Exhibit 2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
CONFORMED COPY
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
dated as of December 10, 1997
by and between
UNITED BANKSHARES, INC.
and
XXXXXX XXXXX BANKSHARES, INC.
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TABLE OF CONTENTS
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RECITALS................................................................................................................. A-1
ARTICLE I
Certain Definitions...................................................................................................... A-1
1.01 CERTAIN DEFINITIONS...................................................................................... A-1
ARTICLE II
The Merger............................................................................................................... A-3
2.01 THE MERGER............................................................................................... A-3
2.02 ARTICLES AMENDMENT....................................................................................... A-4
2.03 EFFECTIVE DATE AND EFFECTIVE TIME........................................................................ A-4
2.04 PLAN OF MERGER........................................................................................... A-4
ARTICLE III
Consideration; Exchange Procedures....................................................................................... A-4
3.01 MERGER CONSIDERATION..................................................................................... A-4
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS.................................................................. A-4
3.03 FRACTIONAL SHARES........................................................................................ A-5
3.04 EXCHANGE PROCEDURES...................................................................................... A-5
3.05 ANTI-DILUTION PROVISIONS................................................................................. A-5
3.06 OPTIONS.................................................................................................. A-5
ARTICLE IV
Actions Pending Acquisition.............................................................................................. A-6
4.01 FOREBEARANCES OF XXXXX................................................................................... A-6
4.02 FOREBEARANCES OF UNITED.................................................................................. A-7
ARTICLE V
Representations and Warranties........................................................................................... A-8
5.01 DISCLOSURE SCHEDULES..................................................................................... A-8
5.02 STANDARD................................................................................................. A-8
5.03 REPRESENTATIONS AND WARRANTIES OF XXXXX.................................................................. A-8
5.04 REPRESENTATIONS AND WARRANTIES OF UNITED................................................................. A-13
ARTICLE VI
Covenants................................................................................................................ A-17
6.01 REASONABLE BEST EFFORTS.................................................................................. A-17
6.02 STOCKHOLDER APPROVALS.................................................................................... A-17
6.03 REGISTRATION STATEMENT................................................................................... A-17
6.04 PRESS RELEASES........................................................................................... A-18
6.05 ACCESS; INFORMATION...................................................................................... A-18
6.06 ACQUISITION PROPOSALS.................................................................................... A-18
6.07 AFFILIATE AGREEMENTS..................................................................................... A-18
6.08 TAKEOVER LAWS............................................................................................ A-18
6.09 CERTAIN POLICIES......................................................................................... A-19
6.10 NASDAQ LISTING........................................................................................... A-19
6.11 REGULATORY APPLICATIONS.................................................................................. A-19
6.12 INDEMNIFICATION.......................................................................................... A-19
6.13 BENEFIT PLANS............................................................................................ A-20
6.14 NOTIFICATION OF CERTAIN MATTERS.......................................................................... A-20
6.15 DIRECTORS AND OFFICERS................................................................................... A-20
6.16 DIVIDEND COORDINATION.................................................................................... A-20
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PAGE
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6.17 BANK MERGER.............................................................................................. A-20
6.18 XXXXX FEE................................................................................................ A-20
ARTICLE VII
Conditions to Consummation of the Merger................................................................................. A-21
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER............................................... A-21
7.02 CONDITIONS TO OBLIGATION OF XXXXX........................................................................ A-21
7.03 CONDITIONS TO OBLIGATION OF UNITED....................................................................... A-22
ARTICLE VIII
Termination.............................................................................................................. A-22
8.01 TERMINATION.............................................................................................. A-22
8.02 EFFECT OF TERMINATION AND ABANDONMENT.................................................................... A-23
ARTICLE IX
Miscellaneous............................................................................................................ A-23
9.01 SURVIVAL................................................................................................. A-23
9.02 WAIVER; AMENDMENT........................................................................................ A-23
9.03 COUNTERPARTS............................................................................................. A-23
9.04 GOVERNING LAW............................................................................................ A-23
9.05 EXPENSES................................................................................................. A-23
9.06 NOTICES.................................................................................................. A-23
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES....................................................... A-24
9.08 INTERPRETATION; EFFECT................................................................................... A-24
EXHIBIT A Form of Stock Option Agreement (See Appendix B of this Proxy Statement)
EXHIBIT A-1 Plan of Merger
EXHIBIT B Form of Xxxxx Affiliate Agreement
EXHIBIT C Form of United Affiliate Agreement
ANNEX A Form of Supplement for Merger Sub
Accession to Acquisition Agreement
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of December 10,
1997 (this "AGREEMENT"), by and between Xxxxxx Xxxxx Bankshares, Inc. ("XXXXX")
and, United Bankshares, Inc. ("UNITED").
RECITALS
X. XXXXX. Xxxxx is a Virginia corporation, having its principal place of
business in Fairfax, Virginia.
B. UNITED. United is a West Virginia corporation, having its principal
place of business in Charleston, West Virginia.
C. STOCK OPTION AGREEMENT. As an inducement to the willingness of United to
continue to pursue the transactions contemplated by this Agreement , Xxxxx
expects (but is not obligated) to grant to United an option pursuant to a stock
option agreement, in substantially the form of EXHIBIT A.
D. INTENTIONS OF THE PARTIES. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be accounted for
under the "pooling-of-interests" accounting method and treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"CODE").
E. BOARD ACTION. The respective Boards of Directors of each of United and
Xxxxx have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:
"ACQUISITION PROPOSAL" means any tender or exchange offer, proposal for a
merger, consolidation or other business combination involving Xxxxx or any of
its Subsidiaries or any proposal or offer to acquire in any manner a substantial
equity interest in, or a substantial portion of the assets or deposits of, Xxxxx
or any of its Subsidiaries, other than the transactions contemplated by this
Agreement.
"AGREEMENT" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPENSATION AND BENEFIT PLANS" has the meaning set forth in Section
5.03(m).
"CORPORATION COMMISSION" has the meaning set forth in Section 2.01(b).
"COSTS" has the meaning set forth in Section 6.12(a).
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 5.01.
"EFFECTIVE DATE" means the date on which the Effective Time occurs.
"EFFECTIVE TIME" means the effective time of the Merger, as provided for in
Section 2.03.
"ENVIRONMENTAL LAWS" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Federal Clean Air Act, and the Occupational Safety and Health Act, each as
amended, regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" has the meaning set forth in Section 5.03(m).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"EXCHANGE AGENT" has the meaning set forth in Section 3.04.
"EXCHANGE RATIO" has the meaning set forth in Section 3.01.
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"GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.12(a).
"INSURANCE AMOUNT" has the meaning set forth in Section 6.12(b).
"INSURANCE POLICY" has the meaning set forth in Section 5.03(t).
"LIEN" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"XXXXX" has the meaning set forth in the preamble to this Agreement.
"XXXXX AFFILIATE" has the meaning set forth in Section 6.07(a).
"XXXXX BOARD" means the Board of Directors of Xxxxx.
"XXXXX BY-LAWS" means the By-laws of Xxxxx.
"XXXXX CERTIFICATE" means the Amended Articles of Incorporation of Xxxxx.
"XXXXX COMMON STOCK" means the common stock, par value $1.11 per share, of
Xxxxx.
"XXXXX MEETING" has the meaning set forth in Section 6.02.
"XXXXX PREFERRED STOCK" means the preferred stock, par value $0.01 per
share, of Xxxxx.
"XXXXX STOCK" means, collectively, Xxxxx Common Stock and Xxxxx Preferred
Stock.
"XXXXX STOCK PLANS" has the meaning set forth in Section 3.06.
"MATERIAL ADVERSE EFFECT" means, with respect to United or Xxxxx, any
effect that (i) is material and adverse to the financial position, results of
operations or business of United and its Subsidiaries taken as a whole or Xxxxx
and its Subsidiaries taken as a whole, respectively, or (ii) would materially
impair the ability of either United or Xxxxx to perform its obligations under
this Agreement or otherwise materially threaten or materially impede the
consummation of the Merger and the other transactions contemplated by this
Agreement; PROVIDED, HOWEVER, that Material Adverse Effect shall not be deemed
to include the impact of (a) changes in banking and similar laws of general
applicability or interpretations thereof by courts or governmental authorities,
(b) changes in generally accepted accounting principles or regulatory accounting
requirements applicable to banks and their holding companies generally and (c)
any modifications or changes to valuation policies and practices in connection
with the Merger or restructuring charges taken in connection with the Merger, in
each case in accordance with generally accepted accounting principles.
"MERGER" has the meaning set forth in Section 2.01.
"MERGER CONSIDERATION" has the meaning set forth in Section 3.01.
"MERGER SUB" means Xxxxxx Xxxxx Holding Company, a Virginia corporation,
and/or one or more other corporations or limited liability companies to be
organized under the corporate laws of a State by United prior to the Effective
Time; provided that the laws of the State of incorporation thereof shall permit
the merger of corporations or limited liability companies organized thereunder
with and into a Virginia corporation.
"MULTIEMPLOYER PLAN" has the meaning set forth in Section 5.03(m).
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"NEW CERTIFICATE" has the meaning set forth in Section 3.04.
"OLD CERTIFICATE" has the meaning set forth in Section 3.04.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust or unincorporated organization.
"PENSION PLAN" has the meaning set forth in Section 5.03(m).
"PLANS" has the meaning set forth in Section 5.03(m).
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"PREVIOUSLY DISCLOSED" by a party shall mean information set forth in its
Disclosure Schedule.
"PROXY STATEMENT" has the meaning set forth in Section 6.03.
"REGISTRATION STATEMENT" has the meaning set forth in Section 6.03.
"REGULATORY AUTHORITY" has the meaning set forth in Section 5.03(i).
"REPRESENTATIVES" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"RIGHTS" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC DOCUMENTS" has the meaning set forth in Section 5.03(g).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"STOCK OPTION AGREEMENT" has the meaning set forth in Recital C.
"SUBSIDIARY" and "SIGNIFICANT SUBSIDIARY" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.01.
"TAKEOVER LAWS" has the meaning set forth in Section 5.03 (o).
"TAX" and "TAXES" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority whether
arising before, on or after the Effective Date.
"TAX RETURNS" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with respect to any Tax.
"TREASURY STOCK" shall mean shares of Xxxxx Stock held by Xxxxx or any of
its Subsidiaries or by United or any of its Subsidiaries, in each case other
than in a fiduciary capacity or as a result of debts previously contracted in
good faith.
"UNITED" has the meaning set forth in the preamble to this Agreement.
"UNITED BOARD" means the Board of Directors of United.
"UNITED COMMON STOCK" means the common stock, par value $2.50 per share, of
United.
"UNITED MEETING" has the meaning set forth in Section 6.02.
"VSCA" means the Virginia Stock Corporation Act.
"WEST VIRGINIA SECRETARY" means the Office of the Secretary of State of the
State of West Virginia.
"WVCA" means the West Virginia Corporation Act.
ARTICLE II
THE MERGER
2.01 THE MERGER. (a) Prior to the Effective Time, United shall take any and
all action necessary (i) duly to organize one or more Merger Subs for the
purpose of consummating the Merger; (ii) to cause each Merger Sub to become a
party to this Agreement, to be evidenced by the execution by each Merger Sub of
a supplement to this Agreement in substantially the
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form of Annex A , and delivery thereof to Xxxxx; and (iii) to cause each Merger
Sub to take all actions necessary or proper to comply with the obligations of
United and each such Merger Sub to consummate the transactions contemplated
hereby.
(b) At the Effective Time, Merger Sub shall merge with and into Xxxxx (the
"MERGER"), the separate corporate existence of Merger Sub shall cease and Xxxxx
shall survive and continue to exist as a Virginia corporation (Xxxxx, as the
surviving corporation in the Merger, sometimes being referred to herein as the
"SURVIVING CORPORATION"). United may at any time prior to the Effective Time
change the method of effecting the combination with Xxxxx (including, without
limitation, the provisions of this Article II) if and to the extent it deems
such change to be necessary, appropriate or desirable; PROVIDED, HOWEVER, that
no such change shall (i) alter or change the amount or kind of consideration to
be issued to holders of Xxxxx Stock as provided for in this Agreement (the
"MERGER CONSIDERATION"), (ii) adversely affect the tax treatment of Xxxxx'x
stockholders as a result of receiving the Merger Consideration or the Merger
qualifying for "pooling of interests" accounting treatment or (iii) materially
impede or delay consummation of the transactions contemplated by this Agreement;
and PROVIDED FURTHER, that United shall provide Xxxxx written notice of such
change.
(c) Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Merger shall become effective upon the occurrence of the filing
in the office of the Virginia State Corporation Commission (the "CORPORATION
COMMISSION") of articles of merger in accordance with Section 13.1-720 of the
VSCA or such later date and time as may be set forth in such articles and the
issuance of a certificate of merger by the Corporation Commission under the
VSCA. The Merger shall have the effects prescribed in the VSCA.
2.02 ARTICLES AMENDMENT. At the Effective Time, Article VI of the United
Restated Articles of Incorporation shall be amended to read as follows (the
"Articles Amendment"):
"VI. The amount of the authorized capital stock of the corporation is
$100,000,000 which shall be divided into 40,000,000 shares of a par value of
$2.50 per share."
2.03 EFFECTIVE DATE AND EFFECTIVE TIME. Subject to the satisfaction or
waiver of the conditions set forth in Article VII, the parties shall cause the
effective date of the Merger (the "EFFECTIVE DATE") to occur on (i) the fifth
business day to occur after the last of the conditions set forth in Article VII
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of United, on the last business day of the month
in which such fifth business day occurs or, if such fifth business day occurs
within the last five business days of such month, on the last business day of
the succeeding month) or (ii) such other date to which the parties may agree in
writing; PROVIDED, HOWEVER, that in no event shall the Effective Date occur on
or prior to January 1, 1998. The time on the Effective Date when the Merger
shall become effective is referred to as the "EFFECTIVE TIME."
2.04 PLAN OF MERGER. The plan of merger included in this Agreement is
separately stated in the Plan of Merger (the "PLAN OF MERGER") attached hereto
as Exhibit A-1. The parties agree that subject to the provisions of this
Agreement, including the approval of the Plan of Merger by the requisite vote of
stockholders of Xxxxx, the Plan of Merger shall be incorporated into the
articles of merger to be filed with the Corporation Commission to effect the
merger.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 MERGER CONSIDERATION. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:
(a) OUTSTANDING XXXXX COMMON STOCK AND XXXXX RIGHTS. Each share,
excluding Treasury Stock, of Xxxxx Common Stock issued and outstanding
immediately prior to the Effective Time shall become and be converted into
0.85 of a share of United Common Stock (the "Exchange Ratio"). The Exchange
Ratio shall be subject to adjustment as set forth in Section 3.05.
(b) OUTSTANDING UNITED STOCK. Each share of United Common Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unaffected by the Merger.
(c) TREASURY SHARES. Each share of Xxxxx Common Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired
at the Effective Time and no consideration shall be issued in exchange
therefor.
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Xxxxx Stock shall cease to be, and shall have no rights as,
stockholders of Xxxxx, other than to receive any dividend or other distribution
with respect to such
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Xxxxx Stock with a record date occurring prior to the Effective Time and the
consideration provided under this Article III. After the Effective Time, there
shall be no transfers on the stock transfer books of Xxxxx or the Surviving
Corporation of shares of Xxxxx Stock.
3.03 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of United Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
United shall pay to each holder of Xxxxx Common Stock who would otherwise be
entitled to a fractional share of United Common Stock (after taking into account
all Old Certificates delivered by such holder) an amount in cash (without
interest) determined by multiplying such fraction by the average of the last
sale prices of United Common Stock, as reported by NASDAQ reporting system (as
reported in THE WALL STREET JOURNAL or, if not reported therein, in another
authoritative source), for the five NASDAQ trading days immediately preceding
the Effective Date.
3.04 EXCHANGE PROCEDURES. (a) At or prior to the Effective Time, United
shall deposit, or shall cause to be deposited, with United Bank (in such
capacity, the "EXCHANGE AGENT"), for the benefit of the holders of certificates
formerly representing shares of Xxxxx Common Stock ("OLD CERTIFICATES"), for
exchange in accordance with this Article III, certificates representing the
shares of United Common Stock ("NEW CERTIFICATES") and an estimated amount of
cash (such cash and New Certificates, together with any dividends or
distributions with a record date occurring after the Effective Date with respect
thereto (without any interest on any such cash, dividends or distributions),
being hereinafter referred to as the "EXCHANGE FUND") to be paid pursuant to
this Article III in exchange for outstanding shares of Xxxxx Common Stock.
(b) As promptly as practicable after the Effective Date, United shall send
or cause to be sent to each former holder of record of shares of Xxxxx Common
Stock immediately prior to the Effective Time transmittal materials for use in
exchanging such stockholder's Old Certificates for the consideration set forth
in this Article III. United shall cause the New Certificates into which shares
of a stockholder's Xxxxx Common Stock are converted on the Effective Date and/or
any check in respect of any fractional share interests or dividends or
distributions which such person shall be entitled to receive to be delivered to
such stockholder upon delivery to the Exchange Agent of Old Certificates
representing such shares of Xxxxx Common Stock (or indemnity reasonably
satisfactory to United and the Exchange Agent, if any of such certificates are
lost, stolen or destroyed) owned by such stockholder. No interest will be paid
on any such cash to be paid in lieu of fractional share interests or in respect
of dividends or distributions which any such person shall be entitled to receive
pursuant to this Article III upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent, if any, nor
any party hereto shall be liable to any former holder of Xxxxx Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect to United Common Stock
with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of Xxxxx Common
Stock converted in the Merger into the right to receive shares of such United
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth in
this Section 3.04, and, following 90 days after the Effective Date, no such
shares of Xxxxx Common Stock shall be eligible to vote until the holder of Old
Certificates is entitled to receive New Certificates in accordance with the
procedures set forth in this Section 3.04. After becoming so entitled in
accordance with this Section 3.04, the record holder thereof also shall be
entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
United Common Stock such holder had the right to receive upon surrender of the
Old Certificates.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Xxxxx for six months after the Effective Time shall be paid to
United. Any stockholders of Xxxxx who have not theretofore complied with this
Article III shall thereafter look only to United for payment of the shares of
United Common Stock, cash in lieu of any fractional shares and unpaid dividends
and distributions on United Common Stock deliverable in respect of each share of
Xxxxx Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
3.05 ANTI-DILUTION PROVISIONS. In the event United changes (or establishes
a record date for changing) the number of shares of United Common Stock issued
and outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization or similar transaction with respect to the
outstanding United Common Stock and the record date therefor shall be prior to
the Effective Date, the Exchange Ratio shall be proportionately adjusted.
3.06 OPTIONS. (a) At the Effective Time, each outstanding option to
purchase shares of Xxxxx Common Stock under the Xxxxx Stock Plans (each, a
"XXXXX STOCK OPTION"), whether vested or unvested, shall be converted into an
option to acquire, on the same terms and conditions as were applicable under
such Xxxxx Stock Option, the number of shares of United
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Common Stock equal to (a) the number of shares of Xxxxx Common Stock subject to
the Xxxxx Stock Option, multiplied by (b) the Exchange Ratio (such product
rounded to the nearest whole number) (a "REPLACEMENT OPTION"), at an exercise
price per share (rounded to the nearest whole cent) equal to (y) the aggregate
exercise price for the shares of Xxxxx Common Stock which were purchasable
pursuant to such Xxxxx Stock Option divided by (z) the number of full shares of
United Common Stock subject to such Replacement Option in accordance with the
foregoing. Notwithstanding the foregoing, each Xxxxx Stock Option which is
intended to be an "incentive stock option" (as defined in Section 422 of the
Code) shall be adjusted in accordance with the requirements of Section 424 of
the Code. At or prior to the Effective Time, Xxxxx shall use its best efforts,
including using its best efforts to obtain any necessary consents from
optionees, with respect to the Xxxxx Stock Plans to permit the replacement of
the outstanding Xxxxx Stock Options by United pursuant to this Section and to
permit United to assume the Xxxxx Stock Plans. Xxxxx shall further take all
action necessary to amend the Xxxxx Stock Plans to eliminate automatic grants or
awards thereunder following the Effective Time. At the Effective Time, United
shall assume the Xxxxx Stock Plans; PROVIDED, that such assumption shall be only
in respect of the Replacement Options and that United shall have no obligation
with respect to any awards under the Xxxxx Stock Plans other than the
Replacement Options and shall have no obligation to make any additional grants
or awards under such assumed Xxxxx Stock Plans.
(b) At all times after the Effective Time, United shall reserve for
issuance such number of shares of United Common Stock as necessary so as to
permit the exercise of options granted under the Xxxxx Stock Plans in the manner
contemplated by this Agreement and the instruments pursuant to which such
options were granted. United shall make all filings required under federal and
state securities laws no later than the Effective Time so as to permit the
exercise of such options and the sale of the shares received by the optionee
upon such exercise at and after the Effective Time and United shall continue to
make such filings thereafter as may be necessary to permit the continued
exercise of options and sale of such shares.
ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 FOREBEARANCES OF XXXXX. From the date hereof until the Effective Time,
except as expressly contemplated by this Agreement, without the prior written
consent of United, Xxxxx will not, and will cause each of its Subsidiaries not
to:
(a) ORDINARY COURSE. Conduct the business of Xxxxx and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and
assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates, or take any action
reasonably likely to have an adverse affect upon Xxxxx'x ability to perform
any of its material obligations under this Agreement.
(b) CAPITAL STOCK. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof, (i) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
Xxxxx Stock or any Rights, (ii) enter into any agreement with respect to
the foregoing, or (iii) permit any additional shares of Xxxxx Stock to
become subject to new grants of employee or director stock options, other
Rights or similar stock-based employee rights.
(c) DIVIDENDS, ETC. (a) Make, declare, pay or set aside for payment
any dividend, other than (A) quarterly cash dividends on Xxxxx Stock in an
amount not to exceed $0.14 per share with record and payment dates
consistent with past practice, and (B) dividends from wholly owned
Subsidiaries to Xxxxx or another wholly owned Subsidiary of Xxxxx) on or in
respect of, or declare or make any distribution on any shares of Xxxxx
Stock or (b) directly or indirectly adjust, split, combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock.
(d) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of Xxxxx or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit, (including incentive or bonus payments) except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, (ii) for other changes that are
required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof, or (iv) for grants
of awards to newly hired employees consistent with past practice.
(e) BENEFIT PLANS. Enter into, establish, adopt or amend (except (i)
as may be required by applicable law or (ii) to satisfy Previously
Disclosed contractual obligations existing as of the date hereof) any
pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement (or similar arrangement) related
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thereto, in respect of any director, officer or employee of Xxxxx or its
Subsidiaries, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder.
(f) DISPOSITIONS. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course of
business and in a transaction that is not material to it and its
Subsidiaries taken as a whole.
(g) ACQUISITIONS. Except as Previously Disclosed, acquire (other than
by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith,
in each case in the ordinary and usual course of business consistent with
past practice) all or any portion of, the assets, business, deposits or
properties of any other entity.
(h) GOVERNING DOCUMENTS. Amend the Xxxxx Certificate, Xxxxx By-laws or
the certificate of incorporation or by-laws (or similar governing
documents) of any of Xxxxx'x Subsidiaries.
(i) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required
by generally accepted accounting principles.
(j) CONTRACTS. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any
of its existing material contracts.
(k) CLAIMS. Except in the ordinary course of business consistent with
past practice, settle any claim, action or proceeding, except for any
claim, action or proceeding which does not involve precedent for other
material claims, actions or proceedings and which involve solely money
damages in an amount, individually or in the aggregate for all such
settlements, that is not material to Xxxxx and its Subsidiaries, taken as a
whole.
(l) ADVERSE ACTIONS. (a) Take any action while knowing that such
action would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (ii) any of the conditions to the Merger
set forth in Article VII not being satisfied or (iii) a material violation
of any provision of this Agreement except, in each case, as may be required
by applicable law or regulation.
(m) RISK MANAGEMENT. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure
to interest rate risk.
(n) INDEBTEDNESS. Incur any indebtedness for borrowed money other than
in the ordinary course of business.
(o) COMMITMENTS. Agree or commit to do any of the foregoing.
4.02 FOREBEARANCES OF UNITED. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Xxxxx, United will not, and will cause each of its
Subsidiaries not to:
(a) PRESERVATION. Fail to use reasonable efforts to preserve intact in
any material respect their business organizations and assets and maintain
their rights, franchises and existing relations with customers, suppliers,
employees and business associates.
(b) EXTRAORDINARY DIVIDENDS. Make, declare, pay or set aside for
payment any extraordinary dividend.
(c) ADVERSE ACTIONS. (a) Take any action while knowing that such
action would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at
or prior to the Effective Time, (ii) any of the conditions to the Merger
set forth in Article VII not being satisfied or (iii) a material violation
of any provision of this Agreement except, in each case, as may be required
by applicable law or regulation; PROVIDED, HOWEVER, that nothing contained
herein shall limit the ability of United to exercise its rights under the
Stock Option Agreement.
(d) COMMITMENTS. Agree or commit to do any of the foregoing.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULES. On or prior to the date hereof, United has
delivered to Xxxxx a schedule and Xxxxx has delivered to United a schedule
(respectively, its "DISCLOSURE SCHEDULE") setting forth, among other things,
items the disclosure of which is necessary or appropriate either in response to
an express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in Section 5.03
or 5.04 or to one or more of its covenants contained in Article IV; PROVIDED,
that (a) no such item is required to be set forth in a Disclosure Schedule as an
exception to a representation or warranty if its absence would not be reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standard established by Section 5.02, and (b) the mere
inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to result in a Material Adverse Effect on the party
making the representation. Xxxxx'x representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or breached as a
result of effects arising solely from actions taken in compliance with a written
request of United.
5.02 STANDARD. No representation or warranty of Xxxxx or United contained
in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no party hereto
shall be deemed to have breached a representation or warranty, as a consequence
of the existence of any fact, event or circumstance unless such fact,
circumstance or event, individually or taken together with all other facts,
events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04 has had or is reasonably likely to have a
Material Adverse Effect. For purposes of this Agreement, "knowledge" shall mean,
with respect to a party hereto, actual knowledge of any officer of that party
with the title, if any ranking not less than senior vice president and that
party's in-house counsel, if any.
5.03 REPRESENTATIONS AND WARRANTIES OF XXXXX. Subject to Sections 5.01 and
5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, Xxxxx hereby represents
and warrants to United:
(a) ORGANIZATION, STANDING AND AUTHORITY. Xxxxx is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia. Xxxxx is duly qualified to do business and is in good
standing in the states of the United States and any foreign jurisdictions where
its ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified.
(b) XXXXX STOCK. As of the date hereof, the authorized capital stock of
Xxxxx consists solely of (i) 9,000,000 shares of Xxxxx Common Stock, of which
5,117,405 shares were outstanding as of the date hereof, and (ii) 1,000,000
shares of Xxxxx Preferred Stock, of which no shares are outstanding. As of the
date hereof, no shares of Xxxxx Common Stock and no shares of Xxxxx Preferred
Stock were held in treasury by Xxxxx or otherwise owned by Xxxxx or its
Subsidiaries ("TREASURY STOCK"). The outstanding shares of Xxxxx Stock have been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof, except as Previously
Disclosed in its Disclosure Schedule, there are no shares of Xxxxx Stock
authorized and reserved for issuance, Xxxxx does not have any Rights issued or
outstanding with respect to Xxxxx Stock, and Xxxxx does not have any commitment
to authorize, issue or sell any Xxxxx Stock or Rights, except pursuant to this
Agreement and the Stock Option Agreement. The number of shares of Xxxxx Common
Stock which are issuable and reserved for issuance upon exercise of Xxxxx Stock
Options as of the date hereof are Previously Disclosed in Xxxxx'x Disclosure
Schedule.
(c) SUBSIDIARIES. (i)(A) Xxxxx has Previously Disclosed a list of all of
its Subsidiaries together with the jurisdiction of organization of each such
Subsidiary, (B) except as Previously Disclosed, it owns, directly or indirectly,
all the issued and outstanding equity securities of each of its Subsidiaries,
(C) no equity securities of any of its Subsidiaries are or may become required
to be issued (other than to it or its wholly-owned Subsidiaries) by reason of
any Right or otherwise, (D) there are no contracts, commitments, understandings
or arrangements by which any of such Subsidiaries is or may be bound to sell or
otherwise transfer any equity securities of any such Subsidiaries (other than to
it or its wholly-owned Subsidiaries), (E) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote or to dispose of
such securities and (F) all the equity securities of each Subsidiary held by
Xxxxx or its Subsidiaries are fully paid and nonassessable (except pursuant to
12 U.S.C. (section xxxx)55) and are owned by Xxxxx or its Subsidiaries free and
clear of any Liens.
(ii) Xxxxx does not own beneficially, directly or indirectly, any equity
securities or similar interests of any Person, or any interest in a partnership
or joint venture of any kind, other than its Subsidiaries.
A-8
(iii) Each of Xxxxx'x Subsidiaries has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified.
(d) CORPORATE POWER. Each of Xxxxx and its Subsidiaries has the corporate
power and authority to carry on its business as it is now being conducted and to
own all its properties and assets; and Xxxxx has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the Stock Option Agreement and to consummate the transactions contemplated
hereby and thereby.
(e) CORPORATE AUTHORITY. Subject in the case of this Agreement to receipt
of the requisite approval of this Agreement (including the agreement of merger
set forth herein) by the holders of more than two-thirds of the outstanding
shares of Xxxxx Common Stock entitled to vote thereon (which is the only
shareholder vote required thereon), this Agreement, the Stock Option Agreement
and the transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of Xxxxx and the Xxxxx Board prior to the date
hereof. This Agreement is a valid and legally binding obligation of Xxxxx,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles). In approving this
Agreement and the Merger and the related transactions, the Board of Directors of
Xxxxx has satisfied its obligations under Article 8 of the Xxxxx Certificate.
The Xxxxx Board of Directors has received the written opinion of Friedman,
Billings, Xxxxxx & Co., Inc. to the effect that as of the date hereof the
consideration to be received by the holders of Xxxxx Common Stock in the Merger
is fair to the holders of Xxxxx Common Stock from a financial point of view.
(f) REGULATORY FILINGS; NO DEFAULTS. (i) No consents or approvals of, or
filings or registrations with, any Governmental Authority or with any third
party are required to be made or obtained by Xxxxx or any of its Subsidiaries in
connection with the execution, delivery or performance by Xxxxx of this
Agreement or the Stock Option Agreement or to consummate the Merger except for
(A) filings of applications or notices with federal and Virginia banking
authorities, (B) filings with the SEC and state securities authorities, and (C)
the filing of articles of merger with the Corporation Commission pursuant to the
VSCA and the issuance of a certificate of merger in connection therewith. As of
the date hereof, Xxxxx is not aware of any reason why the approvals set forth in
Section 7.01(b) will not be received without the imposition of a condition,
restriction or requirement of the type described in Section 7.01(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph, and expiration of related waiting periods, and required
filings under federal and state securities laws, the execution, delivery and
performance of this Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby do not and will
not (A) constitute a breach or violation of, or a default under, or give rise to
any Lien, any acceleration of remedies or any right of termination under, any
law, rule or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Xxxxx or of any of its
Subsidiaries or to which Xxxxx or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default under,
the Xxxxx Certificate or the Xxxxx By-Laws, or (C) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or instrument.
(g) FINANCIAL REPORTS AND SEC DOCUMENTS. (i) Xxxxx'x Annual Reports on Form
10-K for the fiscal years ended December 31, 1994, 1995 and 1996, and all other
reports, registration statements, definitive proxy statements or information
statements filed or to be filed by it or any of its Subsidiaries subsequent to
December 31, 1994 under the Securities Act, or under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, in the form filed or to be filed (collectively,
Xxxxx'x "SEC DOCUMENTS") with the SEC, as of the date filed, (A) complied or
will comply in all material respects with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and will
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 therein,
in light of the circumstances under which they were made, not misleading; and
each of the balance sheets or statements of condition contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of Xxxxx and its Subsidiaries as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in stockholders' equity and cash flows, as the case may be,
of Xxxxx and its Subsidiaries for the periods to which they relate, in each case
in accordance with generally accepted accounting principles consistently applied
during the periods involved, except in each case as may be noted therein,
subject to normal year-end audit adjustments and the absence of footnotes in the
case of unaudited statements.
A-9
(ii) Since December 31, 1996, Xxxxx and its Subsidiaries have not incurred
any liability other than in the ordinary course of business consistent with past
practice.
(iii) Since December 31, 1996, (A) Xxxxx and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding matters related to this Agreement and
the transactions contemplated hereby) and (B) no event has occurred or
circumstance arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.03 or
otherwise), is reasonably likely to have a Material Adverse Effect with respect
to Xxxxx.
(h) LITIGATION. No litigation, claim or other proceeding before any court
or governmental agency is pending against Xxxxx or any of its Subsidiaries and,
to Xxxxx'x knowledge, no such litigation, claim or other proceeding has been
threatened.
(i) REGULATORY MATTERS. (i) Neither Xxxxx nor any of its Subsidiaries or
properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, or extraordinary supervisory letter from, any federal
or state governmental agency or authority charged with the supervision or
regulation of financial institutions (or their holding companies) or issuers of
securities or engaged in the insurance of deposits (including, without
limitation, the Office of the Comptroller of the Currency, the Federal Reserve
System and the FDIC) or the supervision or regulation of it or any of its
Subsidiaries (collectively, the "REGULATORY AUTHORITIES").
(ii) Neither it nor any of its Subsidiaries has been advised by any
Regulatory Authority that such Regulatory Authority is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, commitment letter,
supervisory letter or similar submission.
(j) COMPLIANCE WITH LAWS. Each of Xxxxx and its Subsidiaries:
(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws and
other laws relating to discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect and, to Xxxxx'x knowledge, no
suspension or cancellation of any of them is threatened; and
(iii) has received, since December 31, 1995, no notification or
communication from any Governmental Authority (A) asserting that Xxxxx or
any of its Subsidiaries is not in compliance with any of the statutes,
regulations, or ordinances which such Governmental Authority enforces or
(B) threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to Xxxxx'x knowledge, do any grounds for any of the
foregoing exist).
(k) MATERIAL CONTRACTS; DEFAULTS. Except for this Agreement, the Stock
Option Agreement and those agreements and other documents filed as exhibits to
its SEC Documents, neither it nor any of its Subsidiaries is a party to, bound
by or subject to any agreement, contract, arrangement, commitment or
understanding (whether written or oral) (i) that is a "material contract" within
the meaning of Item 601(b)(10) of the SEC's Regulation S-K or (ii) that
restricts or limits in any way the conduct of business by it or any of its
Subsidiaries (including without limitation a non-compete or similar provision).
Neither it nor any of its Subsidiaries is in default under any contract,
agreement, commitment, arrangement, lease, insurance policy or other instrument
to which it is a party, by which its respective assets, business, or operations
may be bound or affected, or under which it or its respective assets, business,
or operations receive benefits, and there has not occurred any event that, with
the lapse of time or the giving of notice or both, would constitute such a
default.
(l) NO BROKERS. No action has been taken by Xxxxx that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other like payment with respect to the transactions contemplated by this
Agreement, excluding a Previously Disclosed fee to be paid to Friedman,
Billings, Xxxxxx & Co., Inc.
A-10
(m) EMPLOYEE BENEFIT PLANS. (i) Section 5.03 (m)(i) of Xxxxx'x Disclosure
Schedule contains a complete and accurate list of all existing bonus, incentive,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock, stock
option, severance, welfare and fringe benefit plans, employment or severance
agreements and all similar practices, policies and arrangements in which any
employee or former employee (the "EMPLOYEES"), consultant or former consultant
(the "CONSULTANTS") or director or former director (the "DIRECTORS") of Xxxxx or
any of its Subsidiaries participates or to which any such Employees, Consultants
or Directors are a party (the "COMPENSATION AND BENEFIT PLANS"). Neither Xxxxx
nor any of its Subsidiaries has any commitment to create any additional
Compensation and Benefit Plan or to modify or change any existing Compensation
and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and administered
in all material respects in accordance with its terms and with applicable law,
including, but not limited to, ERISA, the Code, the Securities Act, the Exchange
Act, the Age Discrimination in Employment Act, or any regulations or rules
promulgated thereunder, and all filings, disclosures and notices required by
ERISA, the Code, the Securities Act, the Exchange Act, the Age Discrimination in
Employment Act and any other applicable law have been timely made. Each
Compensation and Benefit Plan which is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA (a "PENSION PLAN") and which is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter (including a determination that the related trust under
such Compensation and Benefit Plan is exempt from tax under Section 501(a) of
the Code) from the Internal Revenue Service ("IRS"), and Xxxxx is not aware of
any circumstances likely to result in revocation of any such favorable
determination letter. There is no material pending or, to the knowledge of
Xxxxx, threatened legal action, suit or claim relating to the Compensation and
Benefit Plans. Neither Xxxxx nor any of its Subsidiaries has engaged in a
transaction, or omitted to take any action, with respect to any Compensation and
Benefit Plan that would reasonably be expected to subject Xxxxx or any of its
Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or
Section 502 of ERISA, assuming for purposes of Section 4975 of the Code that the
taxable period of any such transaction expired as of the date hereof.
(iii) No liability (other than for payment of premiums to the PBGC which
have been made or will be made on a timely basis) under Title IV of ERISA has
been or is expected to be incurred by Xxxxx or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or any single-employer plan of any entity (an "ERISA AFFILIATE") which
is considered one employer with Xxxxx under Section 4001(a)(14) of ERISA or
Section 414(b) or (c) of the Code (an "ERISA AFFILIATE PLAN"). None of Xxxxx,
any of its Subsidiaries or any ERISA Affiliate has contributed, or has been
obligated to contribute, to a multiemployer plan under Subtitle E of Title IV of
ERISA at any time since September 26, 1980. No notice of a "reportable event",
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Compensation and Benefit Plan or by any ERISA Affiliate Plan within the 12-month
period ending on the date hereof, and no such notice will be required to be
filed as a result of the transactions contemplated by this Agreement. The PBGC
has not instituted proceedings to terminate any Pension Plan or ERISA Affiliate
Plan and, to Xxxxx'x knowledge, no condition exists that presents a material
risk that such proceedings will be instituted. To the knowledge of Xxxxx, there
is no pending investigation or enforcement action by the PBGC, the Department of
Labor (the "DOL") or IRS or any other governmental agency with respect to any
Compensation and Benefit Plan. Under each Pension Plan and ERISA Affiliate Plan,
as of the date of the most recent actuarial valuation performed prior to the
date of this Agreement, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined
on the basis of the actuarial assumptions contained in such actuarial valuation
of such Pension Plan or ERISA Affiliate Plan), did not exceed the then current
value of the assets of such Pension Plan or ERISA Affiliate Plan and since such
date there has been neither an adverse change in the financial condition of such
Pension Plan or ERISA Affiliate Plan nor any amendment or other change to such
Pension Plan or ERISA Affiliate Plan that would increase the amount of benefits
thereunder which reasonably could be expected to change such result.
(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee benefit
arrangements under any collective bargaining agreement to which Xxxxx or any of
its Subsidiaries is a party have been timely made or have been reflected on
Xxxxx'x financial statements. Neither any Pension Plan nor any ERISA Affiliate
Plan has an "accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and all required
payments to the PBGC with respect to each Pension Plan or ERISA Affiliate Plan
have been made on or before their due dates. None of Xxxxx, any of its
Subsidiaries or any ERISA Affiliate (x) has provided, or would reasonably be
expected to be required to provide, security to any Pension Plan or to any ERISA
Affiliate Plan pursuant to Section 401(a)(29) of the Code, and (y) has taken any
action, or omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a lien under Section 412(n) of the Code
or pursuant to ERISA.
A-11
(v) Neither Xxxxx nor any of its Subsidiaries has any obligations to
provide retiree health and life insurance or other retiree death benefits under
any Compensation and Benefit Plan, other than benefits mandated by Section 4980B
of the Code, and each such Compensation and Benefit Plan may be amended or
terminated without incurring liability thereunder. There has been no
communication to Employees by Xxxxx or any of its Subsidiaries that would
reasonably be expected to promise or guarantee such Employees retiree health or
life insurance or other retiree death benefits on a permanent basis.
(vi) Xxxxx and its Subsidiaries do not maintain any Compensation and
Benefit Plans covering foreign Employees.
(vii) With respect to each Compensation and Benefit Plan, if applicable,
Xxxxx has provided or made available to United, true and complete copies of
existing: (A) Compensation and Benefit Plan documents and amendments thereto;
(B) trust instruments and insurance contracts; (C) two most recent Forms 5500
filed with the IRS; (D) most recent actuarial report and financial statement;
(E) the most recent summary plan description; (F) forms filed with the PBGC
(other than for premium payments); (G) most recent determination letter issued
by the IRS; (H) any Form 5310 or Form 5330 filed with the IRS; and (I) most
recent nondiscrimination tests performed under ERISA and the Code (including
401(k) and 401(m) tests).
(viii) Except as disclosed on Section 5.03(m)(viii) of Xxxxx'x Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
would not, directly or indirectly (including, without limitation, as a result of
any termination of employment prior to or following the Effective Time)
reasonably be expected to (A) entitle any Employee, Consultant or Director to
any payment (including severance pay or similar compensation) or any increase in
compensation, (B) result in the vesting or acceleration of any benefits under
any Compensation and Benefit Plan or (C) result in any material increase in
benefits payable under any Compensation and Benefit Plan.
(ix) Except as disclosed on Section 5.03(m)(ix) of Xxxxx'x Disclosure
Schedule, neither Xxxxx nor any of its Subsidiaries maintains any compensation
plans, programs or arrangements the payments under which would not reasonably be
expected to be deductible as a result of the limitations under Section 162(m) of
the Code and the regulations issued thereunder.
(x) Except as disclosed on Section 5.03(m)(x) of Xxxxx'x Disclosure
Schedule, as a result, directly or indirectly, of the transactions contemplated
by this Agreement (including, without limitation, as a result of any termination
of employment prior to or following the Effective Time), none of United, Xxxxx
or the Surviving Corporation, or any of their respective Subsidiaries will be
obligated to make a payment that would be characterized as an "excess parachute
payment" to an individual who is a "disqualified individual" (as such terms are
defined in Section 280G of the Code), without regard to whether such payment is
reasonable compensation for personal services performed or to be performed in
the future.
(n) LABOR MATTERS. Neither Xxxxx nor any of its Subsidiaries is a party to
or is bound by any collective bargaining agreement, contract or other agreement
or understanding with a labor union or labor organization, nor is Xxxxx or any
of its Subsidiaries the subject of a proceeding asserting that it or any such
Subsidiary has committed an unfair labor practice (within the meaning of the
National Labor Relations Act) or seeking to compel Xxxxx or any such Subsidiary
to bargain with any labor organization as to wages or conditions of employment,
nor is there any strike or other labor dispute involving it or any of its
Subsidiaries pending or, to Xxxxx'x knowledge, threatened, nor is Xxxxx aware of
any activity involving its or any of its Subsidiaries' employees seeking to
certify a collective bargaining unit or engaging in other organizational
activity.
(o) TAKEOVER LAWS; DISSENTERS RIGHTS. Xxxxx has taken all action required
to be taken by it in order to exempt this Agreement, the Stock Option Agreement
and the transactions contemplated hereby and thereby from, and this Agreement,
the Stock Option Agreement and the transactions contemplated hereby and thereby
are exempt from, the requirements of any "moratorium", "control share", "fair
price", "affiliate transaction", "business combination" or other antitakeover
laws and regulations of any state (collectively, "TAKEOVER LAWS"), including,
without limitation, the Commonwealth of Virginia, and including, without
limitation, Sections 13.1-725 through 13.1-728 of the VSCA (because a majority
of Xxxxx'x disinterested directors approved such transactions for such purposes
prior to any "determination date" with respect to United) and Sections
13.1-728.1 through 13.1-728.9 of the VSCA. The provisions of Article 7 of the
Xxxxx Certificate do not apply to the entering into of this Agreement, this
Agreement and the transactions contemplated hereby, including the Merger, as
they have been approved by the required majority votes of the directors referred
to therein. The provisions of Article 7 of the Xxxxx Certificate do not apply to
the entering into of the Stock Option Agreement, the Stock Option Agreement and
the transactions contemplated thereby. Holders of Xxxxx Common Stock do not have
dissenters' rights in connection with the Merger.
(p) ENVIRONMENTAL MATTERS. To Xxxxx'x knowledge, neither the conduct nor
operation of Xxxxx or its Subsidiaries nor any condition of any property
presently or previously owned, leased or operated by any of them (including,
without limitation, in a fiduciary or agency capacity), or on which any of them
holds a Lien, violates or violated Environmental Laws and to Xxxxx'x knowledge,
no condition has existed or event has occurred with respect to any of them or
any such property that,
A-12
with notice or the passage of time, or both, is reasonably likely to result in
liability under Environmental Laws. To Xxxxx'x knowledge, neither Xxxxx nor any
of its Subsidiaries has received any notice from any person or entity that Xxxxx
or its Subsidiaries or the operation or condition of any property ever owned,
leased, operated, or held as collateral or in a fiduciary capacity by any of
them are or were in violation of or otherwise are alleged to have liability
under any Environmental Law, including, but not limited to, responsibility (or
potential responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes, substances or materials
at, on, beneath, or originating from any such property.
(q) TAX MATTERS. (i) All Tax Returns that are required to be filed by or
with respect to Xxxxx and its Subsidiaries have been duly filed, (ii) all Taxes
shown to be due on the Tax Returns referred to in clause (i) have been paid in
full, (iii) the Tax Returns referred to in clause (i) have been examined by the
Internal Revenue Service or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired, (iv) all deficiencies asserted or
assessments made as a result of such examinations have been paid in full, (v) no
issues that have been raised by the relevant taxing authority in connection with
the examination of any of the Tax Returns referred to in clause (i) are
currently pending, and (vi) no waivers of statutes of limitation have been given
by or requested with respect to any Taxes of Xxxxx or its Subsidiaries. Xxxxx
has made available to United true and correct copies of the United States
federal income Tax Returns filed by Xxxxx and its Subsidiaries for each of the
three most recent fiscal years ended on or before December 31, 1996. Neither
Xxxxx nor any of its Subsidiaries has any liability with respect to income,
franchise or similar Taxes that accrued on or before the end of the most recent
period covered by Xxxxx'x SEC Documents filed prior to the date hereof in excess
of the amounts accrued with respect thereto that are reflected in the financial
statements included in Xxxxx'x SEC Documents filed on or prior to the date
hereof. As of the date hereof, neither Xxxxx nor any of its Subsidiaries has any
reason to believe that any conditions exist that might prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
(ii) No Tax is required to be withheld pursuant to Section 1445 of the Code
as a result of the transfer contemplated by this Agreement.
(iii) Xxxxx and its Subsidiaries will not be liable for any taxes as a
result of any Covered Transaction.
(r) RISK MANAGEMENT INSTRUMENTS. All interest rate swaps, caps, floors,
option agreements, futures and forward contracts and other similar risk
management arrangements, whether entered into for Xxxxx'x own account, or for
the account of one or more of Xxxxx'x Subsidiaries or their customers (all of
which are listed on Xxxxx'x Disclosure Schedule), were entered into (i) in
accordance with prudent business practices and all applicable laws, rules,
regulations and regulatory policies and (ii) with counterparties believed to be
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of Xxxxx or one of its Subsidiaries, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles), and is in full force and effect. Neither Xxxxx
nor its Subsidiaries, nor to Xxxxx'x knowledge any other party thereto, is in
breach of any of its obligations under any such agreement or arrangement.
(s) BOOKS AND RECORDS. The books and records of Xxxxx and its Subsidiaries
have been fully, properly and accurately maintained in all material respects,
and there are no material inaccuracies or discrepancies of any kind contained or
reflected therein and they fairly reflect the substance of events and
transactions included therein.
(t) INSURANCE. Xxxxx'x Disclosure Schedule sets forth all of the insurance
policies, binders, or bonds maintained by Xxxxx or its Subsidiaries. Xxxxx and
its Subsidiaries are insured with reputable insurers against such risks and in
such amounts as the management of Xxxxx reasonably has determined to be prudent
in accordance with industry practices. All such insurance policies are in full
force and effect; Xxxxx and its Subsidiaries are not in material default
thereunder; and all claims thereunder have been filed in due and timely fashion.
(u) ACCOUNTING TREATMENT. As of the date hereof, it is aware of no reason
why the Merger will fail to qualify for "pooling of interests" accounting
treatment.
(v) DISCLOSURE. The representations and warranties contained in this
Section 5.03 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 5.03 not misleading.
5.04 REPRESENTATIONS AND WARRANTIES OF UNITED. Subject to Sections 5.01 and
5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, United hereby represents
and warrants to Xxxxx as follows:
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(a) ORGANIZATION, STANDING AND AUTHORITY. United is a corporation duly
organized, validly existing and in good standing under the laws of the
State of West Virginia. United is duly qualified to do business and is in
good standing in the states of the United States and foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified.
(b) UNITED STOCK. (i) As of the date hereof, the authorized capital
stock of United consists solely of 20,000,000 shares of United Common
Stock, of which no more than 15,295,130 shares were outstanding as of the
date hereof. As of the date hereof, except as set forth in its Disclosure
Schedule, United does not have any Rights issued or outstanding with
respect to United Stock and United does not have any commitment to
authorize, issue or sell any United Stock or Rights, except pursuant to
this Agreement. The outstanding shares of United Common Stock have been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights).
(ii) The shares of United Common Stock to be issued in exchange for
shares of Xxxxx Common Stock in the Merger, when issued in accordance with
the terms of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable and subject to no preemptive rights.
(c) SUBSIDIARIES. Each of United's Subsidiaries has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to do business and
is in good standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified and
it owns, directly or indirectly, all the issued and outstanding equity
securities of each of its Significant Subsidiaries.
(d) CORPORATE POWER. Each of United and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and United has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.
(e) CORPORATE AUTHORITY. Subject in the case of this Agreement to
receipt of the requisite approval by (i) the holders of a majority of the
outstanding shares of United Common Stock entitled to vote thereon of the
Articles Amendment and (ii) the holders of a majority of the votes present
or represented by proxy at the United Meeting of the issuance of United
Common Stock as contemplated hereby (which are the only shareholder votes
required thereon), this Agreement, the Stock Option Agreement and the
transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of United and the United Board prior to the date
hereof. This Agreement is a valid and legally binding agreement of United,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to
or affecting creditors' rights or by general equity principles).
(f) REGULATORY APPROVALS; NO DEFAULTS. (i) No consents or approvals
of, or filings or registrations with, any Governmental Authority or with
any third party are required to be made or obtained by United or any of its
Subsidiaries in connection with the execution, delivery or performance by
United of this Agreement or to consummate the Merger except for (A) the
filing of applications and notices, as applicable, with the federal and
state banking authorities; (B) the adoption and approval by the
shareholders of United of the Articles Amendment and the issuance of United
Common Stock as contemplated hereby; (C) the filing and declaration of
effectiveness of the Registration Statement; (D) the filing of articles of
merger with the Corporation Commission pursuant to the VSCA and the
issuance of the related certificate of merger and the filing of the
Articles Amendment with the West Virginia Secretary; (E) such filings as
are required to be made or approvals as are required to be obtained under
the securities or "Blue Sky" laws of various states in connection with the
issuance of United Stock in the Merger; and (F) receipt of the approvals
set forth in Section 7.01(b). As of the date hereof, United is not aware of
any reason why the approvals set forth in Section 7.01(b) will not be
received without the imposition of a condition, restriction or requirement
of the type described in Section 7.01(b).
(ii) Subject to the satisfaction of the requirements referred to in
the preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of United or of any of its
Subsidiaries or to which United or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the certificate of incorporation or by-laws (or similar governing
documents) of United or any of its Subsidiaries, or (C) require any consent
or approval
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under any such law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(g) FINANCIAL REPORTS AND SEC DOCUMENTS; MATERIAL ADVERSE EFFECT. (i)
United's SEC Documents, as of the date filed, (A) complied or will comply
in all material respects with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and
will 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 therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets or statements of
condition contained in or incorporated by reference into any such SEC
Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of United and its
Subsidiaries as of its date, and each of the statements of income or
results of operations and changes in stockholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes
and schedules thereto) fairly presents, or will fairly present, the results
of operations, changes in stockholders' equity and cash flows, as the case
may be, of United and its Subsidiaries for the periods to which they
relate, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in each
case as may be noted therein, subject to normal year-end audit adjustments
in the case of unaudited statements.
(ii) Since December 31, 1996, no event has occurred or circumstance
arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to United.
(h) LITIGATION; REGULATORY ACTION. (i) No litigation, claim or other
proceeding before any Governmental Authority is pending against United or
any of its Subsidiaries and, to the best of United's knowledge, no such
litigation, claim or other proceeding has been threatened.
(ii) Neither United nor any of its Subsidiaries or properties is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, or extraordinary supervisory letter from a
Regulatory Authority, nor has United or any of its Subsidiaries been
advised by a Regulatory Authority that such agency is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(i) COMPLIANCE WITH LAWS. Each of United and its Subsidiaries:
(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws and
other laws relating to discriminatory business practices; and
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to permit
them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best of its
knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) has received, since December 31, 1995, no notification or
communication from any Governmental Authority (A) asserting that United
or any of its Subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances which such Governmental Authority
enforces or (B) threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to United's knowledge, do any grounds
for any of the foregoing exist).
(j) NO BROKERS. No action has been taken by United that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement.
(k) TAKEOVER LAWS. United has taken all action required to be taken by
it in order to exempt this Agreement, the Stock Option Agreement and the
transactions contemplated hereby and thereby from, and this Agreement, the
Stock Option Agreement and the transactions contemplated hereby and thereby
are exempt from, the requirements of any Takeover Laws applicable to
United.
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(l) ENVIRONMENTAL MATTERS. To United's knowledge, neither the conduct
nor operation of United or its Subsidiaries nor any condition of any
property presently or previously owned, leased or operated by any of them
(including, without limitation, in a fiduciary or agency capacity), or on
which any of them holds a Lien, violates or violated Environmental Laws and
to Xxxxx'x knowledge no condition has existed or event has occurred with
respect to any of them or any such property that, with notice or the
passage of time, or both, is reasonably likely to result in liability under
Environmental Laws. To United's knowledge, neither United nor any of its
Subsidiaries has received any notice from any person or entity that United
or its Subsidiaries or the operation or condition of any property ever
owned, leased, operated, or held as collateral or in a fiduciary capacity
by any of them are or were in violation of or otherwise are alleged to have
liability under any Environmental Law, including, but not limited to,
responsibility (or potential responsibility) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such
property.
(m) TAX MATTERS. (i) All Tax Returns that are required to be filed by
or with respect to United and its Subsidiaries have been duly filed, (ii)
all Taxes shown to be due on the Tax Returns referred to in clause (i) have
been paid in full, (iii) the Tax Returns referred to in clause (i) have
been examined by the Internal Revenue Service or the appropriate state,
local or foreign taxing authority or the period for assessment of the Taxes
in respect of which such Tax Returns were required to be filed has expired,
(iv) all deficiencies asserted or assessments made as a result of such
examinations have been paid in full, (v) no issues that have been raised by
the relevant taxing authority in connection with the examination of any of
the Tax Returns referred to in clause (i) are currently pending, and (vi)
no waivers of statutes of limitation have been given by or requested with
respect to any Taxes of United or its Subsidiaries. Neither United nor any
of its Subsidiaries has any liability with respect to income, franchise or
similar Taxes that accrued on or before the end of the most recent period
covered by United's SEC Documents filed prior to the date hereof in excess
of the amounts accrued with respect thereto that are reflected in the
financial statements included in United's SEC Documents filed on or prior
to the date hereof.
(n) BOOKS AND RECORDS. The books and records of United and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
substance of events and transactions included therein.
(o) INSURANCE. United's Disclosure Schedule sets forth all of the
insurance policies, binders, or bonds maintained by United or its
Subsidiaries. United and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of United
reasonably has determined to be prudent in accordance with industry
practices. All such insurance policies are in full force and effect; United
and its Subsidiaries are not in material default thereunder; and all claims
thereunder have been filed in due and timely fashion.
(p) ACCOUNTING TREATMENT. As of the date hereof, it is aware of no
reason why the Merger will fail to qualify for "pooling of interests"
accounting treatment.
(q) DISCLOSURE. The representations and warranties contained in this
Section 5.04 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.04 not misleading.
(r) REPRESENTATIONS AND WARRANTIES OF UNITED WITH RESPECT TO MERGER
SUBS. (i) ORGANIZATION, STANDING AND AUTHORITY. Each Merger Sub has been
duly organized and is validly existing in good standing under the laws of
the State of its organization, and is duly qualified to do business and in
good standing in the jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified.
(ii) POWER. Each Merger Sub has the power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby.
(iii) AUTHORITY. This Agreement and the transactions contemplated
hereby have been authorized by all requisite action on the part of each
Merger Sub and its respective subsidiaries or members. This Agreement is a
valid and legally binding agreement of each Merger Sub enforceable in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
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ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of Xxxxx and United agrees to use its reasonable best efforts in
good faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Merger as promptly as practicable and
otherwise to enable consummation of the transactions contemplated hereby and
shall cooperate fully with the other party hereto to that end. Without limiting
the foregoing, United agrees to use its reasonable best efforts prior to the
Effective Time to file the Articles Amendment.
6.02 STOCKHOLDER APPROVALS. United and Xxxxx agree to take, in accordance
with applicable law or NASDAQ rules and its articles of incorporation and
by-laws, all action necessary to convene an appropriate meeting of its
stockholders to consider and vote upon in the case of United, the approval and
adoption of the Articles Amendment, the issuance of United Common Stock as
contemplated hereby and any other matter required to be approved by United's
stockholders for consummation of the Merger (including any adjournment or
postponement, the "UNITED MEETING") and, in the case of Xxxxx, the approval of
this Agreement, the Plan of Merger and any other matters required to be approved
by Xxxxx'x stockholders for consummation of the Merger (including any
adjournment or postponement, the "XXXXX MEETING"), in each case as promptly as
practicable after the Registration Statement is declared effective.
6.03 REGISTRATION STATEMENT. (a) United agrees to prepare a registration
statement on Form S-4 (the "REGISTRATION STATEMENT") to be filed by United with
the SEC in connection with the issuance of United Common Stock in the Merger
(including the joint proxy statement and prospectus and other proxy solicitation
materials of United and Xxxxx constituting a part thereof (the "PROXY
STATEMENT") and all related documents). Xxxxx agrees to cooperate, and to cause
its Subsidiaries to cooperate, with United, its counsel and its accountants, in
preparation of the Registration Statement and the Proxy Statement; and PROVIDED
that Xxxxx and its Subsidiaries have cooperated as required above, United agrees
to file the Proxy Statement in preliminary form with the SEC as promptly as
reasonably practicable, and to file the Registration Statement with the SEC as
soon as reasonably practicable after any SEC comments with respect to the
preliminary Proxy Statement are resolved. Each of Xxxxx and United agrees to use
all reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. United also agrees to use all reasonable efforts to obtain,
prior to the effective date of the Registration Statement, all necessary state
securities law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement. Xxxxx agrees to furnish to United
all information concerning Xxxxx, its Subsidiaries, officers, directors and
stockholders as may be reasonably requested in connection with the foregoing.
(b) Each of Xxxxx and United agrees, as to itself and its Subsidiaries,
that none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in (i) the Registration Statement will, at the time
the Registration Statement and each amendment or supplement thereto, if any,
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) the Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to stockholders and at the time of the United Meeting or the Xxxxx Meeting, as
the case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or any statement which, in the light of the
circumstances under which such statement is made, will be false or misleading
with respect to any material fact, or which will omit to state any material fact
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier statement in the Proxy
Statement or any amendment or supplement thereto. Each of Xxxxx and United
further agrees that if it shall become aware prior to the Effective Date of any
information furnished by it that would cause any of the statements in the Proxy
Statement to be false or misleading with respect to any material fact, or to
omit to state any material fact necessary to make the statements therein not
false or misleading, to promptly inform the other party thereof and to take the
necessary steps to correct the Proxy Statement.
(c) United agrees to advise Xxxxx, promptly after United 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 United 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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(d) United and Xxxxx, in consultation with the other, shall employ
professional proxy solicitors to assist it in contacting stockholders in
connection with soliciting votes on the Merger.
6.04 PRESS RELEASES. Each of Xxxxx and United agrees that it will not,
without the prior approval of the other party, issue any press release or
written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NASDAQ rules.
6.05 ACCESS; INFORMATION. (a) Each of Xxxxx and United agrees that upon
reasonable notice and subject to applicable laws relating to the exchange of
information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
information as any party may reasonably request and, during such period, it
shall furnish promptly to such other party (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
the business, properties and personnel of it as the other may reasonably
request.
(b) Each agrees that it will not, and will cause its representatives not
to, use any information obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement. Subject to the requirements
of law, each party will keep confidential, and will cause its representatives to
keep confidential, all information and documents obtained pursuant to this
Section 6.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such party, (ii) becomes available to such party from
other sources not known by such party to be bound by a confidentiality
obligation, (iii) is disclosed with the prior written approval of the party to
which such information pertains or (iv) is or becomes readily ascertainable from
published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
to be returned to the party which furnished the same. No investigation by either
party of the business and affairs of the other shall affect or be deemed to
modify or waive any representation, warranty, covenant or agreement in this
Agreement, or the conditions to either party's obligation to consummate the
transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to the Effective
Time, each party shall promptly furnish the other with copies of all monthly and
other interim financial statements produced in the ordinary course of business
as the same shall become available.
6.06 ACQUISITION PROPOSALS. Xxxxx agrees that it shall not, and shall cause
its Subsidiaries and its and its Subsidiaries' officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, any Acquisition Proposal. It shall immediately cease and cause to be
terminated any activities, discussions or negotiations conducted prior to the
date of this Agreement with any parties other than United with respect to any of
the foregoing and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. Xxxxx
shall promptly (within 24 hours) advise United following the receipt by Xxxxx of
any Acquisition Proposal and the substance thereof (including the identity of
the person making such Acquisition Proposal), and advise United of any
developments with respect to such Acquisition Proposal immediately upon the
occurrence thereof.
6.07. AFFILIATE AGREEMENTS. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, (i) United shall deliver to Xxxxx a schedule of
each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the United Meeting, deemed to be an "affiliate" of United
(each, a "United Affiliate") as that term is used in SEC Accounting Series
Releases 130 and 135; and (ii) Xxxxx shall deliver to United a schedule of each
person that, to the best of its knowledge, is or is reasonably likely to be, as
of the date of the Xxxxx Meeting, deemed to be an "affiliate" of Xxxxx (each, a
"Xxxxx Affiliate") as that term is used in Rule 145 under the Securities Act or
SEC Accounting Series Releases 130 and 135.
(b) Each of Xxxxx and United shall use its respective reasonable best
efforts to cause each person who may be deemed to be a Xxxxx Affiliate or a
United Affiliate, as the case may be, to execute and deliver to Xxxxx and United
on or before the date of mailing of the Proxy Statement an agreement in the form
attached hereto as Exhibit B or Exhibit C, respectively.
6.08 TAKEOVER LAWS. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement or the Stock Option Agreement to
be subject to requirements imposed by any Takeover Law and each of them
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shall take all necessary steps within its control to exempt (or ensure the
continued exemption of) the transactions contemplated by this Agreement from, or
if necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect.
6.09 CERTAIN POLICIES. Prior to the Effective Date, Xxxxx shall, consistent
with generally accepted accounting principles and on a basis mutually
satisfactory to it and United, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with that
of United; PROVIDED, HOWEVER, that Xxxxx shall not be obligated to take any such
action pursuant to this Section 6.09 unless and until United acknowledges that
all conditions to its obligation to consummate the Merger have been satisfied
and certifies to Xxxxx that United's representations and warranties, subject to
Section 5.02, are true and correct as of such date and that United is otherwise
material in compliance with this Agreement. Xxxxx'x representations, warranties
and covenants contained in this Agreement shall not be deemed to be untrue or
breached in any respect for any purpose as a consequence of any modifications or
changes undertaken solely on account of this Section 6.09.
6.10 NASDAQ LISTING. To the extent so required, United agrees to use its
reasonable best efforts to list, prior to the Effective Date, on the NASDAQ,
subject to official notice of issuance, the shares of United Common Stock to be
issued to the holders of Xxxxx Common Stock in the Merger.
6.11 REGULATORY APPLICATIONS. (a) United and Xxxxx and their respective
Subsidiaries shall cooperate and use their respective reasonable best efforts to
prepare all documentation, to effect all filings and to obtain all permits,
consents, approvals and authorizations of all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement. Each of United and Xxxxx shall have the right to review in advance,
and to the extent practicable each will consult with the other, in each case
subject to applicable laws relating to the exchange of information, with respect
to, all material written information submitted to any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto agrees
to act reasonably and as promptly as practicable. Each party hereto agrees that
it will consult with the other party hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations of all third parties
and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party apprised of the status of material matters relating to completion of the
transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with all
information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
6.12 INDEMNIFICATION. (a) Following the Effective Date and for a period of
six years thereafter, United shall indemnify, defend and hold harmless the
present directors, officers and employees of Xxxxx and its Subsidiaries (each,
an "INDEMNIFIED PARTY") against all 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 actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement) to the fullest extent that Xxxxx is permitted to indemnify (and
advance expenses to) its directors and officers under the laws of the
Commonwealth of Virginia, the Xxxxx Certificate and the Xxxxx By-Laws as in
effect on the date hereof; PROVIDED that any determination required to be made
with respect to whether an officer's, director's or employee's conduct complies
with the standards set forth under Virginia law, the Xxxxx Certificate and the
Xxxxx By-Laws shall be made by independent counsel (which shall not be counsel
that provides material services to United) selected by United and reasonably
acceptable to such officer or director.
(b) For a period of four years from the Effective Time, United shall use
its reasonable best efforts to provide that portion of director's and officer's
liability insurance that serves to reimburse the present and former officers and
directors of Xxxxx or any of its Subsidiaries (determined as of the Effective
Time) (as opposed to Xxxxx) with respect to claims against such directors and
officers arising from facts or events which occurred before the Effective Time,
which insurance shall contain at least the same coverage and amounts, and
contain terms and conditions no less advantageous, as that coverage currently
provided by Xxxxx; PROVIDED, HOWEVER, that in no event shall United be required
to expend more than 200 percent of the current amount expended by Xxxxx (the
"INSURANCE AMOUNT") to maintain or procure such directors and officers insurance
coverage; PROVIDED, FURTHER, that if United is unable to maintain or obtain the
insurance called for by this Section 6.12(b), United shall use its reasonable
best efforts to obtain as much comparable insurance as is available for the
Insurance Amount; PROVIDED, FURTHER, that officers and directors of Xxxxx or any
Subsidiary may be required to make application and provide customary
representations and warranties to United's insurance carrier for the purpose of
obtaining such insurance.
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(c) Any Indemnified Party wishing to claim indemnification under Section
6.12(a), upon learning of any claim, action, suit, proceeding or investigation
described above, shall promptly notify United thereof; PROVIDED that the failure
so to notify shall not affect the obligations of United under Section 6.12(a)
unless and to the extent that United is actually prejudiced as a result of such
failure.
(d) If United or any of its successors or assigns shall consolidate with or
merge into any other entity and shall not be the continuing or surviving entity
of such consolidation or merger or shall transfer all or substantially all of
its assets to any entity, then and in each case, proper provision shall be made
so that the successors and assigns of United shall assume the obligations set
forth in this Section 6.12.
6.13 BENEFIT PLANS. It is the intention of United that within a reasonable
period of time following the Effective Time (a) it will provide employees of the
Surviving Corporation with employee benefit plans substantially similar in the
aggregate to those provided to similarly situated employees of United, (b) any
such employees will receive credit for years of service with Xxxxx or any of its
Subsidiaries prior to the Effective Time for the purpose of eligibility and
vesting and (c) United shall cause any and all pre-existing condition
limitations (to the extent such limitations did not apply to a pre-existing
condition under the Compensation and Benefit Plans) and eligibility waiting
periods under group health plans to be waived with respect to such participants
and their eligible dependents.
6.14 NOTIFICATION OF CERTAIN MATTERS. Each of Xxxxx and United shall give
prompt notice to the other of any fact, event or circumstance known to it that
(i) is reasonably likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material Adverse Effect
with respect to it or (ii) would cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained herein.
6.15 DIRECTORS AND OFFICERS. (a) United agrees to cause five members of the
Xxxxx Board on the date hereof (selected by United after consultation with
Xxxxx), including Xxxxxxx X. Xxxxxxxxx, who are still members of the Xxxxx Board
immediately prior to the Effective Time and willing and eligible to serve to be
elected or appointed as a director of United at the Effective Time and shall
cause Xx. Xxxxxxxxx to also be elected or appointed as a member of the Executive
Committee of the United Board.
(b) United agrees to cause Xxxxxxx X. Xxxxxxxxx, the Chief Executive
Officer and President of Xxxxx to be elected or appointed as the President of
United at the Effective Time.
6.16 DIVIDEND COORDINATION. After November 1, 1997, the Board of Directors
of Xxxxx shall cause its regular quarterly dividend record dates and payment
dates for Xxxxx Common Stock to be the same as United's regular quarterly
dividend record dates and payment dates for United Common Stock (e.g., Xxxxx
shall move its next dividend record and payment dates from October and October
to September and October, respectively), and Xxxxx shall not thereafter change
its regular dividend payment dates and record dates.
6.17 BANK MERGER. Each of Xxxxx and United shall use its reasonable best
efforts to cause and effect the merger of United's state-chartered Virginia bank
into Xxxxx'x state-chartered Virginia bank as promptly as reasonably practicable
following the Effective Date.
6.18 XXXXX FEE. If (a) the United Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation or
modified or changed such recommendation in a manner adverse in any respect to
the interests of Xxxxx, (b) United shall be in material and willful breach of
any of its covenants contained in this Agreement such that Xxxxx shall be
entitled to terminate the Merger Agreement pursuant to Section 8.01(b) or (c)
the stockholders of United do not approve this Agreement at the United Meeting,
in each case after there has been proposed by a third party a United Acquisition
Transaction (the "Proposal"), then, in any such event, upon the actual
consummation of a United Acquisition Transaction with such third party within 18
months after the Proposal, United shall pay Xxxxx a fee of $9,000,000.
Notwithstanding anything to the contrary contained herein, the fee provided
for in this Section 6.18 shall not be payable if United has terminated, or has
or had the right to terminate, the Merger Agreement pursuant to Section 8.01(b),
8.01(d)(ii) as a result of the Xxxxx stockholders not approving this Agreement
or Section 8.01(e).
For purposes of the foregoing, "United Acquisition Transaction" shall have
the same meaning as the term "Acquisition Transaction" in the Stock Option
Agreement except that the term "Issuer" therein shall refer to and mean United
and the percentage referred to in clause (z) of the second sentence shall be
25%.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of United and Xxxxx to consummate the Merger is
subject to the fulfillment or written waiver by United and Xxxxx prior to the
Effective Time of each of the following conditions:
(a) STOCKHOLDER APPROVALS. This Agreement and the Plan of Merger shall
have been duly approved by the requisite vote of the stockholders of Xxxxx
and the Articles Amendment and the issuance of United Common Stock as
contemplated hereby shall have been duly approved by the requisite vote of
the stockholders of United.
(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained
and shall remain in full force and effect and all statutory waiting periods
in respect thereof shall have expired and no such approvals shall contain
(i) any conditions, restrictions or requirements which the United Board
reasonably determines would either before or after the Effective Time have
a Material Adverse Effect on the Surviving Corporation and its Subsidiaries
taken as a whole or (ii) any conditions, restrictions or requirements that
are not customary and usual for approvals of such type and which the United
Board reasonably determines would either before or after the Effective Date
be unduly burdensome.
(c) NO INJUNCTION. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.
(e) BLUE SKY APPROVALS. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of United Common Stock to be issued in the
Merger shall have been received and be in full force and effect.
(f) LISTING. To the extent required, the shares of United Common Stock
to be issued in the Merger shall have been approved for listing on the
NASDAQ, subject to official notice of issuance.
(g) ARTICLES AMENDMENT. The Articles Amendment shall have been filed
and effective under the WVCA.
7.02 CONDITIONS TO OBLIGATION OF XXXXX. The obligation of Xxxxx to
consummate the Merger is also subject to the fulfillment or written waiver by
Xxxxx prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of United set forth in this Agreement shall be true and correct, subject to
Section 5.02, as of the date of this Agreement and as of the Effective Date
as though made on and as of the Effective Date (except that representations
and warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of such date), and Xxxxx
shall have received a certificate, dated the Effective Date, signed on
behalf of United by the Chief Executive Officer and the Chief Financial
Officer of United to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF UNITED. United shall have performed
in all material respects all obligations required to be performed by them
under this Agreement at or prior to the Effective Time, and Xxxxx shall
have received a certificate, dated the Effective Date, signed on behalf of
United by the Chief Executive Officer and the Chief Financial Officer of
United to such effect.
(c) OPINION OF XXXXX'X COUNSEL. Xxxxx shall have received an opinion
of Silver, Xxxxxxxx & Taff, L.L.P. counsel to Xxxxx, dated the Effective
Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, (i) the Merger constitutes a
"reorganization" within the meaning of Section 368 of the Code and (ii) no
gain or loss will be recognized by stockholders of Xxxxx who receive shares
of United Common Stock in exchange for shares of Xxxxx Common Stock, except
that gain or loss may be recognized as to cash received in lieu of
fractional share interests. In rendering its opinion, Silver, Xxxxxxxx &
Taff, L.L.P. may require and rely upon representations contained in letters
from Xxxxx and others.
A-21
(d) ACCOUNTING TREATMENT. Xxxxx shall have received from Ernst & Young
LLP, Xxxxx'x independent auditors, letters, dated the date of or shortly
prior to each of the mailing date of the Proxy Statement and the Effective
Date, stating its opinion that the Merger shall qualify for
pooling-of-interests accounting treatment.
7.03 CONDITIONS TO OBLIGATION OF UNITED. The obligation of United to
consummate the Merger is also subject to the fulfillment or written waiver by
United prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Xxxxx set forth in this Agreement shall be true and correct, subject to
Section 5.02, as of the date of this Agreement and as of the Effective Date
as though made on and as of the Effective Date (except that representations
and warranties that by their terms speak as of the date of this Agreement
or some other date shall be true and correct as of such date) and United
shall have received a certificate, dated the Effective Date, signed on
behalf of Xxxxx by the Chief Executive Officer and the Chief Financial
Officer of Xxxxx to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF XXXXX. Xxxxx shall have performed in
all material respects all obligations required to be performed by it under
this Agreement at or prior to the Effective Time, and United shall have
received a certificate, dated the Effective Date, signed on behalf of Xxxxx
by the Chief Executive Officer and the Chief Financial Officer of Xxxxx to
such effect.
(c) OPINION OF UNITED'S COUNSEL. United shall have received an opinion
of Xxxxxxxx & Xxxxxxxx, special counsel to United, dated the Effective
Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, the Merger constitutes a
reorganization under Section 368 of the Code. In rendering its opinion,
Xxxxxxxx & Xxxxxxxx may require and rely upon representations contained in
letters from United and others.
(d) ACCOUNTING TREATMENT. United shall have received from Ernst &
Young LLP, United's independent auditors, letters, dated the date of or
shortly prior to each of the mailing date of the Proxy Statement and the
Effective Date, stating its opinion that the Merger shall qualify for
pooling-of-interests accounting treatment.
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated, and the Acquisition may
be abandoned:
(a) MUTUAL CONSENT. At any time prior to the Effective Time, by the
mutual consent of United and Xxxxx, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(b) BREACH. At any time prior to the Effective Time, by United or
Xxxxx, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (i) a breach by the
other party of any representation or warranty contained herein (subject to
the standard set forth in Section 5.02), which breach cannot be or has not
been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a breach by the other party of any
of the covenants or agreements contained herein, which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach, provided that such breach (whether under
(i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) DELAY. At any time prior to the Effective Time, by United or
Xxxxx, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Acquisition is not
consummated by July 15, 1998, except to the extent that the failure of the
Acquisition then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant to
this Section 8.01(c).
(d) NO APPROVAL. By Xxxxx or United, if its Board of Directors so
determines by a vote of a majority of the members of its entire Board, in
the event (i) the approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) any stockholder approval required by Section
7.01(a) herein is not obtained at the Xxxxx Meeting or the United Meeting.
(e) FAILURE TO RECOMMEND, ETC. At any time prior to the Xxxxx Meeting,
by United if the Xxxxx Board shall have failed to make its recommendation
referred to in Section 6.02, withdrawn such recommendation or modified or
changed such recommendation in a manner adverse in any respect to the
interests of United; or at any time prior to the United
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Meeting, by Xxxxx, if the United Board shall have failed to make its
recommendation referred to in Section 6.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse in any
respect to the interests of Xxxxx.
(f) FAILURE TO EXECUTE AND DELIVER STOCK OPTION AGREEMENT. At any time
prior to September 13, 1997, by United if Xxxxx shall not have executed and
delivered the Stock Option Agreement to United.
8.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this Article VIII,
no party to this Agreement shall have any liability or further obligation to any
other party hereunder except (i) as set forth in Section 9.01 and (ii) that
termination will not relieve a breaching party from liability for any willful
breach of this Agreement giving rise to such termination.
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than Section
6.12, 6.13, 6.15, 6.17 and this Article IX which shall survive the Effective
Time) or the termination of this Agreement if this Agreement is terminated prior
to the Effective Time (other than Sections 6.03(b), 6.04, 6.05(b), 6.18, 8.02,
and this Article IX which shall survive such termination).
9.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of this
Agreement may be (i) waived by the party benefitted by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto executed in the same manner as this Agreement, except that (A) after the
Xxxxx Meeting, this Agreement may not be amended if it would violate the VSCA
and (B) after the United Meeting, this Agreement may not be amended if it would
violate the WVCA.
9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 GOVERNING LAW. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of West Virginia applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of Federal law or of the VSCA are applicable).
9.05 EXPENSES. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and SEC fees shall be shared equally between Xxxxx and
United.
9.06 NOTICES. All notices, requests and other communications hereunder to a
party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below or such other
address as such party may specify by notice to the parties hereto.
If to Mason, to:
Xxxxxx Xxxxx Bankshares, Inc.
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
Xxxxx Xxxxxxxx,
Chief Financial Officer
With a copy to:
Silver, Xxxxxxxx & Taff, L.L.P.
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: (000) 000-0000
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Attn: Xxxxx X. Xxxx, P.C.
Xxxxxxxxxxx X. Xxxxx, P.C.
If to United, to:
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx,
Chairman of the Board and Chief Executive Officer
Xxxxxx Xxxxxx
Chief Financial Officer
With a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attn: H. Xxxxxx Xxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement and
any Stock Option Agreement entered into represent the entire understanding of
the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written
agreements heretofore made (other than any such Stock Option Agreement). Except
for Section 6.12, nothing in this Agreement expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
9.08 INTERPRETATION; EFFECT. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." No provision of this Agreement shall
be construed to require Xxxxx, United or any of their respective Subsidiaries,
affiliates or directors to take any action which would violate applicable law
(whether statutory or common law), rule or regulation.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
XXXXXX XXXXX BANKSHARES, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
By: /s/ XXXXX X. XXXXXXX
_____________________________________
Name: Xxxxx X. XxXxxxx
Title: Secretary
UNITED BANKSHARES, INC.
By: /s/ XXXXXXX X. XXXXX
_____________________________________
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
X-00
XXXXXXX X-0
PLAN OF MERGER
PLAN OF MERGER (this "PLAN") of Xxxxxx Xxxxx Bankshares, Inc. ("MASON"), a
Virginia corporation, and Xxxxxx Xxxxx Holding Company ("MASON HOLDING"), a
Virginia Corporation and wholly owned subsidiary of United Bankshares, Inc.
("UNITED").
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS. The following terms are used in this Plan with the
meanings set forth below:
"CODE" means the Internal Revenue Code of 1986, as amended.
"EFFECTIVE DATE" means the effective date of the Merger.
"EFFECTIVE TIME" means the effective time of the Merger.
"XXXXX COMMON STOCK" means the common stock, par value $1.11 per share, of
Xxxxx.
"XXXXX PREFERRED STOCK" means the preferred stock, par value $0.01 per
share, of Xxxxx.
"XXXXX STOCK" means, collectively, Xxxxx Common Stock and Xxxxx Preferred
Stock.
"MERGER AGREEMENT" means the Amended and Restated Agreement and Plan of
Merger, dated as of December 10, 1997, as amended, by and between Xxxxx and
United.
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"SUBSIDIARY" has the meaning ascribed to it in Rule 1-02 of Regulation S-X
of the Securities and Exchange Commission.
"TREASURY STOCK" mean shares of Xxxxx Stock held by Xxxxx or any of its
Subsidiaries or by United or any of its Subsidiaries, in each case other than in
a fiduciary capacity or as a result of debts previously contracted in good
faith.
"UNITED COMMON STOCK" means the common stock, par value $5.00 per share, of
United.
"VSCA" means the Virginia Stock Corporation Act.
1.2 CERTAIN DEFINITIONS. Terms used and not otherwise defined herein have
the meanings specified in the Merger Agreement.
ARTICLE II
TERMS OF THE MERGER
2.1 THE MERGER. The names of the corporations to be merged are Xxxxxx Xxxxx
Holding Company and Xxxxxx Xxxxx Bankshares, Inc. At the Effective Time, Xxxxx
Holding shall merge with and into Xxxxx (the "MERGER"), the separate corporate
existence of Xxxxx Holding shall cease and Xxxxx shall survive and continue to
exist as a Virginia corporation and wholly owned subsidiary of United (Xxxxx, as
the surviving corporation in the Merger, sometimes being referred to herein as
the "SURVIVING CORPORATION").
2.2 EFFECT OF THE MERGER. Subject to the satisfaction or waiver of the
conditions set forth in Article IV of this Plan, the Merger shall become
effective upon the occurrence of the filing in the office of the Virginia State
Corporation Commission (the "CORPORATION COMMISSION") of articles of merger in
accordance with Section 13.1-720 of the VSCA or such later date and time as may
be set forth in such articles and the issuance of a certificate of merger by the
Corporation Commission under the VSCA. The Merger shall have the effects
prescribed in the VSCA.
2.3 ARTICLES OF INCORPORATION AND BY-LAWS. The articles of incorporation
and by-laws of Xxxxx immediately after the Merger shall be those of Xxxxx
Holding as in effect immediately prior to the Effective Time.
1
2.4 DIRECTORS AND OFFICERS OF XXXXX. The directors and officers of Xxxxx
immediately after the Merger shall be the directors and officers of Xxxxx
Holding immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
ARTICLE III
MANNER AND BASIS OF
CONVERTING SHARES
3.1 MERGER CONSIDERATION. At the Effective Time, automatically by virtue of
the Merger and without any action on the part of any person:
(a) OUTSTANDING XXXXX COMMON STOCK. Each share, excluding Treasury Stock,
of Xxxxx Common Stock issued and outstanding immediately prior to the Effective
Time shall become and be converted into 0.85 of a share of United Common Stock
(the "EXCHANGE RATIO"). In the event United changes (or establishes a record
date for changing) the number of shares of United Common Stock issued and
outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization or similar transaction with respect to the
outstanding United Common Stock and the record date therefor shall be prior to
the Effective Date, the Exchange Ratio shall be proportionately adjusted. Xxxxx
Common Stock is the only class of stock of Xxxxx issued and outstanding.
(b) TREASURY SHARES. Each share of Xxxxx Common Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired at
the Effective Time and no consideration shall be issued in exchange therefor.
3.2 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time, holders
of Xxxxx Common Stock shall cease to be, and shall have no rights as,
stockholders of Xxxxx, other than to receive any dividend or other distribution
with respect to such Xxxxx Common Stock with a record date occurring prior to
the Effective Time and the consideration provided herein. After the Effective
Time, there shall be no transfers on the stock transfer books of Xxxxx or the
Surviving Corporation of shares of Xxxxx Common Stock.
3.3 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of United Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
United shall pay to each holder of Xxxxx Common Stock who would otherwise be
entitled to a fractional share of United Common Stock (after taking into account
all Old Certificates delivered by such holder) an amount in cash (without
interest) determined by multiplying such fraction by the average of the last
sale prices of United Common Stock, as reported by NASDAQ reporting system (as
reported in THE WALL STREET JOURNAL or, if not reported therein, in another
authoritative source), for the five NASDAQ trading days immediately preceding
the Effective Date.
3.4 EXCHANGE PROCEDURES. (a) At or prior to the Effective Time, United
shall deposit, or shall cause to be deposited, with Xxxxx Xxxxxx Shareholder
Services (in such capacity, the "EXCHANGE AGENT"), for the benefit of the
holders of certificates formerly representing shares of Xxxxx Common Stock ("OLD
CERTIFICATES"), for exchange in accordance with this Article III, certificates
representing the shares of United Common Stock ("NEW CERTIFICATES") and an
estimated amount of cash (such cash and New Certificates, together with any
dividends or distributions with a record date occurring after the Effective Date
with respect thereto (without any interest on any such cash, dividends or
distributions), being hereinafter referred to as the "EXCHANGE FUND") to be paid
pursuant to this Article III in exchange for outstanding shares of Xxxxx Common
Stock.
(b) As promptly as practicable after the Effective Date, United shall send
or cause to be sent to each former holder of record of shares of Xxxxx Common
Stock immediately prior to the Effective Time transmittal materials for use in
exchanging such stockholder's Old Certificates for the consideration set forth
in this Article III. United shall cause the New Certificates into which shares
of a stockholder's Xxxxx Common Stock are converted on the Effective Date and/or
any check in respect of any fractional share interests or dividends or
distributions which such person shall be entitled to receive to be delivered to
such stockholder upon delivery to the Exchange Agent of Old Certificates
representing such shares of Xxxxx Common Stock (or indemnity reasonably
satisfactory to United and the Exchange Agent, if any of such certificates are
lost, stolen or destroyed) owned by such stockholder. No interest will be paid
on any such cash to be paid in lieu of fractional share interests or in respect
of dividends or distributions which any such person shall be entitled to receive
pursuant to this Article III upon such delivery.
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(c) Notwithstanding the foregoing, neither the Exchange Agent, if any, nor
any party hereto shall be liable to any former holder of Xxxxx Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect to United Common Stock
with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of Xxxxx Common
Stock converted in the Merger into the right to receive shares of such United
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth in
this Section 3.4, and, following 90 days after the Effective Date, no such
shares of Xxxxx Common Stock shall be eligible to vote until the holder of Old
Certificates is entitled to receive New Certificates in accordance with the
procedures set forth in this Section 3.4. After becoming so entitled in
accordance with this Section 3.4, the record holder thereof also shall be
entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
United Common Stock such holder had the right to receive upon surrender of the
Old Certificates.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Xxxxx for six months after the Effective Time shall be paid to
United. Any stockholders of Xxxxx who have not theretofore complied with this
Article III shall thereafter look only to United for payment of the shares of
United Common Stock, cash in lieu of any fractional shares and unpaid dividends
and distributions on United Common Stock deliverable in respect of each share of
Xxxxx Common Stock such stockholder holds as determined pursuant to the Merger
Agreement and this Plan, in each case, without any interest thereon.
3.5 OPTIONS. (a) At the Effective Time, each outstanding option to purchase
shares of Xxxxx Common Stock under the Xxxxx Stock Plans (each, a "XXXXX STOCK
OPTION"), whether vested or unvested, shall be converted into an option to
acquire, on the same terms and conditions as were applicable under such Xxxxx
Stock Option, the number of shares of United Common Stock equal to (a) the
number of shares of Xxxxx Common Stock subject to the Xxxxx Stock Option,
multiplied by (b) the Exchange Ratio (such product rounded to the nearest whole
number) (a "REPLACEMENT OPTION"), at an exercise price per share (rounded to the
nearest whole cent) equal to (y) the aggregate exercise price for the shares of
Xxxxx Common Stock which were purchasable pursuant to such Xxxxx Stock Option
divided by (z) the number of full shares of United Common Stock subject to such
Replacement Option in accordance with the foregoing. Notwithstanding the
foregoing, each Xxxxx Stock Option which is intended to be an "incentive stock
option" (as defined in Section 422 of the Code) shall be adjusted in accordance
with the requirements of Section 424 of the Code. At or prior to the Effective
Time, Xxxxx shall use its best efforts, including using its best efforts to
obtain any necessary consents from optionees, with respect to the Xxxxx Stock
Plans to permit the replacement of the outstanding Xxxxx Stock Options by United
pursuant to this Section and to permit United to assume the Xxxxx Stock Plans.
Xxxxx shall further take all action necessary to amend the Xxxxx Stock Plans to
eliminate automatic grants or awards thereunder following the Effective Time. At
the Effective Time, United shall assume the Xxxxx Stock Plans; PROVIDED, that
such assumption shall be only in respect of the Replacement Options and that
United shall have no obligation with respect to any awards under the Xxxxx Stock
Plans other than the Replacement Options and shall have no obligation to make
any additional grants or awards under such assumed Xxxxx Stock Plans.
(b) At all times after the Effective Time, United shall reserve for
issuance such number of shares of United Common Stock as necessary so as to
permit the exercise of options granted under the Xxxxx Stock Plans in the manner
contemplated by the Merger Agreement, this Plan and the instruments pursuant to
which such options were granted. United shall make all filings required under
federal and state securities laws no later than the Effective Time so as to
permit the exercise of such options and the sale of the shares received by the
optionee upon such exercise at and after the Effective Time and United shall
continue to make such filings thereafter as may be necessary to permit the
continued exercise of options and sale of such shares.
ARTICLE IV
CONDITIONS TO THE MERGER
4.1 Consummation of the Merger is conditioned upon the following:
(a) (i) Approval of the Merger Agreement and this Plan by the affirmative
vote of more than two-thirds of the outstanding shares of Xxxxx Common Stock and
(ii) approval of an amendment to the United Restated Articles of Incorporation
increasing the number of authorized shares of United Common Stock and the
issuance by United of shares of United Common Stock to be issued pursuant to the
Merger by a majority of the outstanding shares of United Common Stock;
3
(b) Receipt of required regulatory approvals;
(c) Absence of governmental action prohibiting consummation;
(d) An effective Registration Statement under the Securities Act of 1933
and no orders or other action suspending such effectiveness;
(e) Receipt of all required permits and authorizations under state
securities laws;
(f) To the extent required, approval of the shares of United Common Stock
issued in the Merger for listing on the NASDAQ, subject to notice of issuance;
(g) The filing and effectiveness of the amendment to the United Restated
Articles of Incorporation;
(h) All representations and warranties made by the respective parties are
true and correct as of the Effective Time as contemplated by the Merger
Agreement and receipt by the parties of appropriate officers' certificates to
such effect; and
(i) Performance of all required obligations by the respective parties and
receipt by the parties of appropriate officers' certificates to such effect.
ARTICLE V
TERMINATION
5.1 This Plan may be terminated prior to the Effective Time as provided in
Article VIII of the Merger Agreement and shall terminate at the same time as the
Merger Agreement.
4
EXHIBIT B
FORM OF MASON AFFILIATE LETTER
____________, 1997
Xxxxxx Xxxxx Bankshares, Inc.
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx,
Chief Financial Officer
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx,
Chief Financial Officer
Ladies and Gentlemen:
I have been advised that I may be deemed to be, but do not admit that I am,
an "affiliate" of Xxxxxx Xxxxx Bankshares, Inc. a Virginia corporation
("Xxxxx"), as that term is defined in Rule 145 promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"), and/or SEC Accounting Series Releases 130 and 135. I
understand that pursuant to the terms of the Agreement and Plan of Merger, dated
as of September 10, 1997 (the "Merger Agreement"), by and between Xxxxx and
United Bankshares, Inc. a West Virginia corporation ("United"), Xxxxx plans to
merge with and into United (the "Merger") and that the Merger is intended to be
accounted for under the "pooling of interests" accounting method.
I further understand that as a result of the Merger, I may receive shares
of common stock, par value $2.50 per share, of United ("United Stock") (i) in
exchange for shares of common stock, par value $1.11 per share, of Xxxxx ("Xxxxx
Stock") or (ii) as a result of the exercise of Rights (as defined in the Merger
Agreement).
I have carefully read this letter and reviewed the Merger Agreement and
discussed their requirements and other applicable limitations upon my ability to
sell, transfer, or otherwise dispose of United Stock and Xxxxx Stock, to the
extent I felt necessary, with my counsel or counsel for Xxxxx.
I represent, warrant and covenant with and to United that in the event I
receive any United Stock as a result of the Merger:
1. I shall not make any sale, transfer, or other disposition of such United
Stock unless (i) such sale, transfer or other disposition has been registered
under the Securities Act, (ii) such sale, transfer or other disposition is made
in conformity with the provisions of Rule 145 under the Securities Act (as such
rule may be amended from time to time), or (iii) in the opinion of counsel in
form and substance reasonably satisfactory to United, or under a "no-action"
letter obtained by me from the staff of the SEC, such sale, transfer or other
disposition will not violate or is otherwise exempt from registration under the
Securities Act.
2. I understand that United is under no obligation to register the sale,
transfer or other disposition of shares of United Stock by me or on my behalf
under the Securities Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
3. I understand that stop transfer instructions will be given to United's
transfer agent with respect to shares of United Stock issued to me as a result
of the Merger and that there will be placed on the certificates for such shares,
or any substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933 applies. The shares represented by this certificate may be
transferred only in accordance with the terms of a letter agreement,
dated ____________, 199_, between the registered holder hereof and
United Bankshares, Inc., a copy of which agreement is on file at the
principal offices of United Bankshares, Inc."
1
4. I understand that, unless transfer by me of the United Stock issued to
me as a result of the Merger has been registered under the Securities Act or
such transfer is made in conformity with the provisions of Rule 145(d) under the
Securities Act, United reserves the right, in its sole discretion, to place the
following legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired from a
person who received such shares in a transaction to which Rule 145
under the Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for resale in connection
with, any distribution thereof within the meaning of the Securities
Act of 1933 and may not be offered, sold, pledged or otherwise
transferred except in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
It is understood and agreed that the legends set forth in paragraphs (3)
and (4) above shall be removed by delivery of substitute certificates without
such legends if I shall have delivered to United (i) a copy of a "no action"
letter from the staff of the SEC, or an opinion of counsel in form and substance
reasonably satisfactory to United, to the effect that such legend is not
required for purposes of the Act, or (ii) evidence or representations
satisfactory to United that the United Stock represented by such certificates is
being or has been sold in conformity with the provisions of Rule 145(d).
I further represent, warrant and covenant with and to United that I will
not sell, transfer or otherwise dispose of, or reduce my risk relative to, any
shares of Xxxxx Stock or United Stock (whether or not acquired by me in the
Merger) during the period commencing 30 days prior to effective date of the
Merger and ending at such time as United notifies me that results covering at
least 30 days of combined operations of Xxxxx and United after the Merger have
been published by United. I understand that United is not obligated to publish
such combined financial results except in accordance with its normal financial
reporting practice.
I further understand and agree that this letter agreement shall apply to
all shares of Xxxxx Stock and United Stock that I am deemed to beneficially own
pursuant to applicable federal securities law.
I also understand that the Merger is intended to be treated as a "pooling
of interests" for accounting purposes, and I agree that if Xxxxx or United
advises me in writing that additional restrictions apply to my ability to sell,
transfer, or otherwise dispose of Xxxxx Stock or United Stock in order for
United to be entitled to use the pooling of interests accounting method, I will
abide by such restrictions.
Very truly yours,
By ____________________________________
Name:
Accepted this ____ day of
_______________, 1997.
XXXXXX XXXXX BANKSHARES, INC.
By __________________________________________________________
Name:
Title:
UNITED BANKSHARES, INC.
By __________________________________________________________
Name:
Title:
2
EXHIBIT C
FORM OF UNITED AFFILIATE LETTER
____________, 1997
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx,
Chief Financial Officer
Ladies and Gentlemen:
I have been advised that I may be deemed to be, but do not admit that I am,
an "affiliate" of United Bankshares, Inc., a West Virginia corporation
("United"), as that term is defined in the Securities and Exchange Commission's
Accounting Series Releases 130 and 135. I understand that pursuant to the terms
of the Agreement and Plan of Merger, dated as of September 10, 1997 (the "Merger
Agreement"), by and between Xxxxxx Xxxxx Bankshares, Inc., a Virginia
corporation ("Xxxxx"), and United, Xxxxx plans to merge with and into United
(the "Merger") and that the merger is intended to be accounted for under the
"pooling of interests" accounting method.
I have carefully read this letter and reviewed the Merger Agreement and
discussed their requirements and other applicable limitations upon my ability to
sell, transfer, or otherwise dispose of common stock of United and Xxxxx, to the
extent I felt necessary, with my counsel or counsel for United.
I hereby represent, warrant and covenant with and to United that:
1. I will not sell, transfer or otherwise dispose of, or reduce my risk
relative to, any shares of common stock of Xxxxx or United (whether or not
acquired by me in the Merger) during the period commencing 30 days prior to the
effective date of the Merger and ending at such time as United notifies me that
results covering at least 30 days of combined operations of Xxxxx and United
after the Merger have been published by United. I understand that United is not
obligated to publish such combined financial results except in accordance with
its normal financial reporting practice.
2. I further understand and agree that this letter agreement shall apply to
all shares of common stock of Xxxxx and United that I am deemed to beneficially
own pursuant to applicable federal securities laws.
3. If United advises me in writing that additional restrictions apply to my
ability to sell, transfer, or otherwise dispose of common stock of Xxxxx or
United in order for United to be entitled to use the "pooling of interests"
accounting method, I will abide by such restrictions.
Very truly yours,
By ____________________________________
Name:
Accepted this ____ day of
_______________, 1997.
UNITED BANKSHARES, INC.
By __________________________________________________________
Name:
Title:
1
ANNEX A
FORM OF SUPPLEMENT FOR MERGER SUB ACCESSION TO ACQUISITION AGREEMENT
SUPPLEMENT, dated as of the [ ] day of [ ], 1997 (this "SUPPLEMENT"), to
the Agreement and Plan of Merger, dated as of September 10, 1997 (as amended
from time to time in accordance with the terms thereof, the "MERGER AGREEMENT"),
by and between Xxxxxx Xxxxx Bankshares, Inc. ("XXXXX") and United Bankshares,
Inc. ("UNITED").
WHEREAS, terms used but not otherwise defined herein have the meanings
specified in the Merger Agreement; and
WHEREAS, pursuant to Section 2.01 of the Merger Agreement, United has
determined to consummate the Merger in part through the merger of [insert
name(s) of Merger Sub(s)] ([each and][the] "MERGER SUB") with and into Xxxxx.
NOW, THEREFORE, by its execution of this Supplement, as of the date hereof,
[each of] the undersigned (i) adopts and becomes a party to the Acquisition
Agreement, as required by Section 2.01 thereof and (ii) agrees to perform all
its obligations and agreements set forth therein.
IN WITNESS WHEREOF, this Supplement has been duly executed and delivered by
the undersigned, duly authorized thereunto as of the date first hereinabove
written.
[INSERT NAME OF MERGER SUB]
By: ___________________________________
Name:
Title:
CONFORMED COPY
SUPPLEMENT FOR MERGER SUB ACCESSION TO ACQUISITION AGREEMENT
SUPPLEMENT, dated as of the 10th day of December, 1997 (this "SUPPLEMENT"),
to the Amended and Restated Agreement and Plan of Merger, dated as of December
10, 1997 (as amended from time to time in accordance with the terms thereof, the
"MERGER AGREEMENT"), by and between Xxxxxx Xxxxx Bankshares, Inc. ("XXXXX") and
United Bankshares, Inc. ("UNITED").
WHEREAS, terms used but not otherwise defined herein have the meanings
specified in the Merger Agreement; and
WHEREAS, pursuant to Section 2.01 of the Merger Agreement, United has
determined to consummate the Merger in part through the merger of Xxxxxx Xxxxx
Holding Company ("MERGER SUB") with and into Xxxxx.
NOW, THEREFORE, by its execution of this Supplement, as of the date hereof,
the undersigned (i) adopts and becomes a party to the Acquisition Agreement, as
required by Section 2.01 thereof and (ii) agrees to perform all its obligations
and agreements set forth therein.
IN WITNESS WHEREOF, this Supplement has been duly executed and delivered by
the undersigned, duly authorized thereunto as of the date first hereinabove
written.
XXXXXX XXXXX HOLDING COMPANY
By: /s/ XXXXXXX X. XXXXX
_____________________________________
Name: Xxxxxxx X. Xxxxx
Title: President
PLAN OF MERGER
PLAN OF MERGER (this "PLAN") of Xxxxxx Xxxxx Bankshares, Inc. ("XXXXX"), a
Virginia corporation, and Xxxxxx Xxxxx Holding Company ("MASON HOLDING"), a
Virginia Corporation and wholly owned subsidiary of United Bankshares, Inc.
("UNITED").
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS. The following terms are used in this Plan with the
meanings set forth below:
"CODE" means the Internal Revenue Code of 1986, as amended.
"EFFECTIVE DATE" means the effective date of the Merger.
"EFFECTIVE TIME" means the effective time of the Merger.
"XXXXX COMMON STOCK" means the common stock, par value $1.11 per share, of
Xxxxx.
"XXXXX PREFERRED STOCK" means the preferred stock, par value $0.01 per
share, of Xxxxx.
"XXXXX STOCK" means, collectively, Xxxxx Common Stock and Xxxxx Preferred
Stock.
"MERGER AGREEMENT" means the Amended and Restated Agreement and Plan of
Merger, dated as of December 10, 1997, as amended, by and between Xxxxx and
United.
"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market System.
"SUBSIDIARY" has the meaning ascribed to it in Rule 1-02 of Regulation S-X
of the Securities and Exchange Commission.
"TREASURY STOCK" mean shares of Xxxxx Stock held by Xxxxx or any of its
Subsidiaries or by United or any of its Subsidiaries, in each case other than in
a fiduciary capacity or as a result of debts previously contracted in good
faith.
"UNITED COMMON STOCK" means the common stock, par value $5.00 per share, of
United.
"VSCA" means the Virginia Stock Corporation Act.
1.2 CERTAIN DEFINITIONS. Terms used and not otherwise defined herein have
the meanings specified in the Merger Agreement.
ARTICLE II
TERMS OF THE MERGER
2.1 THE MERGER. The names of the corporations to be merged are Xxxxxx Xxxxx
Holding Company and Xxxxxx Xxxxx Bankshares, Inc. At the Effective Time, Xxxxx
Holding shall merge with and into Xxxxx (the "MERGER"), the separate corporate
existence of Xxxxx Holding shall cease and Xxxxx shall survive and continue to
exist as a Virginia corporation and wholly owned subsidiary of United (Xxxxx, as
the surviving corporation in the Merger, sometimes being referred to herein as
the "SURVIVING CORPORATION").
2.2 EFFECT OF THE MERGER. Subject to the satisfaction or waiver of the
conditions set forth in Article IV of this Plan, the Merger shall become
effective upon the occurrence of the filing in the office of the Virginia State
Corporation Commission (the "CORPORATION COMMISSION") of articles of merger in
accordance with Section 13.1-720 of the VSCA or such later date and time as may
be set forth in such articles and the issuance of a certificate of merger by the
Corporation Commission under the VSCA. The Merger shall have the effects
prescribed in the VSCA.
2.3 ARTICLES OF INCORPORATION AND BY-LAWS. The articles of incorpora tion
and by-laws of Xxxxx immediately after the Merger shall be those of Xxxxx
Holding as in effect immediately prior to the Effective Time.
2.4 DIRECTORS AND OFFICERS OF XXXXX. The directors and officers of Xxxxx
immediately after the Merger shall be the directors and officers of Xxxxx
Holding immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
1
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES
3.1 MERGER CONSIDERATION. At the Effective Time, automatically by virtue of
the Merger and without any action on the part of any person:
(a) OUTSTANDING XXXXX COMMON STOCK. Each share, excluding Treasury Stock,
of Xxxxx Common Stock issued and outstanding immediately prior to the Effective
Time shall become and be converted into 0.85 of a share of United Common Stock
(the "EXCHANGE RATIO"). In the event United changes (or establishes a record
date for changing) the number of shares of United Common Stock issued and
outstanding prior to the Effective Date as a result of a stock split, stock
dividend, recapitalization or similar transaction with respect to the
outstanding United Common Stock and the record date therefor shall be prior to
the Effective Date, the Exchange Ratio shall be proportionately adjusted. Xxxxx
Common Stock is the only class of stock of Xxxxx issued and outstanding.
(b) TREASURY SHARES. Each share of Xxxxx Common Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired at
the Effective Time and no consideration shall be issued in exchange therefor.
3.2 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time, holders
of Xxxxx Common Stock shall cease to be, and shall have no rights as,
stockholders of Xxxxx, other than to receive any dividend or other distribution
with respect to such Xxxxx Common Stock with a record date occurring prior to
the Effective Time and the consideration provided herein. After the Effective
Time, there shall be no transfers on the stock transfer books of Xxxxx or the
Surviving Corporation of shares of Xxxxx Common Stock.
3.3 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of United Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
United shall pay to each holder of Xxxxx Common Stock who would otherwise be
entitled to a fractional share of United Common Stock (after taking into account
all Old Certificates delivered by such holder) an amount in cash (without
interest) determined by multiplying such fraction by the average of the last
sale prices of United Common Stock, as reported by NASDAQ reporting system (as
reported in THE WALL STREET JOURNAL or, if not reported therein, in another
authoritative source), for the five NASDAQ trading days immediately preceding
the Effective Date.
3.4 EXCHANGE PROCEDURES. (a) At or prior to the Effective Time, United
shall deposit, or shall cause to be deposited, with Xxxxx Xxxxxx Shareholder
Services (in such capacity, the "EXCHANGE AGENT"), for the benefit of the
holders of certificates formerly representing shares of Xxxxx Common Stock ("OLD
CERTIFICATES"), for exchange in accordance with this Article III, certificates
representing the shares of United Common Stock ("NEW CERTIFICATES") and an
estimated amount of cash (such cash and New Certificates, together with any
dividends or distributions with a record date occurring after the Effective Date
with respect thereto (without any interest on any such cash, dividends or
distributions), being hereinafter referred to as the "EXCHANGE FUND") to be paid
pursuant to this Article III in exchange for outstanding shares of Xxxxx Common
Stock.
(b) As promptly as practicable after the Effective Date, United shall send
or cause to be sent to each former holder of record of shares of Xxxxx Common
Stock immediately prior to the Effective Time transmittal materials for use in
exchanging such stockholder's Old Certificates for the consideration set forth
in this Article III. United shall cause the New Certificates into which shares
of a stockholder's Xxxxx Common Stock are converted on the Effective Date and/or
any check in respect of any fractional share interests or dividends or
distributions which such person shall be entitled to receive to be delivered to
such stockholder upon delivery to the Exchange Agent of Old Certificates
representing such shares of Xxxxx Common Stock (or indemnity reasonably
satisfactory to United and the Exchange Agent, if any of such certificates are
lost, stolen or destroyed) owned by such stockholder. No interest will be paid
on any such cash to be paid in lieu of fractional share interests or in respect
of dividends or distributions which any such person shall be entitled to receive
pursuant to this Article III upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent, if any, nor
any party hereto shall be liable to any former holder of Xxxxx Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect to United Common Stock
with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of Xxxxx Common
Stock converted in the Merger into the right to receive shares of such United
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth in
this Section 3.4, and,
2
following 90 days after the Effective Date, no such shares of Xxxxx Common Stock
shall be eligible to vote until the holder of Old Certificates is entitled to
receive New Certificates in accordance with the procedures set forth in this
Section 3.4. After becoming so entitled in accordance with this Section 3.4, the
record holder thereof also shall be entitled to receive any such dividends or
other distributions, without any interest thereon, which theretofore had become
payable with respect to shares of United Common Stock such holder had the right
to receive upon surrender of the Old Certificates.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Xxxxx for six months after the Effective Time shall be paid to
United. Any stockholders of Xxxxx who have not theretofore complied with this
Article III shall thereafter look only to United for payment of the shares of
United Common Stock, cash in lieu of any fractional shares and unpaid dividends
and distributions on United Common Stock deliverable in respect of each share of
Xxxxx Common Stock such stockholder holds as determined pursuant to the Merger
Agreement and this Plan, in each case, without any interest thereon.
3.5 OPTIONS. (a) At the Effective Time, each outstanding option to purchase
shares of Xxxxx Common Stock under the Xxxxx Stock Plans (each, a "XXXXX STOCK
OPTION"), whether vested or unvested, shall be converted into an option to
acquire, on the same terms and conditions as were applicable under such Xxxxx
Stock Option, the number of shares of United Common Stock equal to (a) the
number of shares of Xxxxx Common Stock subject to the Xxxxx Stock Option,
multiplied by (b) the Exchange Ratio (such product rounded to the nearest whole
number) (a "REPLACEMENT OPTION"), at an exercise price per share (rounded to the
nearest whole cent) equal to (y) the aggregate exercise price for the shares of
Xxxxx Common Stock which were purchasable pursuant to such Xxxxx Stock Option
divided by (z) the number of full shares of United Common Stock subject to such
Replacement Option in accordance with the foregoing. Notwithstanding the
foregoing, each Xxxxx Stock Option which is intended to be an "incentive stock
option" (as defined in Section 422 of the Code) shall be adjusted in accordance
with the requirements of Section 424 of the Code. At or prior to the Effective
Time, Xxxxx shall use its best efforts, including using its best efforts to
obtain any necessary consents from optionees, with respect to the Xxxxx Stock
Plans to permit the replacement of the outstanding Xxxxx Stock Options by United
pursuant to this Section and to permit United to assume the Xxxxx Stock Plans.
Xxxxx shall further take all action necessary to amend the Xxxxx Stock Plans to
eliminate automatic grants or awards thereunder following the Effective Time. At
the Effective Time, United shall assume the Xxxxx Stock Plans; PROVIDED, that
such assumption shall be only in respect of the Replacement Options and that
United shall have no obligation with respect to any awards under the Xxxxx Stock
Plans other than the Replacement Options and shall have no obligation to make
any additional grants or awards under such assumed Xxxxx Stock Plans.
(b) At all times after the Effective Time, United shall reserve for
issuance such number of shares of United Common Stock as necessary so as to
permit the exercise of options granted under the Xxxxx Stock Plans in the manner
contemplated by the Merger Agreement, this Plan and the instruments pursuant to
which such options were granted. United shall make all filings required under
federal and state securities laws no later than the Effective Time so as to
permit the exercise of such options and the sale of the shares received by the
optionee upon such exercise at and after the Effective Time and United shall
continue to make such filings thereafter as may be necessary to permit the
continued exercise of options and sale of such shares.
ARTICLE IV
CONDITIONS TO THE MERGER
4.1 Consummation of the Merger is conditioned upon the following:
(a) (i) Approval of the Merger Agreement and this Plan by the affirmative
vote of more than two-thirds of the outstanding shares of Xxxxx Common Stock and
(ii) approval of an amendment to the United Restated Articles of Incorporation
increasing the number of authorized shares of United Common Stock and the
issuance by United of shares of United Common Stock to be issued pursuant to the
Merger by a majority of the outstanding shares of United Common Stock;
(b) Receipt of required regulatory approvals;
(c) Absence of governmental action prohibiting consummation;
(d) An effective Registration Statement under the Securities Act of 1933
and no orders or other action suspending such effectiveness;
(e) Receipt of all required permits and authorizations under state
securities laws;
3
(f) To the extent required, approval of the shares of United Common Stock
issued in the Merger for listing on the NASDAQ, subject to notice of issuance;
(g) The filing and effectiveness of the amendment to the United Restated
Articles of Incorporation;
(h) All representations and warranties made by the respective parties are
true and correct as of the Effective Time as contemplated by the Merger
Agreement and receipt by the parties of appropriate officers' certificates to
such effect; and
(i) Performance of all required obligations by the respective parties and
receipt by the parties of appropriate officers' certificates to such effect.
ARTICLE V
TERMINATION
5.1 This Plan may be terminated prior to the Effective Time as provided in
Article VIII of the Merger Agreement and shall terminate at the same time as the
Merger Agreement.
4
APPENDIX B
STOCK OPTION AGREEMENT
CONFORMED COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of September 11, 1997, between United
Bankshares, Inc., a West Virginia corporation ("Grantee"), and Xxxxxx Xxxxx
Bankshares, Inc., a Virginia corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Merger (the "Merger Agreement");
WHEREAS, as an inducement to the willingness of Grantee to continue to
pursue the transactions contemplated by the Merger Agreement, Issuer has agreed
to grant Grantee the Option (as hereinafter defined); and
WHEREAS, the Board of Directors of Issuer has approved the grant of the
Option and the Merger Agreement prior to the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto
agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase, subject to the terms hereof, up to an aggregate of
1,018,000 fully paid and nonassessable shares of the common stock, par value
$1.11 per share, of Issuer ("Common Stock") at a price per share equal to the
average of last reported sale prices per share of Common Stock as reported on
the NASDAQ National Market System on September 4 and 5, 1997; PROVIDED, HOWEVER,
that in the event Issuer issues or agrees to issue any shares of Common Stock
(other than shares of Common Stock issued pursuant to stock options granted
pursuant to any employee benefit plan prior to the date hereof) at a price less
than such average price per share (as adjusted pursuant to subsection (b) of
Section 5), such price shall be equal to such lesser price (such price, as
adjusted if applicable, the "Option Price"); PROVIDED, FURTHER, that in no event
shall the number of shares for which this Option is exercisable exceed 19.9% of
the issued and outstanding shares of Common Stock. The number of shares of
Common Stock that may be received upon the exercise of the Option and the Option
Price are subject to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), the number of shares of Common Stock subject to the Option
shall be increased so that, after such issuance, such number together with any
shares of Common Stock previously issued pursuant hereto, equals 19.9% of the
number of shares of Common Stock then issued and outstanding without giving
effect to any shares subject or issued pursuant to the Option. Nothing contained
in this Section l(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), PROVIDED that the Holder shall have sent the written
notice of such exercise (as provided in subsection (e) of this Section 2) within
six (6) months following such Subsequent Triggering Event (or such later period
as provided in Section 10). Each of the following shall be an Exercise
Termination Event: (i) the Effective Time of the Merger; (ii) termination of the
Merger Agreement in accordance with the provisions thereof if such termination
occurs prior to the occurrence of an Initial Triggering Event except a
termination by Grantee pursuant to Section 8.01(b) or Section 8.01(e) of the
Merger Agreement (but only if the breach giving rise to the termination was
willful) (each, a "Listed Termination"); or (iii) the passage of eighteen (18)
months (or such longer period as provided in Section 10) after termination of
the Merger Agreement if such termination follows the occurrence of an Initial
Triggering Event or is a Listed Termination. The term "Holder" shall mean the
holder or holders of the Option. Notwithstanding anything to the contrary
contained herein, (i) the Option may not be exercised at any time when Grantee
shall be in material breach of any of its covenants or agreements contained in
the Merger Agreement such that Issuer shall be entitled to terminate the Merger
Agreement pursuant to Section 8.01(b) thereof as a result of a material breach
and (ii) this Agreement shall automatically terminate upon the proper
termination of the Merger Agreement (x) by Issuer pursuant to Section 8.01(b)
thereof as a result of the material breach by Grantee of its covenants or
agreements contained in the Merger Agreement, (y)
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by Issuer or Grantee pursuant to Section 8.01(d) (ii) if Grantee's shareholders
do not approve the Merger Agreement at the meeting, or (z) by Issuer or Grantee
pursuant to Section 8.01(d)(i).
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Issuer or any Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC")) (an "Issuer Subsidiary"), without having received Grantee's prior
written consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person (the term
"person" for purposes of this Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of its Subsidiaries (each a "Grantee Subsidiary") or
the Board of Directors of Issuer (the "Issuer Board") shall have
recommended that the shareholders of Issuer approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement.
For purposes of this Agreement, (a) "Acquisition Transaction" shall mean
(x) a merger or consolidation, or any similar transaction, involving Issuer
or any Issuer Subsidiary (other than mergers, consolidations or similar
transactions (i) involving solely Issuer and/or one or more wholly-owned
(except for directors' qualifying shares and a de minimis number of other
shares) Subsidiaries of the Issuer, provided, any such transaction is not
entered into in violation of the terms of the Merger Agreement or (ii) in
which the shareholders of Issuer immediately prior to the completion of
such transaction own at least 50% of the Common Stock of the Issuer (or the
resulting or surviving entity in such transaction) immediately after
completion of such transaction, provided any such transaction is not
entered into in violation of the terms of the Merger Agreement), (y) a
purchase, lease or other acquisition of all or any substantial part of the
assets or deposits of Issuer or any Issuer Subsidiary, or (z) a purchase or
other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or more of the voting
power of Issuer or any Issuer Subsidiary and (b) "Subsidiary" shall have
the meaning set forth in Rule 12b-2 under the 1934 Act;
(ii) Any person other than the Grantee or any Grantee Subsidiary shall
have acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of Common Stock (the
term "beneficial ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the 1934 Act, and the rules
and regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed to
approve the Merger Agreement and the Merger at a meeting which has been
held for that purpose or any adjournment or postponement thereof, or such
meeting shall not have been held in violation of the Merger Agreement or
shall have been cancelled prior to termination of the Merger Agreement if,
prior to such meeting (or if such meeting shall not have been held or shall
have been cancelled, prior to such termination), it shall have been
publicly announced that any person (other than Grantee or any of its
Subsidiaries) shall have made, or publicly disclosed an intention to make,
a proposal to engage in an Acquisition Transaction;
(iv) The Issuer Board shall have withdrawn or modified (or publicly
announced its intention to withdraw or modify) in any manner adverse in any
respect to Grantee its recommendation that the shareholders of Issuer
approve the transactions contemplated by the Merger Agreement, or Issuer or
any Issuer Subsidiary shall have authorized, recommended, proposed (or
publicly announced its intention to authorize, recommend or propose) an
agreement to engage in an Acquisition Transaction with any person other
than Grantee or a Grantee Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary shall have
made a proposal to Issuer or its shareholders to engage in an Acquisition
Transaction and such proposal shall have been publicly announced;
(vi) Any person other than Grantee or any Grantee Subsidiary shall
have filed with the SEC a registration statement or tender offer materials
with respect to a potential exchange or tender offer that would constitute
an Acquisition Transaction (or filed a preliminary proxy statement with the
SEC with respect to a potential vote by its shareholders to approve the
issuance of shares to be offered in such an exchange offer);
(vii) Issuer shall have willfully breached any covenant or obligation
contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach Grantee would be
entitled to terminate the Merger Agreement (whether immediately or after
the giving of notice or passage of time or both); or
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(viii) Any person other than Grantee or any Grantee Subsidiary shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or other federal or
state bank regulatory or antitrust authority, which application or notice
has been accepted for processing, for approval to engage in an Acquisition
Transaction.
(c) The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 25% or more of the then outstanding
Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) of the second sentence thereof shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event"), it being understood that the giving of such notice by
Issuer shall not be a condition to the right of the Holder to exercise the
Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such exercise and (ii) a
place and date not earlier than three business days nor later than 60 business
days from the Notice Date for the closing of such purchase (the "Closing Date");
PROVIDED, that if prior notification to or approval of the Federal Reserve Board
or any other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, PROVIDED that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder may be
endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement, dated as of ________, 199_, between
the registered holder hereof and Issuer and to resale restrictions arising
under the Securities Act of 1933, as amended. A copy of such agreement is
on file at the principal office of Issuer and will be provided to the
holder hereof without charge upon receipt by Issuer of a written request
therefor."
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933, as amended (the "1933 Act") in the
above legend shall be removed by delivery of substitute certificate(s) without
such reference if the Holder shall have delivered to Issuer a copy of a letter
from the staff of the SEC, or an opinion of counsel, in form and substance
reasonably satisfactory to Issuer, to the effect that such legend is not
required for purposes of the 1933 Act; (ii) the reference to the provisions of
this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference in the opinion
of Counsel to the Holder; and (iii) the legend shall be removed in its entirety
if the conditions in the preceding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required by
law.
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be
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deemed subject to the receipt of any necessary regulatory approvals to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issue and delivery of stock
certificates under this Section 2 in the name of the Holder or its assignee,
transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), or the Change in Bank Control Act
of 1978, as amended, or any state or other federal banking law, prior approval
of or notice to the Federal Reserve Board or to any state or other federal
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state or other
federal regulatory authority as they may require) in order to permit the Holder
to exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are exchangeable, without
expense, at the option of the Holder, upon presentation and surrender of this
Agreement at the principal office of Issuer, for other Agreements providing for
Options of different denominations entitling the holder thereof to purchase, on
the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock purchasable hereunder.
The terms "Agreement" and "Option" as used herein include any Agreements and
related Options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost, stolen,
destroyed or mutilated shall at any time be enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common Stock
that are purchasable upon exercise of the Option pursuant to Section 1 of this
Agreement, the number of shares of Common Stock purchasable upon the exercise of
the Option and the Option Price shall be subject to adjustment from time to time
as provided in this Section 5.
(a) In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are to be
issued or otherwise become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding.
(b) Whenever the number of shares of Common Stock purchasable upon exercise
hereof is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of which
shall be equal to the number of shares of Common Stock purchasable prior to the
adjustment and the denominator of which shall be equal to the number of shares
of Common Stock purchasable after the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs prior
to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within twelve (12) months (or such later period as provided in Section
10) of such Subsequent Triggering Event (whether on its own behalf or on behalf
of any subsequent holder of this Option (or part thereof) or any of the shares
of Common Stock issued pursuant hereto), promptly prepare, file and keep current
a registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its reasonable best
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efforts to cause such registration statement to become effective and remain
current in order to permit the sale or other disposition of any shares of Common
Stock issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee. Issuer will use
its reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such registrations. The
Issuer shall bear the costs of such registrations (including, but not limited
to, Issuer's attorneys' fees, printing costs and filing fees, except for
underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto). The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offer and sale
of the Option Shares would interfere with the successful marketing of the shares
of Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced;
PROVIDED, HOWEVER, that after any such required reduction the number of Option
Shares to be included in such offering for the account of the Holder shall
constitute at least 25% of the total number of shares to be sold by the Holder
and Issuer in the aggregate; and PROVIDED FURTHER, HOWEVER, that if such
reduction occurs, then Issuer shall file a registration statement for the
balance as promptly as practicable thereafter as to which no reduction pursuant
to this Section 6 shall be permitted or occur and the Holder shall thereafter be
entitled to one additional registration and the twelve (12) month period
referred to in the first sentence of this section shall be increased to
twenty-four (24) months. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. If requested by any such Holder in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for Issuer. Upon receiving
any request under this Section 6 from any Holder, Issuer agrees to send a copy
thereof to any other person known to Issuer to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies. Notwithstanding anything to the contrary contained herein, in no event
shall the number of registrations that Issuer is obligated to effect be
increased by reason of the fact that there shall be more than one Holder as a
result of any assignment or division of this Agreement.
7. (a) At any time after the occurrence of a Repurchase Event (as defined
below) (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
market/offer price (as defined below) exceeds (B) the Option Price, multiplied
by the number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor thereto) shall repurchase such
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the market/offer price
multiplied by the number of Option Shares so designated. The term "market/offer
price" shall mean the highest of (i) the price per share of Common Stock at
which a tender or exchange offer therefor has been made, (ii) the price per
share of Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (iii) the highest closing price for shares of Common Stock within
the six-month period immediately preceding the date the Holder gives notice of
the required repurchase of this Option or the Owner gives notice of the required
repurchase of Option Shares, as the case may be, or (iv) in the event of a sale
of all or any substantial part of Issuer's assets or deposits, the sum of the
net price paid in such sale for such assets or deposits and the current market
value of the remaining net assets of Issuer as determined by a nationally
recognized investment banking firm selected by the Holder or the Owner, as the
case may be, and reasonably acceptable to Issuer, divided by the number of
shares of Common Stock of Issuer outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than cash
shall be determined by a nationally recognized investment banking firm selected
by the Holder or Owner, as the case may be, and reasonably acceptable to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and any Option Shares pursuant to this
Section 7 by surrendering for such purpose to Issuer, at its principal office, a
copy of this Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that the Holder or the Owner,
as the case may be, elects to require Issuer to repurchase this Option and/or
the Option Shares in accordance with the provisions of this Section 7. As
promptly as practicable, and in any event within five business days after the
surrender of the Option and/or certificates representing Option Shares and the
receipt of such notice or notices relating thereto, Issuer shall deliver or
cause to be delivered to the Holder the Option Repurchase Price and/or to the
Owner the Option Share
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Repurchase Price therefor or the portion thereof that Issuer is not then
prohibited under applicable law and regulation from so delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, Issuer shall immediately so notify the
Holder and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to the Holder and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five business days after
the date on which Issuer is no longer so prohibited; PROVIDED, HOWEVER, that if
Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 7 is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from delivering to the
Holder and/or the Owner, as appropriate, the Option Repurchase Price and the
Option Share Repurchase Price, respectively, in full (and Issuer hereby
undertakes to use its reasonable best efforts to obtain all required regulatory
and legal approvals and to file any required notices as promptly as practicable
in order to accomplish such repurchase), the Holder or Owner may revoke its
notice of repurchase of the Option and/or the Option Shares whether in whole or
to the extent of the prohibition, whereupon, in the latter case, Issuer shall
promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Repurchase Price and/or the Option Share Repurchase Price
that Issuer is not prohibited from delivering; and (ii) deliver, as appropriate,
either (A) to the Holder, a new Agreement evidencing the right of the Holder to
purchase that number of shares of Common Stock obtained by multiplying the
number of shares of Common Stock for which the surrendered Agreement was
exercisable at the time of delivery of the notice of repurchase by a fraction,
the numerator of which is the Option Repurchase Price less the portion thereof
theretofore delivered to the Holder and the denominator of which is the Option
Repurchase Price, and/or (B) to the Owner, a certificate for the Option Shares
it is then so prohibited from repurchasing. If an Exercise Termination Event
shall have occurred prior to the date of the notice by Issuer described in the
first sentence of this subsection (c), or shall be scheduled to occur at any
time before the expiration of a period ending on the thirtieth day after such
date, the Holder shall nonetheless have the right to exercise the Option until
the expiration of such 30-day period.
(d) For purposes of this Section 7, a "Repurchase Event" shall be deemed to
have occurred upon the occurrence of any of the following events or transactions
after the date hereof:
(i) the acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 50% or more of the then outstanding
Common Stock; or
(ii) the consummation of any Acquisition Transaction described in
Section 2(b) (i) hereof, except that the percentage referred to in clause
(z) shall be 50%.
8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or a Grantee Subsidiary, or engage in a plan of exchange with
any person, other than Grantee or a Grantee Subsidiary and Issuer shall not be
the continuing or surviving corporation of such consolidation or merger or the
acquirer in such plan of exchange, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a plan
of exchange and Issuer shall be the continuing or surviving or acquiring
corporation, but, in connection with such merger or plan of exchange, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger or plan of
exchange represent less than 50% of the outstanding shares and share equivalents
of the merged or acquiring company, or (iii) to sell or otherwise transfer all
or a substantial part of its or the Issuer Subsidiary's assets or deposits to
any person, other than Grantee or a Grantee Subsidiary, then, and in each such
case, the agreement governing such transaction shall make proper provision so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of the Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any person that
controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or surviving
person of a consolidation or merger with Issuer (if other than Issuer),
(ii) the acquiring person in a plan of exchange in which Issuer is
acquired, (iii) the Issuer in a merger or plan of exchange in which Issuer
is the continuing or surviving or acquiring person, and (iv) the transferee
of all or a substantial part of Issuer's assets or deposits (or the assets
or deposits of the Issuer Subsidiary).
(ii) "Substitute Common Stock" shall mean the common stock issued by
the issuer of the Substitute Option upon exercise of the Substitute Option.
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(iii) "Assigned Value" shall mean the market/offer price, as defined
in Section 7.
(iv) "Average Price" shall mean the average closing price of a share
of the Substitute Common Stock for one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding
such consolidation, merger or sale; PROVIDED that if Issuer is the issuer
of the Substitute Option, the Average Price shall be computed with respect
to a share of common stock issued by the person merging into Issuer or by
any company which controls or is controlled by such person, as the Holder
may elect.
(c) The Substitute Option shall have the same terms as the Option, PROVIDED
that if the terms of the Substitute Option cannot, for legal reasons, be the
same as the Option, such terms shall be as similar as possible and in no event
less advantageous to the Holder. The issuer of the Substitute Option shall also
enter into an agreement with the then Holder or Holders of the Substitute Option
in substantially the same form as this Agreement (after giving effect for such
purpose to the provisions of Section 9), which agreement shall be applicable to
the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares of
Substitute Common Stock as is equal to the Assigned Value multiplied by the
number of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the shares of Substitute
Common Stock outstanding prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
shares of Substitute Common Stock outstanding prior to exercise but for this
clause (e), the issuer of the Substitute Option (the "Substitute Option Issuer")
shall make a cash payment to Holder equal to the excess of (i) the value of the
Substitute Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to the
limitation in this clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by the Holder.
(f) Issuer shall not enter into any transaction described in subsection (a)
of this Section 8 unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option Issuer") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the Highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied by
the number of shares of Substitute Common Stock for which the Substitute Option
may then be exercised, and at the request of the owner (the "Substitute Share
Owner") of shares of Substitute Common Stock (the "Substitute Shares"), the
Substitute Option Issuer shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the Highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Stock within the six-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective rights to require the Substitute Option
Issuer to repurchase the Substitute Option and the Substitute Shares pursuant to
this Section 9 by surrendering for such purpose to the Substitute Option Issuer,
at its principal office, the agreement for such Substitute Option (or, in the
absence of such an agreement, a copy of this Agreement) and/or certificates for
Substitute Shares accompanied by a written notice or notices stating that the
Substitute Option Holder or the Substitute Share Owner, as the case may be,
elects to require the Substitute Option Issuer to repurchase the Substitute
Option and/or the Substitute Shares in accordance with the provisions of this
Section 9. As promptly as practicable and in any event within five business days
after the surrender of the Substitute Option and/or certificates representing
Substitute Shares and the receipt of such notice or notices relating thereto,
the Substitute Option Issuer shall deliver or cause to be delivered to the
Substitute Option Holder the Substitute Option Repurchase Price and/or to the
Substitute Share Owner the Substitute Share Repurchase Price therefor or the
portion thereof which the Substitute Option Issuer is not then prohibited under
applicable law and regulation from so delivering.
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(c) To the extent that the Substitute Option Issuer is prohibited under
applicable law or regulation, or as a consequence of administrative policy, from
repurchasing the Substitute Option and/or the Substitute Shares in part or in
full, the Substitute Option Issuer shall immediately so notify the Substitute
Option Holder and/or the Substitute Share Owner and thereafter deliver or cause
to be delivered, from time to time, to the Substitute Option Holder and/or the
Substitute Share Owner, as appropriate, the portion of the Substitute Option
Repurchase Price and/or the Substitute Share Repurchase Price, respectively,
which it is no longer prohibited from delivering, within five (5) business days
after the date on which the Substitute Option Issuer is no longer so prohibited;
PROVIDED, HOWEVER, that if the Substitute Option Issuer is at any time after
delivery of a notice of repurchase pursuant to subsection (b) of this Section 9
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to the Substitute Option Holder and/or
the Substitute Share Owner, as appropriate, the Substitute Option Repurchase
Price and the Substitute Share Repurchase Price, respectively, in full (and the
Substitute Option Issuer shall use its reasonable best efforts to receive all
required regulatory and legal approvals as promptly as practicable in order to
accomplish such repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the Substitute Option or the
Substitute Shares either in whole or to the extent of prohibition, whereupon, in
the latter case, the Substitute Option Issuer shall promptly (i) deliver to the
Substitute Option Holder or Substitute Share Owner, as appropriate, that portion
of the Substitute Option Repurchase Price or the Substitute Share Repurchase
Price that the Substitute Option Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to the Substitute Option Holder, a new
Substitute Option evidencing the right of the Substitute Option Holder to
purchase that number of shares of the Substitute Common Stock obtained by
multiplying the number of shares of the Substitute Common Stock for which the
surrendered Substitute Option was exercisable at the time of delivery of the
notice of repurchase by a fraction, the numerator of which is the Substitute
Option Repurchase Price less the portion thereof theretofore delivered to the
Substitute Option Holder and the denominator of which is the Substitute Option
Repurchase Price, and/or (B) to the Substitute Share Owner, a certificate for
the Substitute Option Shares it is then so prohibited from repurchasing. If an
Exercise Termination Event shall have occurred prior to the date of the notice
by the Substitute Option Issuer described in the first sentence of this
subsection (c), or shall be scheduled to occur at any time before the expiration
of a period ending on the thirtieth day after such date, the Substitute Option
Holder shall nevertheless have the right to exercise the Substitute Option until
the expiration of such 30-day period.
10. The 30-day, 6-month, 12-month, 18-month or 24-month periods for
exercise of certain rights under Sections 2, 6, 7, 9, 12 and 14 shall be
extended: (i) to the extent necessary to obtain all regulatory approvals for the
exercise of such rights (for so long as the Holder, Owner, Substitute Option
Holder or Substitute Share Owner, as the case may be, is using commercially
reasonable efforts to obtain such regulatory approvals), and for the expiration
of all statutory waiting periods; and (ii) to the extent necessary to avoid
liability under Section 16(b) of the 1934 Act by reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Issuer Board prior to the date hereof and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder; PROVIDED, HOWEVER,
that until the date 15 days following the date on which the Federal Reserve
Board has approved an application by Grantee to acquire the shares of Common
Stock subject to the Option, Grantee may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private placement
in which no one party acquires the right to purchase in excess of 2% of the
voting shares of Issuer, (iii) an assignment to a single party (E.G., a broker
or investment banker) for the purpose of conducting a widely dispersed public
distribution on Grantee's behalf or (iv) any other manner approved by the
Federal Reserve Board.
B-8
13. Each of Grantee and Issuer will use its reasonable best efforts to make
all filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including, without limitation, applying to the Federal Reserve
Board under the BHCA for approval to acquire the shares issuable hereunder, but
Grantee shall not be obligated to apply to state banking authorities for
approval to acquire the shares of Common Stock issuable hereunder until such
time, if ever, as it deems appropriate to do so.
14. (a) Grantee may, at any time following a Repurchase Event and prior to
the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price; PROVIDED, HOWEVER, that Grantee may not exercise its
rights pursuant to this Section 14 if Issuer has repurchased the Option (or any
portion thereof) or any Option Shares pursuant to Section 7. The "Surrender
Price" shall be equal to $9.0 million (i) plus, if applicable, Grantee's
purchase price with respect to any Option Shares and (ii) minus, if applicable,
the excess of (B) the net cash amounts, if any, received by Grantee pursuant to
the arms' length sale of Option Shares (or any other securities into which such
Option Shares were converted or exchanged) to any unaffiliated party, over (B)
Grantee's purchase price of such Option Shares.
(b) Grantee may exercise its right to relinquish the Option and any Option
Shares pursuant to this Section 14 by surrendering to Issuer, at its principal
office, a copy of this Agreement together with certificates for Option Shares,
if any, accompanied by a written notice stating (i) that Grantee elects to
relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 14 and (ii) the Surrender Price. The Surrender Price
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from paying the
Surrender Price to Grantee in full, Issuer shall immediately so notify Grantee
and thereafter deliver or cause to be delivered, from time to time, to Grantee,
the portion of the Surrender Price that it is no longer prohibited from paying,
within five business days after the date on which Issuer is no longer so
prohibited; PROVIDED, HOWEVER, that if Issuer at any time after delivery of a
notice of surrender pursuant to paragraph (b) of this Section 14 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from paying to Grantee the Surrender Price in full, (i) Issuer shall (A)
use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (B) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Grantee
with copies of the same, and (c) keep Grantee advised of both the status of any
such request for regulatory and legal approvals, as well as any discussions with
any relevant regulatory or other third party reasonably related to the same and
(ii) Grantee may revoke such notice of surrender by delivery of a notice of
revocation to Issuer and, upon delivery of such notice of revocation, the
Exercise Termination Date shall be extended to a date six months from the date
on which the Exercise Termination Date would have occurred if not for the
provisions of this Section 14(c) (during which period Grantee may exercise any
of its rights hereunder, including any and all rights pursuant to this Section
14).
15. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief. In connection therewith both
parties waive the posting of any bond or similar requirement.
16. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section l(a) hereof (as adjusted pursuant to Section l(b) or Section
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
17. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
18. This Agreement shall be governed by and construed in accordance with
the laws of the State of West Virginia, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the VSCA are applicable).
B-9
19. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
20. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assignees.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors except as
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
22. Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
XXXXXX XXXXX BANKSHARES, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
By: /s/ XXXXX X. XXXXXXX
_____________________________________
Name: Xxxxx X. XxXxxxx
Title: Secretary
UNITED BANKSHARES, INC.
By: /s/ XXXXXXX X. XXXXX
_____________________________________
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
B-10
