AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
EXHIBIT 2 - AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
THIS
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement")
is made and entered into effective as of the 11th day of December 2003, by and
among First Commonwealth Financial Corporation, a Pennsylvania corporation
("Purchaser"), First Commonwealth Bank, a Pennsylvania-chartered
banking corporation and wholly owned subsidiary of Purchaser ("FCB"),
GA Financial, Inc., a Delaware corporation ("Company"), and Great
American Federal Savings and Loan Association, a federal savings association
and wholly owned subsidiary of Company ("Great American").
Recitals
A. The
respective Boards of Directors of Purchaser and Company have determined that
the merger of Company with and into Purchaser (the "Merger"), upon
the terms and subject to the conditions set forth in this Agreement, is
advisable and in the best interests of their respective stockholders, and have
approved and adopted the this Agreement and the Merger, pursuant to which each
outstanding share of the common stock, $0.01 par value, of Company
("Company Common Stock"), will be converted, at the election of each
Company stockholder, into cash and/or shares of the common stock, $1.00 par
value, of Purchaser ("Purchaser Common Stock") as provided
herein. Purchaser will be the surviving
corporation (the "Surviving Corporation") following the Merger.
B. After
the Effective Time, Great American will be merged with and into FCB (the
"Bank Merger"), upon the terms and subject to the conditions set
forth in this Agreement. FCB will be
the surviving financial institution following the Bank Merger.
C. Under
Delaware law, this Agreement and the Merger must be approved and adopted by the
stockholders of Company. The Board of
Directors of Company has adopted a resolution recommending that the
stockholders of Company approve this Agreement and the Merger and the consummation
of the transactions contemplated hereby upon the terms and subject to the
conditions set forth herein.
D. Concurrently
with the execution and delivery of this Agreement, and as an inducement to
Purchaser's willingness to enter into this Agreement, each director and
executive officer of Company has entered into a Voting Agreement with Purchaser
pursuant to which, among other things, he or she agrees to vote in favor of
approval of the transactions contemplated by this Agreement at the Special
Meeting.
E. In
furtherance thereof, the Boards of Directors of Purchaser and Company have
approved this Agreement and the Merger in accordance with Pennsylvania law and
Delaware law, respectively.
F. The
parties intend that that (i) the
Merger will qualify as a reorganization under Section 368 of the Code, (ii) no
gain or loss will be recognized by either Company or Purchaser as a result of
the Merger and (iii) no gain or loss for federal income tax purposes will be
recognized by a Company Stockholder upon the exchange of Company Common Stock
solely for Purchaser Common Stock.
Agreement
In
consideration of the premises and the mutual covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree, intending to be legally bound,
as follows (each capitalized term used in this Agreement shall have the meaning
assigned to such term in Exhibit A):
1.1 Merger. At the Effective Time, Company shall be
merged with and into Purchaser, pursuant to the terms and conditions set forth
herein and pursuant to the Pennsylvania Business Corporation Law
("PBCL") and the Delaware General Corporation Law ("DGCL").
Upon consummation of the Merger, the separate corporate existence of Company
shall cease and Purchaser shall continue as the Surviving Corporation. The Articles of Incorporation and Bylaws of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation and Bylaws of the Surviving Corporation. The effects
of the Merger shall be as provided in Section 1929 of the PBCL and Section 259
of the DGCL.
1.2 Bank Merger. At the time selected by Purchaser following
the Effective Time, Great American shall be merged with and into FCB, pursuant
to the terms and conditions set forth herein, and in the plan of merger which
shall be in form and substance mutually agreeable to FCB and Great American
(the "Bank Plan of Merger"), and pursuant to the Pennsylvania Banking
Code of 1965, as amended ("Banking Code"), and the Home Owners' Loan
Act of 1933, as amended ("HOLA") and the regulations of the Office of
Thrift Supervision ("OTS") promulgated thereunder. Upon consummation of the Bank Merger, the
separate corporate existence of Great American shall cease and FCB shall
continue as the surviving financial institution. The Articles of Incorporation and Bylaws of FCB, in effect
immediately prior to the consummation of the Bank Merger, shall be the Articles
of Incorporation and Bylaws of the surviving financial institution. The effects
of the Merger shall be as provided in Section 1601 et. seq. of the Banking Code
and 12 C.F.R. Section 552.13. By
signing this Agreement, Purchaser and Company consent to and approve the Bank
Merger in their capacities as the sole shareholders of FCB and Great American,
subject only to the consummation of the Merger.
1.3 Effective Time. As soon as practicable after each of the
conditions set forth in Article 6hereof have been satisfied or waived,
Purchaser and Company will file, or cause to be filed, (a) with the Secretary
of State of the Commonwealth of Pennsylvania Articles of Merger in the form
required by and executed in accordance with the applicable provisions of the
PBCL and (b) with the Secretary of State of the State of Delaware a Certificate
of Merger in the form required by and executed in accordance with the
applicable provisions of the DGCL. The
Merger shall become effective upon filing the Articles of Merger with the
Pennsylvania Secretary of State and the Certificate of Merger with the Delaware
Secretary of State, or at such later time as Purchaser and Company may agree as
specified in the Articles of Merger and Certificate of Merger (the
"Effective Time"). The Bank
Merger will be consummated after the Merger at the time selected by Purchaser.
1.4 Conversion of Company Common Stock. At the Effective Time:
(a) Subject
to the allocation and proration procedures set forth in Section 1.10,and
except as provided in Sections 1.5 and 1.12, each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into the right to receive from Purchaser, at the election of the
holder thereof pursuant to Section 1.10, either:
(i) cash
in an amount equal to $35.00 per share (the "Per Share Cash
Consideration"); or
(ii) a
number of shares of Purchaser Common Stock which is equal to the Exchange
Ratio.
(b) The
holders of certificates representing shares of Company Common Stock shall cease
to have any rights as stockholders of Company, except such rights, if any, as
they may have pursuant to the DGCL.
Except as provided above, until certificates representing shares of
Company Common Stock are surrendered for exchange, each certificate shall,
after the Effective Time, represent for all purposes only the right to receive the
amount and type of consideration into which the shares of Company Common Stock
represented thereby shall have been converted by the Merger as provided above.
(c) The
stock transfer books of Company shall be closed and no transfer of shares of
Company Common Stock shall be made thereafter.
1.5 Company Treasury Stock; Shares owned by Purchaser. Notwithstanding any other provision of this
Agreement, any shares of Company Common Stock issued immediately prior to the
Effective Time which are then owned beneficially or of record (a) by Company or
any Company Subsidiary or (b) by Purchaser or any Purchaser Subsidiary, in each
case, other than shares held in an agency or fiduciary capacity or as a result
of debts previously contracted, shall, by virtue of the Merger, be canceled at
the Effective Time without payment of any consideration therefor and without
any conversion thereof.
1.6 Purchaser Common Stock. The shares of Purchaser Common Stock issued
and outstanding immediately prior to the Effective Time shall, on and after the
Effective Time, remain issued and outstanding as the same number of shares of
Purchaser Common Stock.
1.7 Fractional Shares. Notwithstanding any other provision hereof,
no fractional shares of Purchaser Common Stock and no certificates, or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger. In lieu of fractional shares, Purchaser
shall pay to each Company Stockholder who would otherwise be entitled to a
fractional share an amount of cash determined by multiplying such fraction by
the Per Share Cash Consideration.
1.8 Anti-Dilution. In the event Purchaser changes the number of
shares of Purchaser Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend or recapitalization with
respect to the outstanding Purchaser Common Stock and the effective date
therefor shall be prior to the Effective Time, then, for purposes of computing
the Average Closing Price (and, thus, the Exchange Ratio), the closing prices
of the Purchaser
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Common Stock for all trading days prior to the effective date of such
stock split, stock dividend or recapitalization shall be proportionately
adjusted.
1.9 Company Options.
(a) At
the Effective Time, by virtue of the Merger, and without any action on the part
of any holder of an option to purchase Company Common Stock granted under the
Company Option Plan (a "Company Option"), each Company Option that is
then outstanding and unexercised shall, at the election of the holder thereof
pursuant to Section 1.9(b), be either:
(i) assumed
by Purchaser and converted into an option to purchase Purchaser Common Stock (a
"Substituted Option") on the same terms and conditions as are in
effect with respect to the Company Option immediately prior to the Effective
Time, except that (A) each Substituted Option may be exercised solely for
shares of Purchaser Common Stock, (B) the number of shares of Purchaser Common
Stock subject to each Substituted Option shall be equal to the number of shares
of Company Common Stock subject to the assumed Company Option immediately prior
to the Effective Time multiplied by the Exchange Ratio, the product being
rounded, if necessary, up or down to the nearest whole share, and (C) the per
share exercise price under each Substituted Option shall be equal to the per
share exercise price of the assumed Company Option immediately prior to the
Effective Time divided by the Exchange Ratio, the quotient being rounded, if
necessary, up or down to the nearest cent;
(ii) cancelled
and all rights thereunder be extinguished ("Cancelled Option"), in
consideration for which Company shall make payment immediately after the
Effective Time in an amount determined by multiplying (A) the number of shares
of Company Common Stock underlying such Company Option immediately prior to the
Effective Time by (B) an amount equal to the excess (if any) of (x) the Per
Share Cash Consideration, over (y) the exercise price per share of such Company
Option; or
(iii) assumed
by Purchaser and converted into an option to purchase Purchaser Common Stock as
provided in Section 1.9(a)(i) with respect to a number of shares of Company
Common Stock subject to such Company Option designated by the holder thereof
and cancelled in consideration for payment as provided in Section 1.9(a)(ii)
with respect to the remaining shares of Company Common Stock subject thereto.
(b) In
order for any holder of a Company Option to have his or her Company Options
converted into a Substituted Option as set forth in Section 1.9(a)(i) or to
receive cash in exchange for a Cancelled Option as set forth in Section
1.9(a)(ii) or to receive a Substituted Option and cash as set forth in Section
1.9(a)(iii), such holder shall have executed a written election with respect to
such conversion or cancellation no later than three business days prior to the
Effective Time, which written election shall be in such form as shall be
prescribed by Company and reasonably satisfactory to Purchaser. No payment shall be made to a holder of a
Cancelled Option unless and until such holder has executed and delivered the
foregoing written election. In the
event any holder of a Company Option fails to make an election within the time
frame set forth herein, the Company Option held thereby shall automatically be
converted at the Effective Time into an option to purchase Purchaser Common
Stock in the amount and at the exercise price as calculated pursuant to Section
1.9(a)(i).
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(c) As
to any Company Option that is an incentive stock option, it is intended that
the adjustments provided in Section 1.9(a)(i) shall be effected in a manner
which is consistent with the requirements of Section 424(a) of the Internal
Revenue Code. To the extent that it is
not consistent with such requirements, Section 424(a) shall override anything
to the contrary set forth in Section 1.9(a)(i).
(d) No
later than two business days prior to the Effective Time, Company shall deliver
to Purchaser a schedule which sets forth, as of that date, a complete and
accurate list of outstanding Company Options, indicating (i) the holder
thereof, (ii) the number of shares of Company Common Stock subject thereto,
(iii) the exercise price therefor, and (iv) the number of shares of Company
Common Stock subject to such Company Option with respect to which the holder
has elected to receive a Substituted Option and/or cash as provided in Section
1.9(a). Prior to the Effective Time,
Purchaser shall reserve for issuance the number of shares of Purchaser Common
Stock necessary to satisfy Purchaser's obligations under Section 1.9(a). As soon as practicable after the Effective
Time, but in no event later than 20 business days thereafter, Purchaser shall
(i) file a registration statement on Form S-8 with the SEC registering the
shares of Purchaser Common Stock subject to the Substituted Options and shall
use commercially reasonable efforts to maintain the current status of the
prospectus or prospectuses contained therein for so long as such options remain
outstanding, and (ii) take such other actions as are required under applicable
state securities laws for so long as such options remain outstanding.
1.10 Election and Exchange Procedures.
(a) Purchaser
shall designate The Bank of New York (or another bank selected by Purchaser and
reasonably acceptable to Company) as agent (the "Exchange Agent") for
purposes of conducting the election procedure and the exchange procedure as
described in this Section 1.10. Company
shall promptly provide or cause to be provided to the Exchange Agent all
information reasonably necessary for the Exchange Agent to perform its
obligations as specified herein.
(b) Company
shall include with the Proxy Statement/Prospectus sent to the Company
Stockholders an election form for use by the Company Stockholders in making the
election described below as to the form of consideration to be received for
their Company Common Stock (the "Election Form") and other
appropriate and customary transmittal materials for use by the Company
Stockholders in transmitting the certificates representing Company Common Stock
to the Exchange Agent, which shall specify that delivery shall be effected and
risk of loss of Company Common Stock certificates shall pass, only upon proper
delivery of such certificates to the Exchange Agent (the "Letter of
Transmittal). The Election Form and the
Letter of Transmittal shall be in such form and substance as designated by
Purchaser and reasonably acceptable to Company. Purchaser shall thereafter make available one or more copies of
the Election Form and the Letter of Transmittal as may be reasonably requested
by Persons who become Company Stockholders after the record date for the
Special Meeting and prior to the Election Deadline. The Election Form shall permit each Company Stockholder (or
beneficial owner through appropriate and customary documentation and
instructions) to elect to receive either (i) Purchaser Common Stock with
respect to all of such holder's shares of Company Common Stock, (ii) cash with
respect to all of such holder's shares of Company
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Common Stock, or (iii) Purchaser Common Stock in exchange for a
specified number of shares of Company Common Stock and cash in exchange for a
specified number of shares of Company Common Stock. Shares of Company Common Stock with respect to which a Company
Stockholder elects to receive Purchaser Common Stock are referred to as
"Stock Election Shares."
Shares of Company Common Stock with respect to which a Company
Stockholder elects to receive cash are referred to as "Cash Election
Shares." Any shares of Company
Common Stock (other than Dissenting Shares, which are dealt with in Section
1.12 and shares which are cancelled without payment pursuant to Section 1.5)
with respect to which the holder fails to make an effective election to receive
Purchaser Common Stock or cash, together with shares of Company Common Stock
with respect to which a Company Stockholder exercises his or her rights to
appraisal under the DGCL and, as of the Election Deadline, has failed to
perfect or effectively withdrawn or lost such rights, are referred to as
"No-Election Shares." Nominee
record holders who hold Company Common Stock on behalf of multiple beneficial
owners shall indicate how many of the shares held by them are Stock Election
Shares, Cash Election Shares and No-Election Shares.
(c) Any
election by a Company Stockholder to receive Purchaser Common Stock or cash
shall be effective only if the Exchange Agent shall have actually received a
signed and properly completed Election Form by 5:00 p.m., Eastern Time, on the
last business day before the date of the Special Meeting (the "Election
Deadline"); provided, that if all Regulatory Approvals have not been
obtained prior to such date, Purchaser shall extend the Election deadline until
the third business day following the receipt of the final Regulatory
Approval. If the Election Deadline is
so extended, Purchaser shall promptly issue a press release advising the Company
Stockholders of the extension and, upon receipt of the final Regulatory
Approval, shall issue a press release advising the Company Stockholders of the
revised Election Deadline. An Election
Form will be properly completed only if all information called for by the
Election Form is provided and, (i) in the case of shares that represented by
certificates, only if accompanied by a certificate or certificates representing
all shares of Company Common Stock covered thereby, and (ii) in the case of
shares that are held in book-entry form ("Book-Entry Shares"), only
upon compliance with the book-entry delivery procedures reasonably established
by Purchaser and the Exchange Agent, in each case, subject to the provisions of
subsection (g) of this Section 1.10.
Any Election Form may be revoked or changed by the Person submitting
such Election Form to the Exchange Agent by written notice to the Exchange
Agent only if such notice is actually received by the Exchange Agent at or
prior to the Election Deadline. All elections shall be revoked automatically if
the Exchange Agent is notified in writing by Purchaser and Company that this
Agreement has been terminated and, in that event, the Exchange Agent shall
promptly return all Company Common Stock certificates and Book-Entry Shares
received by it to the appropriate Company Stockholders. The Exchange Agent shall have reasonable
discretion to determine when any election, modification or revocation is
received and whether any such election, modification or revocation has been
properly made.
(d) Within
five (5) business days after the Election Deadline, the Exchange Agent shall
effect the allocation among Company Stockholders of rights to receive Purchaser
Common Stock or cash in the Merger as follows:
(i) If
the number of Cash Election Shares multiplied by the Per Share Cash
Consideration is less than the Aggregate Cash Consideration, then:
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(A) No-Election
Shares shall be deemed to be Cash Election Shares to the extent necessary to
cause the total number of Cash Election Shares multiplied by the Per Share Cash
Consideration to equal the Aggregate Cash Consideration. If less than all of
the No-Election Shares need to be treated as Cash Election Shares in order to
accomplish that result, then the Exchange Agent shall convert on a pro rata
basis (subject to rounding to avoid the conversion of fractional shares) a sufficient
number of No-Election Shares into Cash Election Shares to cause the total
number of Cash Election Shares after such conversion multiplied by the Per
Share Cash Consideration to equal the Aggregate Cash Consideration, and all
remaining No-Election Shares shall be treated as Stock Election Shares.
(B) If
all of the No-Election Shares are treated as Cash Election Shares under the
preceding subsection and the total number of Cash Election Shares multiplied by
the Per Share Cash Consideration is still less than the Aggregate Cash
Consideration, then the Exchange Agent shall convert on a pro rata basis
(subject to rounding to avoid the conversion of fractional shares) a sufficient
number of Stock Election Shares into Cash Election Shares to cause the total
number of Cash Election Shares after such conversion times the Per Share Cash
Consideration to equal the Aggregate Cash Consideration.
Notwithstanding the foregoing, if the number of Cash Election Shares multiplied
by the Per Share Cash Consideration is less than the Aggregate Cash
Consideration, Purchaser may, in its sole discretion, elect to reduce the
Aggregate Cash Consideration to an amount not less than the product of the Cash
Election Shares multiplied by the Per Share Cash Consideration and apply the
foregoing allocation procedure (if necessary) using the Aggregate Cash
Consideration as so reduced.
(ii) If
the number of Cash Election Shares multiplied by the Per Share Cash
Consideration is greater than the Aggregate Cash Consideration, then:
(A) All
No-Election Shares shall be deemed to be Stock Election Shares.
(B) The
Exchange Agent shall convert on a pro rata basis (subject to rounding to avoid
the conversion of fractional shares) a sufficient number of Cash Election
Shares into Stock Election Shares to cause the number of remaining Cash
Election Shares multiplied by the Per Share Cash Consideration to equal the
Aggregate Cash Consideration.
(e) Following
and giving effect to any reallocation (if necessary) under subsection (d) of
this Section 1.10, all Stock Election Shares and all No-Election Shares will be
converted into the right to receive Purchaser Common Stock as provided in
Section 1.4(a)(ii) and all Cash Election Shares shall be converted, effective
as of the Effective Time, into the right to receive cash as provided in Section
1.4(a)(i).
(f) At
or prior to the Effective Time, Purchaser shall authorize the Exchange Agent to
issue the number of shares of Purchaser Common Stock issuable in the Merger and
shall deliver to the Exchange Agent the amount of cash payable in the
Merger. All
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such shares shall be deemed to have been issued as of the Effective
Time. The Exchange Agent shall not be
entitled to vote or exercise any rights of ownership with respect to such
shares.
(g) After
the Effective Time, each holder of an outstanding certificate or certificates
which prior thereto represented shares of Company Common Stock who has
surrendered or surrenders such certificate or certificates to the Exchange
Agent with a properly completed Letter of Transmittal, and each Company
Stockholder holding Book-Entry Shares who has complied with the book-entry
delivery procedures established by Purchaser and the Exchange Agent will, upon
acceptance of such certificates and/or Book-Entry Shares by the Exchange Agent,
be entitled to a certificate or certificates representing the number of full
shares of Purchaser Common Stock and/or the amount of cash into which the
aggregate number of shares of Company Common Stock surrendered or delivered
shall have been converted pursuant to this Agreement and, if such holder's
shares of Company Common Stock have been converted into Purchaser Common Stock,
cash in lieu of fractional shares, and any distribution previously paid with
respect to Purchaser Common Stock issuable in the Merger for which the record
date was on or after the Effective Date, in each case without interest. Each Company Stockholder who receives shares
of Purchaser Common Stock in the Merger shall receive a prospectus and
enrollment materials for Purchaser's dividend reinvestment plan together with
such Stockholder's Purchaser Common Stock certificate or certificates. The Exchange Agent shall accept such
certificates and/or Book-Entry Shares upon compliance with such reasonable
terms and conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices. Each outstanding certificate which prior to
the Effective Time represented Company Common Stock and which is not
surrendered to the Exchange Agent in accordance with the procedures provided
for herein shall, except as otherwise herein provided, until duly surrendered
to the Exchange Agent be deemed to evidence ownership of the number of shares
of Purchaser Common Stock and/or the right to receive the amount of cash into
which such Company Common Stock shall have been converted. No dividends which have been declared will
be remitted to any Person entitled to receive shares of Purchaser Common Stock
under this Section 1.10 until such Person surrenders the certificate or
certificates representing Company Common Stock, at which time such dividends
shall be remitted to such Person without interest.
(h) The
Exchange Agent shall use commercially reasonable efforts to distribute
Purchaser Common Stock and cash as provided herein not later than ten (10)
business days after the Effective Time to the former Company Stockholders who
submitted a properly completed Letter of Transmittal and Company stock
certificates prior to the Election Deadline.
The Exchange Agent shall distribute Purchaser Common Stock and cash as
provided herein to other former Company Stockholders within a reasonable time
after its receipt of a properly completed Letter of Transmittal and Company
Common Stock certificates from such former Company Stockholder.
(i) If
any certificate for Company Common Stock has been lost or destroyed, the
Company Stockholder in whose name that certificate is registered may submit to
the Exchange Agent, in lieu of such certificate, an appropriate affidavit of
loss and indemnity agreement and/or a bond in such sum as may be required by
the Exchange Agent as indemnity against any claim that may be made against
Purchaser or the Exchange Agent with respect to the certificates alleged to
have been lost, stolen or destroyed. If
any certificates evidencing shares of
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Purchaser Common Stock are to be issued in a name other than that in
which the certificate evidencing Company Common Stock surrendered in exchange
therefor is registered, it shall be a condition of the issuance thereof that
the certificate so surrendered shall be properly endorsed or accompanied by an
executed form of assignment separate from the certificate, with all signatures
guaranteed, and otherwise in proper form for transfer and that the Person
requesting such exchange pay to the Exchange Agent any transfer or other tax
required by reason of the issuance of a certificate for shares of Purchaser
Common Stock in any name other than that of the registered holder of the
certificate surrendered or otherwise establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(j) Any
portion of the shares of Purchaser Common Stock and cash delivered to the
Exchange Agent by Purchaser pursuant to Section 1.10(f) that remains unclaimed
by the Company Stockholders for one year (or such later period as Purchaser and
the Exchange Agent may agree) after the Effective Time (as well as any proceeds
from any distributions on such shares and any investment of any cash held by
the Exchange Agent) shall be delivered by the Exchange Agent to Purchaser. Any
Company Stockholder who has not complied with Section 1.10(g) before the
expiration of such period shall thereafter look only to Purchaser for the
consideration deliverable to such stockholder in the Merger as determined
pursuant to this Agreement, without any interest thereon. Neither the Exchange Agent nor any party to
this Agreement shall be liable to any holder of shares of Purchaser Common
Stock for any consideration paid to a public official pursuant to applicable
abandoned property, escheat or similar laws.
Purchaser and the Exchange Agent shall be entitled to rely upon the
stock transfer books of Company to establish the identity of those Persons
entitled to receive consideration specified in this Agreement, which books
shall be conclusive with respect to the identify of such Persons. In the event of a dispute with respect to
ownership of shares of Purchaser Common Stock, Purchaser and the Exchange Agent
shall be entitled to deposit any consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto.
1.11 Withholding Rights. Purchaser (through the Exchange Agent, if
applicable) shall be entitled to deduct and withhold from any amounts otherwise
payable pursuant to this Agreement to any Company Stockholder such amounts as
Purchaser is required under the Code or any provision of state, local or
foreign tax law to deduct and withhold with respect to such payment. Any amounts so withheld shall be treated for
all purposes of this Agreement as having been paid to the Company Stockholder
in respect of which such deduction and withholding was made.
1.12 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Purchaser Common Stock that are issued and
outstanding immediately prior to the Effective Time and are held by Company
Stockholders who did not vote in favor of the Merger and who have complied with
all of the relevant provisions of Section 262 of the DGCL ("Dissenting
Shares" and "Dissenting Stockholders," respectively), shall not
be converted into the right to receive the consideration provided in Section
1.4, unless and until such holders shall have failed to perfect or shall have
effectively withdrawn or lost their rights to appraisal under the DGCL. Company shall give Purchaser (a) prompt
notice of any demands for appraisal of any shares of Company Common Stock or
attempted withdrawals of such demands and any other instruments served pursuant
to the DGCL and received by Company relating to Company
9
Stockholders' rights of appraisal, and (b) the opportunity to
direct, in its reasonable business judgment, all negotiations and proceedings
with respect to demands for appraisal under the DGCL. Company shall not, except with the prior written consent of
Purchaser, voluntarily make any payment with respect to, or settle or offer to
settle, any such demand for payment. If
any Dissenting Stockholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent at any time following the Election
Deadline, the shares of Company Common Stock held by such Dissenting
Stockholder shall thereupon be converted into the right to receive the merger
consideration provided in Section 1.4 as if such Dissenting Shares were Stock
Election Shares.
1.13 Closing. Subject to the provisions of Article 6 hereof, the closing of the
transactions contemplated by this Agreement (the "Closing") shall
take place as soon as practicable after the satisfaction or waiver of all of
the conditions to Closing, and shall be on such date, time and location as
Purchaser and Company shall mutually agree. If all conditions to the
obligations of each of the parties shall have been satisfied or waived by the
party entitled to the benefits thereof, the parties shall, at the Closing, duly
execute the Articles of Merger for filing with the Pennsylvania Secretary of
State and the Certificate of Merger for filing with the Delaware Secretary of
State and promptly thereafter shall take all steps necessary or desirable to
consummate the Merger in accordance with all applicable Laws. The date on which the Closing actually
occurs is referred to as the "Closing Date." The Bank Merger will be consummated after
the Merger at a time selected by Purchaser and pursuant to the terms of this
Agreement and the Bank Plan of Merger.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND FCB
To
induce Company and Great American to enter into this Agreement, Purchaser and
FCB represent and warrant as follows:
2.1 Organization.
(a) Purchaser
is a corporation duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania.
Purchaser is duly registered as a bank holding company with the Board of
Governors of the Federal Reserve System (the "FRB") under the Bank
Holding Company Act of 1956, as amended ("BHCA"), and engages only in
activities (and holds properties only of the types) permitted by the
Commonwealth of Pennsylvania and the FRB and the rules and regulations
promulgated thereby (including but not limited to the BHCA). Purchaser (i) has the corporate power and
authority to own, operate and lease all of its properties and assets and to
carry on its business as now being conducted and (ii) is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
such licensing or qualification is necessary, except where the failure to so
qualify would not be reasonably likely to have a Material Adverse Effect on
Purchaser and the Purchaser Subsidiaries.
(b) Each
Purchaser Subsidiary (other than FCB) is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each
Purchaser Subsidiary (i) has the corporate power and
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authority to own, operate and lease all of its properties and assets
and to carry on its business as now being conducted and (ii) is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which such licensing or qualification is necessary, except where the failure to
so qualify would not be reasonably likely to have a Material Adverse Effect on
Purchaser and the Purchaser Subsidiaries.
(c) FCB
is a Pennsylvania-chartered banking corporation, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania, and engages only in activities (and holds properties only of the
types) permitted by the Commonwealth of Pennsylvania, the Pennsylvania Department
of Banking (the "PDB") and the Federal Deposit Insurance Corporation
(the "FDIC") and the rules and regulations promulgated thereby. FCB (i) has the corporate power and
authority to own, operate and lease all of its properties and assets and to carry
on its business as now being conducted and (ii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which such
licensing or qualification is necessary, except where the failure to so qualify
would not be reasonably likely to have a Material Adverse Effect on Purchaser
and the Purchaser Subsidiaries. Deposit
accounts of FCB are insured by the Federal Deposit Insurance Corporation (the
"FDIC") to the fullest extent permitted under applicable Law and all
premiums and assessments required in connection therewith have been paid by
FCB.
2.2 Capitalization.
(a) The
authorized capital stock of Purchaser consists of 100,000,000 shares of
Purchaser Common Stock, and 3,000,000 shares of preferred stock, par value
$1.00 per share (the "Purchaser Preferred Stock"). As of the date hereof, there are (i)
63,715,026 shares of Purchaser Common
Stock issued, 60,699,962 shares of Purchaser Common Stock outstanding, and
3,015,064 shares of Purchaser Common Stock held in Purchaser's treasury, (ii)
no shares of Purchaser Preferred Stock issued and outstanding or held in
Purchaser's treasury, and (iii) 2,988,365 shares of Purchaser Common Stock
reserved for issuance upon exercise of outstanding stock options. All of the issued and outstanding shares of
Purchaser Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable, with no personal liability attaching to the
ownership thereof. None of the issued
and outstanding shares of Purchaser Common Stock were issued in violation of
the preemptive rights of any Person.
Upon issuance as provided in this Agreement, the shares of Purchaser
Common Stock issuable in the Merger will be duly authorized, validly issued,
fully paid and nonassessable and no personal liability will attach to the
ownership thereof. No Person has
preemptive rights in respect of the Purchaser Common Stock to be issued in the
Merger. The shares of Purchaser Common Stock issuable in the Merger will be
registered pursuant to an effective Registration Statement under the Securities
Act.
(b) The
authorized capital stock of FCB consists of 100,000,000 shares of common stock,
par value $1.00 per share ("FCB Common Stock"). As of the date hereof, there are (i)
38,969,900 shares of FCB Common Stock issued and outstanding and (ii) no shares
of FCB Common Stock are held in FCB's treasury. All of the issued and outstanding shares of FCB Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable,
with no personal liability attaching to the ownership thereof. All of the issued and outstanding shares of
FCB Common Stock are held beneficially and of record by
11
Purchaser, free and clear of any Lien.
None of the issued and outstanding shares of FCB Common Stock were
issued in violation of the preemptive rights of any Person. There are no outstanding securities or other
obligations which are convertible into FCB Common Stock or into any other debt
or equity security of FCB, and there are no outstanding rights, subscriptions,
options, warrants, calls, commitments or agreements of any character calling
for the purchase or issuance of any shares of FCB Common Stock or any other
equity security of FCB or any securities representing the right to purchase or
otherwise receive any shares of FCB Common Stock, or any other equity security
of FCB.
2.3 Authority; No Violation.
(a) Purchaser
and FCB have full corporate power and authority to execute and deliver this
Agreement and, subject to receipt of the required regulatory approvals set
forth in Section 2.5, to consummate the transactions contemplated hereby and to
comply with the terms and provisions hereof.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the Boards
of Directors of Purchaser and FCB and no other corporate proceedings on the
part of Purchaser or FCB are necessary to approve this Agreement or to
consummate the Merger or the Bank Merger.
This Agreement has been duly and validly executed and delivered by
Purchaser and FCB and (assuming due authorization, execution and delivery by
Company and Great American of this Agreement) is a valid and binding obligation
of Purchaser and FCB, enforceable against each of Purchaser and FCB in
accordance with its terms, except as enforcement may be limited by (i)
receivership, conservatorship or supervisory powers of bank regulatory
agencies, (ii) general principles of equity and (iii) bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies generally.
(b) Neither
the execution and delivery of this Agreement by Purchaser and FCB, nor the
consummation by Purchaser and FCB of the transactions contemplated hereby, nor
compliance by Purchaser or FCB with any of the terms or provisions hereof, will
(either with or without the giving of notice or the passing of time or both)
(i) violate any provision of the Articles of Incorporation or Bylaws of
Purchaser or the organizational documents of any Purchaser Subsidiary or (ii)
subject to the receipt of the required regulatory approvals set forth in
Section 2.5, (A) violate in any material respect any Law applicable to
Purchaser or any Purchaser Subsidiary, or any of their respective properties or
assets, or (B) violate or conflict in any material respect with, result in a
material breach of any provision of or the loss of any material benefit under,
constitute a material default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Purchaser or any Purchaser Subsidiary is a party, or by
which they or any of their respective properties or assets may be bound or
affected, (C) violate or conflict with any of the terms, conditions or
provisions of any order, judgment or decree to which Purchaser or any Purchaser
Subsidiary is a party, or by which they or any of their respective properties
or assets may be bound or affected, or (D) result in the creation of any Lien
upon any of the respective properties or assets of Purchaser or any Purchaser
Subsidiary.
12
2.4 No Legal Bar. Neither Purchaser nor any Purchaser
Subsidiary is a party to, subject to or bound by any agreement, judgment,
order, writ, prohibition, injunction or decree of any court or other
Governmental Entity or any law which would prevent the execution of this
Agreement by Purchaser or FCB, their delivery thereof to Company and Great
American or, subject to receipt of the required regulatory approvals set forth
in Section 2.5, their consummation of the transactions contemplated hereby and
their compliance with the terms and provisions hereof, and no action or
proceeding is pending or, to the Knowledge of Purchaser, threatened against
Purchaser or any Purchaser Subsidiary in which the validity of this Agreement,
any of the transactions contemplated hereby, or any action which has been taken
by any of the parties to this Agreement in connection herewith or in connection
with any of the transactions contemplated hereby is at issue.
2.5 Approvals, Consents and Filings. Except for (i) the approval of the Merger by
the FRB and the PDB, (ii) the approval of the Bank Merger by the FDIC and the
PDB, (iii) the delivery of notice of the Merger and the Bank Merger to the OTS,
(iv) the declaration of effectiveness of the Registration Statement and
approval of the Proxy Statement/Prospectus by the SEC, (v) any notice or filing
required under the HSR Act, (vi) the approval of Purchaser's additional listing
application for the listing of the Purchaser Common Stock to be issued in the
Merger on the NYSE and (vii) the filing of the Articles of Merger with the
Pennsylvania Secretary of State and the Certificate of Merger with the Delaware
Secretary of State, neither the execution and delivery of this Agreement by
Purchaser nor the consummation of the transactions contemplated hereby,
requires any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity or other third party.
2.6 Financial Statements; Reports; Books and Records.
(a) Purchaser
has previously delivered or made available to Company true, correct and
complete copies of the consolidated balance sheets of Purchaser and the
Purchaser Subsidiaries as of December 31 for the fiscal years 2000 through 2002
and the related consolidated statements of income, changes in shareholders'
equity and cash flows for the fiscal years 2000 through 2002, inclusive, in
each case accompanied by the audit report of Deloitte & Touche LLP,
independent public accountants with respect to Purchaser for such periods, and
the interim unaudited financial statements of Purchaser as of and for the
nine-month periods ended September 30, 2003 and 2002 (all such financial statements
are collectively referred to herein as the "Purchaser Financial
Statements"). The Purchaser Financial Statements (including the related
notes, where applicable) fairly present, in all material respects, the results
of the consolidated operations and the consolidated financial condition of
Purchaser and the Purchaser Subsidiaries for the respective fiscal periods or
as of the respective dates therein set forth.
The Purchaser Financial Statements (including the related notes, where
applicable) comply with applicable accounting requirements with respect thereto
and have been prepared in accordance with accounting principles generally
accepted in the United States of America consistently applied during the
periods involved ("GAAP"), except in each case as indicated in such
statements or in the notes thereto.
(b) Since
December 31, 2000, Purchaser and each Purchaser Subsidiary has timely filed,
and subsequent to the date hereof will timely file, all reports, registrations
and statements, together with any amendments required to be made with respect
13
thereto, that were and are required to be filed with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, proxy
statements and all other communications mailed by Purchaser to its shareholders
(and copies of all such reports, registrations statements and communications
have been furnished or made available by Purchaser to Company), (ii) the FRB,
(iii) the FDIC, (iv) the PDB, and (v) the NYSE and any other self-regulatory
organization, and (vi) any applicable state securities, insurance or banking
authorities (collectively, as used in this Section 2.6(b), the "Regulatory
Agencies") (all such reports, registrations and statements, together with
any amendments thereto, are collectively referred to herein as the
"Purchaser Reports"), and have paid all fees and assessments due and
payable in connection with any of the foregoing. As of their respective dates, the Purchaser Reports complied and,
with respect to filings made after the date of this Agreement, will at the date
of filing comply in all material respects with all of the statutes, rules and
regulations enforced or promulgated by the Regulatory Agencies and did not or
will not, as applicable, at the date of filing contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No Purchaser Subsidiary is required to file
any form, report or other document with the SEC. Except for normal periodic examinations conducted by a Regulatory
Agency in the regular course of the business of Purchaser and the Purchaser
Subsidiaries, since December 31, 2000, no Regulatory Agency has initiated any
proceeding or, to the Knowledge of Purchaser, investigation into the business
or operations of Purchaser or any of the Purchaser Subsidiaries. Purchaser and
each Purchaser Subsidiary has resolved all material violations, criticisms or
exceptions by any Regulatory Agency with respect to any such normal periodic
examination. Neither Purchaser nor any
Purchaser Subsidiary has received any written notice from, or is a party to any
written agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Governmental Entity or any staff thereof (i) asserting that Purchaser or
any Purchaser Subsidiary is not in substantial compliance with any statute,
regulation or ordinance which such Governmental Entity enforces, or with the
internal policies and procedures of such entity, or (ii) directing, restricting
or limiting in any manner the operations of Purchaser or any Purchaser
Subsidiary, including with respect to such entities' capital adequacy, its
credit policies, its management, or the payment of dividends.
(c) The
books and records of Purchaser and each Purchaser Subsidiary have been, and are
being, maintained in accordance with GAAP and any other applicable legal and
accounting requirements and reflect only actual transactions and reasonable
accruals.
2.7 Absence of Changes. Since December 31, 2002 there has not been
any Material Adverse Change in Purchaser and the Purchaser Subsidiaries.
2.8 Brokers, Finders and
Financial Advisors.
Except for Purchaser's engagement of Sandler X'Xxxxx & Partners L.P.
in connection with the issuance of trust preferred and/or other debt securities
to finance the Merger, neither Purchaser nor any Purchaser Subsidiary, nor any
of their respective officers, directors, employees or agents, has employed any
broker, finder or financial advisor in connection with the transactions
contemplated by this Agreement or in connection with any transaction other than
the Merger, or incurred any liability or commitment for any fees or commissions
to any such Person in connection with the transactions contemplated by this
Agreement or in connection with any transaction other than the Merger.
14
2.9 Information to be Supplied. The information to be supplied by Purchaser
or any Purchaser Subsidiary for inclusion in the Registration Statement and/or
any information filed by Purchaser with the SEC under the Exchange Act which is
incorporated by reference into the Registration Statement will not, at the time
the Registration Statement is declared effective pursuant to the Securities Act
and as of the date the Proxy Statement/Prospectus is mailed to Company
Stockholders and up to and including the date of the Special Meeting, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading. The information supplied, or to be supplied,
by Purchaser for inclusion in the Regulatory Applications will, at the time
such documents are filed with any Governmental Entity and up to and including
the date of the attainment of any required regulatory approvals, be accurate in
all material respects.
2.10 Compliance with Applicable Laws.
(a) Purchaser
and each Purchaser Subsidiary has complied in all material respects with all
Laws applicable to it or its assets or to the operation of its business.
Neither Purchaser nor any Purchaser Subsidiary has received any written notice
of any alleged or threatened claim, violation, or liability under any such Laws
that has not heretofore been cured and for which there is any remaining
material liability.
(b) FCB
is an insured depository institution and is "well-capitalized" (as
that term is defined by 12 C.F.R. Section 565.4(b)(1)), and such institution's
examination rating under the Community Reinvestment Act of 1977 is satisfactory
or outstanding.
2.11 Representations and Warranties. The representations or warranties made by
Purchaser and FCB as set forth in this Agreement, or in any document,
statement, certificate or other writing furnished or to be furnished by
Purchaser and FCB to Company pursuant to the transactions contemplated by this
Agreement, do not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated herein or therein which
is necessary to make the statements and facts contained herein or therein, in
light of the circumstances under which they were or are made, not false or
misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF COMPANY AND GREAT
AMERICAN
To
induce Purchaser and FCB to enter into this Agreement, Company and Great
American represent and warrant, except as set forth in the disclosure schedule
delivered by Company to Purchaser on the date hereof (the "Company
Disclosure Schedule"), as follows:
3.1 Organization.
(a) Company
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.
Company is duly registered as a unitary savings and loan holding company
with the OTS under the HOLA, and engages only in activities (and holds properties
only of the types) permitted by the State of Delaware and the OTS and the rules
and regulations promulgated thereby (including but not limited to the
HOLA). Company (i) has the corporate
power and authority to own or lease all of its properties and assets and to
15
carry on its business as it is now being conducted, and (ii) is duly
licensed or qualified to do business in each jurisdiction in which such
licensing or qualification is necessary, except where the failure to so qualify
would not be reasonably likely to have a Material Adverse Effect on Company and
the Company Subsidiaries.
(b) Each
Company Subsidiary (other than Great American) is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation.
Each Company Subsidiary (i) has the corporate power and authority to
own, operate and lease all of its properties and assets and to carry on its
business as now being conducted and (ii) is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which such licensing
or qualification is necessary, except where the failure to so qualify would not
be reasonably likely to have a Material Adverse Effect on Company and the
Company Subsidiaries.
(c) Great
American is a federal savings association duly chartered under the laws of the
United States, with its main office in the Commonwealth of Pennsylvania, and
engages only in activities (and holds properties only of the types) permitted
by the OTS, the PDB and the FDIC and the rules and regulations promulgated
thereby. Great American (i) has the
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted and (ii) is duly licensed or
qualified to do business in each jurisdiction in which such licensing or
qualification is necessary, except where the failure to so qualify would not be
reasonably likely to have a Material Adverse Effect on Company and the Company
Subsidiaries. Deposit accounts of Great
American are insured by the FDIC to the fullest extent permitted by law, and
all premiums and assessments required in connection therewith have been paid by
Great American.
(d) Company
has delivered to Purchaser true, correct and complete copies of the Certificate
of Incorporation and Bylaws, as amended to the date hereof, of Company and each
Company Subsidiary.
3.2 Capitalization,
Subsidiaries and Affiliates.
(a) The
authorized capital stock of Company consists 23,000,000 of shares of Company
Common Stock, and 1,000,000 shares of preferred stock, par value $.01 per share
(the "Company Preferred Stock"). As of the date hereof, there are (i)
8,900,000 shares of Company Common Stock issued and 3,867,408 shares of Company
Common Stock held in Company's treasury, (ii) no shares of Company Preferred
Stock issued and outstanding or held in Company's treasury, and (iii) 5,032,592
shares of Company Common Stock outstanding for voting purposes. Section 3.2(a) of the Company Disclosure
Schedule sets forth a complete and accurate list specifying all outstanding
options to purchase Company Common Stock, indicating (i) the holder thereof,
(ii) the number of shares of Company Common Stock subject thereto, (iii) the
exercise price, date of grant, vesting schedule and expiration date therefor,
and (iv) any terms regarding the acceleration of vesting thereof. The only outstanding options to purchase
shares of Company Common Stock are issued pursuant to the Company Option Plans
and a copy of each Company Option Plan gas been provided to Purchaser. All such outstanding options to purchase
shares of Company Common Stock pursuant to the Company Option Plans shall be
converted or cancelled as provided herein as of the Effective Time. All of the issued and outstanding shares
16
of Company Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable, with no personal liability attaching to
the ownership thereof. None of the
issued and outstanding shares of Company Common Stock were issued in violation
of the preemptive rights of any Person.
Except for the outstanding options to purchase shares of Company Common
Stock under the Company Option Plans, Company does not have and is not bound by
any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of Company Common Stock, Company Preferred Stock or any other equity security
of Company or any securities representing the right to purchase or otherwise
receive any shares of Company Common Stock, Company Preferred Stock, or any
other equity security of Company.
(b) The
authorized capital stock of Great American consists of 1,000 shares of common
stock, par value $1.00 per share ("Great American Common
Stock"). As of the date hereof,
there are (i) 1,000 shares of Great American Common Stock issued and
outstanding and (ii) no shares of Great American Common Stock held in Great
American's treasury. All of the issued
and outstanding shares of Great American Common Stock have been duly authorized
and validly issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof.
None of the issued and outstanding shares of Great American Common Stock
were issued in violation of the preemptive rights of any Person. Great American does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of any
shares of Great American Common Stock or any other equity security of Great
American or any securities representing the right to purchase or otherwise
receive any shares of Great American Common Stock, or any other equity security
of Great American.
(c) Section
3.2(c) of the Company Disclosure Schedule sets forth a true, correct and
complete list of all direct or indirect subsidiaries of Company, whether
consolidated or unconsolidated (each, a "Company Subsidiary," and collectively,
the "Company Subsidiaries"), including a description of the
capitalization of each Company Subsidiary, and all investments by Company or
any Company Subsidiary in any corporation, partnership, company, joint venture
or other entity, as of the date of this Agreement. Company owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity interests of each Company
Subsidiary, free and clear of all Liens.
All of the issued and outstanding shares of capital stock or other
interests of each Company Subsidiary (other than Great American) are duly
authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and none of such shares
or other interests were issued in violation of the preemptive rights of any
Person. No Company Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of any
shares of capital stock or any other equity security of such Company Subsidiary
or any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such Company
Subsidiary.
(d) Each
director and executive officer of Company and each Person who, to the Knowledge
of Company, holds more than 10% of the outstanding shares of Company Common
Stock is listed at Section 3.2(d) of the Company Disclosure Schedule.
17
3.3 Authority; No Violation.
(a) Company
and Great American have full corporate power and authority to execute and
deliver this Agreement and, subject to receipt of the required regulatory and
stockholder approvals set forth in Section 3.5, to consummate the transactions
contemplated hereby and to comply with the terms and provisions hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Boards of Directors of Company and Great American. The Board of Directors of Company has directed that this
Agreement and the transactions contemplated hereby be submitted to the Company
Stockholders for approval at the Special Meeting and, except for the adoption
of this Agreement by the requisite vote of the Company Stockholders, no other
corporate proceedings on the part of Company or Great American (except for
matters related to setting the date, time, place and record date for the
Special Meeting) are necessary to approve this Agreement or to consummate the
Merger or the Bank Merger. This
Agreement has been duly and validly executed and delivered by Company and Great
American and (assuming due authorization, execution and delivery by Purchaser
and FCB of this Agreement) is a valid and binding obligation of Company and
Great American, enforceable against each of Company and Great American in
accordance with its terms, except as enforcement may be limited by (i)
receivership, conservatorship or supervisory powers of bank regulatory
agencies, (ii) general principles of equity and (iii) bankruptcy, insolvency
and similar Laws affecting creditors' rights and remedies generally.
(b) Neither
the execution and delivery of this Agreement by Company and Great American, nor
the consummation by Company and Great American of the transactions contemplated
hereby, nor compliance by Company or Great American with any of the terms or
provisions hereof, will (either with or without the giving of notice of the
passing of time or both) (i) violate any provision of the Certificate of
Incorporation or Bylaws of Company or the organizational documents of any
Company Subsidiary or (ii) subject to the receipt of the required regulatory
and stockholder approvals set forth in Section 3.5 and the third-party consents
set forth in Section 3.3(b) of the Company Disclosure Schedule, (A) violate in
any material respect any Law applicable to Company or any Company Subsidiary,
or any of their respective properties or assets, or (B) violate or conflict in
any material respect with, result in a material breach of any provision of or
the loss of any material benefit under, constitute a material default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which Company or any
Company Subsidiary is a party, or by which they or any of their respective
properties or assets may be bound or affected, (C) violate or conflict with any
of the terms, conditions or provisions of any order, judgment or decree to
which Company or any Company Subsidiary is a party, or by which they or any of
their respective properties or assets may be bound or affected, or (D) result
in the creation of any Lien upon any of the respective properties or assets of
Company or any Company Subsidiary.
3.4 No Legal Bar. Neither Company nor any Company Subsidiary
is a party to, or subject to, or bound by, any agreement or judgment, order,
letter of understanding, writ, prohibition, injunction or decree of any court
or other Governmental Entity, or any Law which
18
would prevent the execution of this Agreement by Company or Great
American, the delivery thereof to Purchaser, or (subject to the receipt of the
required regulatory and stockholder approvals set forth in Section 3.5) their
consummation of the transactions contemplated hereby and their compliance with
the terms and provisions hereof, and no action or proceeding is pending or, to
the Knowledge of Company, threatened against Company or any Company Subsidiary
in which the validity of this Agreement, the transactions contemplated hereby
or any action which has been taken by any of the parties to this Agreement in
connection herewith or in connection with the transactions contemplated hereby
is at issue.
3.5 Approvals, Consents and Filings. Except for (i) the approval of the Merger by
the FRB and the PDB, (ii) the approval of the Bank Merger by the FDIC and the
PDB, (iii) the delivery of notice of the Merger and the Bank Merger to the OTS,
(iv) any notice or filing required under the HSR Act, (v) the approval of the
Merger by the Company Stockholders and (vi) the filing of the Articles of
Merger with the Pennsylvania Secretary of State and the Certificate of Merger
with the Delaware Secretary of State, neither the execution and delivery of
this Agreement by Company or Great American nor the consummation of the transactions
contemplated hereby requires any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity.
3.6 Financial Statements; Reports; Books and Records.
(a) Company
has previously delivered or made available to Purchaser true, correct and
complete copies of the consolidated statements of condition of Company and the
Company Subsidiaries as of December 31 for the fiscal years 2000 through 2002 and
the related consolidated statements of income and comprehensive income,
shareholders' equity and cash flows for the fiscal years 2000 through 2002,
inclusive, in each case accompanied by the audit report of KPMG LLP,
independent public accountants with respect to Company, and the interim
unaudited financial statements of Company as of and for the nine-month periods
ended September 30, 2003 and 2002 (all such financial statements are
collectively referred to herein as the "Company Financial Statements").
The Company Financial Statements (including the related notes, where
applicable) fairly present, and the financial statements referred to in Section
5.7 will fairly present (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount), in all material
respects, the results of the consolidated operations and consolidated financial
condition of Company and the Company Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth. The Company Financial Statements (including
the related notes, where applicable) comply, and the financial statements
referred to in Section 5.7 will comply, with applicable accounting requirements
with respect thereto and have been, and the financial statements referred to in
Section 5.7 will be, prepared in accordance with GAAP, except in each case as
indicated in such statements or in the notes thereto and except, in the case of
unaudited quarterly financial statements, for the absence of notes thereto and
normal year-end audit adjustments consistent with past practice.
(b) Since
December 31, 2000, Company and each Company Subsidiary has timely filed, and
subsequent to the date hereof will timely file, all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that were and are required to be filed with (i) the SEC, including,
but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements and all
other communications mailed by
19
Company to its stockholders (and copies of all such reports,
registrations statements and communications have been furnished or made
available by Company to Purchaser), (ii) the OTS, (iii) the FDIC, (iv) the PDB,
(v) the AMEX and any other self-regulatory organization, and (vi) any
applicable state securities, insurance or banking authorities (collectively, as
used in this Section 3.6(b), the "Regulatory Agencies") (all such
reports, registrations and statements, together with any amendments thereto,
are collectively referred to herein as the "Company Reports"), and
have paid and will pay, as applicable, all fees and assessments due and payable
in connection with any of the foregoing.
As of their respective dates, the Company Reports complied and, with
respect to filings made after the date of this Agreement, will at the date of
filing comply, in all material respects with all of the statutes, rules and
regulations enforced or promulgated by the Regulatory Agencies and did not or
will not, as applicable, at the date of filing contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No Company Subsidiary is required to file
any form, report or other document with the SEC. Except for normal periodic examinations conducted by a Regulatory
Agency in the regular course of the business of Company and the Company
Subsidiaries, since December 31, 2000, no Regulatory Agency has initiated any
proceeding or, to the Knowledge of Company, investigation into the business or
operations of Company or any of the Company Subsidiaries. Company and each
Company Subsidiary has resolved all material violations, criticisms or
exceptions by any Regulatory Agency with respect to any such normal periodic
examination. Neither Company nor any
Company Subsidiary has received any written notice from, or is a party to any
written agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Governmental Entity or any staff thereof (i) asserting that Company or any
Company Subsidiary is not in substantial compliance with any statute,
regulation or ordinance which such Governmental Entity enforces, or with the
internal policies and procedures of such entity, or (ii) directing, restricting
or limiting in any manner the operations of Company or any Company Subsidiary,
including with respect to such entities' capital adequacy, its credit policies,
its management, or the payment of dividends.
(c) The
books and records of Company and each Company Subsidiary have been, and are
being, maintained in accordance with GAAP and any other applicable legal and
accounting requirements and reflect only actual transactions and reasonable
accruals.
(d) Since
December 31, 2002, there have been no significant changes in the internal
controls utilized by Company and Company Subsidiaries with respect to their
financial records (the "Internal Controls") or in other factors that
could significantly affect the Internal Controls, including any corrective
actions with regard to significant deficiencies and material weaknesses. There are no significant deficiencies in the
design or operation of the Internal Controls which could adversely affect the
ability of Company and Company Subsidiaries to record, process, summarize and
report financial data, and there are no material weaknesses in the Internal
Controls. Company is not aware of any
fraud or suspected fraud, whether or not material, that involves management or
other employees who have a significant role in preparing Company's consolidated
financial statements.
20
3.7 Undisclosed Liabilities. Neither Company nor any Company Subsidiary
has any debt, liability or obligation of any kind, whether accrued, absolute,
known, unknown, contingent or otherwise except (i) those reflected in the most
recent audited balance sheet provided by Company to Purchaser or (ii) those
incurred in the Ordinary Course of Business since December 31, 2002, none of
which arises from any breach of contract, tort or violation of law or has or is
reasonably likely to have a Material Adverse Effect on Company and the Company
Subsidiaries.
3.8 Tax Matters.
(a) Company
and each Company Subsidiary has duly filed when due (including applicable
extensions granted without penalty) (i) all material federal and state tax
returns and reports, and (ii) all material returns and reports of other
Governmental Entities having jurisdiction with respect to taxes imposed upon
the income, properties, revenues, operations or other assets of Company or such
Company Subsidiary. Such returns or
reports are true, complete and correct in all material respects. Company and each Company Subsidiary has paid
all taxes and other governmental charges including all applicable interest and
penalties set forth in such returns or reports.
(b) There
are no Liens on the assets of Company or any Company Subsidiary relating to or
attributable to any taxes (other than taxes not yet due and payable). All material federal, state and local taxes
and other material governmental charges payable by Company or any Company
Subsidiary have been paid or have been adequately accrued or reserved for on
such entity's books in accordance with GAAP and banking regulations applied on
a consistent basis. Until the Effective
Time, Company and each Company Subsidiary shall continue to reserve sufficient
funds for the payment of expected tax liabilities in accordance with generally
accepted accounting principles and banking regulations applied on a consistent
basis. Neither Company nor any Company
Subsidiary has received any written, or, to the Knowledge of Company, unwritten
notice of a tax deficiency or assessment of additional taxes of any kind and,
to the Knowledge of Company, there is no threatened claim against Company or
any Company Subsidiary or any basis for any such claim, for payment of any
additional federal, state or local taxes for any period prior to the date of
this Agreement in excess of the accruals or reserves provided therefor in the
most recent audited financial statements provided by Company to Purchaser.
(c) Neither
Company nor any Company Subsidiary has constituted a "distributing
corporation" or a "controlled corporation" in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (i) in
the two years prior to the date of this Agreement or (ii) in a distribution
which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code)
that includes the Merger.
(d) Proper
and accurate amounts have been withheld by Company and each Company Subsidiary
from its employees for all periods in compliance in all material respects with
the tax withholding provisions of applicable federal, state and local tax
laws. All material federal, state and
local tax returns have been filed by Company and each Company Subsidiary for
all periods for which returns were due with respect to withholding, social
security
21
and unemployment taxes and the amounts shown thereon to be due and
payable have been paid in full. Such
returns or reports are true, complete and correct in all material
respects.
3.9 Certain Contracts.
(a) Section
3.9(a) of the Company Disclosure Schedule sets forth a complete and accurate
list of all contracts, arrangements and commitments to which either Company or
any Company Subsidiary is a party or by which either Company or any Company Subsidiary
may be bound as of the date of this Agreement (i) between or among Company, any
Company Subsidiary and/or any Affiliate thereof, (ii) which materially
restricts the conduct of any line of business by Company or any Company
Subsidiary, (iii) that is, whether or not entered into in the Ordinary Course
of Business, not terminable upon notice of 60 days or less and involves
payments to or by Company or a Company Subsidiary of more than $50,000 in the
aggregate per year, except contracts with customers entered into in the
Ordinary Course of Business, (iv) providing for the indemnification by Company
or any Company Subsidiary of any Person, (v) that is, in Company's good faith
determination, material to the financial condition, results of operations or
business of Company or any Company Subsidiary, except contracts with customers
entered into in the Ordinary Course of Business. Each contract, arrangement or commitment of the type described in
this Section 3.9(a), whether or not set forth in Section 3.9(a) of the Company
Disclosure Schedule, is referred to herein as a "Company
Contract." Section 3.9(a) of the
Company Disclosure Schedule does not include the Leases, Employment Agreements
or Company Benefit Plans, and the Leases, Employment Agreements and Company
Benefit Plans are not included in the term "Company Contracts."
(b)
(i) Each Company Contract is valid, binding and in full force and effect and is
enforceable in accordance with its terms, except as enforcement may be limited
by (A) receivership, conservatorship or supervisory powers of bank regulatory
agencies, (B) general principles of equity and (C) bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally; (ii) Company,
each Company Subsidiary and, to the Knowledge of Company, each other party
thereto, has in all material respects performed all obligations required to be
performed by it to date under each Company Contract; and (iii) no event or
condition exists that constitutes or, after notice or lapse of time or both,
would constitute, a material default or cause for termination on the part of
Company or any Company Subsidiary or, to the Knowledge of Company, any other
party under any such Company Contract.
3.10 Litigation and Proceedings. Except as set forth on Section 3.10 of the
Company Disclosure Schedule, neither Company nor any Company Subsidiary is a
party to any, and there are no pending or to the Knowledge of Company,
threatened, legal, administrative, arbitration or other proceedings, claims,
counterclaims, actions or governmental or regulatory investigations of any
nature against Company or any Company Subsidiary. There is no injunction, order, judgment, decree, or regulatory
restriction (other than those of general applicability to savings and loan
holding companies and their subsidiaries) imposed upon Company, any Company
Subsidiary, the officers and directors of Company or any Company Subsidiary or
the assets or business of Company or any Company Subsidiary. Neither Company nor any Company Subsidiary
has been advised of, or is aware of, the threat of any such action.
22
3.11 Tangible Properties.
(a) Section
3.11(a) of the Company Disclosure Schedule sets forth a true, correct and
complete list of all real property owned by Company or any Company
Subsidiary.
(b) Section
3.11(b) of the Company Disclosure Schedule sets forth a true, correct and
complete schedule of all leases, subleases, licenses and other agreements under
which each of Company and the Company Subsidiaries uses or occupies or has the
right to use or occupy, now or in the future, real property (the
"Leases"). Each of the Leases
is valid, binding and in full force and effect in all material respects
according to its terms. Company and
each Company Subsidiary has performed all material obligations required to be
performed by it to date under each of the Leases. No event has occurred and no condition exists that constitutes
or, after notice or lapse of time or both, would constitute, a material default
or termination event on the part of Company or any Company Subsidiary under any
of the Leases. Company and the Company
Subsidiaries have paid all rents and other charges to the extent due under the
Leases.
(c) Each
of Company and the Company Subsidiaries, has good title to, valid leasehold
interests in or otherwise legally enforceable rights to use all of the real
property, personal property and other assets (tangible or intangible), used,
occupied and operated or held for use by it in connection with its business as
presently conducted in each case, free and clear of any Lien, except for (i)
statutory Liens for amounts not yet delinquent, and (ii) Liens incurred in the
Ordinary Course of Business that, individually and in the aggregate, are not
material in character, amount or extent, do not materially detract from the
value and do not materially interfere with the present use, occupancy or
operation of, any material asset.
3.12 Intellectual Property. Section 3.12 of the Company Disclosure
Schedule sets forth all (i) registered trademarks, trade names, service marks
or other trade rights, and all pending applications for any such registrations,
(ii) registered copyrights, and all pending applications for any such
registrations, (iii) trade secrets, (iv) inventions, discoveries, designs,
and drawings, (v) computer software (including all source and object codes and
manuals), and (vi) registered patents, and all pending applications for any
such registrations, whether owned, licensed or otherwise used by Company or any
Company Subsidiary (collectively, the "Intellectual Property
Rights"). The Intellectual
Property Rights are all those necessary for the conduct of the business of
Company and each Company Subsidiary as presently conducted. Neither Company nor any Company Subsidiary
has any obligation to compensate any Person for the use of any of the
Intellectual Property Rights and Company has not granted to any Person any
license, option or other rights to use in any manner any of the Intellectual
Property Rights, whether requiring the payment of royalties or not. The Intellectual Property Rights will not
cease to be rights of Company or be impaired by reason of the performance of
this Agreement or the consummation of the transactions contemplated
hereby. No other Person (i) has notified
Company that such Person claims any ownership of or right to use any
Intellectual Property Rights or (ii) to the Knowledge of Company, is infringing
upon any Intellectual Property Rights.
To the Knowledge of Company, Company's use of the Intellectual Property
Rights does not conflict with, infringe upon or otherwise violate the valid
rights of any Person anywhere where the business of Company is currently
conducted or is currently proposed to be conducted by Company. No written notice has been received and not
fully resolved and no action has been
23
instituted or, to the Knowledge of Company, threatened against Company
alleging that Company's use of the Intellectual Property Rights infringes upon
or otherwise violates any rights of a Person.
3.13 Insurance. Section 3.13 of the Company Disclosure
Schedule contains a complete list and description of all policies of insurance
and bonds presently maintained by Company or any Company Subsidiary providing
coverage for either of them, their assets, or any of their officers, directors
and employees, all of which are in full force and effect, together with a
complete list of all pending claims under any such policies or bonds. All material terms, obligations and
provisions of each such policy and bond has been complied with, all premiums
due thereon have been paid. Neither
Company nor any Company Subsidiary has received any written, or, to the
Knowledge of Company, unwritten notice of cancellation with respect to any such
policy or bond. Such policies and bonds
provide adequate coverage to insure the properties and business of Company and
the Company Subsidiaries and the activities of their officers, directors and
employees against such risks and in such amounts as are prudent and customary. Neither Company nor any Company Subsidiary
has any liability for retrospective premium adjustments with respect to such
policies. Company has previously made
available to Purchaser a true, correct and complete copy of each such insurance
policy and bond.
3.14 Compliance with Applicable Laws.
(a) Company
and each Company Subsidiary has complied in all material respects with all Laws
applicable to it or its assets or to the operation of its business. Neither
Company nor any Company Subsidiary has received any written, or, to the
Knowledge of Company, unwritten notice of any material alleged or threatened
claim, violation, or liability under any such Laws that has not heretofore been
cured and for which there is any remaining material liability.
(b) Great
American is an insured depository institution and is
"well-capitalized" (as that term is defined by 12 C.F.R. Section
565.4(b)(1)), and such institution's examination rating under the Community
Reinvestment Act of 1977 is satisfactory or outstanding.
(c) Neither
Company nor any Company Subsidiary, nor to the Knowledge of Company any other
Person acting on behalf of Company or any Company Subsidiary that qualifies as
a financial institution under the anti-money laundering restrictions of the
United States, including without limitation the federal Bank Secrecy Act and
the USA PATRIOT Act of 2001, and the rules, regulations and orders promulgated
thereunder (collectively, the "Anti-Money Laundering Laws"), has
knowingly acted, by itself or in conjunction with another, in any act in
connection with the concealment of any currency, securities, other proprietary
interest that is the result of a felony as defined in the Anti-Money Laundering
Laws ("Unlawful Gains"), or knowingly accepted, transported, stored,
dealt in or brokered any sale, purchase or any transaction of any nature for
Unlawful Gains. Company and each Company Subsidiary that qualifies as a
financial institution under the Anti-Money Laundering Laws has, during the past
three years, implemented in all material respects such anti-money laundering
mechanisms and kept and filed all reports and other necessary documents as
required by, and otherwise complied in all material respects with, the
Anti-Money Laundering
24
Laws. Each such financial institution has implemented an anti-money
laundering program that meets the requirements of Section 326 and Section 352
of the USA PATRIOT Act and the regulations promulgated thereunder.
(d) Company
and each Company Subsidiary are, and since January 1, 2000 have been, in
material compliance with all applicable federal and state privacy Laws,
including without limitation, Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and
the regulations promulgated thereunder, and with its information security
program required by 12 C.F.R. Part 570.
3.15 Absence of Changes; Operation in the Ordinary Course. Since December 31, 2002 (a) there has not
been any Material Adverse Change in Company and the Company Subsidiaries, taken
as a whole, and (b) except as disclosed in the textual portion of the Company
Reports (including, for that purpose, the notes to the Company Financial
Statements contained therein) or Section 3.15 of the Company Disclosure
Schedule, neither Company nor any Company Subsidiary has taken any action
which, if it had been taken after the date of this Agreement, would require the
consent of Purchaser under Section 4.2 hereof.
3.16 Employee Benefit Plans.
(a) Section
3.16(a) of the Company Disclosure Schedule contains a true and complete list of
all of the Company Benefit Plans.
Company has heretofore delivered to Purchaser true and complete copies
of (i) each Company Benefit Plan and, if the Company Benefit Plan is funded
through a trust or any third party funding vehicle, a copy of the trust or
other funding document, (ii) the most recent determination letter issued by the
Internal Revenue Service with respect to each Company Benefit Plan for which
such a letter has been obtained, (iii) annual reports on Form 5500 required to
be filed with any Governmental Entity for each Company Plan for the three most
recent plan years and all required actuarial reports for the last three plan
years of each Company Benefit Plan.
(b) No
Company Benefit Plan is subject to Title IV of ERISA or section 412 of the Code
and neither Company nor any ERISA Affiliate made, or was required to make,
contributions to any employee benefit plan subject to Title IV of ERISA or
section 412 of the Code during the six year period ending on the Effective
Time.
(c) No
Company Benefit Plan utilizes a funding vehicle described in Section 501(c)(9)
of the Code or is subject to the provisions of Section 505 of the Code.
(d) Each
Company Benefit Plan has been operated and administered in material compliance
with its terms and applicable Law, including Section 406 of ERISA and Section
4975 of the Code.
(e) Each
Company Benefit Plan which is intended to be "qualified" within the
meaning of Section 401(a) of the Code is so qualified and the trusts maintained
thereunder are exempt from taxation under Section 501(a) of the Code.
(f) Except
as set forth in Section 3.16 of the Company Disclosure Schedule, no Company
Benefit Plan provides welfare benefits, including death or medical
25
benefits, with respect to current or former employees or consultants of
Company or any Company Subsidiary beyond their retirement or other termination
of service (other than coverage mandated by applicable Law).
(g) There
are no pending, threatened or anticipated claims by or on behalf of any Company
Benefit Plan, by any employee or beneficiary covered under any such Company
Benefit Plan with respect to such Company Benefit Plan, or otherwise involving
any such Company Benefit Plan (other than routine claims for benefits).
(h)
(i) Except as set forth in Section 3.16 of the Company Disclosure Schedule, no
employee of Company or any Company Subsidiary will be entitled to any
additional benefits or any acceleration of the time of payment or vesting of
any benefits under any Company Benefit Plan as a result of the consummation of
the transactions contemplated by this Agreement (whether alone or in
conjunction with other actions), (ii) no amount payable, or economic benefit
provided, by Company or any of Company Subsidiary (including any acceleration of
the time of payment or vesting of any benefit) as a result of the consummation
of the transactions contemplated by this Agreement (whether alone or in
conjunction with other actions) could be considered an "excess parachute
payment" under Section 280G of the Code, (iii) no Person is entitled to
receive any additional payment from Company, any Company Subsidiary or any
other Person (a "Parachute Gross-Up Payment") in the event that the
excise tax of Section 4999 of the Code is imposed on such Person, and (iv)
neither Company nor any Company Subsidiary has granted to any Person any right
to receive any Parachute Gross-Up Payment.
3.17 Employee Matters.
(a) Section
3.17(a) of the Company Disclosure Schedule contains a list of the names,
titles, responsibilities and compensation arrangements of (i) each officer and
director of Company and each Company Subsidiary and (ii) each employee of
Company or any Company Subsidiary whose base salary from Company or such
Company Subsidiary for the current fiscal year will exceed $50,000. Neither Company or any Company Subsidiary
has received any notice or has any Knowledge that any officer, director or
employee listed on Section 3.17(a) of the Company Disclosure Schedule intends
to terminate his or her employment or service to Company or such Company
Subsidiary.
(b) Section
3.17(b) of the Company Disclosure Schedule sets forth a true and complete list
as of the date hereof of each of the following agreements, arrangements and
commitments to which Company or any Company Subsidiary is a party or by which
any of them may be bound (true and complete copies of which have been made
available to Purchaser and have been delivered or will be delivered to
Purchaser as soon as reasonably practicable after the date hereof): (i) each
employment, consulting, agency or commission agreement not terminable without
liability to Company or any Company Subsidiary upon 60 days' or less prior
notice to the employee, consultant or agent; (ii) each agreement with any
employee of Company or any Company Subsidiary the benefits of which are
contingent, or the terms of which are materially altered, upon the consummation
of the transactions contemplated by this Agreement (whether alone or in
conjunction with other actions); (iii) each agreement with respect to any
employee of Company or any Company Subsidiary of providing any term of
employment or
26
compensation guarantee extending for a period longer than one year; and
(iv) each other agreement or Company Benefit Plan any of the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated,
by the occurrence of any of the transactions contemplated by this Agreement
(whether alone or in conjunction with other actions) or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement ((i) through (iv) collectively, the
"Employment Agreements").
(c) Neither
Company nor any Company Subsidiary is a party to or bound by the terms of any
collective bargaining agreement.
Company and each Company Subsidiary is in compliance in all material
respects with all applicable Laws respecting the employment and employment
practices, terms and conditions of employment and wage and hours of its
employees and is not engaged in any unfair labor practice. There is no labor strike or labor
disturbance pending or, to the Knowledge of Company, threatened against Company
or any Company Subsidiary, and during the past five years neither Company nor
any Company Subsidiary has experienced a work stoppage.
3.18 Brokers, Finders and
Financial Advisors; Fairness Opinion. Except for Company's engagement of Xxxxxx
Xxxxxxxxxx Xxxxx LLC ("JMS") in connection with transactions
contemplated by this Agreement, neither Company nor any Company Subsidiary, nor
any of their respective officers, directors, employees or agents, has employed
any broker, finder or financial advisor in connection with the transactions
contemplated by this Agreement or in connection with any transaction other than
the Merger, or incurred any liability or commitment for any fees or commissions
to any such Person in connection with the transactions contemplated by this
Agreement or in connection with any transaction other than the Merger. The engagement letter between Company and
JMS is annexed to Section 3.18 of the Company Disclosure Schedule. JMS has provided Company with its oral
opinion to the effect that, as of the date of approval of this Agreement by the
Board of Directors of Company, the Merger consideration is fair, from a
financial point of view, to stockholders of Company.
3.19 Environmental. (a) Company and each Company Subsidiary is
in compliance in all material respects with all Environmental Regulations; (b)
there are no Hazardous Materials on, below or above the surface of, or
migrating to or from any parcel of real property nor or formerly owned or
leased by Company or any Company Subsidiary; (c) to the Knowledge of Company,
Great American has no outstanding loans secured by real property that is not in
material compliance with Environmental Regulations, upon which there are
Hazardous Materials or from or to which Hazardous Materials have migrated or
are migrating; and (d) there is no claim, action, suit, proceeding or notice
thereof before any Governmental Entity pending, or to the Knowledge of Company,
threatened, against Company or any Company Subsidiary or, to the Knowledge of
Company, concerning any real property securing Great American loans, and there
is no outstanding judgment, order, writ, injunction, decree, or award against
Company or any Company Subsidiary or, to the Knowledge of Company, any real
property securing Great American loans relating to Environmental Regulations or
Hazardous Materials. Company has
provided to Purchaser all environmental assessments or reports with respect to
each piece of real property now or formerly owned or leased by Company or any
Company Subsidiary which are in Company's possession or control.
27
3.20 Loans; Allowance for Loan Losses.
(a) The
allowance for loan losses shown on the Company Financial Statements is (with
respect to periods ended on or before September 30, 2003), and the allowance
for loan losses shown on the financial statements referred to in Section 5.7
will be (with respect to periods ending subsequent to September 30, 2003),
adequate in the reasonable opinion of management of Company in all material
respects as of the dates thereof and is in compliance with the requirements of
GAAP. Section 3.20(a) of the Company
Disclosure Schedule lists, as of the date thereof, each loan of Great American
which has been criticized or classified by Company, Great American or bank
examiners representing any Governmental Entity as "Substandard,"
"Doubtful" or "Loss" or as a "Potential Problem
Loan."
(b) Each
loan reflected as an asset in the Company Financial Statements: (i) is
evidenced by notes, agreements or other evidences of indebtedness which are
true and genuine and correct in all material respects, (ii) to the extent
required by applicable agreements to be secured, has been secured by valid
liens and security interests on the required collateral which have been
perfected, except as would not adversely affect the value of the loan or the
ability of Great American to realize upon such collateral, and (iii) is the
legal, valid and binding obligation of the obligor named therein, except as
enforcement may be limited by (A) general principles of equity or (B)
bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
3.21 Information to be Supplied. The information to be supplied by Company or
any Company Subsidiary for inclusion in the Registration Statement and/or any
information Company filed with the SEC under the Exchange Act which is
incorporated by reference into the Registration Statement will not, at the time
the Registration Statement is declared effective pursuant to the Securities Act
and as of the date the Proxy Statement/Prospectus is mailed to stockholders of
Company and up to and including the date of the Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading. The information supplied, or to be supplied,
by Company for inclusion in the Regulatory Applications will, at the time such
documents are filed with any Governmental Entity and up to and including the
date of the attainment of any required regulatory approvals or consents, be
accurate in all material respects.
3.22 Related Party Transactions. Except as disclosed in the documents filed
by Company with the SEC or in the footnotes to the Company Financial
Statements, neither Company nor any Company Subsidiary is a party to any
transaction (including any loan or other credit accommodation, but excluding
deposits in the Ordinary Course of Business) with any Affiliate of Company
(except a Company Subsidiary). Any such transactions (a) were made in the
Ordinary Course of Business, (b) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other Persons, and (c) did not involve more than
the normal risk of collectibility or present other risks or unfavorable
features. No loan or credit accommodation to any Affiliate of Company is
presently in default or, during the three-year period prior to the date of this
Agreement, has been in default or has been restructured, modified or extended. Neither Company nor Great American has
received written or, to the Knowledge of Company, unwritten notice that
principal and interest with respect to any such loan or other credit
accommodation will not be paid when due
28
or that the loan grade classification accorded such loan or credit
accommodation by Great American is inappropriate.
3.23 Representations and Warranties. No representation or warranty contained in
this Article 3 or in any other written instrument, document or agreement
delivered by Company or any Company Subsidiary to Purchaser or any Purchaser
Subsidiary pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state any material fact required to be stated herein or therein or necessary to
make the statements made herein or therein, in light of the circumstances under
which they were or are made, not false or misleading.
ARTICLE 4
COVENANTS RELATING TO CONDUCT OF COMPANY'S BUSINESS
4.1 Affirmative Covenants. Unless the prior written consent of
Purchaser shall have been obtained, and, except as otherwise contemplated
herein, from the date of this Agreement until the earlier of the Effective Time
or the termination of this Agreement:
(a) Company
and each Company Subsidiary shall:
(i) Operate
its business only in the Ordinary Course of Business;
(ii) Use
commercially reasonable efforts to preserve intact its business organizations
and assets and to maintain its material rights and franchises;
(iii) Take
no action, unless otherwise required by Law, that would (A) materially
adversely affect the ability of any of them or Purchaser to obtain any
necessary approvals of Governmental Entities required to consummate the
transactions contemplated by this Agreement, or (B) adversely affect the
ability of such party to perform its covenants and agreements under this
Agreement;
(iv) Except
as they may terminate in accordance with their terms, keep in full force and effect,
and not default in any of their material obligations under, the Company
Contracts;
(v) Keep
in full force and effect insurance coverage with responsible insurance carriers
which is reasonably adequate in coverage and amount for companies the size of
Company, or any Company Subsidiary and for the businesses and properties owned
by each and in which each is engaged, to the extent that such insurance is
reasonably available;
(vi) Use
commercially reasonable efforts to retain the customer base of Company and each
Company Subsidiary; and
(vii) Use
commercially reasonable efforts to maintain, renew, keep in full force and
effect, and preserve its business organization and material rights and
29
franchises, permits and licenses, and use commercially reasonable
efforts to maintain positive relations with its present employees, and to use
commercially reasonable efforts to maintain its existing, or substantially
equivalent, credit arrangements with banks and other financial institutions and
to continue the customer relationships of Company and each Company Subsidiary.
(b) Company
shall use commercially reasonable efforts to assist Purchaser in obtaining the
Regulatory Approvals, and Company shall provide to Purchaser or to the
appropriate Governmental Entities all information reasonably required to be
submitted in connection with obtaining such approvals.
(c) Each
of Company and the Company Subsidiaries, at its own cost and expense, shall use
commercially reasonable efforts to secure all consents and releases, if any, of
third parties necessary or desirable with respect to Company or such Company
Subsidiary for the consummation of the transactions contemplated by this
Agreement and shall comply with all applicable Laws in connection with this
Agreement and the consummation of the transactions contemplated hereby.
(d) Company
shall promptly inform Purchaser in writing of any and all facts necessary to
amend or supplement the Company Disclosure Schedule so that the representations
and warranties of Company remain true and correct; provided, however, that
before any such amendment or supplement may be deemed to be a part of the
Company Disclosure Schedule, Purchaser must have consented in writing to such
amendment or supplement.
(e) Company
shall afford Purchaser and its authorized agents and representatives reasonable
access during normal business hours to the properties, operations, books,
records, contracts, documents, loan files and other information of, or relating
to, Company and the Company Subsidiaries.
Company shall provide reasonable assistance to Purchaser in its
investigation of matters relating to Company and the Company Subsidiaries. Subject to the provisions of applicable Law,
Company shall furnish promptly to Purchaser (i) a copy of each material report,
schedule and other document filed by Company and the Company Subsidiaries with
any Governmental Entity and (ii) all other information concerning the business,
interest rate risk, properties and personnel of Company and the Company
Subsidiaries as Purchaser may reasonably request (other than documents,
materials and information related to this Agreement and the transactions
contemplated hereby), provided that no investigation pursuant to this Section
4.1 shall affect or be deemed to modify or waive any representation or warranty
made by Company in this Agreement or the conditions to the obligations of
Company to consummate the transactions contemplated by this Agreement.
(f) Subject
to the fiduciary duties of the Board of Directors of Company, Company will use
commercially reasonable efforts to exempt the transactions contemplated by this
Agreement from any applicable state takeover or similar Law or takeover or
similar provision in the Certificate of Incorporation or Bylaws of Company and
the Company Subsidiaries, including without limitation any provisions of the
Certificate of Incorporation of Company restricting the ownership or acquisition
of Company's capital stock or imposing any "fair price" or
supermajority director or stockholder vote requirements.
30
(g) Subject
to the provisions of applicable Law and the terms and conditions of this
Agreement, Company shall use commercially reasonable efforts to take, or to
cause to be taken, all actions, and to do, or to cause to be done, all things
necessary, proper, or advisable under applicable Laws to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, using commercially reasonable efforts to lift or rescind any
injunction or restraining or other order adversely affecting the ability of the
parties to consummate the transaction contemplated by this Agreement.
(h) Company
shall take, or cause to be taken, all actions necessary to terminate the
Company 1996 Stock-Based Incentive Plan Trust as of the Effective Time, such
that after payment of all benefits due to participants under the Company's 1996
Stock-Based Incentive Plan, including with respect to the accelerated vesting
of thereto for unvested stock awards thereunder and the distribution of stock
awards permitted by Section 4.2(d) of the Company Disclosure Schedule, all
remaining assets in the Trust, including Company Common Stock, shall be
returned to Company and any such Company Common Stock will become treasury
shares of Company and shall be cancelled in the Merger in accordance with
Section 1.5.
4.1 Negative Covenants. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Company
covenants and agrees it will neither do, nor agree or commit to do, nor permit
any Company Subsidiary to do or commit or agree to do, any of the following
without the prior written consent of the Chief Executive Officer or Chief
Financial Officer of Purchaser:
(a) Amend
its Certificate of Incorporation or Bylaws;
(b)
(i) Repurchase, redeem, or otherwise acquire or exchange, directly or
indirectly, any shares of its capital stock or other equity securities or any
securities or instruments convertible into any shares of its capital stock, or
any rights or options to acquire any shares of its capital stock or other
equity securities; or (ii) split or otherwise subdivide its capital stock; or
(iii) recapitalize in any way; or (iv) declare a stock dividend on the Company
Common Stock; or (v) pay or declare a cash dividend or make or declare any
other type of distribution on the Company Common Stock (except that Company may
pay the regular quarterly cash dividend in an amount consistent with past
practice and not exceeding $0.20 per share);
(c) Acquire
or dispose of direct or indirect control over any corporation, association,
firm, organization or other entity, other than in connection with (i) internal
reorganizations or consolidations involving existing Company Subsidiaries, (ii)
foreclosures in the Ordinary Course of Business and not knowingly exposing it
to liability by reason of Hazardous Materials, or (iii) transactions in its
fiduciary capacity;
(d)
(i) Except upon exercise of Company Options outstanding on the date hereof and
except as set forth on Section 4.2(d) of the Company Disclosure Schedule,
issue, sell, agree to sell, or otherwise dispose of or otherwise permit to become
outstanding any additional shares of Company Common Stock or any other capital
stock of Company or of any Company Subsidiary, or any stock appreciation
rights, or any option, warrant, conversion, call, scrip, or other right to
acquire any such stock, or any security convertible into any such stock; (ii)
sell, agree to sell, or otherwise dispose of any substantial part of the assets
or earning power of
31
Company or of any Company Subsidiary; (iii) sell, agree to sell, or
otherwise dispose of any asset of Company or any Company Subsidiary other than
in the Ordinary Course of Business for reasonable and adequate consideration;
or (iv) buy, agree to buy or otherwise acquire a substantial part of the assets
or earning power of any other Person;
(e) Incur,
or permit any Company Subsidiary to incur, any additional debt obligation or
other obligation for borrowed money except for obligations incurred in the
Ordinary Course of Business pursuant to existing Company Contracts;
(f)
(i) Grant any increase in compensation or benefits to any employee or officer
of Company or any Company Subsidiaries except for routine annual salary
increases which, in the aggregate, do not exceed 4% of the total payroll of
Company and the Company Subsidiaries during fiscal year 2003; (ii) pay any
bonus except for bonuses set forth in Section 4.2(f) of the Company Disclosure
Schedule; (iii) enter into any severance agreements with any officer or
employee of Company or any Company Subsidiary; (iv) grant any increase in fees
or other increases in compensation or other benefits to any director of Company
or any Company Subsidiary; or (v) effect any change in retirement benefits for
any class of employees or officers of Company or any Company Subsidiary, unless
such change is required by applicable Law;
(g) Hire
a new employee with an annual compensation in excess of $50,000, amend any
existing employment contract between it and any Person (unless such amendment
is required by Law); enter into or amend any indemnification agreement with any
Person; or enter into any new employment contract with any Person that Company
or any Company Subsidiary (or its successors) does not have the unconditional
right to terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time;
(h) Adopt
any new employee benefit plan or terminate or make any material change in or to
any existing employee benefit plan other than any change that is required by
Law or that, in the opinion of counsel, is necessary or advisable to maintain
the tax-qualified status of any such plan (except for a termination resulting
from Purchaser's decision not to continue any such plan);
(i) Enter
into any new service contracts with an aggregate annual expense in excess of
$50,000 or any lease agreements for any real or personal property;
(j) Make
any capital expenditure except for purchases, repairs, renewals or replacements
in the Ordinary Course of Business in an amount less than $25,000 per
individual expenditure;
(k) Cancel,
release or assign any indebtedness of any Person to Company or any Company
Subsidiary, other than in the Ordinary Course of Business and other than
pursuant to contracts or agreements in force at the date of this Agreement;
(l) Other
than terminations and renewals in the Ordinary Course of Business, enter into,
amend, renew or terminate any Company Contract or Employment Agreement or enter
into any agreement that would have been a Company Contract if it had been in
existence on the date of this Agreement;
32
(m) Settle
any claim, action or proceeding involving any liability of Company or any
Company Subsidiary for money damages in excess of $25,000 or agree in
connection with any such settlement to material restrictions upon the
operations of Company or any Company Subsidiaries;
(n) Change
its method of accounting in effect at December 31, 2002, except as required by
changes in GAAP as recommended or approved by Company's independent auditors or
as required by regulatory accounting principles or regulatory requirements;
(o) Enter
into any new activities or lines of business, or cease to conduct any material
activities or lines of business that it conducts on the date hereof, or conduct
any material business activity not in the Ordinary Course of Business;
(p) Enter
into, renew or purchase any investments in derivatives contracts; or engage in
any forward commitment, futures transaction, financial option transaction,
hedging or arbitrage transaction or covered asset trading activities;
(q) Purchase
any investment securities or make any deposits other than in the Ordinary
Course of Business;
(r) Grant
or commit to grant any new extension of credit to any officer, director or
holder of 2% or more of the outstanding Company Common Stock, or to any
corporation, partnership, trust or other entity controlled by any such Person,
if such extension of credit, together with all other credits then outstanding
to the same borrower and all affiliated persons of such borrower, would exceed
2% of the capital of Great American or amend the terms of any such credit
outstanding on the date hereof; or grant or commit to grant any new extension
of credit to any employee at below market interest rates;
(s) Terminate,
amend or renew any Lease, or enter into a lease of real property, relocate,
open or close any office, or file an application pertaining to such action with
any Government Entity, other than terminations and renewals of any Lease in the
Ordinary Course of Business;
(t) Settle
or compromise any material tax liability or agree to an extension of the
statute of limitations with respect to the assessment or determination of any
taxes;
(u) Enter
into any other material transactions other than in the Ordinary Course of
Business; or
(v) Authorize
or agree in writing or otherwise to take any of the foregoing actions.
Purchaser shall cause its authorized representatives to consider and respond to
requests for Purchaser's consent under this Section 4.2 as promptly as
practicable. Purchaser shall be deemed
to have consented to any action described in clause (g), (i) or (j) of this
Section 4.2 if no
33
authorized representative of Purchaser has responded to a written request for consent within three business days after his or her receipt thereof.
ARTICLE 5
ADDITIONAL AGREEMENTS AND COVENANTS
5.1 Regulatory Approvals.
(a) As
promptly as practicable after the date of this Agreement, Purchaser will
prepare and file all necessary documentation, to effect all applications,
notices, petitions and filings with the appropriate Governmental Entities
(collectively, the "Regulatory Applications") and to obtain the
Regulatory Approvals at the earliest practicable date and shall take such other
action as may be necessary to obtain the Regulatory Approvals at the earliest
practicable date; provided, however, that nothing in this Section 5.1 shall be
construed to obligate Purchaser to take any action to meet any condition
required to obtain prior Regulatory Approval if any such condition materially
differs from conditions customarily imposed by such Governmental Entities in
orders approving acquisitions of the type contemplated by this Agreement,
constitutes a significant impediment upon Purchaser's ability to carry on its
business or acquisition programs (as determined by Purchaser in its reasonable
discretion) or requires Purchaser to increase FCB's capital ratios to amounts
in excess of the FDIC's minimum capital ratio guidelines which may be in effect
from time to time. Purchaser shall pay
all fees and expenses relating to the preparation and filing the Regulatory
Applications and obtaining the Regulatory Approvals.
(b) Company
shall cooperate with Purchaser to effect the foregoing and will promptly
furnish Purchaser with all information about or pertaining to Company and the
Company Subsidiaries as is reasonably determined by Purchaser to be necessary
or appropriate for such filings.
Company and Purchaser shall have the right to review in advance, and
will consult the other on, in each case subject to applicable Laws relating to
the exchange of information, all the information relating to Company or
Purchaser, as the case may be, which appears in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement; provided,
however, that nothing contained herein shall be deemed to provide either party
with a right to review any information provided to any Governmental Entity on a
confidential basis in connection with the transactions contemplated
hereby. Company shall be provided with
a draft of the Regulatory Applications and all correspondence with Regulatory
Authorities relating to the Regulatory Applications and Regulatory
Approvals. Company shall have a
reasonable opportunity to review and comment on such applications and
correspondence. In exercising the
foregoing rights and obligations, each of the parties shall act reasonably and
as promptly as practicable.
(c) Purchaser
and Company shall consult with each other with respect to the obtaining of all
Regulatory Approvals and all other permits, consents, approvals and
authorizations of Governmental Entities and third parties necessary or
advisable to consummate the transactions contemplated by this Agreement. Each of the parties will keep the other
party
34
apprised of the status of the Regulatory Approvals and such other permits,
consents, approvals and authorizations.
5.2 Registration Statement. As promptly as reasonably practicable
following the date of this Agreement, Purchaser, in cooperation with Company,
shall prepare and file with the SEC a Registration Statement on Form S-4 with
respect to the shares of Purchaser Common Stock to be issued in the Merger (the
"Registration Statement").
The Registration Statement shall contain a proxy statement/prospectus
(the "Proxy Statement/Prospectus") which shall serve as the proxy
statement of Company for the Special Meeting and as the prospectus of Purchaser
for the shares of Purchaser Common Stock to be issued in the Merger. Company shall furnish Purchaser with all
information about or pertaining to Company and the Company Subsidiaries as is
reasonably determined by Purchaser to be necessary or appropriate for the
preparation of the Registration Statement and the Proxy Statement/Prospectus,
including, without limitation, any information necessary to comply with
provisions of the DGCL relating to dissenters' rights. The parties shall cooperate in responding to
and considering any questions or comments from the SEC staff regarding the
information contained or incorporated by reference in the Registration Statement. Purchaser will use commercially reasonable
efforts to cause the Registration Statement to be declared effective at the
earliest practicable date, and Purchaser will advise Company, promptly after
Purchaser receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the qualification of the
Purchaser Common Stock for offering or sale in any jurisdiction, of the initiation
or threat of any proceeding for any such purpose, or of any request by the SEC
for the amendment or supplement of the Registration Statement or for additional
information.
5.3 Special Meeting. Company shall call a special meeting of the
Company Stockholders (the "Special Meeting") to be held as soon as
practicable after the Registration Statement is declared effective by the SEC
for purposes of voting upon the adoption of this Agreement and the approval of
the transactions contemplated hereby.
Company shall use commercially reasonable efforts to solicit and obtain
the votes of the Company Stockholders in favor of the adoption of this
Agreement and the approval of the transactions contemplated hereby and, unless
and until a Subsequent Determination shall have been made after complying with
the provisions of Section 5.4, the Board of Directors of Company shall
recommend approval of such transactions by such holders. In connection with the Special Meeting,
Purchaser and Company shall cooperate in the preparation of the Proxy
Statement/Prospectus and, with the approval of each of Purchaser and Company
(which approvals will not be unreasonably withheld), the Proxy
Statement/Prospectus will be mailed to the Company Stockholders.
5.4 Acquisition Proposals. From
the date hereof until the earlier of the termination of this Agreement and the
Closing, Company shall not, nor shall Company authorize or permit any officers,
directors, employees, representatives or other agents of Company or any Company
Subsidiary to, directly or indirectly, (i) take any action to solicit, initiate
or encourage any Acquisition Proposal or (ii) engage in negotiations with, or
disclose any nonpublic information relating to Company or any Company
Subsidiary or afford access to the properties, books or records of Company or
any Company Subsidiary to, any Person that may be considering making, or has
made, an Acquisition Proposal; provided, however, that nothing contained in
this
35
Agreement shall prevent Company or the Board of Directors of Company at
any time prior to the consummation of the Merger from:
(a) furnishing
nonpublic information to, or affording access to the properties, books or
records of Company or any Company Subsidiary to, or entering into negotiations
with, any Person in connection with an unsolicited Acquisition Proposal by such
Person, if (a) Company's Board of Directors determines in good faith that such
action is necessary to comply with their fiduciary duties to the Company
Stockholders under applicable Law; (b) prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such Person,
Company's Board of Directors receives from such Person an executed
confidentiality agreement with customary terms, and (c) Company's Board of
Directors concludes in the exercise of its fiduciary duties that the
Acquisition Proposal is a Superior Proposal;
(b) taking
and disclosing to the Company Stockholders any position, and making any related
filings with the SEC, as required by Rules 14e-2 and 14d-9 under the Exchange
Act, with respect to any Alternative Transaction that is a tender offer;
provided, that Company's Board of Directors shall not recommend that the
Company Stockholders tender their shares of Company Common Stock in connection
with any such tender offer unless the Board shall have determined in good faith
that such action is necessary to comply with its fiduciary duties under
applicable Law; or
(c) if
an unsolicited Acquisition Proposal is received as described in clause (i)
above, informing the Company Stockholders that it no longer believes that the
Merger is advisable and no longer recommends approval of the Merger (a
"Subsequent Determination"), approving or recommending an Alternative
Transaction based on that unsolicited Acquisition Proposal or entering into an
Acquisition Agreement with respect to such an Alternative Transaction if (i)
Company's Board of Directors determines in good faith that such action is
necessary to comply with its fiduciary duties under applicable Law and (b)
Company's Board of Directors concludes in good faith that the Acquisition
Proposal is a Superior Proposal.
Company will promptly notify Purchaser after receipt of any Acquisition
Proposal or any request for nonpublic information relating to Company or any
Company Subsidiary or for access to the properties, books or records of Company
or any Company Subsidiary by any Person that has made an Acquisition Proposal
and will keep Purchaser reasonably informed of the status and details of any
such Acquisition Proposal, indication or request. Such written notice shall specify the material terms and
conditions of the Acquisition Proposal, identify the Person making the
Acquisition Proposal and state that the Board of Directors of Company intends
to make, or is considering making, a Subsequent Determination. For a period of three business days
following such notice, Company shall not take any action with respect to the
Acquisition Proposal and shall provide an opportunity for Purchaser to propose
such adjustments to the terms and conditions of this Agreement as would enable
the Board of Directors of Company to proceed with the transactions contemplated
herein on such adjusted terms.
36
5.5 Employees and Employee Benefits.
(a) Upon
consummation of the Merger and the Bank Merger, all employees of Company and
Great American shall be deemed to be at-will employees of Purchaser and FCB,
respectively, subject only to, and to the extent provided in, those written
employment agreements which have been disclosed on the Company Disclosure
Schedule. At the discretion of
Purchaser, subject to the
requirements of the Code and except as expressly set forth in this Section 5.5,
from and after the Effective Time, all Company Benefit Plans shall continue to
be maintained separately, or be consolidated, frozen or terminated. Employees of Company and Great American who
continue as employees of Purchaser and FCB ("Continuing Employees")
shall be entitled to participate, commencing at the Effective Time, on an
equitable basis in the same benefit plans, programs or policies as are
generally available to employees of Purchaser or FCB, as the case may be, of
similar rank and status. For purposes
of eligibility, vesting, accrual of benefits (but not for benefit accrual
purposes under any qualified defined benefit plan maintained by Purchaser) and
determination of the level of benefits under any employee benefit plans,
arrangements or policies (including, without limitation, severance, vacation,
sick and other leave policies) maintained by Purchaser, Continuing Employees
will be credited with prior years of service with Company or Great
American. Purchaser and FCB shall give
service credit to Continuing Employees (and their dependents) with respect to
the satisfaction of the limitations as to pre-existing condition exclusions,
evidence of insurability requirements and waiting periods for participation and
coverage that are applicable under the employee welfare benefit plans (within
the meaning of Section 3(1) of ERISA) of Purchaser or FCB, equal to the credit
that any such employee had received as of the Effective Time towards the
satisfaction of any such limitations and waiting periods under the comparable
employee welfare benefit plans of Company or Company Subsidiaries and shall
waive preexisting condition limitations to the same extent waived under the
corresponding plans of Company or Company Subsidiaries. Nothing contained herein shall obligate
Purchaser to provide severance or other benefits that are based on years of
service with duplicative benefits for the same years of service.
(b) No
Continuing Employee shall be subject to any waiting period under any welfare
benefit plan of Purchaser to the extent that such period is longer than the
period, if any, to which such Continuing Employee was subject under the
applicable welfare benefit plan of Company.
Continuing Employees shall not be subject to any waiting period under a
welfare benefit plan of Purchaser if the applicable waiting period under the
corresponding Company plan had been satisfied as of the Effective Time. To the extent that the initial period of
coverage for Continuing Employees under any plan of Purchaser that is an
"employee welfare benefit plan" as defined in Section 3(1) of ERISA
is not a full twelve (12) month period of coverage, Continuing Employees shall
be given full credit under the applicable welfare plan for any deductibles and
co-insurance payments made by such Continuing Employees under the corresponding
welfare plan of Company during the balance of such twelve (12) month period of
coverage. Nothing contained herein
shall obligate Purchaser to provide or cause to be provided any duplicative
benefits.
(c) The
Company Employee Stock Ownership Plan ("ESOP") shall be terminated as
of the Effective Time. The Board of
Directors of Company shall use reasonable commercial efforts to cause the
trustees of the ESOP, to the extent consistent with the fiduciary
37
duties of the trustees under ERISA, to make such elections under
Article 1 of this Agreement with respect to unallocated shares of Company
Common Stock held by the ESOP as are necessary to obtain a sufficient amount of
cash to repay in full the then outstanding ESOP indebtedness. The Merger consideration received by the
ESOP trustees with respect to the unallocated shares of Company Common Stock
held by the ESOP shall be first applied by the ESOP trustees to the full
repayment of the ESOP loan. The
remaining shares of Purchaser Common Stock and cash received by the ESOP shall
be allocated to the ESOP participants in accordance with the terms of the ESOP
and applicable Laws as soon as practicable after the Effective Time. In connection with the termination of the
ESOP, Company shall promptly apply to the IRS for a favorable determination
letter on the tax-qualified status of the ESOP on terminations and any
amendments made to the ESOP in
connection with its termination or otherwise, if such amendments have not
previously received a favorable determination letter from the IRS with respect
to their qualification under Code Section 401(a). Any amendments to the ESOP requested by the IRS prior to the
Effective Time shall be adopted by Company and any amendments requested by the
IRS after the Effective Time shall be promptly adopted by Purchaser. Any and all distributions from the ESOP
after its termination shall be made consistent with the aforementioned
determination letter from the IRS.
Prior to the Effective Time, Company shall make contributions to, and
payments on the loan of the ESOP consistent with past practices on regularly
scheduled payment dates.
(d) The
Great American Federal 401(k) Plan (the "Company 401(k) Plan") will
be merged with and into the Purchaser's 401(k) Plan within an administratively
reasonable time after the Effective Date.
Continuing Employees shall be entitled to participate the Purchaser's
401(k) plan pursuant to the terms of that plan within an administratively reasonable
period of time after the Effective Date, as provided in Section 5.5(a)
above. No contributions will be made to
the Company 401(k) Plan after the Effective Date.
(e) From
the Effective Time, Purchaser agrees to honor the terms of the severance,
employment, change of control and deferred compensation agreements set forth in
Sections 3.16(a) and 3.17(b) of the Company Disclosure Schedule (collectively,
the "Post-Termination Payments").
Purchaser acknowledges and agrees that the consummation of the Merger
shall constitute a "Change in Control" for purposes of such
agreements.
(f) From
and after the Effective Time, Purchaser agrees to maintain in full force and
effect the bank-owned life insurance program for Company directors (the
"Company Director BOLI") and the bank-owned life insurance program
for Company officers (the "Company Officer BOLI"). Purchaser agrees that the Merger will
constitute a "Change in Control" for purposes of the Company Director
BOLI. Purchaser agrees to continue the
Company Officer BOLI in accordance with its terms for the remainder of the life
of each executive officer that is participating in the Company Officer BOLI at
the Effective Time; provided, that if it is determined that the Company Officer
BOLI is not permitted by Law with respect to any participant then Purchaser may
terminate the Company Officer BOLI with respect to such participant and
Purchaser shall provide such participant with a substantially equivalent life
insurance benefit.
(g) As
of the Effective Time, Company's Board of Directors shall take action to
immediately vest all Awards under the 1996 Stock-Based Incentive Plan
("Option
38
Plan"), terminate the Option Plan and its related trust, and make
all final distributions in accordance with the terms of the Option Plan. Any remaining Company Common Stock in the
Option Plan shall be returned to Company.
(h) Prior
to the Effective Time, the Board of Directors of Great American shall take such
actions as are reasonably necessary to cause the Great American Employee
Severance Compensation Plan to terminate effective as of a date that is one
year and one day after the Effective Time.
Subject to the preceding sentence, Purchaser agrees to assume the
obligations of Great American under the and to honor the terms of such plan.
(i) Except
as expressly provided in this Section 5.5, Purchaser may amend or terminate any
Company Benefit Plan at any time in accordance with its terms.
5.6 Indemnification of Company Directors, Officers and
Other Persons.
(a) From
and after the Effective Time, Purchaser shall jointly and severally indemnify
and hold harmless each person who is now, or has been at any time prior to the
date hereof, or who becomes prior to the Effective Time, a director, officer,
employee or agent of Company or any Company Subsidiary (the "Covered
Parties"), against all claims, losses, liabilities, damages, judgments,
fines and reasonable fees, costs and expenses, including attorneys' fees and
disbursements (collectively, "Costs"), incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to (i) the fact
that the Covered Party is or was an officer, director, employee or agent of
Company or any Company Subsidiary or was serving as an officer, director or
trustee of another Person at the request of Company or any Company Subsidiary
or (ii) matters existing or occurring at or prior to the Effective Time
(including this Agreement and the transactions and actions contemplated
hereby), whether asserted or claimed prior to, at or after the Effective Time,
to the fullest extent permitted under applicable Law. Each Covered Party will be entitled to advancement of expenses
incurred in the defense of any claim, action, suit, proceeding or investigation
from Purchaser within ten business days of receipt by Purchaser from the
Covered Party of a request therefore, provided, that any person to whom
expenses are advanced provides an undertaking, to the extent required by the
DGCL, to repay such advances if it is ultimately determined that such person is
not entitled to indemnification.
(b) Subject
to the next sentence, the Surviving Corporation shall maintain, and Purchaser
shall cause the Surviving Corporation to maintain, at no expense to the
beneficiaries, in effect for three years from the Effective Time, the current
policies of the directors' and officers' liability insurance maintained by Company
with respect to matters existing or occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement), so long as the
aggregate premium therefore would not be in excess of 300% of the higher of (i)
the last annual premium paid prior to the date of this Agreement or (ii) the
last annual premium paid prior to the Closing Date (the "Maximum
Premium"). If the Company's
existing insurance expires, is terminated or canceled during such three year
period or exceeds the Maximum Premium, the Surviving Corporation shall obtain
as much directors' and officers' liability insurance as can be obtained for the
remainder of such period for an annualized premium not in excess of the Maximum
Premium, on terms and conditions no less advantageous to the Covered Parties
than the Company's existing directors' and officers' liability insurance.
39
(c) Notwithstanding
anything herein to the contrary, if any claim, action, suit, proceeding or investigation
(whether arising before, at or after the Effective Time) is made against any
Covered Party, on or prior to the third anniversary of the Effective Time, the
provisions of this Section 5.6 shall continue in effect until the final
disposition of such claim, action, suit, proceeding or investigation.
(d) The
covenants contained in this Section 5.6 are intended to be for the benefit of,
and shall be enforceable by, each of the Covered Parties and their respective
heirs and legal representatives and shall not be deemed exclusive of any other
rights to which a Covered Party is entitled, whether pursuant to Law, contract
or otherwise.
(e) In
the event that Purchaser or any of its successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision shall be made so that
the successors or assigns of Purchaser Parent shall succeed to the obligations
set forth in this Section 5.6.
5.7 Consents. Company and the Company Subsidiaries will use commercially
reasonable efforts to, and Purchaser and the Purchaser Subsidiaries will
cooperate in good faith with Company and the Company Subsidiaries to, obtain
the consents, authorizations, approvals or notices listed in Section 3.3(b) of
the Company Disclosure Schedule.
Without limiting the generality of the foregoing, Purchaser agrees upon
the reasonable request of Company to provide financial and other information to
any Person from whom a consent is required.
5.8 Access. Upon notice of at least 48 hours, Purchaser shall afford Company
and its representatives reasonable access, during normal business hours
throughout the period up to the Effective Time, to all of the properties, books
and records of Purchaser and FCB; provided, that such representatives shall
execute a confidentiality agreement in such form as Purchaser may require to
prohibit the use or disclosure of any information concerning Purchaser or FCB
without the prior consent of Purchaser.
5.9 Subsequent Interim and Annual Financial Statements. As soon as reasonably available, but in no
event more than 45 days after the end of each fiscal quarter (other than the
fourth fiscal quarter, as to which the time period shall be 75 days), Company
will deliver to Purchaser its unaudited financial statements as of the end of
each such period. As soon as they are
available, Company will deliver to Purchaser its audited financial statements
following the end of its fourth quarter.
5.10 NYSE. Purchaser shall use commercially reasonable efforts to have the
shares of Purchaser Common Stock which are to be issued in exchange for the
Stock Election Shares approved for listing on the NYSE.
5.11 Accruals and Reserves. At the request of Purchaser, subject to any
limitations imposed by Law and the fiduciary duties of the Board of Directors
of Company, Company shall establish such additional accruals and reserves as
may be reasonably necessary to conform Company's accounting and credit loss
reserve practices and methods to those of Purchaser;
40
provided, however, that Company shall not be required to take such
action prior to the receipt of all Regulatory Approvals and stockholder approval;
provided further, however, that no such additional accruals and reserves will
be required to be made more than two (2) business days prior to the Closing
Date. No such additional accruals or
reserves made by Company pursuant to this Section 5.11 shall constitute or be
deemed to be a breach, violation of or failure to satisfy any representation,
warranty, covenant, agreement, condition or other provision of this Agreement
or otherwise be considered in determining whether any such breach, violation or
failure to satisfy shall have occurred.
The recording of any such adjustments shall not be deemed to imply any
misstatement of previously furnished financial statements or information and
shall not be construed as concurrence of Company or its management with any
such adjustments.
5.12 Affiliate Agreements. Company will cause each person listed on
Section 3.2(d) of the Company Disclosure Schedule to execute and deliver to
Purchaser on or before the mailing of the Proxy Statement/Prospectus an
agreement in the form attached as Exhibit B.
5.13 Section 16 Matters. Prior to the Effective Time, Purchaser and
Company shall use commercially reasonable efforts to cause any dispositions of
Company equity securities (including derivative securities with respect to
Company equity securities) or acquisitions of Purchaser equity securities
(including derivative securities with respect to Purchaser equity securities)
resulting from the transactions contemplated by this Agreement by each officer
or director of Purchaser or Company who is subject to Section 16 of the
Exchange Act (or who will become subject to Section 16 of the Exchange Act as a
result of the transactions contemplated hereby) with respect to equity
securities of Purchaser or Company to be exempt from Section 16(b) of the
Exchange Act under Rule 16b-3 promulgated thereunder. Company agrees to furnish Purchaser promptly with all requisite
information necessary for Purchaser to take the action contemplated by this Section
5.12.
5.14 Appointment to Purchaser Board. Purchaser will cause a member of Company's
Board of Directors selected by Company and reasonably acceptable to Purchaser
to be appointed to Purchaser's Board of Directors as of the Effective Time and,
subject to fiduciary obligations under applicable Law, shall cause such
appointee to be nominated for election as a director of Purchaser at the first
annual meeting of shareholders of Purchaser with a proxy mailing date after the
Effective Time.
5.15 Regional Advisory Board. FCB has formed a Pittsburgh Regional
Advisory Board (the "Advisory Board") in furtherance of Purchaser's
efforts to expand its presence in the Pittsburgh metropolitan area. At the Effective Time, all members of
Company's Board of Directors will be appointed to the Advisory Board to assist
in and advise with respect to integration of the operations of Great American
with and into those of FCB and to advise with respect to the operations of FCB
in the Pittsburgh region. The Advisory
Board will be maintained for a term of at least 12 months from the Effective
date. The Advisory board will meet at
least quarterly during its term and may meet more frequently at the reasonable
request of Purchaser. Each member of
the Advisory Board will be paid a quarterly retainer of $4,200 and a fee of
$400 for each meeting of the Advisory Board that he or she attends. FCB will have no obligation to continue the
services of any advisory director who, in the reasonable judgment of FCB, acts
in a manner detrimental to FCB. In the
event that FCB terminates, suspends or
41
disbands the Advisory Board, fails to require or request the attendance
of a member with respect to at least four meetings of the Advisory Board and/or
committee thereof during the term specified above, or removes a member of the
Advisory Board other than because such member acted in a manner detrimental to
FCB, in each case prior to the end of the 12-month period contemplated by this
Section 5.13, any member affected by any such action or failure shall
nonetheless be paid the full amount of unpaid fees that would have been due
such member during the remainder of the 12-month term specified above.
5.16 Reasonable Efforts to Close. Subject to the terms and conditions of this
Agreement, Purchaser and Company agree to use commercially reasonable efforts
to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things necessary, proper, or advisable under applicable Laws to
satisfy the conditions to closing contained herein and to consummate and make
effective the transactions contemplated hereby at the earliest practicable date
following the execution of this Agreement, including, without limitation, using
commercially reasonable efforts to lift or rescind any injunction or
restraining or other order adversely affecting the ability of the parties to
consummate the transaction contemplated by this Agreement.
5.17 Tax Treatment. Each party shall use its commercially
reasonable efforts to cause the Merger to qualify, and will not take any action
or fail to take any action that would result in the Merger not qualifying, as a
"reorganization" within the meaning of Section 368 of the Code.
5.18 Confidentiality. Notwithstanding anything to the contrary in this Agreement or in
the Confidentiality Agreement, any party to this Agreement (as well as their
representatives) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions contemplated by
this Agreement, and all materials of any kind (including opinions or other tax
analyses) related to such tax treatment and tax structure; provided, that this
sentence shall not permit any person making such disclosure to disclose the
name of, or other information that would identify, any party to such
transaction or to disclose confidential commercial or strategic information, or
other proprietary information regarding such transaction not related to such
tax treatment and tax structure; provided further, that the disclosure
authorization granted under this sentence shall not be effective with respect
to any person until the earliest of (i) the date of a public announcement (if
any) of discussions relating to such transaction involving such person, (ii)
the date of a public announcement (if any) of any such transaction involving
such person or (iii) the date of the execution of a definitive agreement (if
any) to enter into any such transaction involving such person, it being
understood that there are no limits at any time on the ability of any party to
consult its own independent tax advisor regarding the tax treatment or tax
structure of the transaction.
42
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Company.
Unless waived in writing by Company, all of the obligations of Company under
this Agreement are subject to the fulfillment prior to or at the Closing of
each of the following conditions:
(a) Representations
and Warranties. The representations and warranties of Purchaser contained
in Section 2, if qualified by a reference to materiality, shall be true, and if
not so qualified, shall be true in all material respects, as of the date of
this Agreement and as of the Effective Time with the same effect as though made
at the Effective Time;
(b) Performance
of Agreements and Covenants. Purchaser shall have performed and complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it prior to or at the Effective
Time;
(c) Documents.
In addition to the other deliveries of Purchaser described elsewhere in this
Agreement, Company shall have received the following documents and instruments:
(i) a
certificate signed by the Secretary or an assistant secretary of Purchaser
dated as of the Closing Date certifying that:
(A) Purchaser's
Board of Directors has duly adopted resolutions (copies of which shall be
attached to such certificate) approving this Agreement and authorizing the
consummation of the transactions contemplated by this Agreement and certifying
that such resolutions have not been amended or modified and remain in full
force and effect;
(B) each
person executing this Agreement on behalf of Purchaser is an officer of
Purchaser holding the office or offices specified therein, with full power and
authority to execute this Agreement and any and all other documents in
connection with the Merger, and that the signature of each person set forth on
such certificate is his or her genuine signature; and
(C) the
charter documents of Purchaser attached to such certificate remain in full
force and effect.
(ii) a
certificate signed by a duly authorized officer of Purchaser stating that the
conditions set forth in Section 6.1(a) and Section 6.1(b) of this Agreement
have been fulfilled; and
(d) Tax
Opinion. Company shall have
received an opinion of counsel to Company, dated as of the Closing Date, to the
effect that (i) the Merger will qualify as a reorganization under Section 368
of the Code, (ii) no gain or loss will be recognized by either Company or
Purchaser as a result of the Merger, (iii) no gain or loss for federal income
tax purposes will be recognized by a Company Stockholder upon the exchange of Company
Common Stock solely for Purchaser Common Stock, (iv) the basis of Purchaser
Common Stock
43
received by a Company Stockholder as a result of the Merger will be the
same as the basis of the Company Common Stock surrendered in exchange therefor,
(v) the holding period of the Purchaser Common Stock received by a Company
Stockholder as a result of the Merger will include the holding period of the
Company Common Stock surrendered in exchange therefor (provided that
such Company Common Stock is held as a capital asset by the Company Stockholder
at the Effective Time), and (vi) the payment of cash to a Company Stockholder
in lieu of fractional shares of Purchaser Common Stock by Purchaser will be
treated as if the fractional shares were distributed as part of the exchange
and then redeemed by Purchaser, and the cash payment will be treated as having
been received as distributions in full payment in exchange for the fractional
shares redeemed and will be taxed as provided in Section 302(a) of the Code. In rendering such opinion, Company's counsel
may require and rely upon representations and covenants, including those
contained in certificates of officers of Purchaser, Company and others,
reasonably satisfactory in form and substance to such counsel. If Company's counsel is not willing to
provide such opinion, Purchaser may request that Purchaser's counsel provide
such opinion to Company in order to satisfy this condition of closing.
6.2 Conditions to the Obligations of Purchaser. Unless waived in writing by Purchaser, all
of the obligations of Purchaser under this Agreement are subject to the
fulfillment prior to or at the Closing of each of the following conditions:
(a) Representations
and Warranties. The representations and warranties of Company contained in
Section 3, if qualified by a reference to materiality, shall be true, and if
not so qualified, shall be true in all material respects, as of the date of
this Agreement and as of the Effective Time with the same effect as though made
at the Effective Time (except that representations and warranties that by their
terms speak specifically as of the date of this Agreement or some other date
shall be true and correct as of such date);
(b) Performance
of Agreements and Covenants. Company shall have performed and complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it prior to or at the Effective
Time;
(c) Documents. In addition to the documents described
elsewhere in this Agreement, Purchaser shall have received the following
documents and instruments:
(i) a
certificate signed by the Secretary or an assistant secretary of Company dated
as of the Closing Date certifying that:
(A) Company's
Board of Directors has duly adopted resolutions (copies of which shall be
attached to such certificate) approving the substantive terms of this Agreement
and authorizing the consummation of the transactions contemplated by this
Agreement and certifying that such resolutions have not been amended or
modified and remain in full force and effect;
(B) the
Company Stockholders have duly adopted resolutions (copies of which shall be
attached to such certificate) approving and adopting this
44
Agreement and the Merger and certifying that such resolutions have not
been amended or modified and remain in full force and effect;
(C) each
person executing this Agreement on behalf of Company is an Officer of Company,
as the case may be, holding the office or offices specified therein, with full
power and authority to execute this Agreement and any and all other documents
in connection with the Merger, and that the signature of each person set forth
on such certificate is his or her genuine signature; and
(D) the
charter documents of Company attached to such certificate remain in full force
and effect; and
(ii) a
certificate signed by a duly authorized officer of Company stating that the
conditions set forth in Sections 6.2(a), (b), (d), (e) and (f) of this
Agreement have been satisfied;
(d) Required
Consents. All material notices and
consents described in Section 3.3(b) of the Company Disclosure Schedule shall
have been given or obtained.
(e) Dissenters
Rights. The aggregate number of
shares of Company Common Stock that are entitled to vote at the Special Meeting
and are Dissenting Shares shall not exceed ten percent (10%) of the total
number of issued and outstanding shares of Company Common Stock held of record
as of the record date for the Special Meeting and entitled to vote on the
Merger at such meeting.
(f) Accruals
and Reserves. Company shall have established any accruals and reserves
described in Section 5.11; and
(g) Director
and Officer Resignations. Company
shall have procured and delivered to Purchaser the written resignations of each
of the directors and executive officers of Company and the Company Subsidiaries
in form and substance reasonably acceptable to Purchaser (none of which
resignations shall prejudice or limit any rights such persons would otherwise
have under any contract or benefit plan of Company).
6.3 Conditions to Obligations of All Parties. The obligation of each party to effect the
transactions contemplated hereby shall be subject to the fulfillment, at or
prior to the Closing, of the following conditions:
(a) No
Pending or Threatened Claims. No claim, action, suit, investigation or
other proceeding shall be pending or threatened before any court or
Governmental Entity which presents a substantial risk of the restraint or
prohibition of the transactions contemplated by this Agreement or the obtaining
of material damages or other relief in connection therewith;
(b) Regulatory
Approvals. The parties hereto shall have received all applicable regulatory
approvals for the consummation of the transactions contemplated herein and all
waiting periods incidental to such approvals or notices given shall have
expired;
45
(c) Effective
Registration Statement. The Registration Statement shall have become
effective and no stop order or other order suspending the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been initiated or threatened by the SEC or any other Governmental Entity;
(d) Stockholder
Vote. The Company Stockholders shall have approved and adopted this
Agreement and the Merger by the applicable requisite vote; and
(e) NYSE
Listing. The shares of Purchaser
Common Stock that shall be issued to the stockholders of Company upon
consummation of the Merger shall have been authorized for listing on the NYSE,
subject to official notice of issuance.
ARTICLE 7
TERMINATION
7.1 Termination. This Agreement and the Plans of Merger may
be terminated at any time prior to the Closing (whether before or after
approval and adoption of the Agreement and the Merger by the Company
Stockholders), as follows:
(a) By
mutual consent in writing of the parties;
(b) By
Purchaser or Company:
(i) In
the event the Closing shall not have occurred by September 30, 2004, unless the
failure of the Closing to occur shall be due to the breach of this Agreement by
the party seeking to terminate this Agreement; provided, however, that, if
Purchaser and FCB shall have filed all Regulatory Applications within sixty (60) days of the date hereof, and if
the Closing shall not have occurred solely because of a delay in the approval
of any such application, then Purchaser may, by written notice to Company,
extend the date referenced in the first sentence of this Section 7.1(b)(i) to
December 31, 2004;
(ii) Upon
denial of any Regulatory Approval necessary for the consummation of the Merger
or the Bank Merger (or should such Regulatory Approval be conditioned upon a
substantial deviation from the transactions contemplated), unless the denial of
such Regulatory Approval (or the conditioning of such Regulatory Approval)
shall be due to the breach of this Agreement by the party seeking to terminate
this Agreement; provided, however, that either Purchaser or Company may, upon written
notice to the other, extend the date set forth in Section 7.1(b)(i) for only
one sixty (60) day period to appeal such denial or condition(s), provided that
such appeal has been made within ten (10) business days of the receipt thereof;
or
(iii) If
the Company Stockholders do not approve and adopt this Agreement and the Merger
at the Special Meeting or any adjournment thereof.
(c) By
Purchaser:
46
(i) if
Company's Board of Directors shall have (a) failed to include in the Proxy
Statement/Prospectus its recommendation without modification or qualification
that the Company Stockholders approve this Agreement and the Merger, (b)
approved or recommended or entered into any agreement providing for an
Alternative Transaction, (c) withdrawn, modified or qualified its
recommendation of this Agreement or the Merger in a manner adverse to the
interests of Purchaser, (d) failed to call and convene the Special Meeting in
accordance with Section 5.3, or (e) resolved to do any of the foregoing; or
(ii) if
Company has breached any representation, warranty or covenant contained in this
Agreement, which breach would result in the nonfulfillment of one or more of
the conditions to the obligations of Purchaser set forth in Section 6.2,
Purchaser has notified Company of the breach, and either such breach is
incapable of being cured or, if capable of being cured, has not been cured
within 30 days after the notice of breach.
(d) By
Company:
(i) if
Purchaser has breached any representation, warranty or covenant contained in
this Agreement, which breach would result in the nonfulfillment of one or more
of the conditions to the obligations of Company set forth in Section 6.1,
Company has notified Purchaser of the breach, and either such breach is
incapable of being cured or, if capable of being cured, has not been cured
within 30 days after the notice of breach; or
(ii) if,
after it has received a Superior Proposal in compliance with Section 5.4 and
otherwise complied with all of its obligations under Section 5.4, Company's
Board of Directors determines in good faith to terminate this Agreement, after
concluding that such action is necessary to comply with its fiduciary duties to
the Company Stockholders under applicable Law.
7.2 Effect of Termination. In the event that this Agreement should be
terminated pursuant to Section 7.1 hereof, all further obligations of the
parties under this Agreement, other than the provisions of Section 7.3, shall
terminate without further liability of any party to another; provided, however,
that a termination under Section 7.1 hereof shall not relieve any party of any
liability for a willful or intentional breach of this Agreement, or be deemed
to constitute a waiver of any available remedy for any such willful or
intentional breach.
7.3 Termination Fee.
(a) Upon
Termination. If (i) Purchaser shall
terminate this Agreement pursuant to clause (i) of Section 7.1(c) or (ii)
Company shall terminate this Agreement pursuant to clause (ii) of Section
7.1(d), then, in either case, Company shall pay to Purchaser, within five
business days of such termination, a fee, in cash, in an amount equal to 4% of
the product of the number of shares of outstanding Company Common Stock as of
the date of termination times the Per Share Cash Consideration (the
"Termination Fee"), plus the
out-of-pocket expenses reasonably incurred by Purchaser in connection with the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby and related hereto (the "Transaction Expenses").
47
(b) Upon Subsequent Transaction. If (i) this Agreement is terminated by either party pursuant to clause (iii) of Section 7.1(b), (ii) an Acquisition Proposal (other than by Purchaser) is pending at the time of the Special Meeting and (iii) with 12 months after the date of the Special Meeting, Company shall consummate an Alternative Transaction, then Company shall pay to Purchaser on demand an amount in cash equal to the Termination Fee plus the Transaction Expenses; provided that no such amount shall be payable to the extent that the Termination Fee and Transaction Expenses were paid under Section 7.3(a).
ARTICLE 8
MISCELLANEOUS
8.1 Survival. The representations, warranties, covenants
and agreements made in this Agreement or in any instrument, agreement,
certificate or other document delivered pursuant to this Agreement shall not
survive the Closing or any termination of this Agreement except that (i) the
provisions of Sections 1.10, 1.11 and 1.12 shall survive the Closing, (ii) the
provisions of Sections 7.2 and Section 7.3 shall survive any termination of
this Agreement, (iii) the provisions of this Article 8 shall survive the
Closing and any termination of this Agreement, and (iv) the covenants that by
their terms are to be performed by either party after the Effective Time or any
termination of this Agreement shall survive the Closing or such termination.
8.2 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be sent by facsimile, hand delivery or
reputable overnight courier. The
facsimile numbers and addresses of the parties set forth below shall be used
for the delivery of notices unless and until a party changes its facsimile
number or address for such purposes by notice to the other parties. Each such notice or other communication
shall be effective (i) if given by facsimile, when transmission of the
facsimile is confirmed by the sender's facsimile machine, (ii) if given by
reputable overnight courier, one business day after being delivered to the
courier or (iii) if given by any other means, when actually received.
|
If to Company: |
GA Financial, Inc. |
|
|
0000 Xxxxxxxx Xxxxxxxxx |
|
|
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 |
|
|
Fax: 000-000-0000 |
|
|
Attn: Xxxx Xxxx |
|
With a copy to: |
Xxxx Xxxxx LLP |
|
|
000 Xxxxx Xxxxxx |
|
|
Xxxxxxxxxx, XX 00000 |
|
|
Fax: 000-000-0000 |
|
|
Attn: Xxxxxxx X. Xxxxxxx |
|
If to Purchaser: |
First Commonwealth Financial Corporation |
|
|
Old Courthouse Square |
|
|
00 Xxxxx Xxxxx Xxxxxx |
|
|
Xxxxxxx, Xxxxxxxxxxxx 00000 |
|
|
Fax: 000-000-0000 |
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|
|
Attn: Xxxx X. Xxxxx |
|
With a copy to: |
Xxxxxxx & Xxxxxx L.L.C. |
|
|
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000 |
|
|
Xxxxxx, Xxxxxxxx 00000 |
|
|
Fax: 000-000-0000 |
|
|
Attn: Xxxxxx X. Xxxxx, Xx. |
or to such other address as any party hereto may hereafter designate to
the other parties in writing.
8.3 Jurisdiction; Venue. Each of the parties hereto (i) agrees that
any legal action or proceeding with respect to any dispute that arises out of
this Agreement or any of the transactions contemplated hereby shall be brought
in the state or federal courts of appropriate subject matter jurisdiction in
Pittsburgh, Pennsylvania and (ii) hereby submits itself to the exclusive
personal jurisdiction of such courts. Each
party waives any objection to venue in any such court.
8.4 Amendments and Supplements. At any time prior to the Closing Date
(whether before or after approval and adoption of the Agreement and the Merger
by the Company Stockholders), this Agreement may be amended or supplemented by
a written instrument signed by Purchaser and FCB and Company and Great
American; provided that, after approval and adoption of this Agreement and the
Merger by the Company Stockholders, without the affirmative vote of the holders
of shares of Company Common Stock representing a majority of the votes that may
be cast by the holders of all then outstanding shares of Company Common Stock,
Company will not enter into any amendment to this Agreement that would (i) (a)
alter or change the amount or kind of shares, securities, cash, property and/or
rights to be received in exchange for or on conversion of all or any of the
Company Common Stock, (b) alter or change any term of the Articles of
Incorporation of the Surviving Corporation to be effected by the Merger, or (c)
alter or change any of the terms and conditions of this Agreement if such
alteration or change would materially adversely affect the holders of shares of
Company Common Stock, or (ii) waive any condition set forth in Section 6.1 or
6.3 if such waiver would materially adversely affect the holders of shares of
Company Common Stock.
8.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania without
giving effect to any choice of law or conflict of laws rule or provision that
would cause the application of the domestic substantive laws of any other
jurisdiction.
49
8.6 Entire Agreement, Assignability, Etc. This Agreement (i) constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the
transactions and matters contemplated hereby (other than the Confidentiality Agreement),
(ii) is not intended to confer any right or remedies upon any Person other
than the parties hereto and the Company Stockholders (except for the rights and
remedies available to (A) current and former employees of Company and the
Company Subsidiaries under Section 5.5, and (B) the Covered Parties under
Section 5.15), and (iii) shall not be assignable by either party without
the prior written consent of the other party.
8.7 Exclusivity of Representations. Company has not and shall not be deemed to
have made to Purchaser any representation or warranty other than as expressly
made by Company in Article 3. Purchaser
have not and shall not be deemed to have made to Company any representation or
warranty other than as expressly made by Purchaser in Article 2.
8.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute but one and the same instrument. The signatures of the parties on this
Agreement may be delivered by facsimile and any such facsimile signature shall
be deemed an original.
8.9 Publicity. As promptly as practicable following the
execution of this Agreement, Company and Purchaser shall issue a joint press
release announcing the transactions contemplated hereby, which shall be
reasonably acceptable to Company and Purchaser. Following that release and prior to the consummation of the
Merger, except as required by Law or any listing agreement with a securities
exchange, neither Company nor Purchaser nor any Company Subsidiary or Purchaser
Subsidiary will, with respect to the transactions contemplated hereby, issue
any press release or make any public statements or mail any communications or
letters to their respective shareholders generally, except with the prior
written consent of the other party or as otherwise permitted by this
Agreement. With respect to any
communication believed to be required by Law or any listing agreement with a
securities exchange, the party making such communication agrees to use its best
efforts to provide a copy of the text of such communication to the other party
prior to its release and to afford the other party a reasonable opportunity to
review and comment thereon.
8.10 Headings; Terms. The section headings contained in this
Agreement are for convenience only and will not affect in any way the meaning
or interpretation of this Agreement.
Defined terms will have the meanings specified, applicable to both
singular and plural forms, for all purposes of this Agreement. All pronouns (and any variation) will be
deemed to refer to the masculine, feminine or neuter, as the identity of the Person
may require. The singular or plural
includes the other, as the context requires or permits. The word include (and any variation) is used
in an illustrative sense rather than a limiting sense. The word "day" means a calendar
day, unless a business day is specified.
All references to "Sections" are to sections of this Agreement
unless indicated otherwise.
8.11 Severability. The invalidity or unenforceability of any
term or provision of this Agreement shall not affect the validity or
enforceability of the remaining terms and provisions hereof.
50
8.12 Waivers. No waiver by either party of any default,
misrepresentation or breach of warranty or covenant hereunder will be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence, and no waiver will be
effective unless set forth in writing and signed by the party against whom such
waiver is asserted.
8.13 Payment of Expenses. Except as otherwise set forth in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, Purchaser and Company shall each pay its own fees and expenses
(including, without limitation, legal fees and expenses) incurred by it in
connection with the transactions contemplated hereunder.
8.14 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties
and no presumption or burden of proof will arise favoring or disfavoring a
party by virtue of the authorship of any of the provisions of this Agreement.
8.15 Remedies Cumulative. All remedies provided in this Agreement, by
Law, equity or otherwise, shall be cumulative and not alternative.
[Signature page follows.]
51
IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered this Agreement as of the date first written above.
FIRST
COMMONWEALTH FINANCIAL
CORPORATION
By:_/S/
XXXXXX X. O'DELL______________
Name: Xxxxxx
X. O'Dell
Title: President
and Chief Executive Officer
FIRST
COMMONWEALTH BANK
By:_/S/
XXXXXX X. XXXXXXXXX _____
Name: Xxxxxx
X. Xxxxxxxxx
Title: Director
GA
FINANCIAL, INC.
By:_/S/
XXXX X. KISH__________________
Name: Xxxx
X. Xxxx
Title: Chairman
of the Board and Chief
Executive
Officer
GREAT
AMERICAN FEDERAL SAVINGS
AND
LOAN ASSOCIATION
By:_/S/
XXXX X. KISH__________________
Name: Xxxx
X. Xxxx
Title: Chairman
of the Board and Chief
Executive
Officer
AMENDED AND RESTATED AGREEMENT
AND PLAN OF MERGER
among
FIRST COMMONWEALTH FINANCIAL CORPORATION
FIRST COMMONWEALTH BANK
GA FINANCIAL, INC.
and
GREAT AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION
Dated as of December 11, 2003
TABLE OF CONTENTS
|
ARTICLE 1 |
BASIC TRANSACTION |
2 |
|
1.1 |
Merger |
2 |
|
1.2 |
Bank Merger |
2 |
|
1.3 |
Effective Time |
2 |
|
1.4 |
Conversion of Company Common Stock |
3 |
|
1.5 |
Company Treasury Stock; Shares owned by Purchaser |
3 |
|
1.6 |
Purchaser Common Stock |
3 |
|
1.7 |
Fractional Shares |
3 |
|
1.8 |
Anti-Dilution |
3 |
|
1.9 |
Company Options |
4 |
|
1.10 |
Election and Exchange Procedures |
5 |
|
1.11 |
Withholding Rights |
9 |
|
1.12 |
Dissenting Shares |
9 |
|
1.13 |
Closing |
10 |
|
|
|
|
|
ARTICLE 2 |
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND FCB |
10 |
|
2.1 |
Organization |
10 |
|
2.2 |
Capitalization |
11 |
|
2.3 |
Authority; No Violation |
12 |
|
2.4 |
No Legal Bar |
13 |
|
2.5 |
Approvals, Consents and Filings |
13 |
|
2.6 |
Financial Statements; Reports; Books and Records |
13 |
|
2.7 |
Absence of Changes |
14 |
|
2.8 |
Brokers, Finders and Financial Advisors |
14 |
|
2.9 |
Information to be Supplied |
15 |
|
2.10 |
Compliance with Applicable Laws |
15 |
|
2.11 |
Representations and Warranties |
15 |
|
|
|
|
|
ARTICLE 3 |
REPRESENTATIONS AND WARRANTIES OF COMPANY AND GREAT AMERICAN |
15 |
|
3.1 |
Organization |
15 |
|
3.2 |
Capitalization, Subsidiaries and Affiliates |
16 |
|
3.3 |
Authority; No Violation |
18 |
|
3.4 |
No Legal Bar |
18 |
|
3.5 |
Approvals, Consents and Filings |
19 |
|
3.6 |
Financial Statements; Reports; Books and Records |
19 |
|
3.7 |
Undisclosed Liabilities |
21 |
|
3.8 |
Tax Matters |
21 |
|
3.9 |
Certain Contracts |
22 |
|
3.10 |
Litigation and Proceedings |
22 |
|
3.11 |
Tangible Properties |
23 |
|
3.12 |
Intellectual Property |
23 |
|
3.13 |
Insurance |
24 |
|
3.14 |
Compliance with Applicable Laws |
24 |
i
|
3.15 |
Absence of Changes; Operation in the Ordinary Course |
25 |
|
3.16 |
Employee Benefit Plans |
25 |
|
3.17 |
Employee Matters |
26 |
|
3.18 |
Brokers, Finders and Financial Advisors; Fairness Opinion |
27 |
|
3.19 |
Environmental |
27 |
|
3.20 |
Loans; Allowance for Loan Losses |
28 |
|
3.21 |
Information to be Supplied |
28 |
|
3.22 |
Related Party Transactions |
28 |
|
3.23 |
Representations and Warranties |
29 |
|
|
|
|
|
ARTICLE 4 |
COVENANTS RELATING TO CONDUCT OF COMPANY'S BUSINESS |
29 |
|
4.1 |
Affirmative Covenants |
29 |
|
4.2 |
Negative Covenants |
31 |
|
|
|
|
|
ARTICLE 5 |
ADDITIONAL AGREEMENTS AND COVENANTS |
34 |
|
5.1 |
Regulatory Approvals |
34 |
|
5.2 |
Registration Statement |
35 |
|
5.3 |
Special Meeting |
35 |
|
5.4 |
Acquisition Proposals |
35 |
|
5.5 |
Employees and Employee Benefits |
37 |
|
5.6 |
Indemnification of Company Directors, Officers and Other Persons |
39 |
|
5.7 |
Consents |
40 |
|
5.8 |
Access |
40 |
|
5.9 |
Subsequent Interim and Annual Financial Statements |
40 |
|
5.10 |
NYSE |
40 |
|
5.11 |
Accruals and Reserves |
40 |
|
5.12 |
Affiliate Agreements |
41 |
|
5.13 |
Section 16 Matters |
41 |
|
5.14 |
Appointment to Purchaser Board |
41 |
|
5.15 |
Regional Advisory Board |
41 |
|
5.16 |
Reasonable Efforts to Close |
42 |
|
5.17 |
Tax Treatment |
42 |
|
5.18 |
Confidentiality |
42 |
|
|
|
|
|
ARTICLE 6 |
CONDITIONS TO CLOSING |
43 |
|
6.1 |
Conditions to the Obligations of Company |
43 |
|
6.2 |
Conditions to the Obligations of Purchaser |
44 |
|
6.3 |
Conditions to Obligations of All Parties |
45 |
|
|
|
|
|
ARTICLE 7 |
TERMINATION |
46 |
|
7.1 |
Termination |
46 |
|
7.2 |
Effect of Termination |
47 |
|
7.3 |
Termination Fee |
47 |
|
|
|
|
|
ARTICLE 8 |
MISCELLANEOUS |
48 |
|
8.1 |
Survival |
48 |
|
8.2 |
Notices |
48 |
|
8.3 |
Jurisdiction; Venue |
49 |
ii
|
8.4 |
Amendments and Supplements |
49 |
|
8.5 |
Governing Law |
49 |
|
8.6 |
Entire Agreement, Assignability, Etc. |
50 |
|
8.7 |
Exclusivity of Representations |
50 |
|
8.8 |
Counterparts |
50 |
|
8.9 |
Publicity |
50 |
|
8.10 |
Headings; Terms |
50 |
|
8.11 |
Severability |
50 |
|
8.12 |
Waivers |
51 |
|
8.13 |
Payment of Expenses |
51 |
|
8.14 |
Construction |
51 |
|
8.15 |
Remedies Cumulative |
51 |
Exhibits:
|
Exhibit A |
Definitions |
|
Exhibit B |
Form of Affiliate Agreement |
|
Exhibit C |
Form of Voting Agreement |
iii
Exhibit A
Definitions
"Acquisition
Proposal" means any written tender offer, agreement, understanding or
other proposal of any nature received by Company pursuant to which any Person,
other than Purchaser or a Purchaser Subsidiary, proposes to engage, directly or
indirectly, in an Alternative Transaction.
"Advisory Board" is defined in Section 5.13.
"Affiliate" means, as to a designated Person, another Person that
controls, is controlled by or is under common control with the designated
Person, and control means the power, directly or indirectly, by stock
ownership, contract, family relationship, employment, position or otherwise, to
significantly influence the business decisions of another Person.
"Aggregate Cash Consideration" means the product of (x) $35 times (y)
40% of the number of shares of Company Common Stock outstandingas
of the Effective Time.
"Agreement" is defined in the first paragraph.
"Alternative Transaction" means a transaction or series of
transactions in which any Person, other than Purchaser or a Purchaser
Subsidiary, merges or consolidates with or into Company or Great American,
acquires substantially all of the assets of Company or Great American, or
acquires beneficial ownership (determined pursuant to Rule 13d-3 of the
Exchange Act) of at least a majority of the total voting power of Company or
Great American.
"AMEX" means the American Stock Exchange.
"Anti-Money Laundering Laws" is defined in Section 3.14(c).
"Average Closing Price" means the average closing price of the
Purchaser Common Stock on the NYSE for the ten trading days ending with the
third trading day prior to the Closing Date, provided, that if Purchaser enters
into a definitive agreement with a third party providing for the acquisition by
such third party of (i) substantially all of the assets of Purchaser or (ii) at
least a majority of the outstanding shares Purchaser Common Stock, then the
Average Closing Price will be calculated using the average closing price of the
Purchaser Common Stock on the NYSE for the ten trading dates ending with the
last trading day preceding the date on which such acquisition is first publicly
announced.
"Bank Merger" is defined in the Recitals.
"Bank Plan of Merger" is defined in Section 1.2.
"Banking Code" is defined in Section 1.2.
"BHCA" is defined in Section 2.1.
A-1
"Book-Entry Shares" is defined in Section 1.10(c).
"Cancelled Option" is defined in Section 1.9(a)(ii).
"Cash Election Shares" is defined in Section 1.10(b).
"Closing Date" is defined in Section 1.13.
"Closing" is defined in Section 1.13.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the first paragraph.
"Company Benefit Plan" means each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, hospitalization, medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required
to be contributed to at any time since December 31, 1999 by Company or ERISA
Affiliate, that together with Company would be deemed a "controlled
group" within the meaning of Section 4001(a)(14) of ERISA, for the benefit
of any employee, director or former employee or director of Company or any
ERISA Affiliate including any such type of plan established, maintained or
contributed to under the Laws of any foreign country.
"Company Common Stock" is defined in the Recitals.
"Company Contract" is defined in Section 3.9(a).
"Company Director BOLI" is defined in Section 5.5(f).
"Company Disclosure Schedule" is defined in the introductory
paragraph of Article 3.
"Company Financial Statements" is defined in Section 3.6(a).
"Company 401(k) Plan" is defined in Section 5.5(d).
"Company Officer BOLI" is defined in Section 5.5(f).
"Company Option" is defined in Section 1.9(a).
"Company Option Plan" means Company's 1996 Stock Based Incentive
Plan.
"Company Preferred Stock" is defined in Section 3.2(a).
"Company Reports" is defined in Section 3.6(b).
"Company Stockholders" shall mean the holders of the Company Common
Stock.
A-2
"Company Subsidiary" is defined in Section 3.2(c).
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, dated as of October 17, 2003, by and between Purchaser and Company.
"Continuing Employees" is defined in Section 5.5(a).
"Costs" is defined in Section 5.6(a).
"Covered Parties" is defined in Section 5.6(a).
"DGCL" is defined in Section 1.1.
"Dissenting Shares" is defined in Section 1.12.
"Dissenting Stockholder" is defined in Section 1.12.
"Effective Time" is defined in Section 1.3.
"Election Deadline" is defined in Section 1.10(c).
"Election Form" is defined in Section 1.10(b).
"Employment Agreement" is defined in Section 3.17(b).
"Environmental Regulations" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises, and similar items of all
governmental entities and all applicable judicial, administrative, and
regulatory decrees, judgments, and orders relating to the protection of human
health or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to any entity, any entity that
is, or at any applicable time was, a member of (A) a controlled group of
corporations (as defined in Section 414(b) of the Code), (B) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (C) an affiliated service group (as defined under Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which includes the
first entity.
"ESOP" is defined in Section 5.5(c).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" is defined in Section 1.10(a).
"Exchange Ratio" shall be calculated by dividing (x) the Per Share
Cash Consideration by (y) the Average Closing Price, and rounding the resulting
number to three decimal places.
A-3
"FCB" is defined in the Recitals.
"FCB Common Stock" is defined in Section 2.2(b).
"FDIC" is defined in Section 2.1(b).
"FRB" is defined in Section 2.1(a).
"GAAP" is defined in Section 2.6(a).
"Governmental Entity" means
(i) any federal, state, local, municipal or foreign government, (ii)
governmental, quasi-governmental authority or body exercising or entitled to
exercise, any governmentally-derived administrative, executive, judicial,
legislative, police, regulatory or taxing authority, or (iii) any
self-regulatory organization, administrative or regulatory agency, commission
or authority, including, without limitation, the Regulatory Agencies listed in
Sections 2.6(b) and 3.6(b).
"Great American" is defined in the Recitals.
"Great American Common Stock" is defined in Section 3.2(b).
"Hazardous Materials" shall mean any substance the presence of which
requires investigation or remediation under any federal, state or local
statute, regulation, ordinance, order, action, policy or common law or which is
or becomes defined as a hazardous waste, hazardous substance, hazardous
material, used oil, pollutant or contaminant under any federal, state or local
statute, regulation, rule or ordinance or amendments thereto.
"HOLA" is defined in Section 1.2.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Intellectual Property Rights" is defined in Section 3.12.
"Internal Controls" is defined in Section 3.6(d).
"JMS" is defined in Section 3.17.
"Knowledge" means, with respect to any Person, the actual knowledge
of such Person (or in the case of an entity, such Person's executive officers
and senior management personnel) after reasonable inquiry.
"Law" means any and all statutes, laws, ordinances, rules,
regulations, orders, permits, judgments, injunctions, decrees, case law and
other rules of law enacted, promulgated or issued by any Governmental Entity.
"Leases" is defined in Section 3.12(b).
"Letter of Transmittal" is defined in Section 1.10(b).
A-4
"Lien" means any security interest, mortgage, pledge, hypothecation,
charge, claim, option, right to acquire, adverse interest, assignment, deposit
arrangement, encumbrance, restriction, lien (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease involving substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction).
"Material Adverse Change" or "Material Adverse Effect"
shall mean, with respect to any Person, any change, effect, event, occurrence
or state of facts that (a) is, or would reasonably be expected to be,
materially adverse to the business, financial condition or results of
operations of such Person and its consolidated subsidiaries, taken as a whole,
or (b) have, or would reasonably be expected to have a material adverse affect
on the ability of such Person to consummate the Merger, in either case, other
than a change, effect, event, occurrence or state of facts (i) resulting from
any change in general economic or market conditions, (ii) which negatively
affects the banking industry generally, (iii) the announcement of the
transactions contemplated hereby and the taking of any action required by or
the implementation of this Agreement, (iv) changes in Law, (v) the failure, in
and of itself, by Company to meet any internal or published projections,
forecasts or predictions for any period ending on or after the date of this
Agreement, unless in the case of (i), (ii) or (iv), such change, effect, event,
occurrence or state of facts has a materially disproportionate impact on the
business, financial condition or results of operations of such Person.
"Maximum Premium" is defined in Section 5.6(b).
"Merger" is defined in the Recitals.
"No-Election Shares" is defined in Section 1.10(b).
"NYSE" means the New York Stock Exchange.
"Optionee" means an eligible individual holding outstanding Company
Options under the Option Plan.
"Ordinary Course of Business" means, with respect to any Person, the
ordinary course of such Person's business operations, consistent in nature and
amount with past practices.
"OTS" is defined in Section 1.2.
"PBCL" is defined in Section 1.1.
"PDB" shall mean the Pennsylvania Department of Banking.
"Pension Plan" shall mean any employee pension benefit plan as such
term is defined in Section 3(2) of ERISA which is maintained by the referenced party.
"Per Share Cash Consideration" is defined in Section 1.4(a)(i).
A-5
"Person" means an individual and any corporation, partnership, trust,
limited liability company, association or Governmental Entity.
"Post-Termination Payments" is defined in Section 5.5(e).
"Proxy Statement/Prospectus" is defined in Section 5.2.
"Purchaser" is defined in the first paragraph.
"Purchaser Common Stock" is defined in the Recitals.
"Purchaser Financial Statements" is defined in Section 2.6(a).
"Purchaser Preferred Stock" is defined in Section 2.2(a).
"Purchaser Reports" is defined in Section 2.6(a).
"Purchaser Subsidiary" means any direct or indirect subsidiary of
Purchaser, whether consolidated or unconsolidated.
"Registration Statement" is defined in Section 5.2.
"Regulatory Agencies" is defined in Sections 2.6(b) and 3.6(b).
"Regulatory Applications" is defined in Section 5.1.
"Regulatory Approval" means the approvals of the FRB, FDIC, PDB and
OTS described in Sections 2.5 and 3.5.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Special Meeting" is defined in Section 5.3.
"Stock Election Shares" shall have meaning given to such term in
Section 1.10(b).
"Subsequent Determination" is defined in Section 5.4(c).
"Superior Proposal" means an unsolicited bona fide Acquisition
Proposal that the Board of Directors of Company determines in good faith, after
consultation with its financial advisors, to be reasonably likely to result in
a transaction that is more favorable to the Company Stockholders from a
financial point of view than the transactions contemplated by this Agreement
taking into account, among other factors, the payments that would be due under
Section 7.3(a) and any delay and uncertainty in receipt of the consideration in
the transaction.
"Surviving Corporation" is defined in the Recitals.
"Termination Fee" is defined in Section 7.3(a).
A-6
"Transaction Expenses" is defined in Section 7.3(a).
"Unlawful Gains" is defined in Section 3.14(c)
"Voting Agreement" means the Voting Agreement in the form attached as
Exhibit
C.
A-7
Exhibit B
Form of Affiliate Agreement
____________, 2004
First Commonwealth Financial Corporation
Xxx Xxxxxxxxxx Xxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
|
Re: |
Agreement and Plan of Merger (the "Merger Agreement") dated as of December 11, 2003 among First Commonwealth Financial Corporation ("FCFC"), First Commonwealth Bank, GA Financial, Inc. ("GA Financial"), and Great American Financial Savings and Loan Association |
Ladies and Gentlemen:
I have
been advised that I may be considered an "affiliate" of GA Financial,
as that term is defined for purposes of Rule 145 ("Rule 145") under
the Securities Act of 1933 (the "Securities Act"). Pursuant to the Agreement, GA Financial will
be merged with and into FCFC, and I may receive shares of FCFC common stock
(the "Shares") in exchange for my shares of GA Financial common
stock.
I
represent and warrant to, and agree with FCFC that:
1. I
have carefully read this letter agreement and the Merger Agreement and have
discussed their requirements and other applicable limitations upon my ability
to sell, transfer or otherwise dispose of the Shares, to the extent I felt
necessary, with my counsel or counsel for GA Financial.
2. I
will not make any sale, transfer or other disposition of the Shares in
violation of the Securities Act or the rules and regulations promulgated
thereunder.
3. I
have been advised that the issuance of the Shares to me has been registered
with the Securities and Exchange Commission (the "SEC") under the
Securities Act on a Registration Statement on Form S-4. I have also been advised, however, that
because I may be considered an "affiliate" of GA Financial at the
time the Merger was submitted for a vote of the shareholders of GA Financial,
any public offer or sale by me of any of the Shares will require either (i) the
further registration of the Shares under the Securities Act, (ii) compliance by
me with Rule 145 or (iii) the availability of another exemption from
registration of such Shares under the Securities Act.
4. I
understand that the Shares have not been registered under the Securities Act
for distribution by me, and that the Shares must be held by me unless (i) such
Shares have
been registered for distribution under the Securities Act, (ii) a sale
of the Shares is made in conformity with the volume and other limitations of
Rule 145 under the Securities Act or (iii) I deliver to FCFC an opinion of
counsel in form and substance reasonably satisfactory to FCFC that some other
exemption from registration under the Securities Act is available with respect
to any proposed sale, transfer or other disposition of the Shares.
5. I
understand that FCFC is under no obligation to register the sale, transfer or
other disposition of the Shares by me or to take any other action necessary in
order to make compliance with an exemption from registration available to me.
6. I
understand that stop transfer instructions will be given to transfer agents of
FCFC with respect to the Shares, and the following legend will be placed on the
certificates representing such Shares:
The shares represented by this certificate were issued in a transaction to
which Rule 145 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 __________, 2004, between the registered holder hereof
and First Commonwealth Financial Corporation, a copy of which agreement is on
file at the principal offices of First Commonwealth Financial Corporation.
7. I
understand and agree that the legend set forth in paragraph 6 above will be
removed by the delivery of substitute certificates without such legend if I
deliver to First Commonwealth (i) a copy of a letter from the staff of the SEC,
or an opinion of counsel in form and substance reasonably satisfactory to First
Commonwealth, to the effect that such legend is not required for purposes of
the Securities Act or (ii) evidence or representations satisfactory to First
Commonwealth that the Shares represented by such certificates are being or have
been sold in conformity with the provisions of Rule 145(d).
8. This
letter agreement will apply to all shares of GA Financial common stock and all
of the Shares that I am deemed to beneficially own pursuant to applicable
federal securities laws.
By its
acceptance of this Letter Agreement, First Commonwealth agrees that for a
period of two years after the effective time of the Merger, it will file on a
timely basis all reports required to be filed by it pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended, so that the public information
provisions of SEC Rule 144(c) under the Securities Act are satisfied and the
resale provisions of SEC Rules 145(d)(1) and (2) are therefore available to me
in the event I desire to transfer any Shares issued to me in the Merger.
Very
truly yours,
__________________________________
2
Name:_____________________________
Title:______________________________
ACCEPTED:
First Commonwealth Financial Corporation
By:_____________________________
Name:
Title:
3
Exhibit
C
Form of Voting Agreement
VOTING AGREEMENT
This
VOTING AGREEMENT is made as of December ___, 2003 by the undersigned
shareholder (the "Shareholder") of GA Financial, Inc., a Delaware
corporation ("GA Financial"), for the benefit of First Commonwealth
Financial Corporation, a Pennsylvania corporation (the "Purchaser").
Recitals
Pursuant
to the terms of an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement") among Purchaser, First Commonwealth Bank, a
Pennsylvania-chartered banking corporation, GA Financial, and Great American
Federal, a federally-chartered savings and loan association, the Purchaser has
agreed to acquire GA Financial in a merger in which the outstanding shares of
Common Stock of GA Financial will be converted, at the election of the holder
(subject to proration as provided in the Merger Agreement), into the right to
receive $35.00 per share in cash or shares of Purchaser's Common Stock (the
"Merger"). As a condition to
its willingness to enter into the Merger Agreement, the Purchaser has required
that the Shareholder agree, and the Shareholder is willing to agree, to the
matters set forth herein.
Agreement
Accordingly,
in consideration of the agreements of the Purchaser in the Merger Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Shareholder, intending to be legally bound
hereby, agrees as follows for the benefit of the Purchaser:
1. Representations
and Warranties of Shareholder. The
Shareholder represents and warrants to the Purchaser that he is the beneficial
owner of and has the power to vote or direct the voting of the number of shares
of GA Financial Common Stock set forth opposite his signature below (together
with any other shares of GA Financial Common Stock acquired by the Shareholder
prior to the termination of this Agreement, the "Shares").
2. Transfer
and Other Restrictions. The
Shareholder agrees that, prior to the Merger, he shall not:
(a) sell,
exchange, transfer, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
the sale, exchange, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares (other than Shares sold in connection with
the cashless exercise of an option, provided that the Shareholder agrees to
notify the Purchaser promptly after any such exercise), unless any subsequent
holder agrees in writing to be bound by the provisions hereof;
(b) grant
any proxies or enter into any voting agreement or similar arrangement with
respect to any of the Shares, except proxies instructing that the Shares be
voted in accordance with Section 3; or
(c) deposit
any of the Shares into a voting trust or other similar arrangement, unless the
trustee is required by the terms thereof to vote the Shares in accordance with
Section 3.
3. Voting. The Shareholder agrees to attend, in person
or by proxy, all meetings of the shareholders of GA Financial and, at any
meeting of the shareholders of GA Financial, agrees to vote all of the Shares:
(a) in
favor of the transactions contemplated by the Merger Agreement;
(b) against
any action or agreement that could result in a breach in any material respect
of any covenant, representation or warranty of GA Financial in the Merger
Agreement; and
(c) except
as otherwise agreed by the Purchaser or permitted under the Merger Agreement,
against (i) any extraordinary corporate transaction, such as a merger, rights
offering, reorganization, recapitalization or liquidation involving GA
Financial, other than the Merger, or (ii) a sale or transfer of a material
portion of the assets of GA Financial or the issuance of any securities of GA
Financial, other than upon exercise of outstanding options.
4. Specific
Enforcement. The Shareholder
acknowledges that damages would be an inadequate remedy for a breach of this
Agreement and that the obligations of the Shareholder shall be specifically
enforceable, in addition to any other remedy which may be available to the
Purchaser at law or in equity.
5. Termination. This Agreement shall terminate without any
action by any of the parties hereto upon the earlier to occur of (i) the
termination of the Merger Agreement pursuant to its terms or (ii) the effective
date of the Merger.
6. 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 together shall constitute one and the same instrument.
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Shareholder as of the date first written above.
Shareholder:
No.
of shares:
(Signature)
(Name)
2
