Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TRI-COUNTY BANK,
ABC BANCORP
AND
TRI-COUNTY MERGER SUB, INC.
As of November 28, 2000
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TABLE OF CONTENTS
Page
ARTICLE 1. TERMS OF MERGER 1
SECTION 1.1 MERGER................................................ 1
SECTION 1.2 TIME AND PLACE OF CLOSING............................. 2
SECTION 1.3 EFFECTIVE TIME........................................ 2
ARTICLE 2. ARTICLES, BYLAWS, MANAGEMENT 2
SECTION 2.1 ARTICLES OF INCORPORATION............................. 2
SECTION 2.2 BYLAWS................................................ 2
SECTION 2.3 DIRECTORS AND OFFICERS................................ 2
ARTICLE 3. MANNER OF CONVERTING AND EXCHANGING SHARES 3
SECTION 3.1 CONVERSION OF SHARES.................................. 3
SECTION 3.2 EXCHANGE OF SHARES.................................... 5
SECTION 3.3 ANTI-DILUTION PROVISIONS.............................. 6
SECTION 3.4 SHARES HELD BY TARGET or PURCHASER.................... 6
SECTION 3.5 STATUS OF TARGET after the Effective Time............. 6
SECTION 3.6 RIGHTS OF FORMER TARGET Shareholders.................. 6
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF TARGET 7
SECTION 4.1 ORGANIZATION, STANDING AND POWER...................... 7
SECTION 4.2 AUTHORITY; NO BREACH.................................. 7
SECTION 4.3 CAPITAL STOCK......................................... 8
SECTION 4.4 FINANCIAL STATEMENTS.................................. 9
SECTION 4.5 ABSENCE OF UNDISCLOSED LIABILITIES.................... 9
SECTION 4.6 ABSENCE OF CERTAIN CHANGES OF EVENTS.................. 9
SECTION 4.7 TAX MATTERS........................................... 9
SECTION 4.8 TARGET Allowance for Possible Loan Losses............. 10
SECTION 4.9 ASSETS................................................ 10
SECTION 4.10 ENVIRONMENTAL MATTERS................................. 11
SECTION 4.11 COMPLIANCE WITH LAWS.................................. 12
SECTION 4.12 LABOR RELATIONS....................................... 12
SECTION 4.13 EMPLOYEE BENEFIT PLANS................................ 13
SECTION 4.14 MATERIAL CONTRACTS.................................... 14
SECTION 4.15 LEGAL PROCEEDINGS..................................... 15
SECTION 4.16 REPORTS............................................... 15
SECTION 4.17 STATEMENTS TRUE AND CORRECT........................... 15
SECTION 4.18 ACCOUNTING, TAX AND REGULATORY MATTERS................ 16
SECTION 4.19 CHARTER PROVISIONS.................................... 16
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER 16
SECTION 5.1 ORGANIZATION, STANDING AND POWER...................... 16
SECTION 5.2 AUTHORITY; NO BREACH.................................. 17
SECTION 5.3 CAPITAL STOCK......................................... 17
SECTION 5.4 PURCHASER SEC Reports................................. 18
SECTION 5.5 FINANCIAL STATEMENTS.................................. 18
SECTION 5.6 ABSENCE OF UNDISCLOSED LIABILITIES.................... 19
SECTION 5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.................. 19
SECTION 5.8 TAX MATTERS........................................... 19
SECTION 5.9 ENVIRONMENTAL MATTERS................................. 20
SECTION 5.10 COMPLIANCE WITH LAWS.................................. 21
SECTION 5.11 LEGAL PROCEEDINGS..................................... 21
SECTION 5.12 REPORTS............................................... 22
SECTION 5.13 STATEMENTS TRUE AND CORRECT........................... 22
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF MERGER SUB 23
SECTION 6.1 ORGANIZATION, STANDING AND POWER...................... 23
SECTION 6.2 AUTHORITY; NO BREACH.................................. 23
ARTICLE 7. CONDUCT OF BUSINESS PENDING CONSUMMATION 24
SECTION 7.1 AFFIRMATIVE COVENANTS OF TARGET....................... 24
SECTION 7.2 NEGATIVE COVENANTS OF TARGET.......................... 24
SECTION 7.3 COVENANTS OF PURCHASER................................ 25
SECTION 7.4 ADVERSE CHANGES IN CONDITION.......................... 26
SECTION 7.5 REPORTS............................................... 26
ARTICLE 8. ADDITIONAL AGREEMENTS 26
SECTION 8.1 SHAREHOLDER APPROVAL.................................. 26
SECTION 8.2 APPLICATIONS.......................................... 27
SECTION 8.3 AGREEMENT AS TO EFFORTS TO CONSUMMATE................. 27
SECTION 8.4 INVESTIGATION AND CONFIDENTIALITY..................... 27
SECTION 8.5 PRESS RELEASES........................................ 28
SECTION 8.6 NO SOLICITATION....................................... 28
SECTION 8.7 TAX TREATMENT......................................... 30
SECTION 8.8 EMPLOYEE BENEFITS AND CONTRACTS....................... 30
SECTION 8.9 LARGE DEPOSITS........................................ 30
SECTION 8.10 INDEMNIFICATION AGAINST CERTAIN LIABILITIES........... 31
SECTION 8.11 IRREVOCABLE PROXIES................................... 31
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE 31
SECTION 9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY............... 31
SECTION 9.2 CONDITIONS TO OBLIGATIONS OF PURCHASER and MERGER SUB. 32
SECTION 9.3 CONDITIONS TO OBLIGATIONS OF TARGET................... 33
ARTICLE 10. TERMINATION 35
SECTION 10.1 TERMINATION........................................... 35
SECTION 10.2 EFFECT OF TERMINATION................................. 36
ARTICLE 11. MISCELLANEOUS 36
SECTION 11.1 DEFINITIONS........................................... 36
SECTION 11.2 EXPENSES.............................................. 42
SECTION 11.3 BROKERS AND FINDERS................................... 43
SECTION 11.4 ENTIRE AGREEMENT...................................... 43
SECTION 11.5 AMENDMENTS............................................ 43
SECTION 11.6 WAIVERS............................................... 44
SECTION 11.7 ASSIGNMENT............................................ 44
SECTION 11.8 NOTICES............................................... 44
SECTION 11.9 GOVERNING LAW......................................... 45
SECTION 11.10 COUNTERPARTS.......................................... 45
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SECTION 11.11 CAPTIONS.............................................. 45
SECTION 11.12 ENFORCEMENT OF AGREEMENT.............................. 45
SECTION 11.13 SEVERABILITY.......................................... 46
SECTION 11.14 SURVIVAL.............................................. 46
SECTION 11.15 PREVAILING PARTY FEES AND EXPENSES.................... 46
LIST OF EXHIBITS
Exhibit Number Description
-------------- -----------
1 Articles of Incorporation of TARGET ((S) 2.1).
2 Form of Irrevocable Proxy ((S) 8.11).
3 Matters as to which Smith, Mackinnon, Greeley,
Bowdoin, Edwards, Xxxxxxxx & Marks, P.A. will opine
((S) 9.2(d)).
4 Form of Employment Agreement ((S) 9.2(e)).
5 Matters as to which Xxxxxx & Xxxxxx LLP will opine
((S) 9.3(d)).
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AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of November 28, 2000, by and among TRI-COUNTY BANK ("TARGET"), a state
non-member bank incorporated and chartered under the laws of the State of
Florida, with its principal office located at 000 X. Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, ABC BANCORP ("PURCHASER"), a corporation organized and existing
under the laws of the State of Georgia, with its principal office located at 00
0xx Xxxxxx, X.X., Xxxxxxxx, Xxxxxxx 00000, and tri-county merger sub, INC.
("Merger sub"), a corporation organized and existing under the laws of the State
of Florida and a wholly-owned subsidiary of PURCHASER.
Preamble
--------
Certain terms used in this Agreement are defined in Section 11.1 hereof.
The Boards of Directors of TARGET, MERGER SUB and PURCHASER are of the
opinion that the transactions described herein are in the best interests of the
parties and their respective shareholders. This Agreement provides for the
combination of TARGET with MERGER SUB by virtue of the merger of MERGER SUB with
and into TARGET, as a result of which the outstanding shares of the capital
stock of TARGET shall be converted into the right to receive the consideration
provided for herein, and the shareholders of TARGET shall become shareholders of
PURCHASER. The transactions described in this Agreement are subject to the
approvals of the shareholders of TARGET, the Board of Governors of the Federal
Reserve System, the Florida Department of Banking and Finance and the Georgia
Department of Banking and Finance and the satisfaction of certain other
conditions described in this Agreement. It is the intention of the parties to
this Agreement that the Merger for federal income tax purposes shall qualify as
a "reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code.
Following the Closing of the Merger, TARGET will be operated as a separate
subsidiary of PURCHASER. TARGET will not have trust powers.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants and agreements set forth herein, the parties agree as
follows:
ARTICLE 1.
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TERMS OF MERGER
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Section 1.1 Merger.
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Subject to the terms and conditions of this Agreement, at the Effective Time,
MERGER SUB shall be merged with and into TARGET in accordance with the
provisions of Sections 658.295 and 658.41 of the FBC and with the effect
provided in Section 658.45 of the FBC (the "Merger"). TARGET shall be the
Surviving Corporation resulting from the Merger and a wholly-owned subsidiary of
PURCHASER. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of TARGET, MERGER SUB and PURCHASER.
Section 1.2 Time and Place of Closing.
--------------------------
The Closing shall take place at 10:00 a.m. on the date that the Effective Time
occurs or at such other time as the Parties, acting through their chief
executive officers or chief financial officers, may mutually agree (the "Closing
Date"). The place of Closing shall be at the offices of TARGET, or such other
place as may be mutually agreed upon by the Parties.
Section 1.3 Effective Time.
---------------
The Merger and other transactions contemplated by this Agreement shall become
effective on the date and at the time the Certificate of Merger reflecting the
Merger shall be issued by the Florida Department of Banking and Finance in
accordance with the relevant provisions of the FBC (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the chief executive officers of each Party, the Parties shall
use their reasonable efforts to cause the Effective Time to occur on (a) the
last business day of the month in which occurs the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger and (ii) the date on which the shareholders of
TARGET approve this Agreement to the extent such approval is required by
applicable Law; or (b) such later date as may be mutually agreed upon in writing
by the chief executive officers or chief financial officers of each Party.
ARTICLE 2.
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ARTICLES, BYLAWS, MANAGEMENT
----------------------------
Section 2.1 Articles of Incorporation.
--------------------------
The Articles of Incorporation of TARGET in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation until otherwise amended or repealed. A copy of the Articles of
Incorporation of TARGET is attached as Exhibit 1 to this Agreement.
Section 2.2 Bylaws.
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The Bylaws of TARGET in effect immediately prior to the Effective Time shall
be the Bylaws of the Surviving Corporation until otherwise amended or repealed.
Section 2.3 Directors and Officers.
-----------------------
(a) The following directors of MERGER SUB in office immediately prior to the
Effective Time shall serve as the directors of the Surviving Corporation from
and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation:
Xxxxxx Xxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxx X. Xxxxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxx Xxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
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Xxxxxxx X. Xxxxxxxxx 00 0xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxx X. Xxxxxx 00 0xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxx 00000
(b) The following officers of MERGER SUB in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of TARGET:
Xxxx X. Xxxxxxxx 000 X. Xxxx Xxxxxx
President & CEO Xxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxxxx 000 X. Xxxx Xxxxxx
Vice President & Cashier Xxxxxxx, Xxxxxxx 00000
Xxxx Xxxx 000 X. Xxxx Xxxxxx
Xxxx Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000
Xxxxx Xxxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx Xxxxxxx, Xxxxxxx 00000
Xxxx Xxxxxxx 000 X. Xxxx Xxxxxx
Xxxx Xxxxxxx Xxxxxxx, Xxxxxxx 00000
ARTICLE 3.
----------
MANNER OF CONVERTING AND EXCHANGING SHARES
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Section 3.1 Conversion of Shares.
---------------------
Subject to the provisions of this Article 3, at the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
the shares of PURCHASER, MERGER SUB and TARGET shall be converted as follows:
(a) Each share of the common stock, par value $.01 per share, of MERGER SUB
issued and outstanding immediately prior to the Effective Time shall be
converted solely into 100 fully paid and non-assessable shares of the Surviving
Corporation.
(b) Subject to the remaining provisions of this Section 3.1, each share of
TARGET Common Stock (including any shares currently subject to options which are
exercised prior to the Effective Time, if any) outstanding immediately prior to
the Effective Time, other than shares with respect to which statutory
dissenters' rights have been perfected (the "Dissenting Shares") and shares held
by TARGET or by PURCHASER or any of the PURCHASER
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Subsidiaries, in each case other than in a fiduciary capacity or as a result of
debts previously contracted (the "Outstanding TARGET Shares"), shall
automatically be converted at the Effective Time into the right to receive (1)
cash and whole shares of PURCHASER Common Stock, plus cash in lieu of fractional
shares pursuant to Section 3.1(c) below, if applicable, in accordance with the
terms of subsection 3.1(b)(i) hereof, or (2) all cash and no shares of PURCHASER
Common Stock in accordance with the terms of subsection 3.1(b)(ii) hereof.
(i) Each holder of a certificate or certificates theretofore
representing an aggregate of 700 or more shares of TARGET Common Stock
(other than Dissenting Shares) immediately prior to the Effective Time shall
thereafter surrender such certificate or certificates and shall be entitled,
upon such surrender, to receive in exchange therefor such holder's Pro-Rata
Share of the Merger Price payable (A) in shares of PURCHASER Common Stock
equal to the quotient obtained by dividing (x) an amount equal to 60% of
such holder's Pro-Rata Share of the Merger Price, by (y) the Average Stock
Price (the "Stock Consideration"); and (B) in cash in an amount equal to the
balance of such holder's Pro-Rata Share of the Merger Price.
(ii) Each holder of a certificate or certificates theretofore
representing an aggregate of fewer than 700 shares of TARGET Common Stock
(other than Dissenting Shares) immediately prior to the Effective Time shall
thereafter surrender such certificate or certificates and shall be entitled,
upon such surrender, to receive in exchange therefor such holder's Pro-Rata
Share of the Merger Price payable entirely in cash (the "Cash
Consideration").
(c) Notwithstanding any other provision of this Agreement, each holder of
shares of TARGET Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of PURCHASER
Common Stock (after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of a share of PURCHASER Common Stock multiplied by
the Average Stock Price. No such holder will be entitled to dividends, voting
rights, or any other rights as a shareholder in respect of any fractional
shares.
(d) Except as contemplated in Section 3.1(a) hereof, each share of the
TARGET Common Stock that is not an Outstanding TARGET Share as of the Effective
Time shall be cancelled without consideration therefor.
(e) Outstanding TARGET Shares held by TARGET shareholders who, prior to the
Effective Time, have met the requirements of Section 658.44 the FBC with respect
to shareholders dissenting from the Merger shall not be converted in the Merger,
but all such shares shall be cancelled and the holders thereof shall thereafter
have only such rights as are granted to dissenting shareholders under the FBC;
provided, however, that if any such shareholder fails to perfect his or her
rights as a dissenting shareholder with respect to his or her Outstanding TARGET
Shares in accordance with the FBC, such shares held by such shareholder shall,
upon the happening of that event, be treated the same as all other holders of
TARGET Common Stock who have not dissented as to the Merger.
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Section 3.2 Exchange of Shares.
------------------
(a) Prior to the Effective Time, PURCHASER shall select a bank or trust
company reasonably acceptable to TARGET to act as exchange agent (the "Exchange
Agent") to effectuate the delivery of the Stock Consideration, Cash
Consideration and cash payable to the TARGET shareholders pursuant to Section
3.1 hereof. Promptly following the Effective Time, and in no event later than
ten (10) business days after the Effective Time, the Exchange Agent shall send
to each holder of Outstanding TARGET Shares immediately prior to the Effective
Time a form of letter of transmittal (the "Letter of Transmittal") for use in
exchanging certificates previously evidencing shares of TARGET Common Stock
("Old Certificates"). The Letter of Transmittal will contain instructions with
respect to the surrender of the Old Certificates and the distribution of any
cash and certificates representing PURCHASER Common Stock, which certificates
shall be deposited with the Exchange Agent by PURCHASER as of the Effective
Time. If any certificates for shares of PURCHASER Common Stock are to be issued
in a name other than that for which an Old Certificate surrendered or exchanged
is issued, the Old Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such exchange
shall affix any requisite stock transfer tax stamps to the Old Certificate
surrendered or provide funds for their purchase or establish to the satisfaction
of the Exchange Agent that such taxes are not payable. Unless and until Old
Certificates (or evidence that such certificates have been lost, stolen or
destroyed accompanied by such security or indemnity as shall be requested by
TARGET) are presented to the Exchange Agent, the holder thereof shall not be
entitled to the Stock Consideration and cash or the Cash Consideration, as the
case may be, to be paid in exchange therefor pursuant to the Merger. Subject to
applicable Law and to the extent that the same has not yet been paid to a public
official pursuant to applicable abandoned property Laws, upon surrender of his
or her Old Certificates, the holder thereof shall be paid the Stock
Consideration and cash or the Cash Consideration, as the case may be, to which
he or she is entitled. All such property, if held by the Exchange Agent for
payment or delivery to the holders of unsurrendered Old Certificates and
unclaimed at the end of six (6) months from the Effective Time, shall at such
time be paid or redelivered by the Exchange Agent to PURCHASER, and after such
time any holder of an Old Certificate who has not surrendered such certificate
shall, subject to applicable Laws and to the extent that the same has not yet
been paid to a public official pursuant to applicable abandoned property Laws,
look as a general creditor only to PURCHASER for payment or delivery of such
property. In no event will any holder of TARGET Common Stock exchanged in the
Merger be entitled to receive any interest on any amounts held by the Exchange
Agent or PURCHASER. All payments in respect of shares of TARGET Common Stock
that are made in accordance with the terms hereof shall be deemed to have been
made in full satisfaction of all rights pertaining to such securities.
(b) In the case of any lost, mislaid, stolen or destroyed Old Certificate,
the TARGET shareholder may be required, as a condition precedent to delivery to
the shareholder of the consideration described in Section 3.1 hereof, to deliver
to PURCHASER a satisfactory indemnity agreement as PURCHASER may direct as
indemnity against any claim that may be made against PURCHASER or the Surviving
Corporation with respect to the Old Certificate alleged to have been lost,
mislaid, stolen or destroyed.
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(c) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of the shares of TARGET Common Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Old Certificates are presented to the Surviving Corporation or
PURCHASER for transfer, they shall be canceled and exchanged for the
consideration described in Section 3.1 hereof.
Section 3.3 Anti-Dilution Provisions.
-------------------------
In the event TARGET or PURCHASER changes the number of shares of TARGET Common
Stock or PURCHASER Common Stock, respectively, issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date therefor (in the case of a stock
split or similar recapitalization) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
Section 3.4 Shares Held by TARGET or PURCHASER.
-----------------------------------
Except as contemplated in Section 3.1(b) hereof, each of the shares of TARGET
Common Stock held by TARGET or PURCHASER or any PURCHASER Company, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
Section 3.5 Status of TARGET after the Effective Time.
------------------------------------------
After consummation of the Merger, TARGET shall be a separate subsidiary of
PURCHASER.
Section 3.6 Rights of Former TARGET Shareholders.
-------------------------------------
(a) At the Effective Time, the stock transfer books of TARGET shall be
closed as to holders of TARGET Common Stock immediately prior to the Effective
Time and no transfer of TARGET Common Stock by any such holder shall thereafter
be made or recognized. From the Effective Time until surrender for exchange in
accordance with the provisions of Section 3.2 hereof, each Old Certificate
(other than shares cancelled pursuant to Section 3.1(c) hereof) shall represent
for all purposes only the right to receive the consideration provided in Section
3.1 hereof. To the extent permitted by Law, former shareholders of record of
TARGET shall be entitled to vote after the Effective Time at any meeting of
PURCHASER shareholders the number of whole shares of PURCHASER Common Stock into
which their respective shares of TARGET Common Stock may have been converted,
regardless of whether such holders have exchanged their Old Certificates for
certificates representing PURCHASER Common Stock in accordance with the
provisions of this Agreement. Whenever a dividend or other distribution is
declared by PURCHASER on the PURCHASER Common Stock, the record date for which
is at or after the Effective Time, the declaration shall include dividends or
other distributions on all shares issuable pursuant to this Agreement, but no
dividend or other distribution payable to the holders of record of PURCHASER
Common Stock as of any time subsequent to the Effective Time shall be delivered
to the former holder of TARGET Common Stock until such holder surrenders such
holder's Old Certificates for exchange as provided in Section 3.2 hereof.
However, upon surrender thereof, both the PURCHASER Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered Cash Consideration and cash to be paid for
fractional share interests (all without interest) shall be delivered and paid
with respect to each share represented by such certificate.
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(b) The PURCHASER Common Stock to be delivered pursuant to Section 3.1
hereof has not been registered under the 1933 Act or any other Securities Laws
by reason of certain exemptions from the registration provisions thereof which
depend upon, among other things, the bona fide nature of the TARGET
shareholders' investment intent. In addition, the PURCHASER Common Stock to be
delivered pursuant to Section 3.1 hereof will be "restricted securities", as
that term is defined in Rule 144 under the 1933 Act, and the certificates
representing such PURCHASER Common Stock will bear a legend restricting transfer
unless (i) the transfer is exempt from the registration requirements of the 1933
Act and any other applicable Securities Laws and an opinion of counsel
reasonably satisfactory to PURCHASER that such transfer is exempt therefrom is
delivered to PURCHASER or (ii) the transfer is made pursuant to an effective
registration statement under the 1933 Act and any other applicable Securities
Laws.
ARTICLE 4.
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REPRESENTATIONS AND WARRANTIES OF TARGET
----------------------------------------
With such exceptions, if any, as may be set forth in a letter (the "TARGET
Disclosure Letter") to be delivered by TARGET to PURCHASER on the date hereof,
TARGET hereby represents and warrants to PURCHASER as follows:
Section 4.1 Organization, Standing and Power.
---------------------------------
TARGET is a corporation duly organized, validly existing, and in good standing
under the Laws of the State of Florida and is duly chartered and qualified as a
state non-member bank under the Laws of the State of Florida and the FDI Act.
TARGET has the corporate power and authority to carry on its business as now
conducted and to own, lease and operate its Assets. TARGET is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET. TARGET has no Subsidiaries.
Section 4.2 Authority; No Breach.
---------------------
(a) TARGET has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of TARGET, subject to the
approval of this Agreement by the holders of a majority of the outstanding
TARGET Common Stock. Subject to such requisite shareholder approval, this
Agreement represents a legal, valid, and binding obligation of TARGET,
enforceable against TARGET in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
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(b) Neither the execution and delivery of this Agreement by TARGET, nor the
consummation by TARGET of the transactions contemplated hereby, nor compliance
by TARGET with any of the provisions hereof, will (i) conflict with or result in
a breach of any provision of TARGET's Articles of Incorporation or Bylaws, or
(ii) constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation of any Lien on any Asset of TARGET under, any
Contract or Permit of TARGET, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET, or, (iii) subject to receipt of
the requisite approvals referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to TARGET or any of its Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and other than
Consents required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, and other than Consents,
filings or notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
TARGET, no notice to, filing with, or Consent of any public body or authority is
necessary for the consummation by TARGET of the Merger and the other
transactions contemplated in this Agreement.
Section 4.3 Capital Stock.
--------------
(a) The authorized capital stock of TARGET consists of 250,000 shares of
TARGET Common Stock, of which 197,955 shares are issued and outstanding as of
the date of this Agreement. All of the issued and outstanding shares of capital
stock of TARGET are duly and validly issued and outstanding and are fully paid
and nonassessable under the FBC. None of the outstanding shares of capital stock
of TARGET has been issued in violation of any preemptive rights of the current
or past shareholders of TARGET.
(b) Except as set forth in the TARGET Disclosure Letter, there are no shares
of capital stock or other equity securities of TARGET outstanding and no
outstanding options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of TARGET or
contracts, commitments, understandings, or arrangements by which TARGET is or
may be bound to issue additional shares of its capital stock or options,
warrants, or rights to purchase or acquire any additional shares of its capital
stock.
Section 4.4 Financial Statements.
---------------------
TARGET has previously delivered to PURCHASER copies of all TARGET Financial
Statements for periods ended prior to the date hereof and will deliver to
PURCHASER copies of all TARGET Financial Statements prepared subsequent to the
date hereof. The TARGET Financial Statements (as of the dates thereof and for
the periods covered thereby) (a) are or, if dated after the date of this
Agreement, will be in accordance with the books and records of TARGET, which are
or will be, as the case may be, complete and correct in all material respects
and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (b) present or will present, as the
case may be, fairly the financial position of TARGET as of the dates indicated
and the results of operations, changes in shareholders' equity, and cash flows
of TARGET for the
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periods indicated, in accordance with GAAP (subject to any exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material).
Section 4.5 Absence of Undisclosed Liabilities.
-----------------------------------
Except as set forth in the TARGET Disclosure Letter, TARGET has no Liabilities
that are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on TARGET, except Liabilities which are accrued or reserved
against in the balance sheets of TARGET as of December 31, 1999 and September
30, 2000 included in the TARGET Financial Statements or reflected in the notes
thereto. Except as set forth in the TARGET Disclosure Letter, TARGET has not
incurred or paid any Liability since September 30, 2000, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on TARGET.
Section 4.6 Absence of Certain Changes of Events.
-------------------------------------
Except as set forth in the TARGET Disclosure Letter, since September 30, 2000,
(a) there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on TARGET, and (b) TARGET has not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of TARGET provided in
Article 7 of this Agreement.
Section 4.7 Tax Matters.
------------
(a) All Tax returns required to be filed by or on behalf of TARGET have been
duly filed or requests for extensions have been timely filed, granted, and have
not expired for periods ended on or before December 31, 1999, and on or before
the date of the most recent fiscal year end immediately preceding the Effective
Time, except to the extent that all such failures to file, taken together, are
not reasonably likely to have a Material Adverse Effect on TARGET, and all
returns filed are complete and accurate to the Knowledge of TARGET. All Taxes
shown on filed returns have been paid. As of the date of this Agreement, there
is no audit examination, deficiency, or refund Litigation with respect to any
Taxes that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on TARGET, except as
reserved against in the TARGET Financial Statements delivered prior to the date
of this Agreement. All Taxes and other Liabilities due with respect to completed
and settled examinations or concluded Litigation have been paid.
(b) TARGET has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due that is currently in
effect, and no unpaid tax deficiency has been asserted in writing against or
with respect to TARGET, which deficiency is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET.
(c) Adequate provision for any Taxes due or to become due for TARGET for the
period or periods through and including the date of the respective TARGET
Financial Statements has been made and is reflected on such TARGET Financial
Statements.
9
(d) Deferred Taxes of TARGET are as set forth in the TARGET Disclosure
Letter.
(e) TARGET is in compliance with, and its records contain all information
and documents (including, without limitation, properly completed IRS Forms W-9)
necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET.
Section 4.8 TARGET Allowance for Possible Loan Losses.
------------------------------------------
The allowance for possible loan or credit losses (the "TARGET Allowance")
shown on the balance sheets of TARGET included in the most recent TARGET
Financial Statements dated prior to the date of this Agreement was, and the
TARGET Allowance shown on the balance sheets of TARGET included in the TARGET
Financial Statements as of dates subsequent to the execution of this Agreement
will be, maintained in accordance with, and are in the amounts required by GAAP
and applicable regulatory requirements or guidelines as of the dates thereof
except where the failure of such TARGET Allowance to be so maintained is not
reasonably likely to have a Material Adverse Effect on TARGET.
Section 4.9 Assets.
-------
Except as set forth in the TARGET Disclosure Letter or as disclosed or reserved
against in the TARGET Financial Statements, TARGET has good and marketable
title, free and clear of all Liens, to all of its Assets. All material tangible
properties used in the businesses of TARGET are in good condition, reasonable
wear and tear excepted, and are usable in the ordinary course of business
consistent with TARGET's past practices. All Assets which are material to
TARGET's business, held under leases or subleases by TARGET are held under valid
Contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The policies of fire, theft, liability,
and other insurance maintained with respect to the Assets or business of TARGET
are as set forth in the TARGET Disclosure Letter, and the fidelity and blanket
bonds in effect as to which TARGET is a named insured are as set forth in the
TARGET Disclosure Letter. The Assets of TARGET include all assets required to
operate the business of TARGET as presently conducted.
Section 4.10 Environmental Matters.
----------------------
Except as set forth in the TARGET Disclosure Letter:
(a) TARGET, its Participation Facilities and its Loan Properties are, and
have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on TARGET.
(b) There is no Litigation pending or, to the Knowledge of TARGET,
threatened before any court, governmental agency or authority or other forum in
which TARGET or any of its Participation Facilities has been or, with respect to
threatened Litigation, may be named as a
10
defendant (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the environment of any
Hazardous Material or oil, whether or not occurring at, on, under or involving a
site owned, leased or operated by TARGET or any of its Participation Facilities,
except for such Litigation pending or, to the Knowledge of TARGET, threatened
that is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on TARGET.
(c) There is no Litigation pending which TARGET has received proper notice
or service thereof or, to the Knowledge of TARGET, threatened before any court,
governmental agency or board or other forum in which any of its Loan Properties
has been or, with respect to threatened litigation, may be named as a defendant
or potentially responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material or oil, whether or not occurring at, on,
under or involving a Loan Property, except for such Litigation pending or, to
the Knowledge of TARGET, threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET.
(d) To the Knowledge of TARGET , there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c) of this Section 4.10,
except such as is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET.
(e) During the period of (i) TARGET's ownership or operation of any of its
current properties, (ii) TARGET's participation in the management of any
Participation Facility, or (iii) TARGET's holding of a security interest in a
Loan Property, there have been no releases of Hazardous Material or oil in, on,
under or affecting any such property, Participation Facility, or to the
Knowledge of TARGET Loan Property, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on TARGET.
(f) Prior to the period of (i) TARGET's ownership or operation of any of its
current properties, (ii) TARGET's participation in the management of any
Participation Facility, or (iii) TARGET's holding of a security interest in a
Loan Property, to the Knowledge of TARGET, there were no releases of Hazardous
Material or oil in, on, under or affecting any such property, Participation
Facility or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET.
Section 4.11 Compliance with Laws.
---------------------
(a) TARGET is duly characterized and qualified as a state non-member bank
under the Laws of the State of Florida and the FDI Act. TARGET has in effect all
Permits necessary for it to own, lease or operate its Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on TARGET, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET.
(b) Except as set forth in the TARGET Disclosure Letter, TARGET:
11
(i) is not in violation of any Laws, Orders or Permits applicable to
its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on TARGET; and
(ii) has not received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (A) asserting that TARGET is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on TARGET, (B) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET, or (C) requiring TARGET to
enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment or memorandum of understanding, or to
adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
Section 4.12 Labor Relations.
----------------
TARGET is not the subject of any Litigation asserting that it has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment, nor is there any strike or
other labor dispute involving TARGET, pending or, to its Knowledge, threatened,
nor to its Knowledge, is there any activity involving TARGET's employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
Section 4.13 Employee Benefit Plans.
-----------------------
(a) TARGET has set forth in the TARGET Disclosure Letter, and delivered or
made available to PURCHASER, copies in each case of all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plans all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including, without limitation, "employee benefit
plans," as that term is defined in Section 3(3) of ERISA, currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by TARGET or
any Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "TARGET Benefit Plans"). Any of the TARGET Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "TARGET ERISA Plan." Each TARGET ERISA Plan
which is also a "defined benefit plan" (as defined in Section 414(j)) of the
Internal Revenue Code) is referred to herein as a "TARGET Pension Plan." No
TARGET Pension Plan is or has been a multi-employer plan within the meaning of
Section 3(37) of ERISA.
12
(b) All TARGET Benefit Plans are in compliance with the applicable terms of
ERISA, the Internal Revenue Code, and any other applicable Laws the breach or
violation of which are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on TARGET. Each TARGET ERISA Plan which is
intended to be qualified under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the Internal Revenue Service, and
TARGET is not aware of any circumstances likely to result in revocation of any
such favorable determination letter. To the Knowledge of TARGET, TARGET has not
engaged in a transaction with respect to any TARGET Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof would
subject TARGET to a tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
TARGET.
(c) No TARGET ERISA Plan which is a defined benefit pension plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, based on actuarial assumptions set forth for such plan's most recent
actuarial valuation. Since the date of the most recent actuarial valuation,
there has been (i) no material change in the financial position of any TARGET
Pension Plan, (ii) no change in the actuarial assumptions with respect to any
TARGET Pension Plan, and (iii) no increase in benefits under any TARGET Pension
Plan as a result of plan amendments or changes in applicable law, which is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on TARGET or materially adversely affect the funding status of any such
plan. Neither any TARGET Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
TARGET, or the single-employer plan of any entity which is considered one
employer with TARGET under Section 4001 of ERISA or Section 414 of the Internal
Revenue Code or Section 302 of ERISA (whether or not waived) (an "ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA, which is
reasonably likely to have a Material Adverse Effect on TARGET. TARGET has not
provided, and is not required to provide, security to a TARGET Pension Plan or
to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29)
of the Code.
(d) Within the six-year period preceding the Effective Time, no Liability
under Subtitle C or D of Title IV or ERISA has been or is expected to be
incurred by TARGET with respect to any ongoing, frozen or terminated single-
employer plan or the single-employer plan of any ERISA Affiliate, which
Liability is reasonably likely to have a Material Adverse Effect on TARGET.
Except as set forth in the TARGET Disclosure Letter, TARGET has not incurred any
withdrawal Liability with respect to a multi-employer plan under Subtitle B of
Title TV or ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to have a Material Adverse
Effect on TARGET. No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any TARGET Pension Plan or by any
ERISA Affiliate within the 12-month period ending on the date hereof.
(e) TARGET has no obligations for retiree health and life benefits under any
of the TARGET Benefit Plans and there are no restrictions on the rights of
TARGET to amend or
13
terminate any such Plan without incurring any Liability thereunder, which
Liability is reasonably likely to have a Material Adverse Effect on TARGET.
(f) Except as set forth in the TARGET Disclosure Letter, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of TARGET from TARGET
under any TARGET Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any TARGET Benefit Plan, or (iii) result in any acceleration of
the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of TARGET and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the TARGET Financial Statements to the extent
required by and in accordance with GAAP.
Section 4.14 Material Contracts.
-------------------
Except as set forth in the TARGET Disclosure Letter or otherwise reflected in
the TARGET Financial Statements, neither TARGET, nor any of its Assets,
businesses or operations, is a party to, or is bound or affected by, or receives
benefits under, (a) any employment, severance, termination, consulting or
retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $25,000, and (b) any Contract relating to the
borrowing of money by TARGET or the guarantee by TARGET of any such obligation
(other than Contracts evidencing deposit liabilities, purchases of federal
funds, fully secured repurchase agreements, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business)
(together with all Contracts referred to in Sections 4.9 and 4.13(a) of this
Agreement, the "TARGET Contracts"). TARGET is not in Default under any TARGET
Contract. All of the indebtedness of TARGET for money borrowed is prepayable at
any time by TARGET without penalty or premium.
Section 4.15 Legal Proceedings.
------------------
Except as set forth in the TARGET Disclosure Letter, there is no Litigation
instituted or pending or, to the Knowledge of TARGET, threatened (or unasserted
but considered probable of assertion and which, if asserted, would have at least
a reasonable probability of an unfavorable outcome) against TARGET, or against
any Asset, interest, or right of TARGET, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against TARGET, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on TARGET.
Section 4.16 Reports.
--------
Except as set forth in the TARGET Disclosure Letter, since January 1, 1998,
TARGET has timely filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with all
Regulatory Authorities. As of their respective dates, each of such reports and
documents,
14
including the financial statements, exhibits, and schedules thereto, complied in
all material respects with all applicable Laws. As of their respective dates,
none of such reports or documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
Section 4.17 Statements True and Correct.
----------------------------
No statement, certificate, instrument or other writing furnished or to be
furnished by TARGET or any Affiliate thereof to PURCHASER pursuant to this
Agreement or any other document, agreement or instrument referred to herein
contains or will contain any untrue statement of material fact or will omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by TARGET or any Affiliate thereof for
inclusion in the Proxy Statement to be mailed to TARGET's shareholders in
connection with the Shareholders' Meeting, and any other documents to be filed
by TARGET or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of TARGET, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the Shareholders'
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that TARGET or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
Section 4.18 Accounting, Tax and Regulatory Matters.
---------------------------------------
Except as set forth in the TARGET Disclosure Letter, neither TARGET nor any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (a) prevent the transactions
contemplated hereby, including the Merger, from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (b)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the imposition of a
condition or restriction of the referred to in the second sentence of such
Section. To the Knowledge of TARGET, there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner without the imposition of any
condition or restriction of the type described in the second sentence of such
Section 9.1(b).
Section 4.19 Charter Provisions.
-------------------
TARGET has taken all action so that the entering into of this Agreement and
the consummation of the Merger and the other transactions contemplated by this
Agreement do not and will not result in the grant of any rights to any Person
under the Articles of Incorporation, Bylaws or other governing instruments of
TARGET or restrict or impair the ability of PURCHASER to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of TARGET that may
be acquired or controlled by it.
15
ARTICLE 5.
----------
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
With such exceptions, if any, as may be set forth in a letter (the
"PURCHASER Disclosure Letter") to be delivered by PURCHASER to TARGET on the
date hereof or as set forth in PURCHASER's SEC Documents, PURCHASER hereby
represents and warrants to TARGET as follows:
Section 5.1 Organization, Standing and Power.
---------------------------------
PURCHASER is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Georgia, and is duly registered as a
bank holding company under the BHC Act. PURCHASER has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets. PURCHASER is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on PURCHASER.
Section 5.2 Authority; No Breach.
---------------------
(a) PURCHASER has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of PURCHASER. This Agreement
represents a legal, valid, and binding obligation of PURCHASER, enforceable
against PURCHASER in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by PURCHASER, nor
the consummation by PURCHASER of the transactions contemplated hereby, nor
compliance by PURCHASER with any of the provisions hereof will (i) conflict with
or result in a breach of any provision of PURCHASER's Articles of Incorporation
or Bylaws, or (ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any Asset of any
PURCHASER Company under, any Contract or Permit of any PURCHASER Company, where
such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
PURCHASER, or, (iii) subject to receipt of the requisite approvals referred to
in Section 9.1(b) of this Agreement, violate any Law or Order applicable to any
PURCHASER Company or any of their respective Assets.
16
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on PURCHASER, no notice to, filing with, or Consent of
any public body or authority is necessary for the consummation by PURCHASER of
the Merger and the other transactions contemplated in this Agreement.
Section 5.3 Capital Stock.
--------------
(a) The authorized capital stock of PURCHASER consists of (i) 15,000,000
shares of PURCHASER Common Stock, of which 8,347,008 shares are issued and
outstanding as of the date of this Agreement and (ii) 5,000,000 shares of
Preferred Stock, none of which are issued or outstanding as of the date of this
Agreement. All of the issued and outstanding shares of PURCHASER Common Stock
are, and all of the shares of PURCHASER Common Stock to be issued in exchange
for shares of TARGET Common Stock upon consummation of the Merger, when issued
in accordance with the terms of this Agreement, will be, duly and validly issued
and outstanding and fully paid and nonassessable under the GBCC. None of the
outstanding shares of PURCHASER Common Stock has been, and none of the shares of
PURCHASER Common Stock to be issued in exchange for shares of TARGET Common
Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past shareholders of PURCHASER. PURCHASER
has reserved 637,500 shares of PURCHASER Common Stock for issuance under the
PURCHASER Stock Plans, pursuant to which options to purchase not more than
270,155 shares of PURCHASER Common Stock are outstanding as of the date of this
Agreement.
(b) Except as set forth in Section 5.3(a) of this Agreement, or as set forth
in the PURCHASER Disclosure Letter or in PURCHASER's SEC Documents, there are no
shares of capital stock or other equity securities of PURCHASER outstanding and
no outstanding options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of PURCHASER
or contracts, commitments, understandings, or arrangements by which PURCHASER is
or may be bound to issue additional shares of its capital stock or options,
warrants, or rights to purchase or acquire any additional shares of its capital
stock.
Section 5.4 PURCHASER SEC Reports.
----------------------
PURCHASER has heretofore made available to TARGET its SEC Documents. As of
the date thereof, PURCHASER's SEC Documents were prepared in all material
respects in accordance with the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. PURCHASER has timely
filed all SEC Documents required to be filed by it pursuant to the 1933 Act and
the 1934 Act which complied as to form, at the time such form, document or
report was filed, in all material respects with the applicable requirements of
the 1933 Act and the 1934 Act.
17
Section 5.5 Financial Statements.
---------------------
The PURCHASER Financial Statements (as of the dates thereof and for the
periods covered thereby) (a) are or, if dated after the date of this Agreement,
will be in accordance with the books and records of the PURCHASER Companies,
which are or will be, as the case may be, complete and correct in all material
respects and which have been or will have been, as the case may be, maintained
in accordance with good business practices, and (b) present or will present, as
the case may be, fairly the consolidated financial position of the PURCHASER
Companies as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows of the PURCHASER Companies for
the periods indicated, in accordance with GAAP (subject to exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material).
Section 5.6 Absence of Undisclosed Liabilities.
-----------------------------------
Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC
Documents, no PURCHASER Company has any Liabilities that are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
PURCHASER, except Liabilities which are accrued or reserved against in the
PURCHASER Financial Statements or reflected in the notes thereto. Except as set
forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC Documents, no
PURCHASER Company has incurred or paid any Liability since September 30, 2000,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practice and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on PURCHASER.
Section 5.7 Absence of Certain Changes or Events.
-------------------------------------
Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC
Documents, since September 30, 2000, except as disclosed in SEC Documents filed
by PURCHASER prior to the date of this Agreement, (a) there have been no events,
changes or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on PURCHASER, and
(b) the PURCHASER Companies have not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of PURCHASER provided in
Article 7 of this Agreement.
Section 5.8 Tax Matters.
------------
(a) All Tax returns required to be filed by or on behalf of any of the
PURCHASER Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1999, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, except to the extent that all such
failures to file, taken together, are not reasonably likely to have a Material
Adverse Effect on PURCHASER, and all returns filed are complete and accurate to
the Knowledge of PURCHASER. All Taxes shown on filed returns have been paid. As
of the date of this Agreement, there is no audit examination, deficiency, or
refund Litigation with respect to any Taxes that is reasonably likely to result
in a determination that would have, individually or in the aggregate, a Material
Adverse Effect on PURCHASER, except as reserved against in the PURCHASER
Financial Statements delivered prior to the date of this Agreement. All Taxe
18
and other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the PURCHASER Companies has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due that
is currently in effect, and no unpaid tax deficiency has been asserted in
writing against or with respect to any PURCHASER Company, which deficiency is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on PURCHASER.
(c) Adequate provision for any Taxes due or to become due for any of the
PURCHASER Companies for the period or periods through and including the date of
the respective PURCHASER Financial Statements has been made and is reflected on
such PURCHASER Financial Statements.
(d) Deferred Taxes of the PURCHASER Companies have been provided for in
accordance with GAAP.
Section 5.9 Environmental Matters.
----------------------
Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC
Documents:
(a) Each PURCHASER Company, its Participation Facilities and its Loan
Properties are, and have been, in compliance with all Environmental Laws, except
for violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PURCHASER.
(b) There is no Litigation pending or, to the Knowledge of PURCHASER,
threatened before any court, governmental agency or authority or other forum in
which any PURCHASER Company or any of its Participation Facilities has been or,
with respect to threatened Litigation, may be named as a defendant (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material
(as defined below) or oil, whether or not occurring at, on, under or involving a
site owned, leased or operated by any PURCHASER Company or any of its
Participation Facilities, except for such Litigation pending or, to the
Knowledge of PURCHASER, threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on PURCHASER.
(c) There is no Litigation pending or, to the Knowledge of PURCHASER,
threatened before any court, governmental agency or board or other forum in
which any of its Loan Properties (or any PURCHASER Company in respect of such
Loan Property) has been or, with respect to threatened Litigation, may be named
as a defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor), with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material or oil, whether or
not occurring at, on, under or involving a Loan Property, except for such
Litigation pending or, to the Knowledge of PURCHASER, threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on XXXXXXXXX.
00
(x) To the Knowledge of PURCHASER, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on PURCHASER.
(e) During the period of (i) any PURCHASER Company's ownership or operation
of any of their respective current properties, (ii) any PURCHASER Company's
participation in the management of any Participation Facility, or (iii) any
PURCHASER Company's holding of a security interest in a Loan Property, there
have been no releases of Hazardous Material or oil in, on, under or affecting
such property, Participation Facility or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on PURCHASER.
(f) Prior to the period of (i) any PURCHASER Company's ownership or
operation of any of their respective current properties, (ii) any PURCHASER
Company's participation in the management of any Participation Facility, or
(iii) any PURCHASER Company's holding of a security interest in a Loan Property,
to the Knowledge of PURCHASER, there were no releases of Hazardous Material or
oil in, on, under or affecting any such property, Participation Facility or Loan
Property, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on PURCHASER.
Section 5.10 Compliance with Laws.
---------------------
(a) PURCHASER is duly registered as a bank holding company under the BHC
Act. Each PURCHASER Company has in effect all Permits necessary for it to own,
lease or operate its Assets and to carry on its business as now conducted,
except for those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on PURCHASER, and
there has occurred no Default under any such Permit, other than Defaults which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on PURCHASER.
(b) Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's
SEC Documents, no PURCHASER Company:
(i) is in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on PURCHASER; or
(ii) has received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (A) asserting that any PURCHASER Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on PURCHASER, (B) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PURCHASER, or (C) requiring any
PURCHASER Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any
20
Board resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of dividends.
Section 5.11 Legal Proceedings.
------------------
Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC
Documents, there is no Litigation instituted or pending or, to the Knowledge of
PURCHASER, threatened (or unasserted but considered probable of assertion and
which, if asserted, would have at least a reasonable probability of an
unfavorable outcome) against PURCHASER, or against any asset, interest, or right
of PURCHASER, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PURCHASER, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against PURCHASER, that are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on PURCHASER.
Section 5.12 Reports.
--------
Except as set forth in the PURCHASER Disclosure Letter or in PURCHASER's SEC
Documents, since January 1, 1998, each PURCHASER Company has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with all Regulatory Authorities.
As of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, none of such
reports and documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
Section 5.13 Statements True and Correct.
----------------------------
No statement, certificate, instrument or other writing furnished or to be
furnished by any PURCHASER Company or any Affiliate thereof to TARGET pursuant
to this Agreement or any other document, agreement or instrument referred to
herein contains or will contain any untrue statement of material fact or will
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any PURCHASER Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to TARGET's
shareholders in connection with the Shareholders' Meeting, and any other
documents to be filed by any PURCHASER Company or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the shareholders of
TARGET, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Proxy Statement or any amendment thereof or supplement thereto, at the time
of the Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Shareholders' Meeting. All documents that any PURCHASER Company
or any Affiliate thereof is responsible for filing with any Regulatory Authority
in connection with the transactions contemplated hereby will comply as to form
in all material respects with the provisions of applicable Law.
21
ARTICLE 6.
----------
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
--------------------------------------------
MERGER SUB hereby represents and warrants to TARGET as follows:
Section 6.1 Organization, Standing and Power.
---------------------------------
MERGER SUB is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Florida. MERGER SUB has the corporate
power and authority to carry on its duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdiction where the character of its assets or the nature
of conduct of its business required it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on MERGER Sub.
Section 6.2 Authority; No Breach.
---------------------
(a) MERGER Sub has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of MERGER SUB. This Agreement
represents a legal, valid, and binding obligation of MERGER SUB, enforceable
against MERGER SUB in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by MERGER SUB, nor
the consummation by MERGER SUB of the transactions contemplated hereby, nor
compliance by MERGER SUB with any of the provisions hereof will (i) conflict
with or result in a breach of any provision of MERGER SUB's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of MERGER SUB under, any Contract or Permit of MERGER SUB, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on MERGER SUB,
or, (iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to MERGER SUB or
any of its Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and other than
Consents required from Regulatory Authorities, and other than notices to or
filings with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, and other than Consents,
filings or notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
MERGER SUB, no notice to, filing with, or Consent of any public body or
authority is necessary for the consummation by MERGER SUB of the Merger and the
other transactions contemplated in this Agreement.
22
ARTICLE 7.
----------
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
Section 7.1 Affirmative Covenants of TARGET.
--------------------------------
Unless the prior written consent of PURCHASER and MERGER SUB shall have been
obtained, and except as otherwise contemplated herein, TARGET shall: (a) to
operate its business in the usual, regular, and ordinary course; (b) to preserve
intact its business organization and Assets and maintain its rights and
franchises; (c) to use its reasonable efforts to cause its representations and
warranties to be correct at all times; and (d) to take no action which would (i)
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the second sentence of Section 9.1(b) of
this Agreement or (ii) adversely affect in any material respect the ability of
either Party to perform its covenants and agreements under this Agreement.
Section 7.2 Negative Covenants of TARGET.
-----------------------------
From the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, TARGET covenants and agrees that it will not do
or agree or commit to do any of the following without the prior written consent
of the chief executive officer or chief financial officer of PURCHASER, which
consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of TARGET; or
(b) incur any additional debt obligation or other obligation for borrowed
money in excess of an aggregate of $25,000 except in the ordinary course of the
business of TARGET consistent with past practices, or impose, or suffer the
imposition, on any share of stock held by TARGET of any Lien or permit any such
Lien to exist, except with regard to Liens on the stock of TARGET set forth in
the TARGET Disclosure Letter; or
(c) except as set forth in the TARGET Disclosure Letter, repurchase, redeem,
or otherwise acquire or exchange (other than exchanges in the ordinary course
under employee benefit plans), directly or indirectly, any shares, or any
securities convertible into any shares, of the capital stock of TARGET, or
declare or pay any dividend or make any other distribution in respect of
TARGET's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of stock options
outstanding as of the date hereof and pursuant to the terms thereof in existence
on the date hereto, or as set forth in the TARGET Disclosure Letter, issue,
sell, pledge, encumber, authorize the issuance of, or enter into any Contract to
issue, sell, pledge, encumber, or authorize the issuance of or otherwise permit
to become outstanding, any additional shares of TARGET Common Stock or any other
capital stock of TARGET, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine or reclassify any capital stock of TARGET or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of TARGET Common Stock or sell, lease, mortgage or
otherwise
23
dispose of or otherwise encumber (i) any shares of capital stock of TARGET or
(ii) any Asset having a book value in excess of $25,000 other than in the
ordinary course of business for reasonable and adequate consideration; or
(f) acquire direct or indirect control over any Person, other than in
connection with (i) internal reorganizations or consolidations involving
existing Subsidiaries, (ii) foreclosures in the ordinary course of business, or
(iii) acquisitions of control by a depository institution Subsidiary in its
fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees or
officers of TARGET (including such discretionary increases as may be
contemplated by existing employment agreements), except in accordance with past
practice set forth in the TARGET Disclosure Letter or as required by Law; pay
any bonus except in accordance with past practice set forth in the TARGET
Disclosure Letter or the provisions of any applicable program or plan adopted by
its Board of Directors prior to the date of this Agreement; enter into or amend
any severance agreements with officers of TARGET; grant any increase in fees or
other increases in compensation or other benefits to directors of TARGET except
in accordance with past practice as described in the TARGET Disclosure Letter;
or
(h) except with regard to the employment agreements referenced in Section
7.2(g), enter into or amend any employment Contract between TARGET and any
Person (unless such amendment is required by Law) that TARGET does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of TARGET or make any material
change in or to any existing employee benefit plans of TARGET other than any
such change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any accounting methods or systems of
internal accounting controls, except as may be appropriate to conform to changes
in regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past practice,
settle Litigation involving any Liability of TARGET for money damages in excess
of $25,000 or which involves material restrictions upon the operations of
TARGET; or
(l) except in the ordinary course of business, modify, amend or terminate
any material Contract or waive, release, compromise or assign any material
rights or claims.
Section 7.3 Covenants of PURCHASER.
-----------------------
From the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, PURCHASER covenants and agrees that it shall
continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment, to enhance the long-term value of
the PURCHASER Common Stock and the business prospects of the PURCHASER Companies
and, to the extent consistent therewith, to use all reasonable efforts to
preserve intact the
24
PURCHASER Companies' core businesses and goodwill with their respective
employees and the communities they serve.
Section 7.4 Adverse Changes in Condition.
-----------------------------
Each Party agrees to give written notice promptly to the other Party upon
becoming aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (a) is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
it or (b) is reasonably likely to cause or constitute a material breach of any
of its representations, warranties, or covenants contained herein, and to use
its best efforts to prevent or promptly to remedy the same.
Section 7.5 Reports.
--------
Each Party shall file all reports required to be filed by it with Regulatory
Authorities between the date of this Agreement and the Effective Time and shall
deliver to the other Party copies of all such reports promptly after the same
are filed. If financial statements are contained in any such reports filed with
the SEC, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in shareholders'
equity, and cash flows for the periods then ended in accordance with GAAP
(subject in the case of interim financial statements to normal recurring year-
end adjustments that are not material). As of their respective dates, such
reports filed with the SEC will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.
ARTICLE 8.
----------
ADDITIONAL AGREEMENTS
---------------------
Section 8.1 Shareholder Approval.
---------------------
TARGET shall call a Shareholders' Meeting for the purpose of voting upon
approval of the Merger and this Agreement and such other related matters as it
deems appropriate. In connection with the Shareholders' Meeting, (a) TARGET and
PURCHASER shall prepare a Proxy Statement and mail it to the TARGET's
shareholders, (b) the Parties shall furnish to each other all information
concerning them that they may reasonably request in connection with such Proxy
Statement, (c) the Board of Directors of TARGET shall recommend (subject to
compliance with their fiduciary duties as advised by counsel) to its
shareholders that they approve this Agreement, and (d) the Board of Directors
and officers of TARGET shall use their reasonable efforts to obtain such
shareholders' approval (subject to compliance with their fiduciary duties as
advised by counsel).
Section 8.2 Applications.
-------------
PURCHASER shall promptly prepare and file, and TARGET shall cooperate in the
preparation and, where appropriate, filing of, applications with all Regulatory
Authorities having jurisdiction over the transactions contemplated by this
Agreement seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. As soon as practicable after
delivery thereof to or receipt thereof from the appropriate Regulatory
Authorities, PURCHASER shall deliver or cause to be delivered to TARGET two (2)
copies of (a) each application or notice filed with such
25
Regulatory Authorities in connection with the Merger, (b) all correspondence
between such Regulatory Authorities and PURCHASER in connection with the Merger,
and (c) any responses to any requests for additional information delivered by
PURCHASER to such Regulatory Authorities in connection with the Merger.
Section 8.3 Agreement as to Efforts to Consummate.
--------------------------------------
Subject to the terms and conditions of this Agreement, each Party agrees to
use, and to cause its Subsidiaries to use, its best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws, as promptly as practicable so as to
permit consummation of the Merger at the earliest possible date and to otherwise
enable consummation of the transactions contemplated hereby and shall cooperate
fully with the other Party hereto to that end, including, without limitation,
using its efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement. Each Party shall
use, and shall cause each of its Subsidiaries to use, its best efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
Section 8.4 Investigation and Confidentiality.
----------------------------------
(a) Between the date of this Agreement and the Effective Time, TARGET will
provide PURCHASER and its accountants, investment bankers, counsel and other
authorized representatives full access, during reasonable business hours and
under reasonable circumstances to any and all of TARGET's premises, properties,
contracts, commitments, books, records and other information (including tax
returns filed and those in preparation) and will cause its respective officers
and employees to furnish to PURCHASER and its authorized representatives any and
all financial, technical and operating data and other information pertaining to
TARGET's business, as PURCHASER shall from time to time reasonably request.
Prior to the Effective Time, each Party will keep the other Party advised of all
material developments relevant to its business and to consummation of the
Merger.
(b) Except as may be required by applicable law or legal process, and except
for such disclosure to those of its directors, officers, employees and
representatives as may be appropriate or required in connection with the
transactions contemplated hereby, each Party shall hold in confidence all
nonpublic information obtained from the other Party (including work papers and
other material derived therefrom) as a result of this Agreement or in connection
with the transactions contemplated hereby (whether so obtained before or after
the execution hereof) until such time as the Party providing such information
consents to its disclosure or such information becomes otherwise publicly
available. Promptly following any termination of this Agreement, each of the
Parties agrees to use its best efforts to cause its respective directors,
officers, employees and representatives to destroy or return to the providing
party all such nonpublic information (including work papers and other material
retrieved therefrom), including all copies thereof. Each Party shall, and shall
cause its advisers and agents to, maintain the confidentiality of all
confidential information furnished to it by the other Party concerning its
business, operations, and financial position and shall not use such information
for any purpose except in furtherance of the transactions contemplated by this
Agreement. If this Agreement is terminated prior to the Effective Time, each
Party shall promptly return all documents and copies thereof and all work papers
containing confidential information received from the other Party, except
26
one copy of certain materials that can be retained for legal files in accordance
with the provisions of the Confidentiality Agreements.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party.
Section 8.5 Press Releases.
---------------
Prior to the Effective Time, TARGET and PURCHASER shall consult with each
other as to the form and substance of any press release or other public
disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, however, that nothing in this Section 8.5 shall
be deemed to prohibit any Party from making any disclosure which its counsel
deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
Section 8.6 No Solicitation.
----------------
(a) TARGET shall not, nor shall it authorize or permit any officer, director
of employee of, or any investment banker, attorney or other advisor or
representative of, TARGET to, (i) solicit or initiate, or encourage the
submission of, any takeover proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
takeover proposal; provided, however, that, if in the opinion of its Board of
Directors, after consultation with counsel, such failure to act would be
inconsistent with its fiduciary duties to stockholders under applicable law,
TARGET may, in response to an unsolicited takeover proposal, and subject to
compliance with subparagraph (c) below, (A) furnish information with respect to
TARGET to any Person pursuant to a confidentiality agreement and (B) participate
in negotiations regarding such takeover proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the immediately preceding sentence by any executive officer of TARGET or any
investment banker, attorney or other advisor or representative of TARGET,
whether or not such person is purporting to act on behalf of TARGET or
otherwise, shall be deemed to be a breach of this Section 8.6 by TARGET. For
purposes of this Agreement, "takeover proposal" means an inquiry, proposal or
acquisition or purchase of a substantial amount of assets of TARGET (other than
investors in the ordinary course of business) or of over 15% of any class of
equity securities of TARGET or any tender offer or exchange offer that if
consummated would result in any Person beneficially owning 15% or more of any
class of equity securities of TARGET, or any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving TARGET other than the transactions
contemplated by this Agreement, or any other transaction the consummation of
which would reasonably be expected to impede, interfere with, prevent or
materially delay the Merger or which would reasonably be expected to dilute
materially the benefits to PURCHASER of the transactions contemplated hereby.
(b) Except as set forth herein, neither the Board of Directors of TARGET nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner
27
adverse to PURCHASER, the approval or recommendation of such Board of Directors
or any such committee of this Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any takeover proposal or (iii)
enter into any agreement with respect to any takeover proposal. Notwithstanding
the foregoing, if in the opinion of the TARGET Board of Directors, after
consultation with counsel, failure to do so would be inconsistent with its
fiduciary duties to TARGET shareholders under applicable law, then, prior to the
Shareholders' Meeting, the TARGET Board of Directors may (subject to the terms
of this and the following sentences) withdraw or modify its approval or
recommendation of this Agreement or the Merger, approve or recommend a superior
proposal, or enter into an agreement with respect to a superior proposal, in
each case at any time after the second business day following PURCHASER's
receipt of written notice (a "Notice of Superior Proposal") advising PURCHASER
that the TARGET Board of Directors has received a superior proposal, specifying
the material terms and conditions of such superior proposal and identifying the
Person making such superior proposal; provided that TARGET shall not enter into
an agreement with respect to a superior proposal unless TARGET shall have
furnished PURCHASER with written notice no later than 12:00 noon one (1) day in
advance of any date that it intends to enter into such agreement. In addition,
if TARGET proposes to enter into an agreement with respect to any takeover
proposal, it shall concurrently with entering into such agreement pay, or cause
to be paid, to PURCHASER the Expenses (to the extent provided by Section
11.2(b)) and the Superior Proposal Termination Fee. For purposes of this
Agreement, a "superior proposal" means any bona fide takeover proposal to
acquire, directly or indirectly, for consideration consisting of cash and/or
securities, more than 50% of the shares of TARGET Common Stock then outstanding
or all or substantially all of the assets of TARGET and otherwise on terms which
the TARGET Board of Directors determines in its good faith judgment (based on
the advice of a financial advisor of nationally recognized reputation) to be
more favorable to its shareholders than the Merger.
(c) In addition to the obligations of TARGET set forth in subsection (b)
above, TARGET shall immediately advise PURCHASER orally and in writing of any
request for information or of any takeover proposal, or any inquiry with respect
to or which could lead to any takeover proposal, the material terms and
conditions of such request, takeover proposal or inquiry, and the identity of
the person making any takeover proposal or inquiry. TARGET shall keep PURCHASER
fully informed of the status and details (including amendments or proposed
amendments) of any such request, takeover proposal or inquiry.
(d) Nothing contained in this Section 8.6 shall prohibit TARGET from making
any disclosure to TARGET's shareholders if, in the opinion of the TARGET Board
of Directors, after consultation with counsel, failure to so disclose would be
inconsistent with its fiduciary duties to its shareholders under applicable law;
provided that TARGET does not, except as permitted by Section 8.6(b) above,
withdraw or modify, or propose to withdraw or modify, its position with respect
to the Merger or approve or recommend, or propose to approve or recommend, a
takeover proposal.
28
Section 8.7 Tax Treatment.
--------------
Each of the Parties undertakes and agrees to use its reasonable efforts to
cause the Merger, and to take no action which would cause the Merger not, to
qualify for treatment as a "reorganization" within the meaning of Section 368(a)
of the Internal Revenue Code for federal income tax purposes.
Section 8.8 Employee Benefits and Contracts.
--------------------------------
PURCHASER shall maintain all TARGET hospitalization and medical benefits plans
in effect as of the Closing Date in full force and effect through December 31,
2000. From and after January 1, 2001, PURCHASER shall provide to the officers
and employees of TARGET employee benefits under PURCHASER's employee benefit
plans (other than stock option or other plans involving the potential issuance
of PURCHASER Common Stock) on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the PURCHASER Companies
to their similarly situated officers and employees, provided that for a period
of twelve (12) months after the Effective Time and except as otherwise provided
herein, PURCHASER shall provide to officers and employees of TARGET severance
benefits in accordance with the policies of either (a) TARGET as set forth in
the TARGET Disclosure Letter, or (b) PURCHASER, whichever of (a) or (b) will
provide the greater benefit to the officer or employee. For purposes of
participation and vesting under such employee benefit plans, the service of the
employees of TARGET prior to the Effective Time shall be treated as service with
a PURCHASER Company participating in such employee benefit plans. Except as
otherwise provided herein, PURCHASER also shall honor in accordance with their
terms all employment, severance, consulting and other compensation Contracts set
forth in the TARGET Disclosure Letter between TARGET and any current or former
director, officer, or employee thereof and all provisions for vested benefits or
other vested amounts earned or accrued through the Effective Time under the
TARGET Benefit Plans.
Section 8.9 Large Deposits.
---------------
Prior to the Closing, TARGET will provide PURCHASER with a list of all
certificates of deposit or checking, savings or other deposits owned by persons
who, to the Knowledge of the TARGET, had deposits aggregating more than $100,000
and a list of all certificates of deposit or checking, savings or other deposits
owned by directors and officers of TARGET and their Affiliates in an amount
aggregating more than $100,000 as of the last day of the calendar month
immediately prior to the Closing.
Section 8.10 Indemnification Against Certain Liabilities.
--------------------------------------------
PURCHASER agrees that all rights to indemnification and all limitations of
liability existing in favor of the officers and directors of TARGET as provided
in its Articles of Incorporation and Bylaws as of the date hereof with respect
to matters occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect, without any amendment thereto, for a
period of not less than four (4) years from the Effective Time; provided,
however, that all rights to any indemnification in respect of any claim asserted
or made within such period shall continue until the final disposition of such
claim.
Section 8.11 Irrevocable Proxies.
--------------------
Concurrent with the execution hereof, TARGET shall obtain and deliver to
PURCHASER irrevocable proxies in substantially the form of Exhibit 2 hereto from
Affiliates of TARGET holding in the aggregate at least 51% of the TARGET Common
Stock and, in any event, from all officers and directors of TARGET and
29
from each TARGET shareholder who owns beneficially 5% or more of the TARGET
Common Stock.
ARTICLE 9.
----------
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
Section 9.1 Conditions to Obligations of Each Party.
----------------------------------------
The respective obligations of each Party to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by both Parties
pursuant to Sections 11.6(a) and 11.6(b) of this Agreement:
(a) All corporate action necessary by TARGET to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken.
(b) All Consents of, filings and registrations with, and notifications to,
all Regulatory Authorities required for consummation of the Merger shall have
been obtained or made and shall be in full force and effect, and all waiting
periods required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner (including,
without limitation, requirements relating to the raising of additional capital
or the disposition of Assets) which, in the reasonable judgment of the Board of
Directors of either Party, would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement so as to
render inadvisable the consummation of the Merger; provided, however, that no
such condition or restriction shall be deemed to be materially adverse unless it
materially differs from terms and conditions customarily imposed by any
Regulatory Authority in connection with similar transactions.
(c) Each Party shall have obtained any and all Consents required for
consummation of the Merger (other than those referred to in Section 9.3 of this
Agreement) or for the preventing of any Default under any Contract or Permit of
such Party which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such Party.
(d) No court or governmental or regulatory authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law or Order (whether temporary, preliminary or permanent) or taken any other
action which prohibits, materially restricts or makes illegal consummation of
the transactions contemplated by this Agreement.
(e) All necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of PURCHASER Common
Stock issuable pursuant to the Merger shall have been received.
Section 9.2 Conditions to Obligations of PURCHASER and MERGER SUB.
------------------------------------------------------
The obligations of PURCHASER and MERGER SUB to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the
30
satisfaction of the following conditions, unless waived by PURCHASER and
MERGER SUB pursuant to Section 11.6(a) of this Agreement:
(a) The representations and warranties of TARGET set forth or referred to in
this Agreement shall be true and correct in all respects as of the date of this
Agreement and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date), except (i) as expressly contemplated by
this Agreement, or (ii) for representations and warranties (other than the
representations and warranties set forth in Section 4.3 of this Agreement, which
shall be true in all respects) the inaccuracies of which relate to matters that
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on TARGET.
(b) Each and all of the agreements and covenants of TARGET to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly performed
and complied with in all material respects.
(c) TARGET shall have delivered to PURCHASER (i) a certificate, dated as of
the Effective Time and signed on its behalf by its chief executive officer, to
the effect that the conditions of its obligations set forth in Sections 9.2(a)
and 9.2(b) of this Agreement have been satisfied in all material respects, and
(ii) certified copies of resolutions duly adopted by TARGET's Board of Directors
and shareholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as PURCHASER and its counsel shall reasonably request.
(d) TARGET shall have delivered to PURCHASER an opinion of Smith, Mackinnon,
Greeley, Bowdoin, Edwards, Xxxxxxxx & Marks, P.A., counsel to TARGET, dated as
of the Closing, in substantially the form of Exhibit 3 hereto.
(e) Xxxx X. Xxxxxxxx and TARGET shall have executed and delivered an
Employment Agreement substantially in the form of Exhibit 4 hereto.
(f) Each of the officers and directors of TARGET specified in writing by
PURCHASER no later than two (2) Business Days prior to the Closing shall have
tendered to PURCHASER resignation letters in form and substance reasonably
acceptable to PURCHASER on or prior to the Closing Date, such resignations to be
effective immediately following the Closing Date.
(g) No proceeding or lawsuit shall have been commenced by any Person for the
purpose of obtaining any injunction, writ or preliminary restraining order to
the effect that the Merger may not be consummated as provided herein.
(h) Holders of not more than 10% of the outstanding shares of TARGET Common
Stock (in the aggregate) shall have filed written notice with TARGET that they
intend to demand payment for their shares.
31
(i) The Average Stock Price on the Closing Date shall not be more than
$11.50 per share.
(j) TARGET and Xxxx X. Xxxxxxxx shall have revoked and terminated in their
entirety (i) that certain Employment Contract dated October 5, 1986 between
TARGET and Xx. Xxxxxxxx, (ii) that certain Change in Control Agreement dated as
of May 3, 2000 between TARGET and Xx. Xxxxxxxx, and (iii) that certain Salary
Continuation Agreement dated July 20, 1993 between TARGET and Xx. Xxxxxxxx (the
"Xxxxxxxx Salary Continuation Agreement").
(k) TARGET and Xxxxxx Xxxxxxxx shall have revoked and terminated in its
entirety that certain Salary Continuation Agreement dated May 21, 1996 between
TARGET and Xx. Xxxxxxxx (the "Xxxxxxxx Salary Continuation Agreement").
Section 9.3 Conditions to Obligations of TARGET.
------------------------------------
The obligations of TARGET to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by TARGET pursuant to Section 11.6(b)
of this Agreement:
(a) The representations and warranties of PURCHASER set forth or referred to
in this Agreement shall be true and correct in all respects as of the date of
this Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date), except (i) as expressly
contemplated by this Agreement, or (ii) for representations and warranties
(other than the representations and warranties set forth in Section 5.3 of this
Agreement, which shall be true in all respects) the inaccuracies of which relate
to matters that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on PURCHASER.
(b) Each and all of the agreements and covenants of PURCHASER to be
performed and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly performed
and complied with in all material respects.
(c) PURCHASER shall have delivered to TARGET (i) a certificate, dated as of
the Effective Time and signed on its behalf by its chief executive officer and
its chief financial officer, to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have been
satisfied in all material respects, and (ii) certified copies of resolutions
duly adopted by PURCHASER's Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as TARGET and its counsel shall reasonably
request.
(d) PURCHASER shall have delivered to TARGET an opinion of Xxxxxx & Xxxxxx
LLP, counsel to PURCHASER, dated as of the Closing, in substantially the form of
Exhibit 4 hereto.
32
(e) TARGET shall have received from Xxxxxx & Xxxxxx LLP, counsel to
PURCHASER, a favorable opinion, dated on or about the Closing Date, based upon
certain representations of PURCHASER and certain assumptions, to the effect that
(i) the Merger will be treated for Federal income tax purposes as a
reorganization qualifying under the provisions of Section 368 of the Internal
Revenue Code, (ii) each of PURCHASER, MERGER SUB and TARGET will be a party to
the reorganization within the meaning of Section 368(b) of the Internal Revenue
Code, and (iii) the exchange in the Merger of TARGET Common Stock for PURCHASER
Common Stock will not give rise to gain or loss to the TARGET shareholders with
respect to such exchange (except to the extent of any cash received), which
opinion shall not have been withdrawn or modified in any material respect.
(f) No proceeding or lawsuit shall have been commenced by any Person for the
purpose of obtaining any injunction, writ or preliminary restraining order to
the effect that the Merger may not be consummated as provided herein.
(g) PURCHASER and Xx. Xxxxxxxx shall each have executed and delivered to the
other an agreement dated as of the Closing Date containing terms and conditions
substantially similar to the Xxxxxxxx Salary Continuation Agreement; provided,
however, that (i) for purposes of the vesting of benefits under such new
agreement, the service of Xx. Xxxxxxxx under the Xxxxxxxx Salary Continuation
Agreement prior to the Effective Time shall be treated as service with PURCHASER
under such new agreement, and (ii) Xx. Xxxxxxxx'x Annual Payment Benefit (as
described in the Xxxxxxxx Salary Continuation Agreement) under such new
agreement shall be $64,041 and shall not be paid until Xx. Xxxxxxxx attains the
minimum retirement age of 65.
(h) PURCHASER and Xx. Xxxxxxxx shall each have executed and delivered to the
other an agreement dated as of the Closing Date containing terms and conditions
substantially similar to the Xxxxxxxx Salary Continuation Agreement; provided,
however, that for purposes of the vesting of benefits under such new agreement,
the service of Xx. Xxxxxxxx under the Xxxxxxxx Salary Continuation Agreement
prior to the Effective Time shall be treated as service with PURCHASER under
such new agreement.
ARTICLE 10.
-----------
TERMINATION
-----------
Section 10.1 Termination.
------------
Notwithstanding any other provision of this Agreement, and notwithstanding the
approval of this Agreement by the shareholders of TARGET, this Agreement may be
terminated and the Merger abandoned at any time prior to the Effective Time:
(a) By consent of the Boards of Directors of PURCHASER, MERGER SUB and
TARGET; or
(b) By the Board of Directors of any Party (provided that the terminating
Party is not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a material
breach by any other Party of any representation or warranty contained in this
Agreement which cannot be or has not been cured within thirty (30)
33
days after the giving of written notice to the breaching Party of such breach
and which breach would provide the non-breaching party the ability to refuse to
consummate the Merger under the standard set forth in Section 9.2(a) of this
Agreement in the case of PURCHASER and Section 9.3(a) of this Agreement in the
case of TARGET; or
(c) By the Board of Directors of any Party (provided that the terminating
Party is not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a material
breach by any other Party of any covenant or agreement contained in this
Agreement which cannot be or has not been cured within (30) days after the
giving of written notice to the breaching Party of such breach; or
(d) By the Board of Directors of any Party (provided that the terminating
Party is not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event (i) any Consent of
any Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby has been denied by final nonappealable action
of such authority or if any action taken by such authority is not appealed
within the time limit for appeal, or (ii) if the shareholders of TARGET fail to
approve this Agreement and the transactions contemplated hereby as required by
the FBC at the Shareholders' Meeting where the transactions were presented to
such shareholders for approval and voted upon; or
(e) By the Board of Directors of any Party in the event that the Merger
shall not have been consummated by March 1, 2001, but only if the failure to
consummate the transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or
(f) By the Board of Directors of any Party (provided that the terminating
Party is not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event that any of the
conditions precedent to the obligations of such Party to consummate the Merger
cannot be satisfied or fulfilled by the date specified in Section 10.1(e) of
this Agreement; or
(g) By the Board of Directors of TARGET in connection with entering into a
definitive agreement in accordance with Section 8.6(b), provided that it has
complied with all provisions thereof, including the notice provisions therein,
and that it makes simultaneous payment of the Expenses and the Superior Proposal
Termination Fee.
(h) By the Board of Directors of TARGET if the Average Stock Price on the
Closing Date is less than $7.50 per share; provided, however, that PURCHASER
shall have the option, at its discretion, to increase the aggregate number of
shares of PURCHASER Common Stock to be delivered to the TARGET shareholders
pursuant to Section 3.1(b) hereof such that the total number of such shares,
when multiplied by the Average Stock Price on the Closing Date and added to the
aggregate Cash Consideration, equals the Merger Price, in which event TARGET may
not terminate this Agreement and abandon the Merger pursuant to this Section
10.1(h).
Section 10.2 Effect of Termination.
----------------------
In the event of the termination and abandonment of this Agreement pursuant to
Section 10.1 of this Agreement, this Agreement
34
shall become void and have no effect, except that (i) the provisions of this
Section 10.2 and Sections 8.4(b), 8.6(b) and 11.2 of this Agreement shall
survive any such termination and abandonment, and (ii) a termination pursuant to
Section 10.1 of this Agreement shall not relieve the breaching Party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination.
ARTICLE 11.
-----------
MISCELLANEOUS
-------------
Section 11.1 Definitions.
------------
Except as otherwise provided herein, the capitalized terms set forth below (in
their singular and plural forms as applicable) shall have the following
meanings:
"Acquisition Proposal" with respect to a Party shall mean any tender offer
or exchange offer or any proposal for a merger, acquisition of all of the stock
or Assets of, or other business combination involving such Party or the
acquisition of a substantial equity interest in, or a substantial portion of the
Assets of, such Party.
"Affiliate" of a Person shall mean: (a) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person or (b) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person.
"Agreement" shall mean this Agreement and Plan of Merger and the Exhibits
delivered pursuant hereto and incorporated herein by reference.
"Assets" of a Person shall mean all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"Average Stock Price" shall mean the arithmetic average closing price of
the PURCHASER Common Stock for all of the trading days during the sixty (60)
consecutive calendar day period immediately preceding the date that is five (5)
calendar days prior to the Closing Date; provided, however, that in no event
shall the Average Stock Price be less than $7.50 per share or more than $11.50
per share, except as otherwise provided herein.
"BHC Act" shall mean the Bank Holding Company Act of 1956, as amended, and
the rules and regulations promulgated thereunder.
"Cash Consideration" shall have the meaning provided in Section 3.1(b) of
this Agreement.
"Closing" shall mean the closing of the transactions contemplated hereby,
as described in Section 1.2 of this Agreement.
35
"Closing Date" shall have the meaning provided in Section 1.2 of this
Agreement.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets or business.
"Default" shall mean (a) any breach or violation of or default under any
Contract, Order or Permit, (b) any occurrence of any event that with the passage
of time or the giving of notice or both would constitute a breach or violation
of or default under any Contract, Order or Permit, or (c) any occurrence of any
event that with or without the passage of or the giving of notice would give
rise to a right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under, any
Contract, Order or Permit.
"Dissenting Shares" shall have the meaning provided in Section 3.1(b) of
this Agreement.
"Effective Time" shall mean the date and time at which the Merger becomes
effective as defined in Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws which are administered,
interpreted or enforced by the United States Environmental Protection Agency and
state and local agencies with primary jurisdiction over pollution or protection
of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Agent" shall have the meaning provided in Section 3.2 of this
Agreement.
"Exchange Ratio" shall mean the quotient of obtained by dividing (a) the
aggregate amount of the Stock Consideration paid to the TARGET shareholders
pursuant to subsection 3.1(b)(i) hereof, by (b) the Average Stock Price.
"Exhibits" 1 through 5, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof and may be referred to
in this Agreement and any other related instrument or document without being
attached hereto.
"Expenses" shall have the meaning provided in Section 11.2 of this
Agreement.
"FBC" shall mean the Florida Banking Code, including the Florida Interstate
Banking Act.
"FDI Act" shall mean the Federal Deposit Insurance Act, as amended, and the
rules and regulations promulgated thereunder.
36
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"Hazardous Material" shall mean any pollutant, contaminant, or hazardous
substance within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.,
or any similar federal, state or local Law.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" as used with respect to a Person shall mean the knowledge after
reasonable due inquiry of the Chairman, President, Chief Financial Officer,
Chief Accounting Officer, Chief Credit Officer, or any Senior or Executive Vice
President of such Person.
"Law" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities or business, including, without limitation, those promulgated,
interpreted or enforced by any of the Regulatory Authorities.
"Letter of Transmittal" shall have the meaning provided in Section 3.2 of
this Agreement.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including,
without limitation, costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than endorsements
of notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) pledges to secure deposits and other Liens incurred in the
ordinary course of the banking business, and (iii) Liens which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.
"Litigation" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including, without limitation, Contracts related to it),
or the transactions contemplated by this Agreement, but shall not include
regular, periodic examinations of depository institutions and their Affiliates
by Regulatory Authorities.
37
"Loan Property" shall mean any property owned by the Party in question or
by any of its Subsidiaries or in which such Party or Subsidiary holds a security
interest, and, where required by the context, includes the owner or operator of
such property, but only with respect to such property.
"Material" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question, provided that any
specific monetary amount stated in this Agreement shall determine materiality in
that instance.
"Material Adverse Effect" on a Party shall mean an event, change or
occurrence which has a material adverse impact on (a) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (b) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions contemplated by
this Agreement, provided that "material adverse impact" shall not be deemed to
include the impact of (x) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental authorities,
(y) changes in generally accepted accounting principles or regulatory accounting
principles generally applicable to banks and their holding companies, and (z)
the Merger and compliance with the provisions of this Agreement on the operating
performance of the Parties.
"Merger" shall mean the merger of MERGER SUB with and into TARGET referred
to in Section 1.1 of this Agreement.
"Merger Price" shall mean $7,187,461 in the aggregate, subject to
adjustment pursuant to Section 11.2(a)(i) hereof.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Notice of Superior Proposal" shall have the meaning provided in Section
8.6(b) of this agreement.
"Old Certificates" shall have the meaning provided in Section 3.2 of this
Agreement.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Regulatory Authority.
"Outstanding TARGET Shares" shall have the meaning provided in Section
3.1(b) of this Agreement.
"Participation Facility" shall mean any facility or property in which the
Party in question participates in the management (including any property or
facility held in a joint venture) and, where required by the context, said term
means the owner or operator of such facility or property, but only with respect
to such facility or property.
38
"Party" shall mean TARGET, PURCHASER and MERGER SUB, and "Parties" shall
mean all of TARGET, PURCHASER and MERGER SUB.
"Permit" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any, Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its capital stock, Assets,
Liabilities, or business.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"Pro-Rata Share" shall mean, with respect to each TARGET shareholder, the
quotient obtained by dividing (a) the number of shares of TARGET Common Stock
held by such TARGET shareholder, by (b) 197,955.
"Proxy Statement" shall mean the proxy statement used by TARGET to solicit
the approval of its shareholders of the transactions contemplated by this
Agreement.
"PURCHASER Common Stock" shall mean the $1.00 par value per share common
stock of PURCHASER.
"PURCHASER Companies" shall mean, collectively, PURCHASER and all PURCHASER
Subsidiaries.
"PURCHASER Disclosure Letter" shall have the meaning set forth in Article 5
hereof.
"PURCHASER Financial Statements" shall mean the consolidated financial
statements of PURCHASER contained in PURCHASER's SEC Documents, including the
notes thereto.
"PURCHASER Stock Plans" shall mean the existing stock option and other
stockbased compensation plans of PURCHASER.
"PURCHASER Subsidiaries" shall mean the Subsidiaries of PURCHASER.
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the Governors
of the Federal Reserve System, the Office of the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, all state banking and other
regulatory agencies having jurisdiction over the Parties and their respective
Subsidiaries, including the Florida Department of Banking and Finance, the NASD,
the SEC and all state securities agencies.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall mean all reports and registration statements filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
39
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, state blue sky laws, and
the rules and regulations of any Regulatory Authority promulgated thereunder.
"Shareholders' Meeting" shall mean the meeting of the shareholders of
TARGET to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"Stock Consideration" shall have the meaning provided in Section 3.1(b) of
this Agreement.
"Subsidiaries" shall mean all those corporations, banks, associations, or
other entities of which the entity in question owns or controls 5% or more of
the outstanding equity securities either directly or through an unbroken chain
of entities as to each of which 5 % or more of the outstanding equity securities
is owned directly or indirectly by its parent; provided, however, there shall
not be included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary capacity.
"Superior Proposal Termination Fee" shall have the meaning provided in
Section 11.2 of this Agreement.
"Surviving Corporation" shall mean TARGET as the surviving corporation
resulting from the Merger.
"TARGET Allowance" shall have the meaning set forth in Section 4.8 of this
Agreement.
"TARGET Benefit Plans" shall have the meaning set forth in Section 4.13 of
this Agreement.
"TARGET Common Stock" shall mean the $16.00 par value per share common
stock of TARGET.
"TARGET Disclosure Letter" shall have the meaning set forth in Article 4
hereof.
"TARGET ERISA Plan" shall have the meaning provided in Section 4.13 of this
Agreement.
"TARGET Financial Statements" shall mean (a) the balance sheets (including
related notes and schedules, if any) of TARGET as of September 30, 2000, and as
of December 31, 1999 and 1998 and the related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) for the nine months ended September 30, 2000, and for each of the three
fiscal years ended December 31, 1999, 1998, 1997, as previously furnished by
TARGET to PURCHASER, and (b) the balance sheets of TARGET (including related
notes and schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) with respect to periods ended subsequent to September 30, 2000.
40
"TARGET Stock Plans" shall mean the existing stock option and other stock-
based compensation plans of TARGET.
"Taxes" shall mean any federal, state, county, local, foreign and other
taxes, assessments, charges, fares, and impositions, including interest and
penalties thereon or with respect thereto.
Section 11.2 Expenses.
---------
(a) Except as otherwise provided in this Section 11.2, each of the Parties
shall bear and pay all direct costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including filing,
registration and application fees, printing fees, and fees and expenses of its
own financial or other consultants, investment bankers, accountants, and counsel
(the "Expenses"); provided, however, that (i) the Merger Price shall be reduced
by an amount equal to all of the fees, costs and expenses of Xxxxx X. Xxxxx &
Co., TARGET's investment banker, in excess of $89,500 and all of the fees, costs
and expenses of Smith, Mackinnon, Greeley, Bowdoin, Edwards, Xxxxxxxx & Marks,
P.A., TARGET's legal counsel, in excess of $35,000; and (ii) each of the Parties
shall bear and pay one-half of the fees payable in connection with the Proxy
Statement and printing costs incurred in connection with the printing of the
Proxy Statement.
(b) TARGET shall pay, or cause to be paid, in same day funds to PURCHASER
(i) the sum of (A) all of PURCHASER's Expenses, plus (B) $375,000 upon demand if
(x) TARGET terminates this Agreement pursuant to Section 10.1(g) or (y) prior to
the termination of this Agreement (other than by TARGET pursuant to Section
9.1(b)), a takeover proposal shall have been made and within one (1) year of
such termination, TARGET enters into an agreement with respect to, or approves
or recommends or takes any action to facilitate, such takeover proposal (the
"Superior Proposal Termination Fee"); and (ii) $150,000 upon demand if PURCHASER
or MERGER SUB terminates this Agreement pursuant to Section 10.1(f) hereof
because the condition precedent to PURCHASER's and MERGER SUB's obligations to
consummate the Merger set forth in Section 9.2(h) hereof has not been satisfied.
The amount of Expenses payable pursuant to subpart (A) of this Section 11.2(b)
shall be the amount set forth in an estimate delivered by PURCHASER, subject to
an upward or downward adjustment upon delivery of reasonable documentation
therefor.
Section 11.3 Brokers and Finders.
--------------------
Except as set forth in the TARGET Disclosure Letter, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon its representing or being retained by or allegedly
representing or being retained by TARGET, PURCHASER or MERGER SUB, each of
TARGET, PURCHASER and MERGER SUB, as the case may be, agrees to indemnify and
hold the other Parties harmless of and from any Liability in respect of any such
claim.
Section 11.4 Entire Agreement.
-----------------
Except as otherwise expressly provided herein, this Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
between the Parties with respect to the transactions contemplated hereunder
41
and supersedes all prior arrangements or understandings with respect thereto,
written or oral (except, as to of this Agreement, with respect to the
Confidentiality Agreements). Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 8.8 and 8.10 of this
Agreement.
Section 11.5 Amendments.
-----------
To the extent permitted by Law, this Agreement may be amended by a subsequent
writing signed by each of the Parties upon the approval of the Boards of
Directors of each of the Parties; provided, however, that after any such
approval by the holders of TARGET Common Stock, there shall be made no amendment
decreasing the consideration to be received by TARGET shareholders without the
further approval of such shareholders.
Section 11.6 Waivers.
--------
(a) Prior to or at the Effective Time, PURCHASER, acting through its Board
of Directors, chief executive officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by TARGET, to waive or extend the time for the compliance or fulfillment by
TARGET of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of PURCHASER under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of PURCHASER.
(b) Prior to or at the Effective Time, TARGET, acting through its Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
PURCHASER or MERGER SUB, to waive or extend the time for the compliance or
fulfillment by PURCHASER or MERGER SUB of any and all of their respective
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of TARGET under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of TARGET.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
Section 11.7 Assignment.
-----------
Except as expressly contemplated hereby, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Party. Subject to the immediately preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by the Parties
and their respective successors and assigns.
42
Section 11.8 Notices.
--------
All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered as of the date so delivered:
PURCHASER or
MERGER SUB: ABC Bancorp
00 0xx Xxxxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: President
Copy to Counsel (which shall not constitute notice to PURCHASER or MERGER SUB):
Xxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxx
TARGET: Tri-County Bank
000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: President
Copy to Counsel (which shall not constitute notice to TARGET):
Smith, Mackinnon, Greeley, Bowdoin,
Edwards, Xxxxxxxx & Marks, P.A.
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Post Office Box 2254
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
Section 11.9 Governing Law.
--------------
This Agreement shall be governed by and construed in accordance with the Laws
of the State of Florida, without regard to any applicable conflicts of Laws,
except to the extent that the federal laws of the United States may apply to the
Merger.
Section 11.10 Counterparts.
-------------
This Agreement may be executed in one 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.
43
Section 11.11 Captions.
---------
The captions contained in this Agreement are for reference purposes only and
are not part of this Agreement.
Section 11.12 Enforcement of Agreement.
-------------------------
The Parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement was not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Section 11.13 Severability.
-------------
Any term or provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Section 11.14 Survival.
---------
The respective representations, warranties, obligations, covenants and
agreements of the Parties shall not survive the Effective Time or the
termination and abandonment of this Agreement except that (i) Articles 2, 3 and
11 and Sections 8.4(b), 8.7, 8.8 and 8.10 of this Agreement shall survive the
Effective Time; and (ii) Sections 8.4(b), 8.6(b), 10.2, 11.2 and 11.14 shall
survive the termination and abandonment of this Agreement.
Section 11.15 Prevailing Party Fees and Expenses.
-----------------------------------
In connection with any action arising out of this Agreement, the substantially
prevailing Party in any such action shall be entitled to receive from the other
Party or Parties, as the case may be, in addition to any other rights and
remedies available to such prevailing Party hereunder or otherwise, all costs
and expenses (including reasonable attorneys' fees and costs) incurred by the
substantially prevailing Party in connection therewith, in addition to any other
award made by the court in which such action is brought.
[Signatures Next Page]
44
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed and delivered on its behalf as of the day and year first above written.
ABC BANCORP
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
President
TRI-COUNTY BANK
By: /s/ Xxxx X. Xxxxxxxx
--------------------
President
TRI-COUNTY MERGER SUB, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Chairman of the Board of
Directors
45
EXHIBIT 1
---------
ARTICLES OF INCORPORATION OF TARGET
[See Attached]
EXHIBIT 2
---------
FORM OF IRREVOCABLE PROXY
-------------------------
This Irrevocable Proxy is given by the undersigned, ______________
("Shareholder"), in favor of ABC Bancorp, a Georgia corporation ("ABC"), as of
the ____day of ______________, 2000.
WHEREAS, ABC and Tri-County Bank, a Florida chartered non-member bank
("Tri-County"), have entered into an Agreement and Plan of Merger dated as of
November 28, 2000 (the "Merger Agreement") (capitalized terms used but not
defined herein shall have the same meaning assigned to such terms in the Merger
Agreement), pursuant to which ABC proposes to acquire the entire equity interest
in Tri-County by means of a merger (the "Merger") of Tri-County with a wholly-
owned subsidiary of ABC in which (a) each issued and outstanding share of common
stock, $16.00 par value per share, of Tri-County (the "Tri-County Common
Stock"), other than shares of Tri-County Common Stock with respect to which
statutory dissenters' rights have been perfected and shares held by Tri-County
(or any of its subsidiaries) or by ABC (or any of its subsidiaries), in each
case other than in a fiduciary capacity or as a result of debt previously
contracted, shall automatically be converted into the right to receive cash and
whole shares of ABC's common, $1.00 par value per share, plus cash in lieu of
fractional shares as provided in the Merger Agreement;
WHEREAS, Shareholder owns, as of the date hereof, ___________ shares of
Tri-County Common Stock (the "Existing Shares", together with any shares of Tri-
County Common Stock acquired after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares"); and
WHEREAS, ABC has entered into the Merger Agreement in reliance on
Shareholder's agreement to support the Merger, including the granting of
Shareholder's Irrevocable Proxy hereunder.
NOW, THEREFORE, with respect to the Merger Agreement and the transactions
contemplated thereby and in accordance with Section 607.0722 of the Florida
Business Corporation Act, Shareholder hereby irrevocably makes, constitutes and
appoints ABC to act as Shareholder's true and lawful proxy and attorney-in-fact
in the name and on behalf of Shareholder, with full power to appoint a
substitute or substitutes. Shareholder further directs ABC, and ABC hereby
agrees, to vote all of the Shares which are entitled to vote at any meeting of
the shareholders of Tri-County (whether annual or special and whether or not an
adjourned meeting), or by written consent in the place and stead of Shareholder,
in favor of the Merger as set forth in the Merger Agreement. By giving this
proxy, Shareholder hereby revokes any other proxy granted by Shareholder at any
time with respect to the Shares and no subsequent proxies will be given with
respect thereto by Shareholder. THE PROXY GRANTED HEREBY IS COUPLED WITH AN
INTEREST AND IS IRREVOCABLE. The proxy granted hereby shall not be terminated
by any act of Shareholder or by operation of law, by lack of appropriate power
of authority, or by the occurrence of any other event or events and shall be
binding upon all beneficiaries, heirs at law, legatees, distributees,
successors, assigns and legal representatives of Shareholder. Shareholder
agrees to use all good faith efforts to cause any record owner of the
Shares of which Shareholder is the beneficial owner to grant to ABC a proxy of
the same effect as that contained herein. Shareholder shall perform such further
acts and execute such further documents as may be required to vest in ABC the
sole power to vote the Shares during the term of the proxy granted herein. The
proxy granted herein shall expire on the earlier of (i) the date on which ABC
and Shareholder mutually consent in writing to terminate this Irrevocable Proxy,
(ii) the date of the Closing (as defined in the Merger Agreement), or (iii) the
termination of the Merger Agreement in accordance with the terms thereof.
Notwithstanding anything herein to the contrary, the proxy granted hereby and
power herein conferred upon ABC (or any substitute or substitutes) may not be
exercised prior to the receipt by ABC and Tri-County of the Consents of the
Regulatory Authorities (as contemplated by the Merger Agreement).
IN WITNESS WHEREOF, Shareholder has executed and delivered this Irrevocable
Proxy as of the date set forth above.
SHAREHOLDER
---------------------------
(Name)
---------------------------
(Signature)
EXHIBIT 3
---------
MATTERS AS TO WHICH SMITH, MACKINNON, GREELEY, BOWDOIN, EDWARDS, XXXXXXXX &
---------------------------------------------------------------------------
MARKS, P.A. WILL OPINE:
-----------------------
[Such opinion may state that it has been prepared and is to be construed in
accordance with the Report on Standards for Florida Opinions dated April 8,
1991, issued by the Business Law Section of the Florida Bar, and that a copy of
such Report is incorporated by reference into such opinion.]
1. TARGET is a Florida chartered state bank duly organized and validly
existing under the laws of the State of Florida with all requisite power and
authority to conduct its business as described in the Proxy Statement, and to
own and use its Assets. The deposits of TARGET are insured by the Federal
Deposit Insurance Corporation to the extent provided by law. TARGET has no
Subsidiaries.
2. TARGET's authorized shares consist of __________ shares of Common
Stock, of which ________ shares were outstanding as of ________________, and
_______ shares of Preferred Stock, none of which were outstanding as of
_____________. The outstanding shares of TARGET Common Stock have been duly
authorized and validly issued, were not issued in violation of any statutory
preemptive rights of shareholders, and are fully paid and nonassessable. To our
knowledge, except as set forth in the TARGET Disclosure Letter, there are no
options, subscriptions, warrants, calls, rights or commitments obligating TARGET
to issue equity securities or acquire its equity securities.
3. The execution and delivery by TARGET of the Agreement do not, and if
TARGET were now to perform its obligations under the Agreement such performance
would not, result in any violation of the Articles of Incorporation or Bylaws of
TARGET or, to our knowledge, result in any breach of, or default or acceleration
under, any material Contract or Order to which TARGET is a party or by which
TARGET is bound.
4. TARGET has duly authorized the execution and delivery of the Agreement
and all performance by TARGET thereunder, and has duly executed and delivered
the Agreement.
5. The Agreement is enforceable against TARGET.
EXHIBIT 4
---------
R&H DRAFT
FORM OF EMPLOYMENT AGREEMENT
----------------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of
_____________, 2000, by and between TRI-COUNTY BANK, a Florida bank (the
"Bank"), and Xxxx X. Xxxxxxxx, a resident of the State of Florida (the
"Executive").
WHEREAS, ABC Bancorp, a Georgia corporation ("ABC"), has acquired all of
the equity interest of the Bank by means of a merger pursuant to an Agreement
and Plan of Merger dated as of November 28, 2000 (the "Merger Agreement");
WHEREAS, the Bank is now a wholly-owned subsidiary of ABC;
WHEREAS, the Executive is the President and Chief Executive Officer of the
Bank and desires to continue his employment with the Bank in such capacity;
WHEREAS, ABC desires that the Executive continue to serve in the capacity
of President and Chief Executive Officer of the Bank; and
WHEREAS, the Bank and the Executive, in conjunction with and pursuant to
the terms of the Merger Agreement, desire to set forth in writing the terms and
conditions of the Executive's continued employment with the Bank.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment and Duties.
---------------------
(a) The Bank hereby agrees to continue to employ the Executive and the
Executive agrees to continue employment in his capacity as President and Chief
Executive Officer of the Bank to act in accordance with the terms and conditions
set forth herein. The Executive also consents to serve, if elected, as a
director of the Bank for the additional compensation therefor set forth below.
During the term of this Agreement, the Executive agrees that this position will
be his principal employment, that he will serve the Bank faithfully and to the
best of his ability and that he will devote his full business time, attention
and skills to the operation of the business of the Bank, subject to reasonable
absences for vacation and illness, and that he will perform such duties,
functions and responsibilities in connection with such position and consistent
with the foregoing as are from time to time delegated to the Executive by the
Board of Directors of the Bank (the "Board"); provided, however, that the
-------- -------
foregoing shall not be deemed to restrict the Executive from devoting a
reasonable amount of time and attention to the management of his personal
affairs and investments, so long as such activities do not interfere with the
responsible performance of the Executive's duties hereunder. The Executive
shall provide the Board with periodic reports on, and keep them informed on a
current basis concerning, the business and affairs of the Bank.
(b) The Bank shall provide the Executive with a private office, secretarial
and administrative assistance, office equipment, supplies and other facilities
and services suitable to the Executive's position to be located at 000 X. Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at a comparable location within Xxxxxxxxx
County, Florida.
2. Term. The term ("Term") of this Agreement shall commence on the date
----
hereof and shall continue until the second anniversary of the date hereof.
3. Compensation. In consideration of the services to be rendered by the
------------
Executive to the Bank hereunder, the Bank hereby agrees to pay or otherwise
provide the Executive the following compensation and benefits, it being
understood that the Bank shall have the right to deduct therefrom all taxes
which may be required to be deducted or withheld under any provision of
applicable law (including, without limitation, Social Security payments, income
tax withholding and other required deductions now in effect or which may become
effective by law any time during the Term):
(a) The Executive shall receive an annual salary of ("Salary") of Eighty-
Five Thousand Dollars ($85,000) to be paid in equal installments in accordance
with the Bank's salary payment practices in effect from time to time for
executives of the Bank. The Bank may consider and declare from time to time
increases in the Salary it pays Executive, and shall consider and declare Salary
increases based upon the following standards:
a. Inflation;
b. Adjustments to the salaries of other senior management
personnel; and
c. Past performance of Executive and the contribution which Executive
makes to the business and profits of the Bank during the Term.
(b) In addition to Salary, the Executive shall be entitled to receive (i) a
fee for his service as a director of the Bank equal to Six Thousand Dollars
($6,000) per year to be paid in equal installments together with his Salary, and
(ii) an annual bonus pursuant to any annual incentive compensation plan adopted
by the Board of Directors of ABC.
(c) During the Term, the Executive shall be included as a participant in
all present and future employee benefit, retirement and compensation plans
generally available to employees of the Bank, consistent with his Salary and his
position with the Bank, including, without limitation, Employer's pension plan
and hospitalization, major medical, disability and group life insurance plans.
(d) The Executive shall be entitled to receive reimbursement for all
reasonable expenses incurred by him in connection with the fulfillment of his
duties hereunder, upon receipt of appropriate vouchers therefor, provided that
the Executive has complied with all reasonable policies and procedures relating
to the reimbursement of such expenses as shall, from time to time, be
established by the Bank.
2
4. Termination.
-----------
(a) This Agreement and the Executive's employment hereunder shall
terminate on the earliest to occur of the following events: (i) on the mutual
agreement of the Bank and the Executive; (ii) the death of the Executive; (iii)
the Executive becoming unable to perform a substantial portion of his duties as
described herein due to injury, illness or disability (mental or physical) as
determined by an independent physician selected by the Bank and reasonably
satisfactory to the Executive for a period of three (3) consecutive months or
any aggregate period of six (6) months in any eighteen (18) month period
("Disability"); (iv) immediately upon the Bank giving written notice (referred
to herein as the "Notice of Termination") to the Executive of termination for
any reason or for no reason; (v) immediately upon the Executive giving a Notice
of Termination, which Notice of Termination shall specify in reasonable detail
the reason (or lack thereof) for such termination hereunder, to the Bank of
termination (1) due to a material breach by the Bank of, or a material failure
by the Bank to perform, the terms and conditions of this Agreement and, after
written notice from the Executive of such breach or failure, the Bank at any
time thereafter again so breaches or fails to perform, or (2) for any reason or
for no reason; or (vi) immediately and at any time upon the Bank giving a Notice
of Termination to the Executive of a termination for Cause (as defined herein),
which Notice of Termination shall specify in reasonable detail the Cause for
such termination hereunder.
(b) For purposes of this Agreement, "Cause" for termination hereof shall
exist if: (i) the Executive is convicted of (from which no appeal may be
taken), or pleads guilty to, any act of fraud, misappropriation or embezzlement,
or any felony; (ii) in the reasonable determination of the Board, the Executive
has engaged in conduct or activity materially damaging to the business of the
Bank (it being understood, however, that unintentional physical damage to any
property of the Bank by the Executive shall not be a ground for such a
determination by the Board); or (iii) the Executive has failed, without
reasonable cause, to devote his full business time and best efforts to the
business of the Bank as provided in Section 1(a) hereof and, after written
notice from the Bank of such failure, the Executive at any time thereafter again
so fails.
5. Compensation Upon Termination. In the event of the termination of the
-----------------------------
Executive's employment with the Bank pursuant to Section 4 hereof, the Bank
shall continue to pay compensation and benefits to the Executive as follows:
(a) In the event of a termination pursuant to Section 4(a)(v)(2) or
Section 4(a)(vi) hereof, compensation provided for herein shall continue to be
paid, and the Executive shall continue to participate in the employee benefit,
retirement, compensation plans and other perquisites as provided in Section 3
hereof, through and including the date of termination specified in the Notice of
Termination (the "Date of Termination"). Any benefits payable under insurance,
health, retirement and bonus plans as a result of the Executive's participation
in such plans through the Date of Termination shall be paid when due under such
plans.
(b) In the event of a termination pursuant to Section 4(a)(iv) or
Section 4(a)(v)(1) hereof, compensation provided for herein shall continue to be
paid to the Executive through the end of Term so long as the Executive is not in
breach of the terms and conditions of Section 7 hereof; provided, however, that
-------- -------
the Executive's participation in all of the employee benefit, retirement,
compensation plans and other perquisites as provided in Section 3 hereof shall
3
terminate on the Date of Termination unless otherwise required by applicable
law. Notwithstanding the proviso in the immediately preceding sentence, any
benefits payable under insurance, health, retirement and bonus plans as a result
of the Executive's participation in such plans through the Date of Termination
shall be paid when due under such plans.
(c) In the event of a termination pursuant to Section 4(a)(ii) or Section
4(a)(iii) hereof, compensation provided for herein shall continue to be paid,
and Executive shall continue to participate in the employee benefit, retirement,
and compensation plans and other perquisites as provided in Section 3 hereof,
(i) in the event of Executive's death, through the date of death, or (ii) in the
event of Executive's Disability, through the Date of Termination pursuant to
Section 4(a)(iii) hereof. Any benefits payable under insurance, health,
retirement and bonus plans as a result of Executive's participation in such
plans through the date of death or the Date of Termination pursuant to Section
4(a)(iii) hereof, as the case may be, shall be paid when due under those plans.
6. Representations and Warranties.
------------------------------
(a) The Executive represents and warrants to the Bank that: (i) he has
the full power and authority to execute, deliver and perform this Agreement, and
that he has taken all actions necessary to secure all approvals required in
connection herewith and therewith; (ii) this Agreement has been duly authorized,
executed and delivered by him and constitutes his valid and binding agreement,
enforceable against him in accordance with its terms; and (iii) the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not, with the passage of time or the
giving of notice or both, violate or conflict with, constitute a breach of or
default under, result in the loss of any material benefit under, or permit the
acceleration of or entitle any party to accelerate any obligation under or
pursuant to, any material mortgage, lien, leases, agreement, instrument, order,
arbitration award, judgment or decree to which he is a party or by which he or
any of his assets are bound.
(b) The Bank hereby represents and warrants to the Executive that: (i) this
Agreement has been duly authorized, executed and delivered by it, and
constitutes the valid and binding agreement of it, enforceable against it in
accordance with its terms; (ii) it has the full power authority to execute,
deliver and perform this Agreement and has taken all necessary action to secure
all approvals required in connection herewith; and (iii) the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not, with the passage of time or the giving of notice
or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any material benefit under, or permit the acceleration of
or entitle any party to accelerate any obligation under or pursuant to, its
charter or bylaws or any material mortgage, lien, lease, agreement, instrument,
order, arbitration award, judgment or decree to which it is a party or by which
it or any of its assets are bound.
7. Restrictive Covenants. Acknowledging that (i) he has intimate
---------------------
knowledge of the business of the Bank which, if exploited by him, in
contravention of this Agreement, would seriously adversely and irreparably
affect the value of the Bank and the ability of ABC to continue to operate the
Bank following the consummation of the merger contemplated by the Merger
Agreement; (ii) the provisions of this Section 7 are reasonable and necessary to
protect
4
the legitimate interests of ABC; (iii) the provisions of this Section 7 are
reasonable and necessary to protect the goodwill of the Bank acquired by ABC
pursuant to the Merger Agreement; (iv) any violation of this Section 7 will
result in irreparable injury to ABC and the Bank and that damages at law would
not be reasonable or adequate compensation to ABC and the Bank for a violation
of this Section 7; and (v) that in the course of his employment with the Bank,
as contemplated by this Agreement, and as a result of the position of trust that
he will hold under this Agreement, he will obtain private and confidential
information and proprietary data relating to ABC, the Bank and other affiliates
of ABC, including, without limitation, financial information, product
information and other data that are valuable assets and property rights of the
Bank and ABC and its affiliates (collectively referred to as "Confidential
Information"), the Executive hereby agrees as follows:
(a) The Executive shall not, during the Term of this Agreement or any time
after the termination of this Agreement, either directly or indirectly, disclose
or use any Confidential Information acquired during his employment with the
Bank, unless (i) the Confidential Information has been made public through no
action or fault of the Executive, or (ii) its disclosure is requested or
compelled by applicable law or regulatory agency. The Executive further agrees
that after the termination of this Agreement, or at such other time as the Bank
requests, the Executive will return to the Bank all documents, papers and
records constituting Confidential Information, and all copies of same in the
Executive's possession and control.
(b) For a period equal to (i) one (1) year after the expiration of the Term
or the termination of this Agreement and the Executive's employment hereunder
prior to the expiration of the Term pursuant to Section 4(a)(v) or Section
4(a)(vi) hereof; or (ii) the remaining Term and a period of one (1) year after
the expiration of the Term upon the termination of this Agreement and the
Executive's employment hereunder pursuant to Section 4(a)(iv) hereof, the
Executive shall not directly or indirectly provide banking or bank-related
services to, or solicit the banking or bank-related business of, any customer of
the Bank at the time of such provision of services or solicitation which the
Executive served either alone or with others while employed by the Bank in any
city, town, borough, township, village or other place in which the Executive
performed services for the Bank while employed by it, or assist any actual or
potential competitor of the Bank to provide banking or bank-related services to
or solicit any such customer's banking or bank-related business in any such
place.
(c) While the Executive is employed by the Bank and for a period equal to
(i) one (1) year after the expiration of the Term or the termination of this
Agreement and the Executive's employment hereunder prior to the expiration of
the Term pursuant to Section 4(a)(v) or Section 4(a)(vi) hereof; or (ii) the
remaining Term and a period of one (1) year after the expiration of the Term
upon the termination of this Agreement and the Executive's employment hereunder
pursuant to Section 4(a)(iv) hereof, the Executive shall not, directly or
indirectly, as principal, agent, or trustee, or through the agency of any
corporation, partnership, trade association, agent or agency, engage in any
banking or bank-related business or venture which competes with the business of
the Bank as conducted during the Executive's employment by the Bank within a
radius of fifty (50) miles of the Bank's main office.
(d) In addition to all other remedies provided at law or in equity, the
Bank may petition and obtain from a court of law or equity both temporary and
permanent injunctive relief
5
without the necessity of proving actual damages and without posting bond or
other security to prevent a breach by the Executive of any covenant contained in
this Section 7, as well as to an equitable accounting of all earnings and
profits and other benefits arising out of any such violations.
7. Notices. Any notice or other communication required or permitted to be
-------
given hereunder shall be in writing and deemed to have been given when delivered
in person or when dispatched by telegram or electronic facsimile transfer
(confirmed in writing by mail, registered or certified, return receipt
requested, postage prepaid, simultaneously dispatched) to the addresses
specified below.
If to the Executive: Xxxx X. Xxxxxxxx
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
If to the Bank: Tri-County Bank
c/o ABC Bancorp
00 0xx Xxxxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: President
or to such other address or fax number as either party may from time to time
designate in writing to the other.
8. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto relating to the subject matter hereof, and, except
for that certain Salary Continuation Agreement dated the date hereof between ABC
and the Executive, supersedes all prior or contemporaneous agreements and
understandings, whether oral or written, with respect to the same. No
modification, alteration, amendment or rescission of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed
by both parties hereto.
9. Governing Law. This Agreement and the rights and duties of the parties
-------------
hereunder shall be governed by, construed under and enforced in accordance with
the laws of the State of Florida.
10. Assignment. This Agreement shall inure to the benefit of and be
----------
binding upon the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. The rights, duties and
obligations under this Agreement are assignable by the Bank to a successor of
all or substantially all of the business or assets of the Bank. The rights,
duties and obligations of the Executive under this Agreement shall not be
assignable.
11. Survival. The respective obligations of the parties under Sections 5
--------
and 7 hereof shall survive the termination of this Agreement.
12. Prevailing Party. In connection with any action arising out of this
----------------
Agreement, the substantially prevailing party in any such action shall be
entitled to receive from the other
6
party all costs and expenses (including reasonable attorneys' fees and costs)
incurred by the substantially prevailing party in connection therewith, in
addition to any other award made by the court in which such action is brought.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and
delivered, and the Executive has executed and delivered this Agreement, all as
of the day and year first above written.
TRI-COUNTY BANK
By: ______________________________________
Its: ____________________________________
___________________________________ (SEAL)
XXXX X. XXXXXXXX
7
EXHIBIT 5
---------
MATTERS AS TO WHICH
XXXXXX & XXXXXX LLP WILL OPINE:
------------------------------
[Subject to standard assumptions, limitations, restrictions and matters
disclosed in the Agreement and its schedules, including principles of equity and
remedies, such as specific performance and the enforceability on non-competition
and employment agreements and covenants, and that no opinion shall be expressed
with respect to Federal and state securities laws.]
1. PURCHASER is a corporation duly organized, existing and in good
standing under the laws of the State of Georgia with corporate power and
authority (a) to conduct its business as described in the Proxy Statement, and
(b) to own and use its Assets.
2. PURCHASER's authorized shares consist of _______________ shares of
Common Stock, no par value, of which __________ shares were outstanding as of
_____________, and 5,000,000 shares of Preferred Stock, none of which were
outstanding as of ____________. The outstanding shares of PURCHASER Common Stock
have been duly authorized and validly issued, were not issued in violation of
any statutory preemptive rights of shareholders, and are fully paid and
nonassessable. To our knowledge, except as set forth in Section 5.3 of the
Agreement, the PURCHASER Disclosure Letter and the PURCHASER SEC Documents,
there are no options, subscriptions, warrants, calls, rights or commitments
obligating PURCHASER to issue equity securities or acquire its equity
securities.
3. The execution and delivery by PURCHASER of the Agreement do not, and if
PURCHASER were now to perform its obligations under the Agreement such
performance would not, result in any violation of the Articles of Incorporation
or Bylaws of PURCHASER or, to our knowledge, result in any breach of, or default
or acceleration under, any material Order by which PURCHASER is bound or any
material Contract to which PURCHASER is a party or by which PURCHASER is bound
that is filed as an exhibit to PURCHASER's SEC Documents.
4. PURCHASER has duly authorized the execution and delivery of the
Agreement and all performance by PURCHASER thereunder and has duly executed and
delivered the Agreement.
5. Assuming that Florida Law is the same as Georgia Law, the Agreement is
enforceable against PURCHASER.
AMENDMENT NO. 1
TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 (the "Amendment") to the AGREEMENT AND PLAN OF MERGER
dated as of November 28, 2000 (the "Merger Agreement"; capitalized terms used
but not specifically defined herein shall have the meanings ascribed to such
terms in the Merger Agreement), among TRI-COUNTY BANK ("TARGET"), a state non-
member bank incorporated and chartered under the laws of the State of Florida,
ABC BANCORP ("PURCHASER"), a corporation organized and existing under the laws
of the State of Georgia, and tri-county merger sub, INC. ("Merger sub"), a
corporation organized and existing under the laws of the State of Florida, is
made as of the 26th day of January, 2001 by and among TARGET, PURCHASER and
MERGER SUB.
W I T N E S S E T H:
-------------------
WHEREAS, TARGET, PURCHASER and MERGER SUB have entered into the Merger
Agreement; and
WHEREAS, TARGET, PURCHASER and MERGER SUB each desire to amend the Merger
Agreement to extend the date set forth in Section 10.1(e) of the Merger
Agreement after which the Board of Directors of any Party may terminate the
Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
SECTION 1. Amendment to Section 10.1(e) of the Merger Agreement. Section
10.1(e) of the Merger Agreement is hereby amended by deleting Section 10.1(e) of
the Merger Agreement in its entirety and substituting the following in lieu
thereof:
"(e) By the Board of Directors of any Party in the event that the Merger
shall not have been consummated by May 1, 2001, but only if the failure to
consummate the transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or"
SECTION 2. Effect on Merger Agreement. Except as otherwise specifically
provided herein, the Merger Agreement shall not be amended but shall remain in
full force and effect.
SECTION 3. Representations and Warranties. TARGET, PURCHASER and MERGER SUB
each represent and warrant that no interest in the Merger Agreement has been
sold, hypothecated, assigned or otherwise transferred. TARGET, PURCHASER and
MERGER SUB each further represent and warrant that there are no defaults under
the Merger Agreement as of the date hereof.
SECTION 4. Binding Effect; Headings. The covenants contained herein shall
bind, and the benefits hereof shall inure to the benefit of, the respective
successors and permitted assigns of the parties hereto. The Section headings
contained in this Amendment are for reference purposes only and will not affect
in any way the meaning or interpretation of this Amendment.
SECTION 5. Governing Law. This Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida,
without giving effect to any principles of conflicts of laws.
SECTION 6. Counterparts; Facsimile Transmission. This Amendment may be
executed simultaneously in counterparts, each of which will be deemed an
original, and all of which together will constitute one and the same instrument.
Executed counterparts may be delivered via facsimile transmission.
IN WITNESS WHEREOF, TARGET, PURCHASER and MERGER SUB have each caused this
Amendment to be executed and delivered on its behalf as of the day and year
first above written.
ABC BANCORP
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
President
TRI-COUNTY BANK
By: /s/ Xxxx X. Xxxxxxxx
--------------------
President
TRI-COUNTY MERGER SUB, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Chairman of the Board of
Directors
2
AMENDMENT NO. 2
TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 2 (the "Amendment") to the AGREEMENT AND PLAN OF MERGER
dated as of November 28, 2000, as amended by Amendment No. 1 thereto dated as of
January 26, 2001 (as so amended, the "Merger Agreement"; capitalized terms used
but not specifically defined herein shall have the meanings ascribed to such
terms in the Merger Agreement), among TRI-COUNTY BANK ("TARGET"), a state non-
member bank incorporated and chartered under the laws of the State of Florida,
ABC BANCORP ("PURCHASER"), a corporation organized and existing under the laws
of the State of Georgia, and tri-county merger sub, INC. ("Merger sub"), a
corporation organized and existing under the laws of the State of Florida, is
made as of the 20th day of February, 2001 by and among TARGET, PURCHASER and
MERGER SUB.
W I T N E S S E T H:
-------------------
WHEREAS, TARGET, PURCHASER and MERGER SUB have entered into the Merger
Agreement; and
WHEREAS, TARGET, PURCHASER and MERGER SUB each desire to amend the Merger
Agreement to provide that TARGET will merge with and into MERGER SUB and MERGER
SUB will the surviving corporation in the Merger;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
SECTION 1. Amendment to the Preamble to the Merger Agreement.
-------------------------------------------------
(a) The Preamble to the Merger Agreement is hereby amended by deleting the
second sentence of the second paragraph thereof in its entirety and
substituting the following in lieu thereof:
"This Agreement provides for the combination of TARGET with MERGER SUB by
virtue of the merger of TARGET with and into MERGER SUB, as a result of
which the outstanding shares of the capital stock of TARGET shall be
converted into the right to receive the consideration provided for herein,
and the shareholders of TARGET shall become shareholders of PURCHASER."
(b) The Preamble to the Merger Agreement is hereby further amended by
deleting the last paragraph thereof in its entirety and substituting the
following in lieu thereof:
"Following the Closing of the Merger, MERGER SUB will continue to be
operated as a separate subsidiary of PURCHASER and will continue
operations under the name "Tri-County Bank". MERGER SUB will not have trust
powers."
SECTION 2. Amendment to Section 1.1 of the Merger Agreement.
------------------------------------------------
Section 1.1 of the Merger Agreement is hereby amended by deleting Section 1.1 of
the Merger Agreement in its entirety and substituting the following in lieu
thereof:
"SECTION 1.1 Merger. Subject to the terms and conditions of this
------
Agreement, at the Effective Time, TARGET shall be merged with and into
MERGER SUB in accordance with the provisions of Sections 658.295 and 658.41
of the FBC and with the effect provided in Section 658.45 of the FBC (the
"Merger"). MERGER SUB shall be the Surviving Corporation resulting from the
Merger and remain a wholly-owned subsidiary of PURCHASER. The Merger shall
be consummated pursuant to the terms of this Agreement, which has been
approved and adopted by the respective Boards of Directors of TARGET,
MERGER SUB and PURCHASER."
SECTION 3. Amendment to Section 2.1 of the Merger Agreement.
------------------------------------------------
Section 2.1 of the Merger Agreement is hereby amended by deleting Section 2.1 of
the Merger Agreement in its entirety and substituting the following in lieu
thereof:
"SECTION 2.1 Articles of Incorporation. The Amended and Restated
-------------------------
Articles of Incorporation of MERGER SUB in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation until otherwise amended or repealed. A copy of the Amended and
Restated Articles of Incorporation of MERGER SUB is attached as Exhibit 1
to this Agreement."
SECTION 4. Amendment to Section 2.2 of the Merger Agreement.
------------------------------------------------
Section 2.2 of the Merger Agreement is hereby amended by deleting Section 2.2 of
the Merger Agreement in its entirety and substituting the following in lieu
thereof:
"SECTION 2.2 Bylaws. The Bylaws of MERGER SUB in effect immediately
------
prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until otherwise amended or repealed."
SECTION 5. Amendment to Section 3.5 of the Merger Agreement.
------------------------------------------------
Section 3.5 of the Merger Agreement is hereby amended by deleting Section 3.5 of
the Merger Agreement in its entirety and substituting the following in lieu
thereof:
"SECTION 3.5 Status of MERGER SUB after the Effective Time. After
---------------------------------------------
consummation of the Merger, MERGER SUB shall continue to be a separate
subsidiary of PURCHASER."
2
SECTION 6. Amendment to Section 9.2(e) of the Merger Agreement.
---------------------------------------------------
Section 9.2(e) of the Merger Agreement is hereby amended by deleting Section
9.2(e) of the Merger Agreement in its entirety and substituting the following in
lieu thereof:
"(e) Xxxx X. Xxxxxxxx and MERGER SUB shall have executed and delivered
an Employment Agreement substantially in the form of Exhibit 4 hereto."
SECTION 7. FURTHER Amendment to Section 9.2 of the Merger Agreement.
--------------------------------------------------------
Section 9.2 of the Merger Agreement is hereby further amended by adding the
following new Section 9.2(l) to the Merger Agreement immediately following
Section 9.2(k):
"(l) MERGER SUB shall have received all Consents of all Regulatory
Authorities to conduct a banking business in the State of Florida,
including, without limitation, the receipt of a newly-issued charter from
the State of Florida to conduct banking operations therein."
SECTION 8. Amendment to Section 11.1 of the Merger Agreement.
-------------------------------------------------
Section 11.1 of the Merger Agreement is hereby amended by deleting the
definition of "Surviving Corporation" in its entirety and substituting the
following in lieu thereof:
"'Surviving Corporation' shall mean MERGER SUB as the surviving
corporation resulting from the Merger."
SECTION 9. Amendment to Exhibit 1 to the Merger Agreement.
----------------------------------------------
The Merger Agreement is hereby amended by deleting Exhibit 1 to the Merger
Agreement in its entirety and substituting Exhibit 1 attached hereto and
incorporated herein by this reference in lieu thereof.
SECTION 10. Amendment to Exhibit 4 to the Merger Agreement.
----------------------------------------------
The Merger Agreement is hereby amended by deleting Exhibit 4 to the Merger
Agreement in its entirety and substituting Exhibit 4 attached hereto and
incorporated herein by this reference in lieu thereof.
SECTION 11. Effect on Merger Agreement.
--------------------------
Except as otherwise specifically provided herein, the Merger Agreement shall not
be amended but shall remain in full force and effect.
SECTION 12. Representations and Warranties.
------------------------------
TARGET, PURCHASER and MERGER SUB each represent and warrant that no interest in
the Merger Agreement has been sold, hypothecated, assigned or otherwise
transferred. TARGET, PURCHASER and MERGER SUB each further represent and warrant
that there are no defaults under the Merger Agreement as of the date hereof.
SECTION 13. Binding Effect; Headings.
------------------------
The covenants contained herein shall bind, and the benefits hereof shall inure
to the benefit of, the respective successors and permitted
3
assigns of the parties hereto. The Section headings contained in this Amendment
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Amendment.
SECTION 14. GOVERNING LAW.
-------------
This Amendment shall be governed by, and construed and enforced in accordance
with, the laws of the State of Florida, without giving effect to any principles
of conflicts of laws.
SECTION 15. COUNTERPARTS; FACSIMILE TRANSMISSION.
------------------------------------
This Amendment may be executed simultaneously in counterparts, each of which
will be deemed an original, and all of which together will constitute one and
the same instrument. Executed counterparts may be delivered via facsimile
transmission.
[Signatures Next Page]
4
IN WITNESS WHEREOF, TARGET, PURCHASER and MERGER SUB have each caused this
Amendment to be executed and delivered on its behalf as of the day and year
first above written.
ABC BANCORP
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
President
TRI-COUNTY BANK
By: /s/ Xxxx X. Xxxxxxxx
--------------------
President
TRI-COUNTY MERGER SUB, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Chairman of the Board of
Directors
5
EXHIBIT 1
---------
AMENDED AND RESTATED articles of incorporation of MERGER SUB
[See Attached]
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TRI-COUNTY MERGER SUB, INC.
Tri-County Merger Sub, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the Florida General Corporation Act (the "Act"),
does hereby certify:
FIRST: That the Articles of Incorporation of the Corporation shall be amended
and restated in their entirety as follows:
ARTICLE I
---------
The name of the Corporation shall be TRI-COUNTY BANK and its initial place of
business shall be 000 Xxxxx Xxxx Xxxxxx, in the City of Trenton, in the County
of Xxxxxxxxx and State of Florida.
ARTICLE II
----------
The general nature of the business to be transacted by the Corporation shall
be: that of a general commercial banking business with all the rights, powers
and privileges granted and conferred by the Florida Banking Code, regulating the
organization, powers and management of bank corporations.
ARTICLE III
-----------
Section 1. The aggregate amount of the total authorized capital stock of the
corporation is Four Million and 00/100 Dollars ($4,000,000.00) of common stock
to be divided into Two Hundred Fifty Thousand (250,000) shares of the par value
of Sixteen and 00/100 ($16.00) each. Such stock may be issued from time to time
without action by the shareholders of the Corporation, for such consideration as
may be fixed from time to time by the Corporation's Board of Directors, and
shares so issued, the full consideration for which has been paid or delivered,
shall be deemed fully paid stock and the holder of such shares shall not be
liable for any further payment.
Section 2. The Corporation shall begin business with at least $1,200,000.00
in paid-in capital stock to be divided into 75,000 shares of the par value of
$16.00 each. The amount of surplus with which the Corporation will begin
business will be not less than $240,000.00 and the
amount of undivided profits, not less than $60,000.000, all of which (capital
stock, surplus and undivided profits) shall be paid in cash.
ARTICLE IV
----------
The term for which said Corporation shall exist shall be perpetual, unless
terminated pursuant to the Florida Banking Code.
ARTICLE V
---------
The number of directors shall not be fewer than five (5). The names and
street addresses of the first directors of the corporation are:
NAME: STREET ADDRESS:
---- --------------
Xxxxxx Xxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxx X. Xxxxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxx Xxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxxxxxx 00 0xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxx X. Xxxxxx 00 0xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxx 00000
* * * * *
EXHIBIT 4
---------
FORM OF EMPLOYMENT AGREEMENT
----------------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of
___________________________, 2001, by and between TRI-COUNTY BANK (f/k/a Tri-
County Merger Sub, Inc.), a Florida state-chartered bank (the "Bank"), and Xxxx
X. Xxxxxxxx, a resident of the State of Florida (the "Executive").
WHEREAS, ABC Bancorp, a Georgia corporation ("ABC"), has acquired all of
the equity interest of Tri-County Bank (Charter No. 10934) ("Old Tri-County") by
means of a merger of Old Tri-County with and into the Bank pursuant to an
Agreement and Plan of Merger dated as of November 28, 2000, as amended by
Amendment No.1 thereto dated as of January 26, 2001 and by Amendment No.2
thereto dated as of _______________, 2001 (as so amended, the "Merger
Agreement");
WHEREAS, the Bank is a wholly-owned subsidiary of ABC;
WHEREAS, the Executive was the President and Chief Executive Officer of Old
Tri-County and desires to be employed by the Bank in such capacity;
WHEREAS, ABC desires that the Executive serve in the capacity of President
and Chief Executive Officer of the Bank; and
WHEREAS, the Bank and the Executive, in conjunction with and pursuant to
the terms of the Merger Agreement, desire to set forth in writing the terms and
conditions of the Executive's employment with the Bank.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment and Duties.
---------------------
(a) The Bank hereby agrees to employ the Executive, and the Executive
agrees to be employed, in the capacity of President and Chief Executive Officer
of the Bank to act in accordance with the terms and conditions set forth herein.
The Executive also consents to serve, if elected, as a director of the Bank for
the additional compensation therefor set forth below. During the term of this
Agreement, the Executive agrees that this position will be his principal
employment, that he will serve the Bank faithfully and to the best of his
ability and that he will devote his full business time, attention and skills to
the operation of the business of the Bank, subject to reasonable absences for
vacation and illness, and that he will perform such duties, functions and
responsibilities in connection with such position and consistent with the
foregoing as are from time to time delegated to the Executive by the Board of
Directors of the Bank (the "Board"); provided, however, that the foregoing shall
-------- -------
not be deemed to restrict the Executive from devoting a reasonable amount of
time and attention to the management of his personal affairs and investments, so
long as such activities do not interfere with the responsible
performance of the Executive's duties hereunder. The Executive shall provide the
Board with periodic reports on, and keep them informed on a current basis
concerning, the business and affairs of the Bank.
(b) The Bank shall provide the Executive with a private office, secretarial
and administrative assistance, office equipment, supplies and other facilities
and services suitable to the Executive's position to be located at 000 X. Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or at a comparable location within Xxxxxxxxx
County, Florida.
2. Term. The term ("Term") of this Agreement shall commence on the date
----
hereof and shall continue until the second anniversary of the date hereof.
3. Compensation. In consideration of the services to be rendered by the
------------
Executive to the Bank hereunder, the Bank hereby agrees to pay or otherwise
provide the Executive the following compensation and benefits, it being
understood that the Bank shall have the right to deduct therefrom all taxes
which may be required to be deducted or withheld under any provision of
applicable law (including, without limitation, Social Security payments, income
tax withholding and other required deductions now in effect or which may become
effective by law any time during the Term):
(a) The Executive shall receive an annual salary of ("Salary") of Eighty-
Five Thousand Dollars ($85,000) to be paid in equal installments in accordance
with the Bank's salary payment practices in effect from time to time for
executives of the Bank. The Bank may consider and declare from time to time
increases in the Salary it pays Executive, and shall consider and declare Salary
increases based upon the following standards:
a. Inflation;
b. Adjustments to the salaries of other senior management personnel; and
c. Past performance of Executive and the contribution which Executive makes
to the business and profits of the Bank during the Term.
(b) In addition to Salary, the Executive shall be entitled to receive (i) a
fee for his service as a director of the Bank equal to Six Thousand Dollars
($6,000) per year to be paid in equal installments together with his Salary, and
(ii) an annual bonus pursuant to any annual incentive compensation plan adopted
by the Board of Directors of ABC.
(c) During the Term, the Executive shall be included as a participant in
all present and future employee benefit, retirement and compensation plans
generally available to employees of the Bank, consistent with his Salary and his
position with the Bank, including, without limitation, Employer's pension plan
and hospitalization, major medical, disability and group life insurance plans.
(d) The Executive shall be entitled to receive reimbursement for all
reasonable expenses incurred by him in connection with the fulfillment of his
duties hereunder, upon receipt of appropriate vouchers therefor, provided that
the Executive has complied with all reasonable
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policies and procedures relating to the reimbursement of such expenses as shall,
from time to time, be established by the Bank.
4. Termination.
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(a) This Agreement and the Executive's employment hereunder shall terminate
on the earliest to occur of the following events: (i) on the mutual agreement
of the Bank and the Executive; (ii) the death of the Executive; (iii) the
Executive becoming unable to perform a substantial portion of his duties as
described herein due to injury, illness or disability (mental or physical) as
determined by an independent physician selected by the Bank and reasonably
satisfactory to the Executive for a period of three (3) consecutive months or
any aggregate period of six (6) months in any eighteen (18) month period
("Disability"); (iv) immediately upon the Bank giving written notice (referred
to herein as the "Notice of Termination") to the Executive of termination for
any reason or for no reason; (v) immediately upon the Executive giving a Notice
of Termination, which Notice of Termination shall specify in reasonable detail
the reason (or lack thereof) for such termination hereunder, to the Bank of
termination (1) due to a material breach by the Bank of, or a material failure
by the Bank to perform, the terms and conditions of this Agreement and, after
written notice from the Executive of such breach or failure, the Bank at any
time thereafter again so breaches or fails to perform, or (2) for any reason or
for no reason; or (vi) immediately and at any time upon the Bank giving a Notice
of Termination to the Executive of a termination for Cause (as defined herein),
which Notice of Termination shall specify in reasonable detail the Cause for
such termination hereunder.
(b) For purposes of this Agreement, "Cause" for termination hereof shall
exist if: (i) the Executive is convicted of (from which no appeal may be
taken), or pleads guilty to, any act of fraud, misappropriation or embezzlement,
or any felony; (ii) in the reasonable determination of the Board, the Executive
has engaged in conduct or activity materially damaging to the business of the
Bank (it being understood, however, that unintentional physical damage to any
property of the Bank by the Executive shall not be a ground for such a
determination by the Board); or (iii) the Executive has failed, without
reasonable cause, to devote his full business time and best efforts to the
business of the Bank as provided in Section 1(a) hereof and, after written
notice from the Bank of such failure, the Executive at any time thereafter again
so fails.
5. Compensation Upon Termination. In the event of the termination of the
-----------------------------
Executive's employment with the Bank pursuant to Section 4 hereof, the Bank
shall continue to pay compensation and benefits to the Executive as follows:
(a) In the event of a termination pursuant to Section 4(a)(v)(2) or Section
4(a)(vi) hereof, compensation provided for herein shall continue to be paid, and
the Executive shall continue to participate in the employee benefit, retirement,
compensation plans and other perquisites as provided in Section 3 hereof,
through and including the date of termination specified in the Notice of
Termination (the "Date of Termination"). Any benefits payable under insurance,
health, retirement and bonus plans as a result of the Executive's participation
in such plans through the Date of Termination shall be paid when due under such
plans.
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(b) In the event of a termination pursuant to Section 4(a)(iv) or Section
4(a)(v)(1) hereof, compensation provided for herein shall continue to be paid to
the Executive through the end of Term so long as the Executive is not in breach
of the terms and conditions of Section 7 hereof; provided, however, that the
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Executive's participation in all of the employee benefit, retirement,
compensation plans and other perquisites as provided in Section 3 hereof shall
terminate on the Date of Termination unless otherwise required by applicable
law. Notwithstanding the proviso in the immediately preceding sentence, any
benefits payable under insurance, health, retirement and bonus plans as a result
of the Executive's participation in such plans through the Date of Termination
shall be paid when due under such plans.
(c) In the event of a termination pursuant to Section 4(a)(ii) or Section
4(a)(iii) hereof, compensation provided for herein shall continue to be paid,
and Executive shall continue to participate in the employee benefit, retirement,
and compensation plans and other perquisites as provided in Section 3 hereof,
(i) in the event of Executive's death, through the date of death, or (ii) in the
event of Executive's Disability, through the Date of Termination pursuant to
Section 4(a)(iii) hereof. Any benefits payable under insurance, health,
retirement and bonus plans as a result of Executive's participation in such
plans through the date of death or the Date of Termination pursuant to Section
4(a)(iii) hereof, as the case may be, shall be paid when due under those plans.
6. Representations and Warranties.
------------------------------
(a) The Executive represents and warrants to the Bank that: (i) he has
the full power and authority to execute, deliver and perform this Agreement, and
that he has taken all actions necessary to secure all approvals required in
connection herewith and therewith; (ii) this Agreement has been duly authorized,
executed and delivered by him and constitutes his valid and binding agreement,
enforceable against him in accordance with its terms; and (iii) the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not, with the passage of time or the
giving of notice or both, violate or conflict with, constitute a breach of or
default under, result in the loss of any material benefit under, or permit the
acceleration of or entitle any party to accelerate any obligation under or
pursuant to, any material mortgage, lien, leases, agreement, instrument, order,
arbitration award, judgment or decree to which he is a party or by which he or
any of his assets are bound.
(b) The Bank hereby represents and warrants to the Executive that: (i) this
Agreement has been duly authorized, executed and delivered by it, and
constitutes the valid and binding agreement of it, enforceable against it in
accordance with its terms; (ii) it has the full power authority to execute,
deliver and perform this Agreement and has taken all necessary action to secure
all approvals required in connection herewith; and (iii) the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not, with the passage of time or the giving of notice
or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any material benefit under, or permit the acceleration of
or entitle any party to accelerate any obligation under or pursuant to, its
charter or bylaws or any material mortgage, lien, lease, agreement, instrument,
order, arbitration award, judgment or decree to which it is a party or by which
it or any of its assets are bound.
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7. Restrictive Covenants. Acknowledging that (i) he has intimate
---------------------
knowledge of the business of the Bank which, if exploited by him, in
contravention of this Agreement, would seriously adversely and irreparably
affect the value of the Bank and the ability of ABC to continue to operate the
Bank following the consummation of the merger contemplated by the Merger
Agreement; (ii) the provisions of this Section 7 are reasonable and necessary to
protect the legitimate interests of ABC; (iii) the provisions of this Section 7
are reasonable and necessary to protect the goodwill of the Bank acquired by ABC
when ABC acquired Old Tri-County pursuant to the Merger Agreement; (iv) any
violation of this Section 7 will result in irreparable injury to ABC and the
Bank and that damages at law would not be reasonable or adequate compensation to
ABC and the Bank for a violation of this Section 7; and (v) that in the course
of his employment with the Bank, as contemplated by this Agreement, and as a
result of the position of trust that he will hold under this Agreement, he will
obtain private and confidential information and proprietary data relating to
ABC, the Bank and other affiliates of ABC, including, without limitation,
financial information, product information and other data that are valuable
assets and property rights of the Bank and ABC and its affiliates (collectively
referred to as "Confidential Information"), the Executive hereby agrees as
follows:
(a) The Executive shall not, during the Term of this Agreement or any time
after the termination of this Agreement, either directly or indirectly, disclose
or use any Confidential Information acquired during his employment with the
Bank, unless (i) the Confidential Information has been made public through no
action or fault of the Executive, or (ii) its disclosure is requested or
compelled by applicable law or regulatory agency. The Executive further agrees
that after the termination of this Agreement, or at such other time as the Bank
requests, the Executive will return to the Bank all documents, papers and
records constituting Confidential Information, and all copies of same in the
Executive's possession and control.
(b) For a period equal to (i) one (1) year after the expiration of the Term
or the termination of this Agreement and the Executive's employment hereunder
prior to the expiration of the Term pursuant to Section 4(a)(v) or Section
4(a)(vi) hereof; or (ii) the remaining Term and a period of one (1) year after
the expiration of the Term upon the termination of this Agreement and the
Executive's employment hereunder pursuant to Section 4(a)(iv) hereof, the
Executive shall not directly or indirectly provide banking or bank-related
services to, or solicit the banking or bank-related business of, any customer of
the Bank at the time of such provision of services or solicitation which the
Executive served either alone or with others while employed by the Bank in any
city, town, borough, township, village or other place in which the Executive
performed services for the Bank while employed by it, or assist any actual or
potential competitor of the Bank to provide banking or bank-related services to
or solicit any such customer's banking or bank-related business in any such
place.
(c) While the Executive is employed by the Bank and for a period equal to
(i) one (1) year after the expiration of the Term or the termination of this
Agreement and the Executive's employment hereunder prior to the expiration of
the Term pursuant to Section 4(a)(v) or Section 4(a)(vi) hereof; or (ii) the
remaining Term and a period of one (1) year after the expiration of the Term
upon the termination of this Agreement and the Executive's employment hereunder
pursuant to Section 4(a)(iv) hereof, the Executive shall not, directly or
indirectly, as principal, agent, or trustee, or through the agency of any
corporation, partnership, trade association, agent or agency, engage in any
banking or bank-related business or venture which competes with the
5
business of the Bank as conducted during the Executive's employment by the Bank
within a radius of fifty (50) miles of the Bank's main office.
(d) In addition to all other remedies provided at law or in equity, the
Bank may petition and obtain from a court of law or equity both temporary and
permanent injunctive relief without the necessity of proving actual damages and
without posting bond or other security to prevent a breach by the Executive of
any covenant contained in this Section 7, as well as to an equitable accounting
of all earnings and profits and other benefits arising out of any such
violations.
7. Notices. Any notice or other communication required or permitted to be
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given hereunder shall be in writing and deemed to have been given when delivered
in person or when dispatched by telegram or electronic facsimile transfer
(confirmed in writing by mail, registered or certified, return receipt
requested, postage prepaid, simultaneously dispatched) to the addresses
specified below.
If to the Executive: Xxxx X. Xxxxxxxx
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
If to the Bank: Tri-County Bank
c/o ABC Bancorp
00 0xx Xxxxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: President
or to such other address or fax number as either party may from time to time
designate in writing to the other.
8. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto relating to the subject matter hereof, and, except
for that certain Salary Continuation Agreement dated the date hereof between ABC
and the Executive, supersedes all prior or contemporaneous agreements and
understandings, whether oral or written, with respect to the same. No
modification, alteration, amendment or rescission of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed
by both parties hereto.
9. Governing Law. This Agreement and the rights and duties of the parties
-------------
hereunder shall be governed by, construed under and enforced in accordance with
the laws of the State of Florida.
10. Assignment. This Agreement shall inure to the benefit of and be
----------
binding upon the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. The rights, duties and
obligations under this Agreement are assignable by the Bank to a successor of
all or substantially all of the business or assets of the Bank. The rights,
duties and obligations of the Executive under this Agreement shall not be
assignable.
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11. Survival. The respective obligations of the parties under Sections 5
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and 7 hereof shall survive the termination of this Agreement.
12. Prevailing Party. In connection with any action arising out of this
----------------
Agreement, the substantially prevailing party in any such action shall be
entitled to receive from the other party all costs and expenses (including
reasonable attorneys' fees and costs) incurred by the substantially prevailing
party in connection therewith, in addition to any other award made by the court
in which such action is brought.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and
delivered, and the Executive has executed and delivered this Agreement, all as
of the day and year first above written.
TRI-COUNTY BANK
(f/k/a Tri-County Merger Sub, Inc.)
By: ______________________________________
Its: _____________________________________
___________________________________ (SEAL)
XXXX X. XXXXXXXX
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