1
EXHIBIT 2.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated December 17, 1998, is
by and between Valley National Bancorp, a New Jersey corporation and registered
bank holding company ("Valley"), and Ramapo Financial Corporation a New Jersey
corporation and registered bank holding company ("Ramapo") for The Ramapo Bank
(the "Bank").
BACKGROUND
1. Valley, Ramapo, the Bank and Valley National Bank ("Valley Bank"), a
wholly-owned subsidiary of Valley, as of the date hereof, are prepared to
execute an Agreement and Plan of Merger (the "Merger Agreement") pursuant to
which Valley will acquire Ramapo through a merger of Ramapo with and into Valley
(the "Merger").
2. As an inducement to Valley to enter into the Merger Agreement and in
consideration for such entry and negotiation, Ramapo has agreed to grant to
Valley the Option.
AGREEMENT
In consideration of the foregoing and the mutual covenants and
agreements set forth herein and in the Merger Agreement, Valley and Ramapo,
intending to be legally bound hereby, agree:
1. Grant of Option. Ramapo hereby grants to Valley the option to purchase up to
1,608,159 shares (the "Option Shares") of Ramapo's common stock, $1.00 par value
("Common Stock") at an exercise price of $7.50 per share (the "Option Price"),
on the terms and conditions set forth herein (the "Option").
2. Exercise of Option. This Option shall not be exercisable until the occurrence
of a Triggering Event (as such term is hereinafter defined). Upon or after the
occurrence of a Triggering Event (as such term is hereinafter defined), Valley
may exercise the Option, in whole or in part, at any time or from time to time
subject to the terms and conditions set forth herein.
The term "Triggering Event" means the occurrence of any of the following events:
A person or group (as such terms are defined in the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations thereunder)
other than Valley or an affiliate of Valley:
a. acquires beneficial ownership (as such term is defined in Rule 13d-3 as
promulgated under the Exchange Act) of at least 15% of the then outstanding
shares of Common Stock; provided, however, that the continuing ownership by a
person or group which as of the date hereof owns more than 15% of the
outstanding Common Stock shall not constitute a Triggering Event;
b. enters into a letter of intent or an agreement, whether oral or written, with
Ramapo pursuant to which such person or any affiliate of such person would (i)
merge or consolidate, or enter into any similar transaction with Ramapo or the
Bank, (ii) acquire all or a significant portion of the assets or liabilities of
Ramapo or the Bank, or (iii) acquire beneficial ownership of securities
representing, or the right to acquire beneficial
2
ownership or to vote securities representing 15% or more of the then outstanding
shares of Common Stock;
c. makes a filing with any bank or thrift regulatory authorities or publicly
announces a bona fide proposal (a "Proposal") for (i) any merger, consolidation
or acquisition of all or a significant portion of all the assets or liabilities
of Ramapo or any other business combination involving Ramapo or the Bank, or
(ii) a transaction involving the transfer of beneficial ownership of securities
representing, or the right to acquire beneficial ownership or to vote securities
representing, 15% or more of the outstanding shares of Common Stock, and
thereafter, if such Proposal has not been Publicly Withdrawn (as such term is
hereinafter defined) at least 15 days prior to the meeting of stockholders of
Ramapo called to vote on the Merger and Ramapo stockholders fail to approve the
Merger by the vote required by applicable law at the meeting of stockholders
called for such purpose; or
d. makes a bona fide Proposal and thereafter, but before such Proposal has been
Publicly Withdrawn, Ramapo (i) willfully takes any action in any manner which
would materially interfere with its ability to consummate the Merger or (ii)
willfully takes any action in any manner (other than actions taken in the
ordinary course of business) which would materially reduce the value of the
Merger to Valley.
The term "Triggering Event" also means the taking of any direct or indirect
action by Ramapo or any of its directors, executive officers, investment bankers
or other persons with actual or apparent authority to speak for the Ramapo Board
of Directors, inviting, encouraging or soliciting any proposal which has as its
purpose a tender offer for the shares of Common Stock, a merger, consolidation,
plan of exchange, plan of acquisition or reorganization of Ramapo or the Bank,
or a sale of shares of Common Stock or stock of the Bank, or any significant
portion of the assets or liabilities of Ramapo or the Bank.
The term "significant portion" means 15% of the assets or liabilities of Ramapo.
"Publicly Withdrawn", for purposes of clauses (c) and (d) above, shall mean an
unconditional bona fide withdrawal of the Proposal coupled with a public
announcement of no further interest in pursuing such Proposal or in acquiring
any controlling influence over Ramapo or in soliciting or inducing any other
person (other than Valley or any affiliate of Valley) to do so.
Notwithstanding the foregoing, the Option may not be exercised at any time (i)
in the absence of any required governmental or regulatory approval or consent
necessary for Ramapo to issue the Option Shares or Valley to exercise the Option
or prior to the expiration or termination of any waiting period required by law,
or (ii) so long as any injunction or other order, decree or ruling issued by any
federal or state court of competent jurisdiction is in effect which prohibits
the sale or delivery of the Option Shares.
Ramapo shall notify Valley promptly in writing of the occurrence of any
Triggering Event known to it, it being understood that the giving of such notice
by Ramapo shall not be a condition to the
3
right of Valley to exercise the Option. Ramapo will not take any action which
would have the effect of preventing or disabling Ramapo from delivering the
Option Shares to Valley upon exercise of the Option or otherwise performing its
obligations under this Agreement.
In the event Valley wishes to exercise the Option, Valley shall send a written
notice to Ramapo (the date of which is hereinafter referred to as the "Notice
Date") specifying the total number of Option Shares it wishes to purchase and a
place and date for the closing of such a purchase (a "Closing"); provided,
however, that a Closing shall not occur prior to two business days nor later
than 20 business days after the later of receipt of any necessary regulatory
approvals and the expiration of any legally required notice or waiting period,
if any.
3. Payment and Delivery of Certificates. At any Closing hereunder (a) Valley
will make payment to Ramapo of the aggregate price for the Option Shares so
purchased by wire transfer of immediately available funds to an account
designated by Ramapo, (b) Ramapo will deliver to Valley a stock certificate or
certificates representing the number of Option Shares so purchased, free and
clear of all liens, claims, charges and encumbrances of any kind or nature
whatsoever created by or through Ramapo, registered in the name of Valley or its
designee, in such denominations as were specified by Valley in its notice of
exercise and bearing a legend as set forth below and (c) Valley shall pay any
transfer or other taxes required by reason of the issuance of the Option Shares
so purchased. Unless a registration statement is filed and declared effective
under Section 4 hereof, a legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Agreement, which legend will
read substantially as follows: "The transfer of shares represented by this
certificate is subject to certain provisions of an agreement, dated as of
December 17, 1998, between the registered holder hereof and Ramapo 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 Ramapo and will be provided
to the holder hereof without charge upon receipt by Ramapo of a written request
therefore."
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 Valley shall have delivered to Ramapo a copy of a letter from
the staff of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Ramapo, 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 Ramapo; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding
4
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
4. Registration Rights. Upon or after the occurrence of a Triggering Event and
upon receipt of a written request from Valley, Ramapo shall prepare and file a
registration statement with the Securities and Exchange Commission and any state
securities bureau, covering the Option and such number of Option Shares as
Valley shall specify in its request, and Ramapo shall use its best efforts to
cause such registration statement to be declared effective in order to permit
the sale or other disposition of the Option and the Option Shares (it being
understood and agreed that Valley will use reasonable efforts to effect any such
sale or other disposition on a widely distributed basis), provided that Valley
shall in no event have the right to have more than one such registration
statement become effective and further provided that Ramapo shall have the right
to delay for up to six months such registration if the Option Shares can and
will be registered in connection with the filing of a Registration Statement on
Form S-4 (or a successor form) by any person acquiring Ramapo.
In connection with such filing, Ramapo shall use its best efforts to cause to be
delivered to Valley such certificates, opinions, accountant's letters and other
documents as Valley shall reasonably request and as are customarily provided in
connection with registrations of securities under the Securities Act of 1933, as
amended. All expenses incurred by Ramapo in complying with the provisions of
this Section 4, including without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for Ramapo and blue sky
fees and expenses shall be paid by Ramapo. Underwriting discounts and
commissions to brokers and dealers relating to the Option Shares, fees and
disbursements of counsel to Valley and any other expenses incurred by Valley in
connection with such registration shall be borne by Valley. In connection with
such filing, Ramapo shall indemnify and hold harmless Valley against any losses,
claims, damages or liabilities, joint or several, to which Valley may become
subject, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement with
respect to Ramapo or alleged untrue statement with respect to Ramapo of any
material fact with respect to Ramapo contained in any preliminary or final
registration statement or any amendment or supplement thereto, or arise out of a
material fact with respect to Ramapo required to be stated therein or necessary
to make the statements therein with respect to Ramapo not misleading; and Ramapo
will reimburse Valley for any legal or other expense reasonably incurred by
Valley in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Ramapo will not be liable
in any case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such preliminary or final registration
statement or such amendment or supplement thereto in reliance
5
upon and in conformity with written information furnished by or on behalf of
Valley specifically for use in the preparation thereof concerning Valley or its
plans or intentions. Valley will indemnify and hold harmless Ramapo to the same
extent as set forth in the immediately preceding sentence but only with
reference to written information specifically furnished by or on behalf of
Valley concerning Valley or its plans or intentions for use in the preparation
of such preliminary or final registration statement or such amendment or
supplement thereto; and Valley will reimburse Ramapo for any legal or other
expense reasonably incurred by Ramapo in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding
anything to the contrary herein, no indemnifying party shall be liable for any
settlement effected without its prior written consent.
5. Adjustment Upon Changes in Capitalization. In the event of any change in the
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, conversions, exchanges of shares or the like,
then the number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
In the event any capital reorganization or reclassification of the Common Stock,
or any consolidation, merger or similar transaction of Ramapo with another
entity, or in the event any sale of all or substantially all of the assets of
Ramapo shall be effected in such a way that the holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions (in form
reasonably satisfactory to the holder hereof) shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified herein and in lieu of the Common
Stock immediately theretofore purchasable and receivable upon exercise of the
rights represented by this Option, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of shares
of Common Stock immediately theretofore purchasable and receivable upon exercise
of the rights represented by this Option had such reorganization,
reclassification, consolidation, merger or sale not taken place; provided,
however, that if such transaction results in the holders of Common Stock
receiving only cash, the holder hereof shall be paid the difference between the
Option Price and such cash consideration without the need to exercise the
Option.
6. Filings and Consents. Each of Valley and Ramapo will use its 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.
Exercise of the Option herein provided shall be subject to compliance with all
applicable laws including, in the event Valley is the holder hereof, approval of
the Board of Governors of the Federal Reserve System and Ramapo agrees to
cooperate with
6
and furnish to the holder hereof such information and documents as may be
reasonably required to secure such approvals.
7. Representations and Warranties of the Parties.
a. Ramapo. Ramapo hereby represents and warrants to Valley as follows:
i. Due Authorization. Ramapo has full corporate power and authority to execute,
deliver and perform this Agreement and all corporate action necessary for
execution, delivery and performance of this Agreement has been duly taken by
Ramapo.
ii. Authorized Shares. Ramapo has taken and, as long as the Option is
outstanding, will take all necessary corporate action to authorize and reserve
for issuance all shares of Common Stock that may be issued pursuant to any
exercise of the Option.
iii. No Conflicts. Neither the execution and delivery of this Agreement nor
consummation of the transactions contemplated hereby (assuming all appropriate
regulatory approvals) will violate or result in any violation or default of or
be in conflict with or constitute a default under any term of the certificate of
incorporation or by-laws of Ramapo or, to its knowledge, any agreement,
instrument, judgment, decree, statute, rule or order applicable to Ramapo.
iv. Binding Obligation. This Agreement has been duly and validly executed by
Ramapo and represents a valid and binding obligation of Ramapo enforceable
against Ramapo in accordance with its terms.
b. Valley. Valley hereby represents and warrants to Ramapo as follows:
i. Due Authorization. Valley has full corporate power and authority to execute
and deliver this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby.
ii. Requisite Corporate Action. The execution and delivery of this Agreement
have been authorized by all requisite corporate action by Valley, and no other
corporate proceedings are necessary therefor.
iii. Binding Obligation. This Agreement has been duly and validly executed and
delivered by Valley and represents a valid and legally binding obligation of
Valley, enforceable against Valley in accordance with its terms.
8. Specific Performance. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement and that the obligations of the
parties hereto shall be specifically enforceable. Notwithstanding the foregoing,
Valley shall have the right to seek money damages against Ramapo for a breach of
this Agreement.
9. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof.
10. Assignment or Transfer. Valley may not sell, assign or otherwise transfer
its rights and obligations hereunder, in whole or in part, to any person or
group of persons other than to an affiliate of Valley. Valley represents that it
is acquiring the
7
Option for Valley's own account and not with a view to or for sale in connection
with any distribution of the Option. Valley is aware that presently neither the
Option nor the Option Shares are being offered by a registration statement filed
with, and declared effective by, the Securities and Exchange Commission, but
instead are being offered in reliance upon the exemption from the registration
requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.
11. Amendment of Agreement. By mutual consent of the parties hereto, this
Agreement may be amended in writing at any time, for the purpose of facilitating
performance hereunder or to comply with any applicable regulation of any
governmental authority or any applicable order of any court or for any other
purpose.
12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
13. Notices. All notices, requests, consents and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally, by express service, cable, telegram or telex,
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties as follows:
If to Valley, to:
Valley National Bancorp
0000 Xxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Telecopier No. (000) 000-0000
Copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx
Attn.: Xxxxxx X. Xxxxx, Esq.
Delivery:
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Mail:
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Telecopier No. (000) 000-0000
If to Ramapo, to:
Ramapo Financial Corporation
00 Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxx, Xxx Xxxxxx 00000
Attn.: Xxxxxxxx X. X'Xxxx, President
Telecopier No. (000) 000-0000
Copy to:
Williams, Caliri, Xxxxxx & Otley
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Delivery:
0000 Xxxxx 00
Xxxxx, Xxx Xxxxxx 00000
Mail:
X.X. Xxx 000
0
Xxxxx, Xxx Xxxxxx 00000-0000
Telecopier No. (000) 000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
15. Captions. The captions in the Agreement are inserted for convenience and
reference purposes, and shall not limit or otherwise affect any of the terms or
provisions hereof.
16. Waivers and Extensions. The parties hereto may, by mutual consent, extend
the time for performance of any of the obligations or acts of either party
hereto. Each party may waive (i) compliance with any of the covenants of the
other party contained in this Agreement and/or (ii) the other party's
performance of any of its obligations set forth in this Agreement.
17. Parties in Interest. This Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement, except as provided
in Section 10 permitting Valley to assign its rights and obligations hereunder
only to an affiliate of Valley.
18. Counterparts. 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.
19. Termination. The Option granted hereby, to the extent not previously
exercised, shall terminate upon either the termination of the Merger Agreement
as provided therein or the consummation of the transactions contemplated by the
Merger Agreement; provided, however, that if termination of the Merger Agreement
occurs after the occurrence of a Triggering Event, this Agreement and the Option
granted hereby shall not terminate until the later of one month after the
consummation of the transaction constituting the Triggering Event or 18 months
following the date of the termination of the Merger Agreement.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to resolutions adopted
by its Board of Directors, has caused this Agreement to be executed by its duly
authorized officer, all as of the day and year first above written.
RAMAPO FINANCIAL CORPORATION
By: /s/ Xxxxxxxx X. X'Xxxx
Xxxxxxxx X. X'Xxxx, President and Chief Executive Officer
VALLEY NATIONAL BANCORP
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Chairman, President and Chief Executive
Officer
