereto (i) agrees
that any legal action or proceeding with respect to any dispute that arises out
of this Agreement or any of the transactions contemplated hereby shall be
brought in the state or federal courts of appropriate subject matter
jurisdiction in Pittsburgh, Pennsylvania and (ii) hereby submits itself to the
exclusive personal jurisdiction of such courts. Each party waives any objection to venue in any such court.
8.4 Amendments
and Supplements. At any time prior to the Closing
Date, this Agreement may be amended or supplemented by a written instrument
signed by First Commonwealth and Pittsburgh Financial; provided that, after the
adoption of this Agreement by the shareholders of Pittsburgh Financial, without
the affirmative vote of the holders of shares of Pittsburgh Financial Common
Stock representing a majority of the votes that may be cast by the holders of
all then outstanding shares of Pittsburgh Financial Common Stock, Pittsburgh
Financial will not (i) enter into any amendment to this Agreement that would
alter or change any of the terms and conditions of this Agreement if such
alteration or change would materially adversely affect the holders of shares of
Pittsburgh Financial Common Stock, or (ii) waive any condition set forth in
Section 6.1 or 6.3 if such waiver would materially adversely affect the holders
of shares of Pittsburgh Financial Common Stock
41
8.5 Governing
Law. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to any choice of law or conflict of laws rule or
provision that would cause the application of the domestic substantive laws of
any other jurisdiction.
8.6 Entire
Agreement, Assignability, Etc. This Agreement
(including the Pittsburgh Financial Disclosure Schedule) constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the
transactions and matters contemplated hereby, (ii) is not intended to confer
any right or remedies upon any Person other than the parties hereto, the
shareholders of Pittsburgh Financial, and other than with respect to the covenants
and agreements set forth in Sections 4.4, 4.9, and 4.10, to be performed or
satisfied following the Effective Time, and (iii) shall not be assignable by
either party without the prior written consent of the other party.
8.7 Exclusivity
of Representations. Pittsburgh Financial has not and
shall not be deemed to have made to First Commonwealth any representation or
warranty other than as expressly made by Pittsburgh Financial in
Section 3. First Commonwealth have
not and shall not be deemed to have made to Pittsburgh Financial any
representation or warranty other than as expressly made by First Commonwealth
in Section 2.
8.8 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute but one and the
same instrument. The signatures of the
parties on this Agreement may be delivered by facsimile and any such facsimile
signature shall be deemed an original.
8.9 Publicity. Promptly
following the execution of this Agreement, Pittsburgh Financial and First
Commonwealth shall issue a joint press release announcing the transactions
contemplated hereby, which shall be reasonably acceptable to Pittsburgh
Financial and First Commonwealth.
Following that release and prior to the consummation of the Merger,
except as required by law or any listing agreement with a securities exchange
or interdealer quotation system, neither Pittsburgh Financial nor First
Commonwealth nor any Subsidiary of Pittsburgh Financial or First Commonwealth
will, with respect to the transactions contemplated hereby, issue any press
release or make any public statements or mail any communications or letters to
their respective shareholders generally, except with the prior approval of the
other party or as otherwise permitted by this Agreement. With respect to any communication believed
to be required by law or any listing agreement with a securities exchange or
interdealer quotation system, the party making such communication agrees to
provide a copy of the text of such communication to the other party prior to
its release and to afford the other party a reasonable opportunity to comment
thereon.
8.10 Headings;
Terms. The section headings contained in
this Agreement are for convenience only and will not affect in any way the
meaning or interpretation of this Agreement.
Defined terms will have the meanings specified, applicable to both
singular and plural forms, for all purposes of this Agreement. All pronouns (and any variation) will be
deemed to refer to the masculine, feminine or neuter, as the identity of the
Person may require. The singular or
plural includes the other, as the context requires or permits. The word include (and any variation) is used
in an illustrative sense rather than a limiting sense. The word "day" means a calendar
day,
42
unless a Business Day is specified.
All references to "Sections" are to sections of this Agreement
unless indicated otherwise.
8.11 Severability. The
invalidity or unenforceability of any term or provision of this Agreement shall
not affect the validity or enforceability of the remaining terms and provisions
hereof.
8.12 Waivers. No
waiver by either party of any default, misrepresentation or breach of warranty
or covenant hereunder will be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence, and no waiver will be effective unless set forth in writing and
signed by the party against whom such waiver is asserted.
8.13 Payment
of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, First Commonwealth and
Pittsburgh Financial shall each pay its own fees and expenses (including,
without limitation, legal fees and expenses) incurred by it in connection with
the transactions contemplated hereunder.
8.14 Construction. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring a party by virtue of the authorship of any of the
provisions of this Agreement.
8.15 Remedies
Cumulative. All remedies provided in this
Agreement, by law, equity or otherwise, shall be cumulative and not
alternative.
8.16 Incorporation
of Disclosure Schedule. The Pittsburgh Financial
Disclosure Schedule is incorporated herein by reference and made a part hereof.
For purposes of this Agreement, any matter disclosed in any portion of the
Pittsburgh Financial Disclosure Schedule shall be deemed to have been disclosed
for purposes of and to be an exception to all representations and warranties of
Pittsburgh Financial in this Agreement.
[Signature page follows.]
43
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Agreement as of the date first written above.
First
Commonwealth Financial Corporation
By: /S/
XXXXXX X.
O'DELL
Name: Xxxxxx
X. O'Dell
Title: President
and Chief Executive Officer
First
Commonwealth Bank
By: /S/
XXXXXXXX A.
GLASS
Name: Xxxxxxxx
A. Glass
Title: President
and Chief Executive Officer
Pittsburgh
Financial Corp.
By: /S/
J. XXXXX
XXXXXX
Name: J.
Xxxxx Xxxxxx
Title: Chairman,
President and Chief
Executive
Officer
Pittsburgh
Savings Bank
By: /S/
J. XXXXX XXXXXX
Name: J.
Xxxxx Xxxxxx
Title: Chairman,
President and Chief
Executive
Officer
AGREEMENT
AND PLAN OF MERGER
among
FIRST COMMONWEALTH FINANCIAL CORPORATION
FIRST COMMONWEALTH BANK
PITTSBURGH FINANCIAL CORP.
and
PITTSBURGH SAVINGS BANK
Dated as of August 8, 2003
TABLE OF CONTENTS
|
ARTICLE 1 BASIC TRANSACTION........................................................................... |
2 |
|
|
1.1 |
Merger........................................................................................................................ |
2 |
|
1.2 |
Bank Merger............................................................................................................... |
2 |
|
1.3 |
Effective Time.............................................................................................................. |
2 |
|
1.4 |
Conversion of Pittsburgh Financial Common Stock....................................................... ................................................................................................................................... |
2 |
|
1.5 |
PFC Treasury Stock; Shares owned by First Commonwealth....................................... |
3 |
|
1.6 |
First Commonwealth Common Stock........................................................................... |
3 |
|
1.7 |
Fractional Shares......................................................................................................... |
3 |
|
1.8 |
Anti-Dilution................................................................................................................ |
3 |
|
1.9 |
Pittsburgh Financial Options......................................................................................... |
3 |
|
1.10 |
Election and Exchange Procedures............................................................................... |
5 |
|
1.11 |
Withholding Rights....................................................................................................... |
9 |
|
1.12 |
Closing........................................................................................................................ |
9 |
|
|
|
|
|
2.1 |
Organization and Corporate Authority of First Commonwealth...................................... |
9 |
|
2.2 |
Organization and Qualification of FCB.......................................................................... |
10 |
|
2.3 |
Authority..................................................................................................................... |
10 |
|
2.4 |
No Legal Bar............................................................................................................... |
10 |
|
2.5 |
Approvals, Consents and Filings................................................................................... |
11 |
|
2.6 |
Financial Statements..................................................................................................... |
11 |
|
2.7 |
No Material Adverse Change....................................................................................... |
11 |
|
2.8 |
Capitalization of First Commonwealth........................................................................... |
11 |
|
2.9 |
Capitalization of FCB................................................................................................... |
11 |
|
2.10 |
Disclosure.................................................................................................................... |
12 |
|
|
|
|
|
3.1 |
Organization and Qualification of Pittsburgh Financial and Subsidiaries.......................... |
12 |
|
3.2 |
Organization and Qualification of BankPittsburgh.......................................................... |
13 |
|
3.3 |
Authority..................................................................................................................... |
13 |
|
3.4 |
No Legal Bar............................................................................................................... |
13 |
|
3.5 |
Approvals, Consents and Filings................................................................................... |
14 |
|
3.6 |
Financial Statements..................................................................................................... |
14 |
|
3.7 |
Undisclosed Liabilities.................................................................................................. |
14 |
|
3.8 |
Regulatory Reports...................................................................................................... |
14 |
|
3.9 |
Books and Records..................................................................................................... |
14 |
|
3.10 |
Tax Matters................................................................................................................. |
15 |
|
3.11 |
Litigation and Proceedings............................................................................................ |
16 |
|
3.12 |
Business Operations..................................................................................................... |
16 |
|
3.13 |
Absence of Changes; Operation in the Ordinary Course............................................... |
19 |
|
3.14 |
Employees and Benefits............................................................................................... |
19 |
|
3.15 |
Certain Agreements..................................................................................................... |
21 |
|
|
Capitalization of Pittsburgh Financial............................................................................. |
21 |
i
|
3.17 |
Capitalization of BankPittsburgh................................................................................... |
21 |
|
3.18 |
Pittsburgh Financial Subsidiaries................................................................................... |
22 |
|
3.19 |
Allowance for Loan Losses.......................................................................................... |
22 |
|
3.20 |
Absence of Brokers..................................................................................................... |
22 |
|
3.21 |
Representations and Warranties................................................................................... |
22 |
|
|
|
|
|
4.1 |
Regulatory Approvals.................................................................................................. |
23 |
|
4.2 |
Preparation of Registration Statement........................................................................... |
23 |
|
4.3 |
Registration Statement Effectiveness............................................................................. |
23 |
|
4.4 |
Employees and Employee Benefits............................................................................... |
24 |
|
4.5 |
Reasonable Efforts to Close......................................................................................... |
27 |
|
4.6 |
Access........................................................................................................................ |
27 |
|
4.7 |
NYSE......................................................................................................................... |
27 |
|
4.8 |
Updating of Representations......................................................................................... |
27 |
|
4.9 |
Indemnification............................................................................................................. |
28 |
|
4.10 |
Insurance..................................................................................................................... |
28 |
|
|
|
|
|
5.1 |
Shareholders' Meeting.................................................................................................. |
29 |
|
5.2 |
Conduct of Business -- Affirmative Covenants.............................................................. |
29 |
|
5.3 |
Conduct of Business -- Negative Covenants................................................................. |
31 |
|
5.4 |
Acquisition Proposals................................................................................................... |
34 |
|
5.5 |
Accruals and Reserves................................................................................................. |
35 |
|
5.6 |
Affiliate Agreements..................................................................................................... |
35 |
|
|
|
|
|
6.1 |
Conditions to the Obligations of Pittsburgh Financial..................................................... |
36 |
|
6.2 |
Conditions to the Obligations of First Commonwealth................................................... |
37 |
|
6.3 |
Conditions to Obligations of All Parties......................................................................... |
38 |
|
|
|
|
|
7.1 |
Termination.................................................................................................................. |
38 |
|
7.2 |
Effect of Termination.................................................................................................... |
39 |
|
7.3 |
Termination Fee........................................................................................................... |
40 |
|
|
|
|
|
8.1 |
Survival....................................................................................................................... |
40 |
|
8.2 |
Notices........................................................................................................................ |
40 |
|
8.3 |
Jurisdiction; Venue....................................................................................................... |
41 |
|
8.4 |
Amendments and Supplements..................................................................................... |
41 |
|
8.5 |
Governing Law............................................................................................................ |
42 |
|
8.6 |
Entire Agreement, Assignability, Etc............................................................................. |
42 |
|
8.7 |
Exclusivity of Representations....................................................................................... |
42 |
|
8.8 |
Counterparts................................................................................................................ |
42 |
|
8.9 |
Publicity....................................................................................................................... |
42 |
|
8.10 |
Headings; Terms.......................................................................................................... |
42 |
|
8.11 |
Severability.................................................................................................................. |
43 |
|
8.12 |
Waivers....................................................................................................................... |
43 |
ii
|
8.13 |
Payment of Expenses................................................................................................... |
43 |
|
8.14 |
Construction................................................................................................................ |
43 |
|
8.15 |
Remedies Cumulative................................................................................................... |
43 |
|
8.16 |
Incorporation of Disclosure Schedule........................................................................... |
43 |
|
Exhibits: |
|
|
Exhibit A |
Holding Company Plan of Merger |
|
Exhibit B |
Bank Plan of Merger |
|
Exhibit C |
Definitions |
|
Exhibit D |
Pittsburgh Financial Disclosure Schedule |
iii
"Acquisition
Proposal" means any tender offer, agreement, understanding or other
proposal of any nature pursuant to which any Person, other than First
Commonwealth or a First Commonwealth Subsidiary, would directly or indirectly
engage in an Alternative Transaction.
"Affiliate"
of a party means any person, partnership, corporation, association or other
legal entity directly or indirectly controlling, controlled by or under common
control with that party.
"Agreement"
shall have the meaning given to such term in the first paragraph.
"Aggregate
Cash Consideration" means $11,399,048.
"Alternative
Transaction" means a transaction or series of transactions in which any
Person, other than First Commonwealth or a First Commonwealth Subsidiary,
merges or consolidates with or into Pittsburgh Financial or BankPittsburgh,
acquires substantially all of the assets of Pittsburgh Financial or
BankPittsburgh, or acquires beneficial ownership (determined pursuant to Rule
13d-3 of the Exchange Act) of at least a majority of the total voting power of
Pittsburgh Financial or BankPittsburgh.
"ATM"
means an automated teller machine.
"Average
Closing Price" means the average closing price of the First Commonwealth
Common Stock on the NYSE for the ten trading days ending with the third trading
day prior to the Closing.
"Balance Sheet
Date" shall have the meaning given to such term in Section 3.13.
"Bank Common
Stock" shall have the meaning given to such term in Section 3.17.
"Bank
Merger" shall have the meaning given to such term in the Recitals.
"Bank Plan of
Merger" shall have the meaning given to such term in the Recitals.
"BankPittsburgh"
shall have the meaning given to such term in the Recitals.
"BHCA"
shall have the meaning given to such term in Section 2.1.
"Cancelled
Option Holder" shall have the meaning given to such term in Section
1.9(a)(i).
"Cash Election
Shares" shall have the meaning given to such term in Section 1.10(a).
"Claim"
shall have the meaning given to such term in Section 4.9.
"Closing"
shall have the meaning given to such term in Section 1.12.
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"Closing
Date" shall have the meaning given to such term in Section 1.12.
"Code"
means the Internal Revenue Code of 1986, as amended.
"Continuing
Employees" shall have the meaning given to such term in Section 4.4(b).
"Continuing
Option Holder" shall have the meaning given to such term in Section
1.9(a)(ii).
"Costs"
shall have the meaning given to such term in Section 4.9.
"Effective
Time" shall have the meaning given to such term in Section 1.3.
"Election
Deadline" shall have the meaning given to such term in Section 1.10(b).
"Election
Form" shall have the meaning given to such term in Section 1.10(a).
"Environmental
Regulations" means all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises, and similar items of all governmental entities and all
applicable judicial, administrative, and regulatory decrees, judgments, and
orders relating to the protection of human health, the environment, or the use,
storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Materials.
"ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended.
"ERISA
Affiliate" means, with respect to any entity, any entity that is, or at
any applicable time was, a member of (A) a controlled group of corporations (as
defined in Section 414(b) of the Code), (B) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code), or (D) an
affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes the first
entity.
"ESOP"
shall have the meaning given to such term in Section 4.4(d).
"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange
Agent" shall have the meaning given to such term in Section 1.10(a).
"Exchange
Ratio" shall be calculated by dividing (x) the Per Share Cash
Consideration by (y) the Average Closing Price.
"FCB"
shall have the meaning given to such term in the Recitals.
"First
Commonwealth" shall have the meaning given to such term in the first
paragraph.
"First
Commonwealth Common Stock" shall have the meaning given to such term in
the Recitals.
C-2
"First
Commonwealth Filings" shall have the meaning given to such term in Section
2.6.
"First
Commonwealth Subsidiary" means any Person in which First Commonwealth,
directly or indirectly, owns at least a majority of the stock or other equity
interests of such Person or possess at least a majority of the total voting
power of such Person.
"FDIC"
shall have the meaning given to such term in Section 2.2.
"FRB"
shall have the meaning given to such term in Section 2.1.
"GAAP"
shall mean accounting principles generally accepted in the United States,
consistently applied.
"Government
Approval" means the regulatory and government approvals specified in
Sections 2.5 and 3.5.
"Hazardous
Materials" means any substance the presence of which requires
investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law or which is or
becomes defined as a hazardous waste, hazardous substance, hazardous material,
used oil, pollutant or contaminant under any federal, state or local statute,
regulation, rule or ordinance or amendments thereto.
"Holding
Company Plan of Merger" shall have the meaning given to such term in the
Recitals.
"Indemnified
Parties" shall have the meaning given to such term in Section 4.9.
"Intellectual
Property Rights" shall have the meaning given to such term in Section
3.12(e).
"IRS"
shall mean the Internal Revenue Service.
"Knowledge"
means, with respect to any Person, the knowledge of such Person's officers and
management personnel, after a reasonable inquiry.
"Leased
Property" shall have the meaning given to such term in Section 3.12(g).
"Leases"
shall have the meaning given to such term in Section 3.12(f).
"Material
Adverse Change" or "Material Adverse Effect" shall mean, with
respect to any Person, any change, effect, event, occurrence or state of facts
that is, or would reasonably be expected to be, (i) materially adverse to the
business, financial condition or results of operations of such Person, other
than a change, effect, event, occurrence or state of facts resulting from (u)
any change in banking or similar laws, rules or regulations of general
applicability or interpretations thereof by courts or governmental authorities,
(v) any change in GAAP or regulatory accounting principles, in each case which
affects banks, savings banks or their holding companies generally, (x) changes
in general economic conditions or interest rates affecting savings banks and
banks generally, (y) expenses incurred in connection with the
C-3
transactions contemplated hereby and (z) the effects of any action or
omission taken pursuant to this Agreement or with the prior consent of the
other party or (ii) which materially impairs the ability of such Person to
consummate the transactions contemplated hereby.
"Material
Contract" means all of the following written contracts, agreements,
mortgages, security agreements, deeds of trust, guarantees or commitments to
which Pittsburgh Financial or any Pittsburgh Financial Subsidiary is a party,
or by which it may be bound: (a) any
employment, bonus or consulting contract; (b) any
contract concerning a partnership or joint venture; (c) any
contract or agreement that restricts Pittsburgh Financial or any Pittsburgh
Financial Subsidiary (or would restrict such First Commonwealth as the
surviving corporation after the Effective Time) from competing in any line of
business in any location; (d) any loan, agreement, note, capital lease
agreement or other agreement evidencing or related to indebtedness of
Pittsburgh Financial or any Pittsburgh Financial Subsidiary for borrowed money;
(e) any
mortgage, pledge, conditional sales contract, security agreement, option, or
any other similar agreement that creates any lien, claim, charge or encumbrance
on or any right to purchase any asset of Pittsburgh Financial or any Pittsburgh
Financial Subsidiary, or any interest therein (other than those in which
BankPittsburgh is mortgagee, secured party or deed of trust beneficiary, in
each case arising in the ordinary course of its business); (f) any
agreement relating to business acquisitions or dispositions not yet
consummated; (g) any
guarantee or indemnification other than letters of credit or loan commitments
issued by BankPittsburgh in the Ordinary Course of Business; (h) any contract involving
the payment or receipt of more than $25,000 or having a term or requiring
performance over a period of more than 90 days; or (i) any other contract
that is material to Pittsburgh Financial on a consolidated basis.
"Merger"
shall have the meaning given to such term in the Recitals.
"Multiemployer
Plans" shall have the meaning given to such term in Section 3.14(c).
"NYSE"
means the New York Stock Exchange.
"No-Election
Shares" shall have the meaning given to such term in Section 1.10(a).
"Option
Plans" means, collectively, the Pittsburgh Financial 1996 Stock Option
Plan and the Pittsburgh Financial 2000
Stock Option Plan.
"Ordinary
Course of Business" means, with respect to any Person, the ordinary course
of such person's business operations, consistent with past practices.
"PBC"
shall have the meaning given to such term in Section 1.2.
"PBCL"
shall have the meaning given to such term in Section 1.1.
"Pension
Plan" shall have the meaning given to such term in Section 3.14(c).
"Per Share
Cash Consideration" shall have the meaning given to such term in Section
1.4(a)(i).
C-4
"Person"
shall mean any natural person, corporation, partnership, limited liability
company, joint venture, association, business trust or any other kind of
entity.
"PDB"
shall have the meaning given to such term in Section 2.2.
"Pinnacle"
shall mean Pinnacle Settlement Group, LLC, a Pennsylvania limited liability
company.
"Pittsburgh
Financial" shall have the meaning given to such term in the first
paragraph.
"Pittsburgh
Financial Common Stock" shall have the meaning given to such term in the
Recitals.
"Pittsburgh
Financial Disclosure Schedule" shall have the meaning given to such term
in the introductory paragraph of Article 3.
"Pittsburgh
Financial Filings" shall have the meaning given to such term in Section
3.8.
"Pittsburgh
Financial Option" shall have the meaning given to such term in Section
1.9(a).
"Pittsburgh
Financial Shareholders" shall mean the holders of the Pittsburgh Financial
Common Stock.
"Pittsburgh
Financial Shareholders' Meeting" shall mean the special meeting of Pittsburgh
Financial Shareholders to be held pursuant to Section 5.1 of this Agreement,
including any adjournment or adjournments thereof.
"Pittsburgh
Financial Subsidiary" means any Person in which Pittsburgh Financial,
directly or indirectly, owns at least a majority of the stock or other equity
interests of such Person or possess at least a majority of the total voting
power of such Person, including, without limitation, BankPittsburgh, FraMal
Holdings Corporation, a Delaware corporation, Pinnacle, and Pittsburgh Home
Capital Trust I, a Delaware business trust.
"Plan"
shall have the meaning given to such term in Section 3.14(c).
"Plans of
Merger" shall mean the Holding Company Plan of Merger and the Bank Plan of
Merger.
"Post-Termination
Payments" shall have the meaning given to such term in Section 4.4(g).
"Proxy
Statement/Prospectus" shall mean the proxy statement to be used by
Pittsburgh Financial to solicit proxies with a view to securing the approval of
the Pittsburgh Financial Shareholders of this Agreement and the Plan of Merger,
which shall also serve as the prospectus for the shares of First Commonwealth
Common Stock to be issued to the Pittsburgh Financial Shareholders.
C-5
"Real
Property" shall have the meaning given to such term in Section 3.12(g).
"Registration
Statement" shall have the meaning given to such term in Section 4.2.
"Regulatory
Authorities" shall mean, collectively, the Department of Justice, the
FDIC, the SEC, the FRB, the PDB or any other state or federal governmental or
quasi-governmental entity which has, or may hereafter have, jurisdiction over
any of the transactions described in this Agreement.
"SEC"
shall mean the United States Securities and Exchange Commission.
"Securities
Act" shall mean the Securities Act of 1933, as amended.
"SERP"
shall have the meaning given to such term in Section 4.4(f).
"Stock
Election Shares" shall have the meaning given to such term in Section
1.10(a).
"Subsequent
Determination" shall have the meaning given to such term in Section
5.4(c).
"Superior
Proposal" means an unsolicited bona fide Acquisition Proposal that the
Board of Directors of Pittsburgh Financial determines in good faith, after
consultation with its financial advisors, to be reasonably likely to result in
a transaction that is more favorable to Pittsburgh Financial's shareholders
from a financial point of view than the transactions contemplated by this
Agreement.
"Surviving
Corporation" shall have the meaning given to such term in the Recitals.
"Termination
Fee" shall have the meaning given to such term in Section 7.3(a).
"401(k)
Plan" shall have the meaning given to such term in Section 4.4(e).
C-6
