EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
by and among
NORTHWEST BANCORP, MHC
NORTHWEST BANCORP, INC.
NORTHWEST MERGER SUBSIDIARY, INC.
NORTHWEST SAVINGS BANK
and
FIRST XXXX BANCORP, INC.
and
XXXX FEDERAL SAVINGS AND LOAN ASSOCIATION OF BELLEVUE
Dated as of March 11, 2003
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
Section 1.01 Definitions......................................................2
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.01 Effects of Merger; Surviving Corporation.........................8
Section 2.02 Conversion of Shares.............................................9
Section 2.03 Exchange Procedures.............................................10
Section 2.04 Stock Options...................................................11
Section 2.05 Restricted Stock................................................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FIRST XXXX BANCORP AND
XXXX FEDERAL SAVINGS
Section 3.01 Organization....................................................12
Section 3.02 Capitalization..................................................13
Section 3.03 Authority; No Violation.........................................14
Section 3.04 Consents........................................................15
Section 3.05 Financial Statements............................................15
Section 3.06 Taxes...........................................................16
Section 3.07 Absence of Certain Changes or Events............................17
Section 3.08 Material Contracts; Leases; Defaults............................17
Section 3.09 Ownership of Property; Insurance Coverage.......................18
Section 3.10 Legal Proceedings...............................................19
Section 3.11 Compliance With Applicable Law..................................19
Section 3.12 Employee Benefit Plans..........................................20
Section 3.13 Brokers, Finders and Financial Advisors.........................23
Section 3.14 Environmental Matters...........................................23
Section 3.15 Loan Portfolio..................................................24
Section 3.16 Securities Documents............................................25
Section 3.17 Related Party Transactions......................................25
Section 3.18 Schedule of Termination Benefits................................26
Section 3.19 Deposits........................................................26
i
Section 3.20 Antitakeover Provisions Inapplicable............................26
Section 3.21 Registration Obligations........................................27
Section 3.22 Risk Management Instruments.....................................27
Section 3.23 Fairness Opinion................................................27
Section 3.24 Intellectual Property...........................................27
Section 3.25 Bank Owned Life Insurance.......................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NORTHWEST MHC,
NORTHWEST SAVINGS BANK AND NORTHWEST BANCORP
Section 4.01 Organization....................................................28
Section 4.02 Authority; No Violation.........................................29
Section 4.03 Consents........................................................30
Section 4.04 Financial Statements............................................30
Section 4.05 Securities Documents............................................30
Section 4.06 Compliance With Applicable Law..................................31
Section 4.07 Financing.......................................................31
Section 4.08 Regulatory Approvals............................................32
Section 4.09 Tax Opinion.....................................................32
Section 4.10 Legal Proceedings...............................................32
Section 4.11 Ownership of First Xxxx Bancorp Common Stock....................32
ARTICLE V
COVENANTS OF THE PARTIES
Section 5.01 Conduct of First Xxxx Bancorp's Business........................32
Section 5.02 Access; Confidentiality.........................................37
Section 5.03 Regulatory Matters and Consents.................................37
Section 5.04 Taking of Necessary Action......................................38
Section 5.05 Certain Agreements..............................................39
Section 5.06 No Other Bids and Related Matters...............................41
Section 5.07 Duty to Advise; Duty to Update First Xxxx Bancorp's
Disclosure Schedules..........................................42
Section 5.08 Conduct of Business of Northwest MHC, Northwest Bancorp
and Northwest Savings Bank....................................42
Section 5.09 Board and Committee Minutes.....................................42
Section 5.10 Undertakings by First Xxxx Bancorp and Northwest Bancorp........43
Section 5.11 Employee and Termination Benefits; Directors and Management.....45
Section 5.12 Duty to Advise; Duty to Update Northwest Bancorp's
Disclosure Schedules..........................................48
Section 5.13 Bank and Related Merger Transactions............................49
Section 5.14 Northwest MHC...................................................49
ii
ARTICLE VI
CONDITIONS
Section 6.01 Conditions to First Xxxx Bancorp's Obligations under
this Agreement................................................49
Section 6.02 Conditions to Northwest Bancorp's Obligations under
this Agreement................................................50
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.01 Termination.....................................................51
Section 7.02 Effect of Termination...........................................53
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Expenses........................................................53
Section 8.02 Survival........................................................54
Section 8.03 Amendment, Extension and Waiver.................................54
Section 8.04 Entire Agreement................................................54
Section 8.05 Successors and Assigns..........................................54
Section 8.06 Notices.........................................................55
Section 8.07 Captions........................................................55
Section 8.08 Counterparts....................................................55
Section 8.09 Severability....................................................55
Section 8.10 Governing Law...................................................56
Section 8.11 Specific Performance............................................56
Exhibits:
Exhibit A: Form of Plan of Merger
Exhibit B: Form of First Xxxx Bancorp Letter Agreement
Exhibit C: Form of Opinion of Counsel
Exhibit D: Form of Termination and Release Agreement
Exhibit E: Form of Noncompetition Agreement
iii
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March
11, 2003, is by and among Northwest Bancorp, MHC, a Federal mutual holding
company ("Northwest MHC"), Northwest Bancorp, Inc., a Federal corporation
("Northwest Bancorp"), Northwest Merger Subsidiary, Inc., a wholly-owned
subsidiary of Northwest Bancorp incorporated under the laws of the State of
Delaware ("Northwest Merger Subsidiary"), Northwest Savings Bank, a Pennsylvania
savings bank, and First Xxxx Bancorp, Inc., a Delaware corporation ("First Xxxx
Bancorp") and Xxxx Federal Savings and Loan Association of Bellevue ("Xxxx
Federal Savings"). Each of Northwest Bancorp, Northwest Merger Subsidiary,
Northwest Savings Bank, First Xxxx Bancorp and Xxxx Federal Savings is sometimes
individually referred to herein as a "party," and all of them are sometimes
collectively referred to herein as the "parties."
RECITALS
WHEREAS, Northwest MHC, a registered savings and loan holding company,
with principal offices in Warren, Pennsylvania, owns a majority of the issued
and outstanding capital stock of Northwest Bancorp, with principal offices in
Warren, Pennsylvania;
WHEREAS, Northwest Bancorp, a registered savings and loan holding
company, with principal offices in Warren, Pennsylvania, owns all of the issued
and outstanding capital stock of Northwest Savings Bank and Northwest Merger
Subsidiary, both with principal offices in Warren, Pennsylvania;
WHEREAS, First Xxxx Bancorp, a registered savings and loan holding
company, with principal offices in Wilmington, Delaware, owns all of the issued
and outstanding capital stock of Xxxx Federal Savings, with principal offices in
Pittsburgh, Pennsylvania;
WHEREAS, the Board of Directors of First Xxxx Bancorp deems it
advisable and in the best interests of First Xxxx Bancorp stockholders and the
Board of Directors of Northwest Bancorp deems it advisable and in the best
interests of Northwest Bancorp stockholders to consummate the business
combination transactions contemplated herein whereby Northwest Merger
Subsidiary, subject to the terms and conditions set forth herein, will merge
with and into First Xxxx Bancorp, with First Xxxx Bancorp as the surviving
entity (the "Merger") and subsequent thereto First Xxxx Bancorp will merge with
or liquidate into Northwest Bancorp, with Northwest Bancorp as the surviving
entity (the "Company Merger"), and Xxxx Federal Savings will merge with and into
Northwest Savings Bank, with Northwest Savings Bank as the surviving entity (the
"Bank Merger") (the Merger, the Company Merger and the Bank Merger are sometimes
collectively referred to as the "Mergers");
WHEREAS, the parties hereto desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
Merger, and the other transactions contemplated by this Agreement; and
WHEREAS, simultaneously with the execution of this Agreement by the
parties hereto, each director of First Xxxx Bancorp is entering into the letter
agreement included as Exhibit B to this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual representations, warranties and covenants herein contained and intending
to be legally bound hereby, the parties hereto do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.01. Definitions. Except as otherwise provided herein, as used
in this Agreement, the following terms shall have the indicated meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate" means, with respect to any Person, any Person who
directly, or indirectly, through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person and,
without limiting the generality of the foregoing, includes any
executive officer or director of such Person and any Affiliate of such
executive officer or director.
"Agreement" means this agreement, and any amendment or
supplement hereto, which constitutes a "plan of merger" between
Northwest Bancorp, Northwest Merger Subsidiary and First Xxxx Bancorp.
"Applications" means the applications for all Regulatory
Approvals that are required by the transactions contemplated hereby.
"Bank Merger" means the merger of Xxxx Federal Savings with
and into Northwest Savings Bank, with Northwest Savings Bank as the
surviving institution.
"Bank Merger Agreement" shall mean a Plan of Merger which is
substantially in the form of the Plan of Merger included as Exhibit A
to this Agreement.
"Xxxx Federal Savings ESOP" means the Xxxx Federal Savings and
Loan Association of Bellevue Employee Stock Ownership Plan and Trust.
"Xxxx Federal Savings Restricted Stock Plan" means the Xxxx
Federal Savings and Loan Association of Bellevue Master Stock
Compensation Plan, as amended from time to time.
"Business Day" means any day other than a Saturday, Sunday or
Federal holiday.
"Certificate" has the meaning given to that term in Section
2.02(a)(iv) of this Agreement.
2
"Closing Date" means the Business Day determined by Northwest
Bancorp, in its sole discretion, which is within ten (10) Business Days
after the last condition precedent (other than the delivery of
certificates or other instruments and documents to be delivered at
closing) pursuant to this Agreement has been fulfilled or waived
(including the expiration of any applicable waiting period), or such
other date as to which Northwest Bancorp and First Xxxx Bancorp shall
mutually agree.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Merger" means the merger or liquidation of First Xxxx
Bancorp, as a wholly-owned subsidiary of Northwest Bancorp, with and
into Northwest Bancorp, with Northwest Bancorp being the surviving
corporation.
"Compensation and Benefit Plans" means any bonus, incentive,
deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase,
restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare and fringe benefit plans, employment, severance and
change in control agreements and all other benefit practices, policies
and arrangements maintained by First Xxxx Bancorp or Xxxx Federal
Savings in which any employee or former employee, consultant or former
consultant or director or former director of First Xxxx Bancorp or
Xxxx Federal Savings participates or to which any such employee,
consultant or director is a party or is otherwise entitled to receive
benefits.
"Confidentiality Agreement" means the letter agreement, dated
as of January 9, 2003, between Northwest Bancorp and Xxxxxx Brothers,
as financial adviser to, and on behalf of, First Xxxx Bancorp.
"Department" means the Pennsylvania Department of Banking.
"DGCL" means the Delaware General Corporation Law, as from
time to time amended, and any successor thereto.
"Disclosure Schedule" means any of the Northwest Bancorp
Disclosure Schedules or the First Xxxx Bancorp Disclosure Schedules.
"Dissenters' Shares" means shares of First Xxxx Bancorp Common
Stock that have not been voted in favor of approval of the Company
Merger and with respect to which appraisal rights have been perfected
in accordance with Section 262 of the DGCL.
"DOL" means the U.S. Department of Labor.
"Environmental Law" means any Federal or state law, statute,
rule, regulation, code, order, judgment, decree, injunction, common law
or agreement with any Federal or state governmental authority relating
to (i) the protection, preservation or restoration of the environment
(including air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any
other natural resource),
3
(ii) human health or safety relating to the presence of Hazardous
Material, or (iii) exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Material, in each case as
amended and now in effect.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated from time to time
thereunder.
"Exchange Agent" means American Stock Transfer & Trust
Company, the transfer agent for Northwest Bancorp, or such other entity
selected by Northwest Bancorp and agreed to by First Xxxx Bancorp.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"FHLB" means a Federal Home Loan Bank.
"First Xxxx Bancorp Common Stock" shall have the meaning given
to such term in Section 3.02(a).
"First Xxxx Bancorp Disclosure Schedules" means the Disclosure
Schedules delivered by First Xxxx Bancorp to Northwest Bancorp pursuant
to Article III of this Agreement.
"First Xxxx Bancorp Financials" means (i) the audited
consolidated financial statements of First Xxxx Bancorp as of December
31, 2002 and 2001 and for the three years ended December 31, 2002,
including the notes thereto included in Securities Documents filed by
First Xxxx Bancorp, or in the case of the audited consolidated
financial statements for 2002, delivered to Northwest Bancorp, and (ii)
the unaudited interim consolidated financial statements of First Xxxx
Bancorp as of each calendar quarter thereafter included in Securities
Documents filed by First Xxxx Bancorp.
"First Xxxx Bancorp Option" means issued and outstanding
options granted by First Xxxx Bancorp to purchase shares of First Xxxx
Bancorp Common Stock pursuant to the First Xxxx Bancorp Stock Option
Plan.
"First Xxxx Bancorp Regulatory Reports" means the Thrift
Financial Reports of Xxxx Federal Savings and accompanying schedules,
as filed with the OTS, for each appropriate calendar quarter beginning
with the quarter ended December 31, 2001, through the Closing Date, and
all Annual, Quarterly and Current Reports filed with the OTS by First
Xxxx Bancorp from December 31, 2001 through the Closing Date.
4
"First Xxxx Bancorp Rights" means the rights attached to
shares of First Xxxx Bancorp Common Stock pursuant to the First Xxxx
Bancorp Rights Agreement.
"First Xxxx Bancorp Rights Agreement" means the Shareholder
Rights Agreement between First Xxxx Bancorp and Registrar and Transfer
Company, as Rights Agent, dated as of November 18, 1998.
"First Xxxx Bancorp Subsidiary" means any corporation, limited
liability company, limited liability partnership or partnership
(whether general or limited), 50% or more of the capital stock or other
equity ownership interest of which is owned, either directly or
indirectly, by First Xxxx Bancorp or Xxxx Federal Savings, except any
corporation limited liability company, limited liability partnership or
partnership (whether general or limited), the stock or other equity
ownership interest of which is held as security by Xxxx Federal Savings
in the ordinary course of its lending activities.
"First Xxxx Bancorp Stock Option Plan" means the First Xxxx
Bancorp 1996 Master Stock Option Plan, as amended from time to time.
"GAAP" means accounting principles generally accepted in the
United States of America as in effect at the relevant date and
consistently applied.
"Hazardous Material" means any substance (whether solid,
liquid or gas) which is listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated,
under any Environmental Law, whether by type or by quantity, including
any substance containing any such substance as a component. Hazardous
Material includes, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste,
special waste, industrial substance, oil or petroleum, or any
derivative or by-product thereof, radon, radioactive material,
asbestos, asbestos-containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
"HOLA" means the Home Owners' Loan Act, as amended.
"IRS" means the Internal Revenue Service.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) means
those facts that are known, or reasonably should have been known, by
the senior officers and directors of such Person, and includes any
facts, matters or circumstances set forth in any written notice from
any Regulatory Authority or any other written notice received by that
Person.
"Loan Property" shall have the meaning given to such term in
Section 3.14(b) of this Agreement.
"Material Adverse Effect" shall mean, with respect to First
Xxxx Bancorp and Northwest Bancorp, any adverse effect (a) on its
respective assets, financial condition or
5
results of operations which is material to its respective assets,
financial condition, results of operations or business on a
consolidated basis, or (b) which would materially impair the ability of
First Xxxx Bancorp or Northwest Bancorp, respectively, or any of their
respective Affiliates, to perform its obligations under this Agreement,
or otherwise materially impede the consummation of the Merger and the
other transactions contemplated by this Agreement, except in each case
for any such effect caused by (i) changes in economic conditions
affecting financial institutions generally, including but not limited
to a change in interest rates generally, (ii) any individual or
combination of changes occurring after the date hereof in any Federal
or state law, rule or regulation or in GAAP, which change(s) affect(s)
financial institutions generally, (iii) expenses incurred in connection
with this Agreement and the transactions contemplated hereby, or (iv)
the effects of any action or omission taken pursuant to this Agreement
or with the written consent of the other party or parties hereto.
"Material Contract" shall have the meaning given to such term
in Item 601(b)(10) of the SEC's Regulation S-K
"Merger" means the merger of Northwest Merger Subsidiary with
and into First Xxxx Bancorp, with First Xxxx Bancorp as the surviving
corporation.
"Merger Effective Date" means that date upon which the
certificate of merger as to the Merger are accepted for filing by the
Secretary of State of the State of Delaware, or such other date as
otherwise stated in such filed articles of merger, in accordance with
Delaware law. The Merger Effective Date shall be the same date as the
Closing Date.
"Merger Consideration" has the meaning given to that term in
Section 2.02(a)(i) of this Agreement.
"Northwest Bancorp Disclosure Schedules" means the Disclosure
Schedules delivered by Northwest Bancorp to First Xxxx Bancorp pursuant
to Article IV of this Agreement.
"Northwest Bancorp Financials" means (i) the audited
consolidated financial statements of Northwest Bancorp as of June 30,
2002 and 2001 and for the three years ended June 30, 2002, including
the notes thereto and (ii) the unaudited interim consolidated financial
statements of Northwest Bancorp as of each calendar quarter thereafter.
"Northwest Bancorp Regulatory Reports" means the Call Reports
of Northwest Savings Bank and accompanying schedules, as filed with the
FDIC, for each calendar quarter beginning with the quarter ended June
30, 2002, through the Closing Date, and all Annual, Quarterly and
Current Reports filed on Form H-(b)11 with the OTS by Northwest Bancorp
from June 30, 2002 through the Closing Date.
"Northwest Bancorp Subsidiary" means any corporation, limited
liability company, limited liability partnership or partnership
(whether general or limited), 50% or
6
more of the capital stock or other equity ownership interest of which
is owned, either directly or indirectly, by Northwest Bancorp or
Northwest Savings Bank, except any corporation limited liability
company, limited liability partnership or partnership (whether general
or limited), the stock or other equity ownership interest of which is
held as security by Northwest Savings Bank in the ordinary course of
its lending activities.
"Northwest Banking Subsidiary" means Northwest Savings Bank
and Jamestown Savings Bank.
"OTS" means the Office of Thrift Supervision.
"Participation Facility" shall have the meaning given to such
term in Section 3.14(b) of this Agreement.
"PBCA" means the Pennsylvania Business Corporation Act, as
from time to time amended, and any successor thereto.
"Pension Plan" has the meaning given to that term in Section
3.12 of this Agreement.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, trust or "group"
(as that term is defined in Section 13(d)(3) of the Exchange Act).
"Proxy Statement" means the proxy statement, together with any
supplements thereto, to be transmitted to holders of First Xxxx Bancorp
Common Stock in connection with the transactions contemplated by this
Agreement.
"Regulatory Agreement" has the meaning given to that term in
Section 3.11(c) of this Agreement.
"Regulatory Approvals" means all consents, waivers, approvals,
nonobjections and clearances required to be obtained from or issued by
the OTS, the FDIC, the Department or the respective staffs thereof in
order to complete the transactions contemplated hereby.
"Regulatory Authority" means any agency or department of any
federal, state or local government, including without limitation the
OTS, the FDIC, the Department or the respective staffs thereof.
"Rights" means warrants, options, rights, convertible
securities and other capital stock equivalents that obligate an entity
to issue its securities or to make payments of cash in lieu of issuing
such securities or in respect to such securities.
"SAIF" means the Savings Association Insurance Fund of the
FDIC.
7
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated from time to time thereunder.
"Securities Documents" means all registration statements,
schedules, statements, forms, reports, proxy material, and other
documents required to be filed under the Securities Laws.
"Securities Laws" means the Securities Act and the Exchange
Act.
"Subsidiary" means any corporation, limited liability company,
limited liability partnership or partnership, whether general or
limited), 50% or more of the capital stock or other equity ownership
interest of which is owned, either directly or indirectly, by another
entity, except any corporation the stock or other equity ownership
interest of which is held as security by either Northwest Savings Bank
or Xxxx Federal Savings, as the case may be, in the ordinary course of
its lending activities.
"Superior Proposal" has the meaning given to that term in
Section 5.06 of this Agreement.
"Surviving Corporation" has the meaning given to that term in
Section 2.01(a)(i) of this Agreement.
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.01. Effects of Merger; Surviving Corporation.
(a) As of the Merger Effective Date, the following shall occur:
(i) Northwest Merger Subsidiary shall merge with and into First
Xxxx Bancorp; the separate existence of Northwest Merger Subsidiary shall cease;
First Xxxx Bancorp shall be the surviving corporation in the Merger (the
"Surviving Corporation") and a wholly-owned subsidiary of Northwest Bancorp; and
all of the property (real, personal and mixed), rights, powers and duties and
obligations of Northwest Merger Subsidiary shall be taken and deemed to be
transferred to and vested in First Xxxx Bancorp, as the Surviving Corporation in
the Merger, without further act or deed; all in accordance with the DGCL.
(ii) the Certificate of Incorporation of the Surviving Corporation
shall be amended and restated to read in its entirety as the Certificate of
Incorporation of Northwest Merger Subsidiary, in effect immediately prior to the
Merger Effective Date; and the Bylaws of the Surviving Corporation shall be
amended and restated to read in their entirety as the Bylaws of Northwest Merger
Subsidiary, in effect immediately prior to the Merger Effective Date, until
thereafter altered, amended or repealed in accordance with applicable law.
8
(iii) the directors of Northwest Merger Subsidiary duly elected
and holding office immediately prior to the Merger Effective Date shall be the
directors of the Surviving Corporation, each to hold office until his or her
successor is elected and qualified or otherwise in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation.
(iv) the officers of Northwest Merger Subsidiary duly elected and
holding office immediately prior to the Merger Effective Date shall be the
officers of the Surviving Corporation, each to hold office until his or her
successor is elected and qualified or otherwise in accordance with the
Certificate of Incorporation and the Bylaws of the Surviving Corporation.
(b) Notwithstanding any provision of this Agreement to the contrary,
Northwest Bancorp may elect, subject to the filing of all Applications and the
receipt of all Regulatory Approvals, to modify the structure of the transactions
contemplated hereby, and the parties shall enter into such alternative
transactions, so long as (i) there are no adverse tax consequences to any of the
stockholders of First Xxxx Bancorp as a result of such modification, (ii) the
Merger Consideration is not thereby changed in kind or reduced in amount or
delayed in payment following the Merger Effective Date because of such
modification, (iii) such modification will not materially increase the
obligations, liabilities or duties of First Xxxx Bancorp or Xxxx Federal Savings
prior to the Merger Effective Date, and (iv) such modification will not be
likely to delay or jeopardize receipt of any Regulatory Approvals or otherwise
materially delay consummation of the Mergers.
Section 2.02. Conversion of Shares. At the Merger Effective Date, by
virtue of the Merger and without any action on the part of any Person:
(a)(i) Each outstanding share of First Xxxx Bancorp Common Stock issued
and outstanding at the Merger Effective Date, except as provided in clauses
(ii), and (iii) of paragraph (a) of this Section, shall cease to be outstanding,
and shall be converted into the right to receive $26.25 in cash (the "Merger
Consideration").
(ii) Any shares of First Xxxx Bancorp Common Stock which are owned
or held by any party hereto or any of their respective Subsidiaries (other than
in a fiduciary capacity or in connection with debts previously contracted) at
the Merger Effective Date, as well as any shares of First Xxxx Bancorp Common
Stock held in trust established pursuant to the Xxxx Federal Savings Restricted
Stock Plan that have not been allocated or granted, shall be deemed cancelled
and the certificates for such shares shall be deemed retired, such shares shall
not be converted into the Merger Consideration, and no cash or shares of capital
stock of Northwest Bancorp shall be issued or exchanged therefor.
(iii) The Surviving Corporation, and upon consummation of the
Company Merger, Northwest Bancorp, as the successor thereto, shall pay for any
Dissenters' Shares in accordance with Section 262 of the DGCL, and the holders
thereof shall not be entitled to receive any Merger Consideration; provided,
that if appraisal rights under Section 262 of the DGCL with respect to any
Dissenters' Shares shall have been effectively withdrawn or lost, such shares
will thereupon cease to be treated as Dissenters' Shares and shall be converted
into the right to receive the Merger Consideration pursuant to Section
2.02(a)(i).
9
(iv) The holders of certificates (immediately prior to the Merger)
representing shares of First Xxxx Bancorp Common Stock (any such certificate
being hereinafter referred to as a "Certificate") shall cease to have any rights
as stockholders of First Xxxx Bancorp, except such rights, if any, as they may
have pursuant to applicable law and this Agreement.
(b) At the Merger Effective Date, by virtue of the Merger and without
any action on the part of any Person, each share of Northwest Merger Subsidiary
common stock issued and outstanding immediately before the Merger Effective Date
shall be converted into and become an outstanding share of common stock of the
Surviving Corporation.
Section 2.03. Exchange Procedures.
(a) As promptly as practicable after the Merger Effective Date, and in
any event within five (5) Business Days thereafter, the Exchange Agent shall
mail to each holder of record of outstanding shares of First Xxxx Bancorp Common
Stock a letter of transmittal in form and substance reasonably acceptable to
First Xxxx Bancorp ("Letter of Transmittal") containing instructions for the
surrender of the Certificate(s) held by such holder for payment therefor. Upon a
holder's surrender of the Certificate(s) to the Exchange Agent in accordance
with the instructions set forth in the Letter of Transmittal, such holder shall
promptly receive in exchange therefor the Merger Consideration, without interest
thereon. Neither Northwest Bancorp nor the Exchange Agent shall be obligated to
deliver the Merger Consideration to a former stockholder of First Xxxx Bancorp
until such former stockholder surrenders his Certificate(s).
(b) If payment of the Merger Consideration is to be made to a Person
other than the Person in whose name a Certificate surrendered in exchange
therefore is registered, it shall be a condition of payment that the Certificate
so surrendered shall be properly endorsed (or accompanied by an appropriate
instrument of transfer) and otherwise in proper form for transfer, and that the
Person requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of the
Certificate surrendered, or required for any other reason, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(c) Contemporaneously with or prior to the Merger, Northwest Bancorp
and/or Northwest Savings Bank shall deposit or cause to be deposited, in trust
with the Exchange Agent, an amount of cash equal to the aggregate Merger
Consideration that the First Xxxx Bancorp stockholders shall be entitled to
receive on the Merger Effective Date pursuant to Section 2.02 hereof (determined
by multiplying the Merger Consideration by the number of shares of First Xxxx
Bancorp Common Stock which are issued and outstanding immediately prior to the
Merger Effective Date, other than shares referenced in Section 2.02(a)(ii) and
(iii) hereof).
(d) The payment of the Merger Consideration upon the exchange of First
Xxxx Bancorp Common Stock in accordance with the terms and conditions hereof
shall constitute full satisfaction of all rights pertaining to such First Xxxx
Bancorp Common Stock.
10
(e) Promptly following the date which is twelve (12) months after the
Merger Effective Date, Northwest Bancorp may request the Exchange Agent to
deliver to Northwest Bancorp all cash, Certificates and other documents in its
possession relating to the transactions described in this Agreement, in which
case the Exchange Agent's duties shall terminate. In such event, each holder of
a Certificate formerly representing shares of First Xxxx Bancorp Common Stock
may surrender such Certificate to Northwest Bancorp and (subject to applicable
abandoned property, escheat and similar laws) receive in consideration therefore
the Merger Consideration multiplied by the number of shares of First Xxxx
Bancorp Common Stock formerly represented by such Certificate, without any
interest or dividends thereon.
(f) As of the close of business on the Merger Effective Date, there
shall be no transfers on the stock transfer books of First Xxxx Bancorp of the
shares of First Xxxx Bancorp Common Stock which are outstanding immediately
prior to the Merger Effective Date, and the stock transfer books of First Xxxx
Bancorp shall be closed with respect to such shares. If, after the Merger
Effective Date, Certificates representing such shares are presented for transfer
to the Exchange Agent, they shall be canceled and exchanged for the Merger
Consideration as provided in this Article II.
(g) In the event any Certificate for First Xxxx Bancorp Common Stock
shall have been lost, stolen or destroyed, the Exchange Agent (or Northwest
Bancorp, if the Exchange Agent's duties hereunder have been discharged) shall
deliver in exchange for such lost, stolen or destroyed certificate, upon the
making of an affidavit of the fact by the holder thereof, the cash to be paid in
the Merger as provided for herein; provided, however, that Northwest Bancorp
may, in its sole discretion and as a condition precedent to the delivery
thereof, require the owner of such lost, stolen or destroyed Certificate to
deliver a bond in such reasonable sum as Northwest Bancorp may determine as
indemnity against any claim that may be made against First Xxxx Bancorp,
Northwest Bancorp or any other party with respect to the Certificate alleged to
have been lost, stolen or destroyed.
Section 2.04. Stock Options. First Xxxx Bancorp Disclosure Schedule
2.04 sets forth all of the outstanding First Xxxx Bancorp Options as of the date
hereof, all of which are vested and exercisable. At the Merger Effective Date,
each First Xxxx Bancorp Option which is unexercised and outstanding immediately
prior thereto shall, by reason of the Merger, be terminated and converted into
the right to receive in cash an amount equal to (i) the difference between (A)
the Merger Consideration and (B) the exercise price of each such First Xxxx
Bancorp Option multiplied by (ii) the number of shares of First Xxxx Bancorp
Common Stock subject to the First Xxxx Bancorp Option. First Xxxx Bancorp agrees
to take or to cause to be taken all actions necessary to provide for such
payment at or prior to the Merger Effective Date, and shall use its reasonable
best efforts to obtain the written acknowledgement of each holder of a then
outstanding First Xxxx Bancorp Option with regard to the termination of such
Option and the full payment therefor in accordance with the terms of this
Agreement.
Section 2.05. Restricted Stock. First Xxxx Bancorp Disclosure Schedule
2.05 sets forth all outstanding unvested awards under the Xxxx Federal Savings
Restricted Stock Plan. At the Merger Effective Date, each unvested restricted
share of First Xxxx Bancorp Common Stock granted under the Xxxx Federal Savings
Restricted Stock Plan which is outstanding at such time
11
shall vest and become free of all restrictions. Each holder of such a share of
restricted First Xxxx Bancorp Common Stock shall have the same right to receive
the Merger Consideration as is provided to each holder of First Xxxx Common
Stock. First Xxxx Bancorp agrees to take or to cause to be taken all actions
necessary to provide for such payment at or prior to the Merger Effective Date,
and shall use its reasonable best efforts to obtain the written acknowledgement
of each holder of a share of restricted First Xxxx Bancorp Common Stock with
regard to the payment for such shares and the full payment therefor in
accordance with the terms of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FIRST XXXX BANCORP AND
XXXX FEDERAL SAVINGS
No representation or warranty of First Xxxx Bancorp or Xxxx Federal
Savings contained in Article III shall be deemed untrue or incorrect, and First
Xxxx Bancorp and Xxxx Federal Savings shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events inconsistent with
any paragraph of Article III has had or is reasonably expected to have a
Material Adverse Effect on First Xxxx Bancorp; provided, however, that the
foregoing standard shall not apply to representations and warranties contained
in Sections 3.01, 3.02(a) and (b), 3.03(a), 3.04 and 3.18, which shall be deemed
untrue, incorrect and breached if they are not true and correct in all material
respects.
Subject to the standard set forth above, and except as set forth in the
First Xxxx Bancorp Disclosure Schedules delivered by First Xxxx Bancorp to
Northwest Bancorp on the date hereof, First Xxxx Bancorp and Xxxx Federal
Savings represent and warrant to Northwest MHC, Northwest Bancorp and Northwest
Savings Bank as follows:
Section 3.01. Organization.
(a) First Xxxx Bancorp is a corporation duly organized, validly
existing and in good standing under the DGCL, and is duly registered as a
savings and loan holding company under the HOLA. First Xxxx Bancorp has full
corporate power and authority to carry on its business as now conducted and is
duly licensed or qualified to do business in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or the conduct
of its business requires such qualification.
(b) Xxxx Federal Savings is a Federal savings and loan association
organized, validly existing and in good standing under the laws of the United
States. The deposits of Xxxx Federal Savings are insured by the FDIC through the
SAIF to the fullest extent permitted by law, and all premiums and assessments
required to be paid in connection therewith have been paid by Xxxx Federal
Savings when due. As of the date hereof, no proceedings for the revocation of
such deposit insurance are pending, or the Knowledge of Xxxx Federal Savings,
threatened.
(c) Xxxx Federal Savings is a member in good standing of the FHLB of
Pittsburgh and owns the requisite amount of stock therein.
12
(d) The respective minute books of First Xxxx Bancorp and Xxxx Federal
Savings accurately records, in all respects, all material corporate actions of
their respective stockholders and boards of directors (including committees)
through the date of this Agreement.
(e) Prior to the date of this Agreement, First Xxxx Bancorp and each
First Xxxx Bancorp Subsidiary has made available to Northwest Bancorp true and
correct copies of their respective certificate of incorporation or charter, and
bylaws, each of which is attached hereto as First Xxxx Bancorp Disclosure
Schedule 3.01(e).
(f) First Xxxx Bancorp Disclosure Schedule 3.01(f) sets forth a true
and complete list of all of First Xxxx Bancorp's and Xxxx Federal Savings'
Subsidiaries. First Xxxx Bancorp owns, directly or indirectly, all of the issued
and outstanding equity securities of each Subsidiary. There are no contracts,
commitments, understandings or arrangements by which any of such Subsidiaries is
or may be bound to sell or otherwise transfer any shares of its equity
securities (other than to First Xxxx Bancorp or a wholly-owned Subsidiary of
it). There are no contracts, commitments, understandings, or arrangements
relating to First Xxxx Bancorp's rights to vote or to dispose of such
securities. All of the equity securities of each such Subsidiary held by First
Xxxx Bancorp are fully paid and nonassessable, not subject to preemptive or
similar rights and are owned by First Xxxx Bancorp free and clear of any liens.
(g) Each of First Xxxx Bancorp's Subsidiaries has been duly organized
and qualified under the laws of the jurisdiction of its organization and is duly
qualified to do business and in good standing in the jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified.
Section 3.02. Capitalization.
(a) The authorized capital stock of First Xxxx Bancorp consists of
20,000,000 shares of common stock, par value $0.01 per share ("First Xxxx
Bancorp Common Stock"), of which 4,535,714 shares are outstanding, as of the
date hereof, and 2,000,000 shares of preferred stock, par value $0.01 per share
("First Xxxx Bancorp Preferred Stock"), none of which are outstanding. The
outstanding shares of First Xxxx Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable, and none of such shares
have been issued in violation of the preemptive rights of any Person. There are
4,076,612 shares of First Xxxx Bancorp Common Stock held by First Xxxx Bancorp
as treasury stock. Neither First Xxxx Bancorp nor Xxxx Federal Savings has or is
bound by any Rights or other agreements of any character relating to the
purchase, sale or issuance or voting of, or right to receive dividends or other
distributions on any shares of First Xxxx Bancorp Common Stock, or any other
security of First Xxxx Bancorp or any securities representing the right to vote,
purchase or otherwise receive any shares of First Xxxx Bancorp Common Stock or
any other security of First Xxxx Bancorp, other than 364,405 shares issuable
upon exercise of First Xxxx Bancorp Options (as set forth in First Xxxx Bancorp
Disclosure Schedule 2.04, which are not outstanding shares), 180,844 unallocated
shares issuable under and held pursuant to the Xxxx Federal Savings Restricted
Stock Plan which are outstanding, but which, in accordance with Section
2.02(a)(ii), will not be converted into the Merger Consideration), and shares
held pursuant to the Xxxx Federal Savings ESOP (which are outstanding). First
Xxxx Bancorp Disclosure Schedule 3.02(a) sets forth (i)
13
each holder of awards of Stock Options under the First Xxxx Bancorp Stock Option
Plan, the number of shares each such individual may acquire pursuant to the
exercise of First Xxxx Bancorp Stock Options and the exercise price relating to
the First Xxxx Bancorp Stock Options, and (ii) the name of each participant
under the Xxxx Federal Savings ESOP, the number of shares of First Xxxx Bancorp
Common Stock allocated to each such participant and the unallocated shares of
First Xxxx Bancorp Common Stock held by the Xxxx Federal Savings ESOP. Except as
set forth in First Xxxx Bancorp Disclosure Schedule 3.02(a), there are no shares
of restricted stock of First Xxxx Bancorp outstanding, or authorized to be
issued pursuant to any Compensation and Benefit Plan of First Xxxx Bancorp.
(b) First Xxxx Bancorp owns all of the capital stock of Xxxx Federal
Savings, free and clear of any lien or encumbrance. Except for Xxxx Federal
Savings and its Subsidiary, First Xxxx Bancorp does not possess, directly or
indirectly, any equity interest in any corporate entity, except for equity
interests held in the investment portfolios of First Xxxx Bancorp, equity
interests held by Xxxx Federal Savings in a fiduciary capacity, equity interests
held in connection with the lending activities of Xxxx Federal Savings,
including stock in the FHLB of Pittsburgh and common stock in the Federal
National Mortgage Association.
(c) To First Xxxx Bancorp's Knowledge (based solely upon filings made
by Persons pursuant to Section 13(d) of the Exchange Act), other than as set
forth in First Xxxx Bancorp Disclosure Schedule 3.02(c), no Person is the
beneficial owner (as defined in Section 13(d) of the Exchange Act) of 5% or more
of the outstanding shares of First Xxxx Bancorp Common Stock.
Section 3.03. Authority; No Violation.
(a) First Xxxx Bancorp and Xxxx Federal Savings each has full corporate
power and authority to execute and deliver this Agreement and, subject to a
favorable vote of the First Xxxx Bancorp stockholders and receipt of all
Regulatory Approvals, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by First Xxxx Bancorp and Xxxx Federal
Savings and the completion by First Xxxx Bancorp and Xxxx Federal Savings of the
transactions contemplated hereby, have been duly and validly approved by the
Boards of Directors of First Xxxx Bancorp and Xxxx Federal Savings, and, except
for approval of the stockholders of First Xxxx Bancorp, and in connection with
the liquidation of First Xxxx Bancorp following consummation of the Merger, no
other corporate proceedings on the part of First Xxxx Bancorp or Xxxx Federal
Savings are necessary to complete the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by First Xxxx Bancorp
and Xxxx Federal Savings, and the Bank Merger Agreement has been duly and
validly approved by the Board of Directors of Xxxx Federal Savings, and by First
Xxxx Bancorp in its capacity as the sole stockholder of Xxxx Federal Savings,
and assuming due authorization, execution and delivery of this Agreement by
Northwest MHC, Northwest Bancorp, Northwest Savings Bank and Northwest Merger
Subsidiary, this Agreement constitutes the valid and binding obligation of First
Xxxx Bancorp and Xxxx Federal Savings, enforceable against First Xxxx Bancorp
and Xxxx Federal Savings in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and as to Xxxx Federal Savings, the
14
conservatorship or receivership provisions of the FDIA, and subject, as to
enforceability, to general principles of equity.
(b) (A) The execution and delivery of this Agreement by First Xxxx
Bancorp and Xxxx Federal Savings, (B) subject to receipt of all Regulatory
Approvals and the approval of the stockholders of First Xxxx Bancorp, and except
as set forth on First Xxxx Bancorp Disclosure Schedule 3.03(b), the consummation
of the transactions contemplated hereby, and (C) compliance by First Xxxx
Bancorp and Xxxx Federal Savings with all of the terms, conditions or provisions
hereof, will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of First Xxxx Bancorp or the charter and
bylaws of Xxxx Federal Savings; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to First Xxxx
Bancorp or Xxxx Federal Savings or any of their respective properties or assets;
or (iii) violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or
the creation of any lien, security interest, charge or other encumbrance upon
any of the properties or assets of First Xxxx Bancorp or Xxxx Federal Savings
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other investment or
obligation to which First Xxxx Bancorp or Xxxx Federal Savings is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
Section 3.04. Consents. Except as set forth in First Xxxx Bancorp
Disclosure Schedule 3.04, and except for the receipt of the Regulatory Approvals
and compliance with any conditions contained therein, the approval of this
Agreement by the stockholders of First Xxxx Bancorp the filing of the Proxy
Statement and form of proxy with, and clearance of the same by, the SEC, the
filing of a certificate of merger with the Secretary of State of the State of
Delaware pursuant to the DGCL in connection with the Merger and the Company
Merger, the filing of articles of combination with the OTS in connection with
the Company Merger and the filing of Articles of Merger with the Pennsylvania
Secretary of State pursuant to the PBCA, in connection with the Bank Merger, no
consents or approvals of, or filings or registrations with, any public body or
authority are necessary, and no consent or approval of any other Person is
necessary in connection with (a) the execution and delivery of this Agreement by
First Xxxx Bancorp and Xxxx Federal Savings, and the Bank Merger Agreement by
Xxxx Federal Savings and (b) the completion by First Xxxx Bancorp and Xxxx
Federal Savings of the transactions contemplated hereby and thereby. First Xxxx
Bancorp and Xxxx Federal Savings have no reason to believe that (i) any
Regulatory Approvals will not be received or (ii) any public body or authority,
the consent or approval of which is not required or to which a filing is not
required, will object to the completion of the transactions contemplated by this
Agreement.
Section 3.05. Financial Statements.
(a) First Xxxx Bancorp has previously made available to Northwest
Bancorp the First Xxxx Bancorp Regulatory Reports. The First Xxxx Bancorp
Regulatory Reports have been prepared in all respects in accordance with
applicable regulatory accounting principles and practices throughout the periods
covered by such statements, and fairly present in all respects,
15
the consolidated financial position, results of operations and changes in
stockholders' equity of First Xxxx Bancorp as of and for the periods ended on
the dates thereof, in accordance with applicable regulatory accounting
principles applied on a consistent basis.
(b) First Xxxx Bancorp has previously made available to Northwest
Bancorp the First Xxxx Bancorp Financials. The First Xxxx Bancorp Financials
have been prepared in accordance with GAAP, and (including the related notes
where applicable) fairly present in each case the consolidated financial
position, results of operations and cash flows of First Xxxx Bancorp and Xxxx
Federal Savings on a consolidated basis as of and for the respective periods
ending on the dates thereof, in accordance with GAAP applied on a consistent
basis during the periods involved, except as indicated in the notes thereto, or
in the case of unaudited statements, as permitted by Form 10-Q.
(c) At the date of each balance sheet included in the First Xxxx
Bancorp Financials or the First Xxxx Bancorp Regulatory Reports, First Xxxx
Bancorp did not have any liabilities, obligations or loss contingencies of any
nature (whether absolute, accrued, contingent or otherwise) of a type required
to be reflected in such First Xxxx Bancorp Financials or First Xxxx Bancorp
Regulatory Reports or in the footnotes thereto which are not fully reflected or
reserved against therein or fully disclosed in a footnote thereto, except for
liabilities, obligations and loss contingencies which are incurred in the
ordinary course of business, consistent with past practice, and except for
liabilities, obligations and loss contingencies which are within the subject
matter of a specific representation and warranty herein and subject, in the case
of any unaudited statements, to normal, recurring audit adjustments and the
absence of footnotes.
Section 3.06. Taxes. For federal income tax purposes, First Xxxx
Bancorp and Xxxx Federal Savings are members of the same affiliated group within
the meaning of Code Section 1504(a). First Xxxx Bancorp and Xxxx Federal Savings
have duly filed all federal, state and local tax returns required to be filed by
them as of the date hereof (all such returns being accurate and correct) and
have duly paid or made provisions for the payment of all federal, state and
local taxes which have been incurred by or are due or claimed to be due from
First Xxxx Bancorp and Xxxx Federal Savings by any taxing authority or pursuant
to any written tax sharing agreement, other than taxes or other charges which
(i) are not delinquent, (ii) are being contested in good faith, or (iii) have
not yet been fully determined. As of the date of this Agreement, there is no
dispute pending, audit examination, deficiency assessment, tax investigation or
refund litigation with respect to any taxes of First Xxxx Bancorp or any of its
Subsidiaries, and no claim has been made by any authority in a jurisdiction
where First Xxxx Bancorp or any of its Subsidiaries do not file tax returns that
First Xxxx Bancorp or any such Subsidiary is subject to taxation in that
jurisdiction. First Xxxx Bancorp and its Subsidiaries have 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. First Xxxx Bancorp and
each of its Subsidiaries has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party, and First
Xxxx Bancorp and each of its Subsidiaries has timely complied with all
applicable information reporting requirements under Part III, Subchapter A of
Chapter 61 of the Code and similar applicable state and local information
reporting requirements.
16
Section 3.07. Absence of Certain Changes or Events. Except as disclosed
in the First Xxxx Bancorp Disclosure Schedule 3.07, since December 31, 2002,
there has not been any change in the business, assets, liabilities, condition
(financial or otherwise), or results of operations of First Xxxx Bancorp.
Section 3.08. Material Contracts; Leases; Defaults.
(a) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.08(a), and except for this Agreement and the Bank Merger Agreement, and those
agreements and other documents filed as exhibits to First Xxxx Bancorp's
Securities Documents, neither First Xxxx Bancorp nor Xxxx Federal Savings is a
party to, bound by or subject to (i) agreement, contract, arrangement,
commitment or understanding (whether written or oral) that is a Material
Contract; (ii) any collective bargaining agreement with any labor union relating
to employees of First Xxxx Bancorp or Xxxx Federal Savings; (iii) any agreement
which by its terms limits the payment of dividends by First Xxxx Bancorp or Xxxx
Federal Savings; (iv) any instrument evidencing or related to material
indebtedness for borrowed money whether directly or indirectly, by way of
purchase money obligation, conditional sale, lease purchase, guaranty or
otherwise, in respect of which First Xxxx Bancorp or Xxxx Federal Savings is an
obligor to any Person, which instrument evidences or relates to indebtedness
other than deposits, repurchase agreements, FHLB of Pittsburgh advances,
bankers' acceptances, "treasury tax and loan" accounts established in the
ordinary course of business and transactions in "federal funds" or which
contains financial covenants or other restrictions (other than those relating to
the payment of principal and interest when due) which would be applicable on or
after the Merger Effective Date to Northwest Bancorp or any Northwest Bancorp
Subsidiary; (v) any contract (other than this Agreement) limiting the freedom,
in any respect, of First Xxxx Bancorp or Xxxx Federal Savings to engage in any
type of banking or bank-related business which First Xxxx Bancorp or Xxxx
Federal Savings is permitted to engage in under applicable law as of the date of
this Agreement or (vi) any agreement, contract, arrangement, commitment or
understanding (whether written or oral) that restricts or limits in any way the
conduct of business by First Xxxx Bancorp or Xxxx Federal Savings.
(b) Each real estate lease that may require the consent of the lessor
or its agent resulting from the Company Merger or the Bank Merger by virtue of a
prohibition or restriction relating to assignment, by operation of law or
otherwise, or change in control, is listed in First Xxxx Bancorp Disclosure
Schedule 3.08(b) identifying the section of the lease that contains such
prohibition or restriction. Neither First Xxxx Bancorp nor Xxxx Federal Savings
is in default in any respect under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is a party,
by which its assets, business, or operations may be bound or affected, or under
which it or its assets, business, or operations receive benefits, and there has
not occurred any event that, with the lapse of time or the giving of notice or
both, would constitute such a default.
(c) True and correct copies of Material Contracts, agreements,
instruments, contracts, arrangements, commitments, leases or understandings
identified in First Xxxx Bancorp Disclosure Schedule 3.08(a) and 3.08(b) have
been made available to Northwest Bancorp on or before the date hereof, and are
in full force and effect on the date hereof and neither First Xxxx Bancorp nor
17
Xxxx Federal Savings (nor, to the Knowledge of First Xxxx Bancorp or any First
Xxxx Bancorp Subsidiary), any other party to any such "Material Contract,"
agreement, instrument, contract, arrangement, commitment, lease or understanding
has breached any provision of, or is in default in any respect under any term
of, any such "Material Contract," agreement, instrument, contract, arrangement,
commitment, lease or understanding. Except as set forth in First Xxxx Bancorp
Disclosure Schedule 3.08(c), no party to any such "Material Contract,"
agreement, instrument, contract, arrangement, commitment, lease or understanding
will have the right to terminate any or all of the provisions of any such
"Material Contract," agreement, instrument, contract, arrangement, commitment,
lease or understanding as a result of the execution of, and the transactions
contemplated by, this Agreement, or require the payment of an early termination
fee or penalty. No such "Material Contract," agreement, instrument, contract,
arrangement, commitment, lease or understanding to which First Xxxx Bancorp or
Xxxx Federal Savings is a party or under which First Xxxx Bancorp or Xxxx
Federal Savings may be liable contains provisions which permit an independent
contractor to terminate it without cause and after such termination without
cause continue to accrue future benefits thereunder.
Section 3.09. Ownership of Property; Insurance Coverage.
(a) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.09(a), First Xxxx Bancorp and the Xxxx Federal Savings each has good and, as
to real property, marketable title to all material assets and properties owned
by First Xxxx Bancorp or Xxxx Federal Savings in the conduct of their business,
whether such assets and properties are real or personal, tangible or intangible,
including assets and property reflected in the balance sheets contained in the
First Xxxx Bancorp Regulatory Reports and in the First Xxxx Bancorp Financials
or acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of in the ordinary course of business, since the
date of such balance sheets), subject to no liens, mortgages, security interests
or pledges, or to the Knowledge of First Xxxx Bancorp, adverse encumbrances,
except (i) those items which secure liabilities for public or statutory
obligations or any discount with, borrowing from or other obligations to the
FHLB of Pittsburgh, inter-bank credit facilities, or any transaction by Xxxx
Federal Savings acting in a fiduciary capacity, and (ii) statutory liens for
amounts not yet delinquent or which are being contested in good faith. First
Xxxx Bancorp and Xxxx Federal Savings, as lessee, have the right under valid and
subsisting leases of real and personal properties used by First Xxxx Bancorp and
Xxxx Federal Savings in the conduct of their business to occupy or use all such
properties as presently occupied and used by each of them. Such existing leases
and commitments to lease constitute operating leases for both tax and financial
accounting purposes and the lease expense and minimum rental commitments with
respect to such leases and lease commitments are as disclosed in the notes to
the First Xxxx Bancorp Financials.
(b) With respect to all agreements pursuant to which First Xxxx Bancorp
or Xxxx Federal Savings has purchased securities subject to an agreement to
resell, if any, First Xxxx Bancorp or Xxxx Federal Savings has a lien or
security interest (which to First Xxxx Bancorp's Knowledge is a valid, perfected
first lien) in the securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of the
debt secured thereby.
18
(c) First Xxxx Bancorp and Xxxx Federal Savings currently maintain
insurance considered by First Xxxx Bancorp to be reasonable for their respective
operations. First Xxxx Bancorp has not received notice from any insurance
carrier that (i) such insurance will be canceled or that coverage thereunder
will be reduced or eliminated, or (ii) premium costs with respect to such
policies of insurance will be substantially increased. There are presently no
claims pending under such policies of insurance and no notices have been given
by First Xxxx Bancorp under such policies. All such insurance is valid and
enforceable and in full force and effect, and within the last three (3) years
First Xxxx Bancorp has received each type of insurance coverage for which it has
applied and during such periods has not been denied indemnification for any
claims submitted under any of its insurance policies. First Xxxx Bancorp
Disclosure Schedule 3.09(c) identifies all policies of insurance maintained by
First Xxxx Bancorp and Xxxx Federal Savings.
Section 3.10. Legal Proceedings. Except as set forth in First Xxxx
Bancorp Disclosure Schedule 3.10, neither First Xxxx Bancorp nor Xxxx Federal
Savings is a party to any, and there are no pending or, to the Knowledge of
either First Xxxx Bancorp or Xxxx Federal Savings, threatened legal,
administrative, arbitration or other proceedings, claims (whether asserted or
unasserted), actions or governmental investigations or inquiries of any nature
(i) against First Xxxx Bancorp or Xxxx Federal Savings (other than routine bank
regulatory examinations), (ii) to which First Xxxx Bancorp's or Xxxx Federal
Savings' assets are or may be subject, or (iii) challenging the validity or
propriety of any of the transactions contemplated by this Agreement.
Section 3.11. Compliance With Applicable Law.
(a) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.11(a), since January 1, 1998, First Xxxx Bancorp and Xxxx Federal Savings each
was, and is, in compliance with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable to it, its properties, assets and deposits, its business, and its
conduct of business and its relationship with its employees, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act of 1977, the Home Mortgage Disclosure Act, the Bank
Secrecy Act, the USA Patriot Act, the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all
other applicable fair lending laws and other laws relating to discriminatory
business practices.
(b) First Xxxx Bancorp and Xxxx Federal Savings each has all permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Regulatory Authorities that are
required in order to permit it to own or lease its properties and to conduct its
business as presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to the
Knowledge of First Xxxx Bancorp and Xxxx Federal Savings, no suspension or
cancellation of any such permit, license, certificate, order or approval is
threatened or will result from the consummation of the transactions contemplated
by this Agreement.
(c) Other than as set forth in First Xxxx Bancorp Disclosure Schedule
3.11(c), neither First Xxxx Bancorp nor Xxxx Federal Savings has received any
notification or communication from any Regulatory Authority (i) asserting that
First Xxxx Bancorp or Xxxx Federal Savings is not
19
in compliance with any of the statutes, regulations or ordinances that such
Regulatory Authority enforces; (ii) threatening to revoke any license,
franchise, permit or governmental authorization of First Xxxx Bancorp or Xxxx
Federal Savings; (iii) requiring or threatening to require First Xxxx Bancorp or
Xxxx Federal Savings, or indicating that First Xxxx Bancorp or Xxxx Federal
Savings may be required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement with any federal or state
governmental agency or authority that is charged with the supervision or
regulation of banks or engages in the insurance of bank deposits restricting or
limiting, or purporting to restrict or limit, in any respect the operations of
First Xxxx Bancorp or Xxxx Federal Savings, including without limitation any
restriction on the payment of dividends; or (iv) directing, restricting or
limiting, or purporting to direct, restrict or limit, in any manner the
operations of First Xxxx Bancorp or Xxxx Federal Savings, including without
limitation any restriction on the payment of dividends (any such notice,
communication, memorandum, agreement or order described in this sentence is
hereinafter referred to as a "Regulatory Agreement"). Neither First Xxxx Bancorp
nor Xxxx Federal Savings has consented to or entered into any currently
effective Regulatory Agreement. The most recent regulatory rating given to Xxxx
Federal Savings as to compliance with the Community Reinvestment Act ("CRA") is
satisfactory or better.
Section 3.12. Employee Benefit Plans.
(a) First Xxxx Bancorp Disclosure Schedule 3.12 includes a list of all
existing Compensation and Benefit Plans. Each Compensation and Benefit Plan that
is an "employee pension benefit plan" (as defined in Section 3(2) of ERISA) (a
"Pension Plan") and which is intended to be qualified under Section 401(a) of
the Code (a "First Xxxx Bancorp or Xxxx Federal Savings Qualified Plan") has
received a favorable determination letter from the IRS or was a prototype
document that has received a favorable letter from the IRS, and First Xxxx
Bancorp and Xxxx Federal Savings have no Knowledge of any circumstances likely
to result in revocation of any such favorable determination letter. There has
been no announcement or commitment by First Xxxx Bancorp, Xxxx Federal Savings
or any of its Subsidiaries to create an additional Compensation and Benefit
Plan, or to amend any Compensation and Benefit Plan, except for amendments
required by applicable law to maintain its qualified status or otherwise, which
do not increase the cost of such Compensation and Benefit Plan.
(b) Each Compensation and Benefit Plan has been operated and
administered in all respects in accordance with its terms and with applicable
law, including, but not limited to, ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in Employment Act, and any regulations or
rules promulgated thereunder, and all filings, disclosures and notices required
by ERISA, the Code, the Securities Act, the Exchange Act, the Age Discrimination
in Employment Act and any other applicable law have been timely made. Except as
set forth in First Xxxx Bancorp Disclosure Schedule 3.12(b), there is no
pending, or to the Knowledge of First Xxxx Bancorp threatened, litigation,
administrative action, suit or claim relating to any of the Compensation and
Benefit Plans (other than routine claims for benefits). Neither First Xxxx
Bancorp nor Xxxx Federal Savings has engaged in a transaction, or omitted to
take any action, with respect to any Compensation and Benefit Plan that would
reasonably be expected to subject First Xxxx Bancorp or Xxxx Federal Savings to
a tax or penalty imposed by either Section 4975 of the Code or Section 502 of
ERISA, assuming for purposes of Section 4975 of the Code that the
20
taxable period of any such transaction expired as of the date hereof and
subsequently expires as of the day next preceding the Merger Effective Date.
Except as set forth in First Xxxx Bancorp Disclosure Schedule 3.12(b), each of
the Compensation and Benefit Plan can be terminated in accordance with its terms
upon sixty (60) days written notice.
(c) No liability under Title IV of ERISA has been incurred by First
Xxxx Bancorp or Xxxx Federal Savings or any of its Subsidiaries with respect to
any Compensation and Benefit Plan which is subject to Title IV of ERISA, or with
respect to any "single-employer plan" (as defined in Section 4001(a) of ERISA)
("First Xxxx Bancorp or Xxxx Federal Savings Pension Plan") currently or
formerly maintained by First Xxxx Bancorp or Xxxx Federal Savings or any entity
which is considered one employer with First Xxxx Bancorp or Xxxx Federal Savings
under Section 4001(b)(1) of ERISA or Section 414 of the Code (an "ERISA
Affiliate") since the effective date of ERISA that has not been satisfied in
full, and no condition exists that presents a risk to First Xxxx Bancorp or Xxxx
Federal Savings or any ERISA Affiliate of incurring a liability under such
Title. No First Xxxx Bancorp or Xxxx Federal Savings Pension Plan had an
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, as of the last day of the end of the most recent plan year ending
prior to the date hereof; the fair market value of the assets of each First Xxxx
Bancorp or Xxxx Federal Savings Pension Plan exceeds the present value of the
"benefit liabilities" (as defined in Section 4001(a)(16) of ERISA) under such
First Xxxx Bancorp or Xxxx Federal Savings Pension Plan as of the end of the
most recent plan year with respect to the respective First Xxxx Bancorp or Xxxx
Federal Savings Pension Plan ending prior to the date hereof, calculated on the
basis of the actuarial assumptions used in the most recent actuarial valuation
for such First Xxxx Bancorp or Xxxx Federal Savings Pension Plan as of the date
hereof; there is not currently pending with the PBGC any filing with respect to
any reportable event under Section 4043 of ERISA nor has any reportable event
occurred as to which a filing is required and has not been made (other than as
might be required with respect to this Agreement and the transactions
contemplated thereby). Neither First Xxxx Bancorp or Xxxx Federal Savings nor
any ERISA Affiliate has contributed to any "multiemployer plan," as defined in
Section 3(37) of ERISA, on or after September 26, 1980. Except as set forth in
First Xxxx Bancorp's Disclosure Schedule 3.12(c), neither First Xxxx Bancorp or
Xxxx Federal Savings, nor any ERISA Affiliate, nor any Compensation and Benefit
Plan, including any First Xxxx Bancorp or Xxxx Federal Savings Pension Plan, nor
any trust created thereunder, nor any trustee or administrator thereof has
engaged in a transaction in connection with which First Xxxx Bancorp or Xxxx
Federal Savings, any ERISA Affiliate, and any Compensation and Benefit Plan,
including any First Xxxx Bancorp or Xxxx Federal Savings Pension Plan any such
trust or any trustee or administrator thereof, could reasonably be expected to
be subject to either a civil liability or penalty pursuant to Section 409,
502(i) or 502(l) of ERISA or a tax imposed pursuant to Chapter 43 of the Code.
(d) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee benefit
arrangements to which First Xxxx Bancorp or Xxxx Federal Savings is a party or a
sponsor have been timely made, and all anticipated contributions and funding
obligations are accrued monthly on First Xxxx Bancorp's consolidated financial
statements to the extent required and in accordance with GAAP. First Xxxx
Bancorp and its Subsidiaries have expensed and accrued as a liability the
present value of future benefits under each applicable Compensation and Benefit
Plan in accordance with
21
applicable laws and GAAP consistently applied. None of First Xxxx Bancorp, Xxxx
Federal Savings nor any ERISA Affiliate (x) has provided, or would reasonably be
expected to be required to provide, security to any Pension Plan or to any ERISA
Affiliate Plan pursuant to Section 401(a)(29) of the Code, or (y) has taken any
action, or omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a Lien under Section 412(n) of the Code
or pursuant to ERISA.
(e) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.12(e), neither First Xxxx Bancorp nor Xxxx Federal Savings has any obligations
to provide retiree health, life insurance, disability insurance, or other
retiree death benefits under any Compensation and Benefit Plan, other than
benefits mandated by Section 4980B of the Code. There has been no communication
to employees by First Xxxx Bancorp or Xxxx Federal Savings that would reasonably
be expected to promise or guarantee such employees retiree health, life
insurance, disability insurance, or other retiree death benefits.
(f) With respect to each Compensation and Benefit Plan, if applicable,
First Xxxx Bancorp has provided or made available to Northwest Bancorp copies of
the: (A) trust instruments and insurance contracts; (B) most recent Form 5500
filed with the IRS; (C) most recent actuarial report and financial statement;
(D) the most recent summary plan description; (E) most recent determination
letter issued by the IRS; (F) any Form 5310 or Form 5330 filed with the IRS; and
(G) most recent nondiscrimination tests performed under ERISA and the Code
(including 401(k) and 401(m) tests).
(g) Except as set forth in First Xxxx Bancorp Disclosure Schedules
3.02(a), 3.12(a), and 3.18, the consummation of the Merger will not, directly or
indirectly (including, without limitation, as a result of any termination of
employment or service at any time prior to or following the Merger Effective
Date) (A) entitle any employee, consultant or director to any payment or benefit
(including severance pay, change in control benefit, or similar compensation) or
any increase in compensation, (B) result in the vesting or acceleration of any
benefits under any Compensation and Benefit Plan or (C) result in any increase
in benefits payable under any Compensation and Benefit Plan.
(h) Neither First Xxxx Bancorp nor Xxxx Federal Savings maintains any
compensation plans, programs or arrangements under which any payment is
reasonably likely to become non-deductible, in whole or in part, for tax
reporting purposes as a result of the limitations under Section 162(m) of the
Code and the regulations issued thereunder.
(i) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.12(i), the consummation of the Merger will not, directly or indirectly
(including without limitation, as a result of any termination of employment or
service at any time prior to or following the Merger Effective Date), entitle
any current or former employee, director or independent contractor of First Xxxx
Bancorp or Xxxx Federal Savings to any actual or deemed payment (or benefit)
which would constitute a "parachute payment" (as such term is defined in Section
280G of the Code).
(j) Except as set forth in First Xxxx Bancorp Disclosure Schedule
3.02(a) or 3.12(a), there are no stock appreciation or similar rights, earned
dividends or dividend equivalents, or
22
shares of restricted stock, outstanding under any Compensation and Benefit Plan
or otherwise as of the date hereof and none will be granted, awarded, or
credited after the date hereof.
Section 3.13. Brokers, Finders and Financial Advisors. Except for the
engagement of Xxxxxx Brothers in connection with the transactions contemplated
by this Agreement, neither First Xxxx Bancorp nor Xxxx Federal Savings, nor any
of their respective officers, directors, employees or agents, has employed any
broker, finder or financial advisor in connection with the transactions
contemplated by this Agreement, or incurred any liability or commitment for any
fees or commissions to any such Person in connection with the transactions
contemplated by this Agreement.
Section 3.14. Environmental Matters.
(a) With respect to First Xxxx Bancorp and Xxxx Federal Savings:
(i) Except as set forth in First Xxxx Bancorp Disclosure
Schedule 3.14, each of First Xxxx Bancorp and Xxxx Federal Savings, the
Participation Facilities, and, to First Xxxx Bancorp's Knowledge, the Loan
Properties are, and have been, in compliance with, and are not liable under, any
Environmental Laws;
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, proceeding or, to First Xxxx Bancorp's
Knowledge, investigation pending or, to First Xxxx Bancorp's Knowledge,
threatened, before any court, governmental agency or board or other forum
against it or Xxxx Federal Savings or any Participation Facility (x) for alleged
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release (as defined
herein) into the environment of any Hazardous Material (as defined herein),
whether or not occurring at or on a site owned, leased or operated by it or Xxxx
Federal Savings or any Participation Facility;
(iii) There is no suit, claim, action, demand, executive or
administrative order, directive, proceeding or to First Xxxx Bancorp's
Knowledge, investigation pending or, to First Xxxx Bancorp's Knowledge
threatened, before any court, governmental agency or board or other forum
relating to or against any Loan Property (or First Xxxx Bancorp or Xxxx Federal
Savings in respect of such Loan Property) (x) relating to alleged noncompliance
(including by any predecessor) with, or liability under, any Environmental Law
or (y) relating to the presence of or release into the environment of any
Hazardous Material, whether or not occurring at or on a site owned, leased or
operated by a Loan Property;
(iv) To First Xxxx Bancorp's Knowledge, the properties
currently owned or operated by First Xxxx Bancorp or Xxxx Federal Savings
(including, without limitation, soil, groundwater or surface water on, under or
adjacent to the properties, and buildings thereon) are not contaminated with and
do not otherwise contain any Hazardous Material other than as permitted under
applicable Environmental Law;
(v) Neither First Xxxx Bancorp nor Xxxx Federal Savings has
received any notice, demand letter, executive or administrative order, directive
or request for information from
23
any federal, state, local or foreign governmental entity or any other Person
indicating that it may be in violation of, or liable under, any Environmental
Law;
(vi) To First Xxxx Bancorp's Knowledge, there are no
underground storage tanks on, in or under any properties owned or operated by
First Xxxx Bancorp or Xxxx Federal Savings or any Participation Facility, and no
underground storage tanks have been closed or removed from any properties owned
or operated by First Xxxx Bancorp or Xxxx Federal Savings or any Participation
Facility; and
(vii) Except as set forth in First Xxxx Bancorp Disclosure
Schedule 3.14, to First Xxxx Bancorp's Knowledge, during the period of (s) First
Xxxx Bancorp's or Xxxx Federal Savings' ownership or operation of any of their
respective current properties or (t) First Xxxx Bancorp's or Xxxx Federal
Savings' participation in the management of any Participation Facility, there
has been no contamination by or release of Hazardous Materials in, on, under or
affecting such properties. To First Xxxx Bancorp's Knowledge, prior to the
period of (x) First Xxxx Bancorp's or Xxxx Federal Savings' ownership or
operation of any of their respective current properties or (y) First Xxxx
Bancorp's or Xxxx Federal Savings' participation in the management of any
Participation Facility, there was no contamination by or release of Hazardous
Material in, on, under or affecting such properties.
(b) "Loan Property" means any property in which the applicable party
(or a Subsidiary of it) 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. "Participation Facility" means any facility in which the
applicable party (or a Subsidiary of it) participates in the management
(including all property held as trustee or in any other fiduciary capacity) and,
where required by the context, includes the owner or operator of such property,
but only with respect to such property.
Section 3.15. Loan Portfolio.
(a) The allowances for possible losses reflected in the consolidated
balance sheets contained in the First Xxxx Bancorp Financials as of and for the
period ending December 31, 2002 were adequate under GAAP and all regulatory
requirements applicable to First Xxxx Bancorp and Xxxx Federal Savings, and the
allowances for possible losses shown on the consolidated balance sheets
contained in the First Xxxx Bancorp Financials for periods ending after December
31, 2002 will be adequate as of the dates thereof under GAAP and all regulatory
requirements applicable to First Xxxx Bancorp and Xxxx Federal Savings.
(b) First Xxxx Bancorp Disclosure Schedule 3.15(b) sets forth a
listing, as of February 28, 2003, by account, of: (A) all loans, (1) that are
contractually past due 90 days or more in the payment of principal and/or
interest, (2) that are on non-accrual status, (3) that as of the date of this
Agreement are classified as "Other Loans Specially Mentioned", "Special
Mention", "Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Watch
list" or words of similar import, together with the principal amount of and
accrued and unpaid interest on each such Loan and the identity of the obligor
thereunder, (4) where a reasonable doubt exists as to the timely future
collectibility of principal and/or interest, whether or not interest is still
accruing or the
24
loans are less than 90 days past due, (5) where the interest rate terms have
been reduced and/or the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due to concerns regarding
the borrower's ability to pay in accordance with such initial terms, or (6)
where a specific reserve allocation exists in connection therewith, and (B) all
assets classified by First Xxxx Bancorp or Xxxx Federal Savings as real estate
acquired through foreclosure or in lieu of foreclosure, including in-substance
foreclosures, and all other assets currently held that were acquired through
foreclosure or in lieu of foreclosure.
(c) To the Knowledge of First Xxxx Bancorp and Xxxx Federal Savings,
all loans receivable (including discounts) and accrued interest entered on the
books of First Xxxx Bancorp and Xxxx Federal Savings arose out of bona fide
arm's-length transactions, were made for good and valuable consideration in the
ordinary course of First Xxxx Bancorp's or Xxxx Federal Savings' respective
business, and the notes or other evidences of indebtedness with respect to such
loans (including discounts) are to the Knowledge of First Xxxx Bancorp true and
genuine and are what they purport to be. Except as set forth in First Xxxx
Bancorp Disclosure Schedule 3.15, to the Knowledge of First Xxxx Bancorp, the
loans, discounts and the accrued interest reflected on the books of First Xxxx
Bancorp and Xxxx Federal Savings are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury or
truth-in-lending laws), except as may be provided by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity. All such loans are owned by First Xxxx Bancorp or Xxxx Federal Savings
free and clear of any liens, except for liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business and which are not yet due
and payable, and liens in favor of the FHLB of Pittsburgh to secure advances of
the FHLB of Pittsburgh to Xxxx Federal Savings.
(d) To the Knowledge of First Xxxx Bancorp and Xxxx Federal Savings,
the notes and other evidences of indebtedness evidencing the loans described in
Section 3.15(c) above, and all pledges, mortgages, deeds of trust and other
collateral documents or security instruments relating thereto are, in all
respects, valid, true and genuine, and what they purport to be.
Section 3.16. Securities Documents. First Xxxx Bancorp has made
available to Northwest Bancorp copies of its (i) annual reports on Form 10-K for
the years ended December 31, 2001, 2000 and 1999, (ii) quarterly reports on Form
10-Q for the quarters ended September 30, 2002, June 30, 2002 and March 31, 2002
and (iii) proxy materials used in connection with its meetings of stockholders
held in 2002, 2001 and 2000. Such reports and such proxy materials complied, at
the time filed with the SEC, with the Securities Laws.
Section 3.17. Related Party Transactions. Except as described in First
Xxxx Bancorp's Proxy Statement distributed in connection with the 2002 annual
meeting of stockholders or as otherwise set forth in First Xxxx Bancorp
Disclosure Schedule 3.17, neither First Xxxx Bancorp nor Xxxx Federal Savings is
a party to any transaction (including any loan or other credit accommodation)
with any Affiliate of First Xxxx Bancorp. All such transactions (a) were made in
the ordinary course of business, (b) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other Persons, and (c) did not involve more than
the normal risk of collectibility or present other unfavorable features. No loan
or credit accommodation to any Affiliate of First Xxxx Bancorp or
25
Xxxx Federal Savings is presently in default or, during the three (3) year
period prior to the date of this Agreement, has been in default or has been
restructured, modified or extended. Neither First Xxxx Bancorp nor Xxxx Federal
Savings has been notified that principal and interest with respect to any such
loan or other credit accommodation will not be paid when due or that the loan
grade classification accorded such loan or credit accommodation by First Xxxx
Bancorp is inappropriate.
Section 3.18. Schedule of Termination Benefits. First Xxxx Bancorp
Disclosure Schedule 3.18 includes a description of all termination benefits and
related payments (including dollar amounts) that would or will be payable to the
individuals identified thereon, excluding any First Xxxx Bancorp Options granted
to such individuals, under any and all employment agreements, special
termination agreements, change in control agreements, supplemental executive
retirement plans, deferred bonus plans, deferred compensation plans, salary
continuation plans, or any compensation arrangement, or other pension benefit or
welfare benefit plan maintained by First Xxxx Bancorp or Xxxx Federal Savings
for the benefit of officers or directors of First Xxxx Bancorp or Xxxx Federal
Savings (the "Benefits Schedule"), assuming their employment or service is
terminated as of July 31, 2003 and the Closing Date occurs prior to such
termination, and provided, however, that the dollar amounts of such benefits and
payments need not be provided for any tax-qualified pension plan, any insured
welfare benefit plan, the First Xxxx Bancorp Stock Option Plan, the Xxxx Federal
Savings Restricted Stock Plan, the First Xxxx Bancorp Dividend Reinvestment and
Stock Purchase Plan, the severance provisions of Section 5.11(f) of this
Agreement or the miscellaneous benefits set forth in First Xxxx Bancorp
Disclosure Schedule 3.12(a). No other individuals are entitled to benefits under
any such plans.
Section 3.19. Deposits. None of the deposits of First Xxxx Bancorp or
Xxxx Federal Savings is a "brokered deposit" as defined in 12 CFR Section
337.6(a)(2).
Section 3.20. Antitakeover Provisions Inapplicable.
(a) Assuming that the representation and warranty of Northwest MHC,
Northwest Bancorp and Northwest Savings Bank contained in Section 4.11 is
accurate, the transactions contemplated by this Agreement are not subject to the
requirements of any "moratorium," "control share," "fair price," "affiliate
transactions," "business combination" or other antitakeover laws and regulations
of any state. The affirmative vote of a majority of the issued and outstanding
shares of First Xxxx Bancorp Common Stock is required to approve this Agreement
under First Xxxx Bancorp's certificate of incorporation and the DGCL.
(b) First Xxxx Bancorp has taken all necessary action so that the
entering into of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in the grant of any
rights to any Person under the First Xxxx Bancorp Rights Agreement or enable or
require the First Xxxx Bancorp Rights issuable thereunder to be exercised,
distributed or triggered, and to otherwise ensure that none of Northwest Bancorp
or any of its Affiliates is or becomes an Acquiring Person (as such term is
defined in the First Xxxx Bancorp Rights Agreement) by reason of the execution
of this Agreement or consummation of the transactions contemplated by this
Agreement, and that a Distribution Date (as such term is defined in the First
Xxxx Bancorp Rights Agreement) does not occur by reason of the execution of
26
this Agreement or consummation of the transactions contemplated by this
Agreement and the Bank Merger Agreement. First Xxxx Bancorp Disclosure Schedule
3.20(b) sets forth the form of an amendment to the First Xxxx Bancorp Rights
Agreement that has been adopted by First Xxxx Bancorp.
Section 3.21. Registration Obligations. Neither First Xxxx Bancorp nor
Xxxx Federal Savings is under any obligation, contingent or otherwise, that will
survive the Merger Effective Date by reason of any agreement to register any
transaction involving any of its securities under the Securities Act.
Section 3.22. Risk Management Instruments. All interest rate swaps,
caps, floors, option agreements, futures and forward contracts and other similar
risk management arrangements, whether entered into for the account of First Xxxx
Bancorp or Xxxx Federal Savings or their customers (all of which are set forth
in First Xxxx Bancorp Disclosure Schedule 3.22) were entered into in accordance
with prudent business practices and in all respects in compliance with all
applicable laws, rules, regulations and regulatory policies and with
counterparties believed to be financially responsible at the time; and each of
them constitutes the valid and legally binding obligation of First Xxxx Bancorp
or Xxxx Federal Savings, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles), and is in full force and effect. Neither First Xxxx Bancorp, Xxxx
Federal Savings, nor to the Knowledge of First Xxxx Bancorp any other party
thereto, is in breach of any of its obligations under any such agreement or
arrangement in any respect.
Section 3.23. Fairness Opinion. First Xxxx Bancorp has received a
written opinion from Xxxxxx Brothers dated as of the date of this Agreement, to
the effect that, subject to the terms, conditions and qualifications set forth
therein, as of the date thereof, the Merger Consideration to be received by the
stockholders of First Xxxx Bancorp pursuant to this Agreement is fair to such
stockholders from a financial point of view.
Section 3.24. Intellectual Property. First Xxxx Bancorp and its
Subsidiaries owns or, to the Knowledge of First Xxxx Bancorp, possesses valid
and binding licenses and other rights to use all patents, copyrights, trade
secrets, trade names, servicemarks and trademarks used in their businesses, each
without payment, and neither First Xxxx Bancorp nor any of its Subsidiaries has
received any notice of conflict with respect thereto that asserts the rights of
others. First Xxxx Bancorp and its Subsidiaries, has performed all the
obligations required to be performed, and are not in default in any respect,
under any contract, agreement, arrangement or commitment relating to any of the
foregoing.
Section 3.25. Bank Owned Life Insurance. First Xxxx Bancorp Disclosure
Schedule 3.09(c) sets forth a true, correct and complete description of all Bank
Owned Life Insurance ("BOLI") owned by First Xxxx Bancorp or its Subsidiaries.
The value of such BOLI as of the date hereof is fairly and accurately reflected
on the First Xxxx Bancorp Financials in accordance with GAAP.
27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NORTHWEST MHC,
NORTHWEST BANCORP AND NORTHWEST SAVINGS BANK
No representation or warranty of Northwest MHC, Northwest Bancorp or
Northwest Savings Bank contained in Article IV shall be deemed untrue or
incorrect, and Northwest MHC, Northwest Bancorp and Northwest Savings Bank shall
not be deemed to have breached a representation or warranty, as a consequence of
the existence of any fact, circumstance or event unless such fact, circumstance
or event, individually or taken together with all other facts, circumstances or
events inconsistent with any paragraph of Article IV has had or is reasonably
expected to have a Material Adverse Effect on Northwest Bancorp; provided,
however, that the foregoing standard shall not apply to representations and
warranties contained in Sections 4.01, 4.02(a) and 4.03, which shall be deemed
untrue, incorrect and breached if they are not true and correct in all material
respects.
Subject to the standard set forth above, and except as set forth in the
Northwest Bancorp Disclosure Schedules delivered by Northwest Bancorp to First
Xxxx Bancorp on the date hereof, Northwest MHC, Northwest Bancorp and Northwest
Savings Bank represent and warrant to First Xxxx Bancorp and Xxxx Federal
Savings as follows:
Section 4.01. Organization.
(a) Northwest MHC and Northwest Bancorp are corporations duly
organized, validly existing and in good standing under the laws of the United
States, and are duly registered as savings and loan holding companies under the
HOLA. Each of Northwest MHC and Northwest Bancorp has full corporate power and
authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification.
(b) Each Northwest Banking Subsidiary is a stock savings bank duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is wholly-owned by Northwest Bancorp. The
deposits of Northwest Savings Bank are insured by the FDIC to the fullest extent
permitted by law, and all premiums and assessments required to be paid in
connection therewith have been paid when due. As of the date hereof, no
proceedings for the revocation of such deposit insurance are pending or, to the
Knowledge of Northwest Bancorp or Northwest Savings Bank, threatened.
(c) Northwest Savings Bank is a member in good standing of the FHLB of
Pittsburgh and owns the requisite amount of stock therein.
(d) Prior to the date of this Agreement, Northwest Bancorp has
delivered to First Xxxx Bancorp true and correct copies of the charter and
bylaws (or equivalent documents) of Northwest MHC, Northwest Bancorp, Northwest
Savings Bank and Northwest Merger Subsidiary.
28
(e) Northwest Merger Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with its principal executive offices in Warren, Pennsylvania. Northwest Merger
Subsidiary is a wholly-owned subsidiary of Northwest Bancorp.
Section 4.02. Authority; No Violation.
(a) Northwest MHC, Northwest Bancorp, Northwest Savings Bank and
Northwest Merger Subsidiary have full corporate power and authority to execute
and deliver this Agreement and Northwest Bancorp, Northwest Savings Bank and
Northwest Merger Subsidiary have full corporate power and authority to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Northwest MHC, Northwest Bancorp, Northwest Savings Bank and
Northwest Merger Subsidiary and the completion by Northwest Bancorp, Northwest
Savings Bank and Northwest Merger Subsidiary of the transactions contemplated
hereby have been duly and validly approved by the Boards of Directors of
Northwest MHC, Northwest Bancorp, Northwest Savings Bank and Northwest Merger
Subsidiary. The Bank Merger Agreement has been duly and validly approved by the
Board of Directors of Northwest Savings Bank and by Northwest Bancorp in its
capacity as the sole stockholder of Northwest Savings Bank. Other than in
connection with the liquidation of First Xxxx Bancorp following consummation of
the Merger, no other corporate proceedings on the part of Northwest MHC,
Northwest Bancorp, Northwest Savings Bank or Northwest Merger Subsidiary are
necessary to complete the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Northwest MHC, Northwest
Bancorp, Northwest Savings Bank and Northwest Merger Subsidiary and assuming due
authorization, execution and delivery of this Agreement by First Xxxx Bancorp
and Xxxx Federal Savings, this Agreement constitutes the valid and binding
obligation of Northwest MHC, Northwest Bancorp, Northwest Savings Bank and
Northwest Merger Subsidiary, enforceable against Northwest MHC, Northwest
Bancorp, Northwest Savings Bank and Northwest Merger Subsidiary in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and as to Northwest Savings Bank, the
conservatorship or receivership provisions of the FDIA, and subject, as to
enforceability, to general principles of equity.
(b) (A) The execution and delivery of this Agreement and the Bank
Merger Agreement by Northwest MHC, Northwest Bancorp, Northwest Savings Bank and
Northwest Merger Subsidiary, as applicable, (B) subject to receipt of the
Regulatory Approvals, the consummation of the transactions contemplated hereby,
and (C) compliance by Northwest MHC, Northwest Bancorp, Northwest Savings Bank
and Northwest Merger Subsidiary with any of the terms or provisions hereof, will
not (i) conflict with or result in a breach of any provision of the charter or
bylaws of Northwest MHC, Northwest Bancorp, or the articles of incorporation or
bylaws of any Northwest Bancorp Subsidiary; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Northwest MHC, Northwest Bancorp or any Northwest Bancorp
Subsidiary or any of their respective properties or assets; or (iii) violate,
conflict with, result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default), under, result in the termination of, accelerate the performance
required by, or result in a right of termination or
29
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Northwest MHC, Northwest
Bancorp or any Northwest Bancorp subsidiary under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other investment or obligation to which Northwest MHC,
Northwest Bancorp or any Northwest Bancorp Subsidiary is a party, or by which
they or any of their respective properties or assets may be bound or affected.
Section 4.03. Consents. Except for the receipt of the Regulatory
Approvals and compliance with any conditions contained therein, the approval of
this Agreement by the stockholders of First Xxxx Bancorp, the filing of the
Proxy Statement and form of proxy with, and clearance of the same by, the SEC,
the filing of a certificate of merger with the Secretary of State of the State
of Delaware pursuant to the DGCL in connection with the Merger and the Company
Merger, the filing of articles of combination with the OTS in connection with
the Company Merger and the filing of articles of merger with the Pennsylvania
Secretary of State pursuant to the PBCA in connection with the Bank Merger, no
consents or approvals of, or filings or registrations with, any public body or
authority are necessary, and no consents or approvals of any other Person is
necessary in connection with (a) the execution and delivery of this Agreement
and the Bank Merger Agreement by Northwest MHC, Northwest Bancorp, Northwest
Savings Bank and Northwest Merger Subsidiary, as applicable, and (b) the
completion by Northwest Bancorp, Northwest Savings Bank and Northwest Merger
Subsidiary of the transactions contemplated hereby. Northwest MHC, Northwest
Bancorp and Northwest Savings Bank have no reason to believe that (i) any
Regulatory Approvals will not be received or will be received with conditions of
the type referred to in Section 6.02(d) or that would adversely impact the
ability of Northwest Merger Subsidiary, Northwest Savings Bank and Northwest
Bancorp to complete the transactions contemplated by this Agreement or (ii) any
public body or authority, the consent or approval of which is not required or to
which a filing is not required, will object to the completion of the
transactions contemplated by this Agreement.
Section 4.04. Financial Statements. Northwest Bancorp has made
available to First Xxxx Bancorp the Northwest Bancorp Financials. The Northwest
Bancorp Financials have been prepared in accordance with GAAP and (including the
related notes where applicable) fairly present in each case the consolidated
financial position, results of operations and cash flows of Northwest Bancorp
and the Northwest Bancorp Subsidiaries on a consolidated basis as of and for the
respective periods ending on the dates thereof, in accordance with GAAP applied
on a consistent basis during the periods involved, except as indicated in the
notes thereto, or in the case of unaudited statements, as permitted by Form
10-Q.
Section 4.05. Securities Documents. Northwest Bancorp has made
available to First Xxxx Bancorp copies of its (i) annual reports on Form 10-K
for the years ended June 30, 2002, 2001 and 2000, (ii) quarterly reports on Form
10-Q for the quarters ended September 30, 2002 and December 31, 2002 and (iii)
proxy materials used in connection with its meetings of stockholders held in
2002, 2001 and 2000. Such reports and such proxy materials complied, at the time
filed with the SEC, with the Securities Laws.
30
Section 4.06. Compliance With Applicable Law.
(a) Each of Northwest MHC, Northwest Bancorp and each Northwest Bancorp
Subsidiary is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable to it, its properties, assets and deposits, its business, its
conduct of business and its relationship with its employees, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act of 1977, the Home Mortgage Disclosure Act and all
other applicable fair lending laws and other laws relating to discriminatory
business practices.
(b) Each of Northwest MHC, Northwest Bancorp and each Northwest Bancorp
Subsidiary has all permits, licenses, authorizations, orders and approvals of,
and has made all filings, applications and registrations with, all Regulatory
Authorities that are required in order to permit it to own or lease its
properties and to conduct its business as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the best Knowledge of Northwest Bancorp, no suspension or
cancellation of any such permit, license, certificate, order or approval is
threatened or will result from the consummation of the transactions contemplated
by this Agreement.
(c) None of Northwest MHC, Northwest Bancorp or any Northwest Bancorp
Subsidiary has received any notification or communication from any Regulatory
Authority (i) asserting that Northwest MHC, Northwest Bancorp or any Northwest
Bancorp Subsidiary is not in compliance with any of the statutes, regulations or
ordinances which such Regulatory Authority enforces; (ii) threatening to revoke
any license, franchise, permit or governmental authorization of Northwest MHC,
Northwest Bancorp or any Northwest Bancorp Subsidiary; (iii) requiring or
threatening to require Northwest MHC, Northwest Bancorp or any Northwest Bancorp
Subsidiary, or indicating that Northwest MHC, Northwest Bancorp or any Northwest
Bancorp Subsidiary may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement with any federal
or state governmental agency or authority which is charged with the supervision
or regulation of banks or engages in the insurance of bank deposits restricting
or limiting, or purporting to restrict or limit the operations of Northwest MHC,
Northwest Bancorp or any Northwest Bancorp Subsidiary, including without
limitation any restriction on the payment of dividends; or (iv) directing,
restricting or limiting, or purporting to direct, restrict or limit, in any
manner the operations of Northwest MHC, Northwest Bancorp or any Northwest
Bancorp Subsidiary, including without limitation any restriction on the payment
of dividends (any such notice, communication, memorandum, agreement or order
described in this sentence is hereinafter referred to as a "Regulatory
Agreement"). None of Northwest MHC, Northwest Bancorp or any Northwest Bancorp
Subsidiary has consented to or entered into any currently effective Regulatory
Agreement. The most recent regulatory rating given to each Northwest Banking
Subsidiary as to compliance with the CRA is satisfactory or better.
Section 4.07. Financing. On the Merger Effective Date, Northwest
Bancorp and Northwest Savings Bank together will have funds that are sufficient
and available to meet their obligations under this Agreement. Northwest Bancorp
and Northwest Savings Bank do not need to incur borrowings for the express
purpose of funding all or part of the aggregate Merger
31
Consideration, and Northwest Bancorp and Northwest Savings Bank do not need to
raise additional capital for the express purpose of consummating the
transactions contemplated by this Agreement.
Section 4.08. Regulatory Approvals. Northwest MHC, Northwest Bancorp
and Northwest Savings Bank are not aware of any reason that they cannot obtain
the Regulatory Approvals, and none of Northwest MHC, Northwest Bancorp and
Northwest Savings Bank has received any advice or information from any
Regulatory Authority indicating that any such approval will be denied or are
doubtful.
Section 4.09. Tax Opinion. Northwest Bancorp and Northwest Savings Bank
are not aware of any reason that they cannot obtain the tax opinion referenced
in Section 6.02(h).
Section 4.10. Legal Proceedings. None of Northwest MHC, Northwest
Bancorp and Northwest Savings Bank is a party to any, and there are no pending
or to the knowledge of Northwest MHC, Northwest Bancorp or Northwest Savings
Bank, threatened legal, administrative, arbitration or other proceedings, claims
(whether asserted or unasserted), actions or governmental investigations or
inquiries of any nature.
Section 4.11 Ownership of First Xxxx Bancorp Common Stock. As of the
date hereof, none of Northwest MHC, Northwest Bancorp or any Northwest Bancorp
Subsidiary, or to the Knowledge of Northwest MHC, Northwest Bancorp or Northwest
Savings Bank, any of its other Affiliates or associates (as such terms are
defined under the Exchange Act), owns beneficially or of record, directly or
indirectly, or is a party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, shares of First Xxxx
Bancorp Common Stock which in the aggregate represent 5% or more of the
outstanding First Xxxx Bancorp Common Stock.
ARTICLE V
COVENANTS OF THE PARTIES
Section 5.01. Conduct of First Xxxx Bancorp's Business.
(a) From the date of this Agreement to the Closing Date, First Xxxx
Bancorp and Xxxx Federal Savings each will conduct its business and engage in
transactions, including extensions of credit, only in the ordinary course and
consistent with past practice and policies, except as otherwise required or
contemplated by this Agreement or with the written consent of Northwest Bancorp.
First Xxxx Bancorp and Xxxx Federal Savings will use their reasonable good faith
efforts, to (i) preserve their business organizations intact, (ii) maintain good
relationships with employees, and (iii) preserve for themselves the goodwill of
their customers and others with whom business relationships exist. From the date
hereof to the Closing Date, except as otherwise consented to or approved by
Northwest Bancorp in writing (which approval will not be unreasonably delayed or
withheld) or as contemplated or required by this Agreement, First Xxxx Bancorp
will not, and First Xxxx Bancorp will not permit Xxxx Federal Savings to:
32
(i) amend any provision of its certificate of incorporation,
charter or other chartering documents or bylaws, impose, or suffer the
imposition, on any share of stock held by First Xxxx Bancorp in Xxxx Federal
Savings of any material lien, charge or encumbrance or permit any such lien to
exist, or waive or release any material right or cancel or compromise any
material debt or claim;
(ii) change the number of shares of its authorized capital
stock or issue or grant any Right, option, warrant, call, commitment,
subscription, right to purchase or agreement of any character relating to its
authorized or issued capital stock, or any securities convertible into shares of
such capital stock, or split, combine or reclassify any shares of its capital
stock, redeem or otherwise acquire any shares of such capital stock, or sell or
issue any shares of capital stock (except, in each case, pursuant to and in
connection with the exercise of First Xxxx Bancorp Options);
(iii) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of its capital stock, except that (i) First Xxxx Bancorp may continue to
pay its regular quarterly cash dividend to stockholders of $0.15 per share, with
record dates consistent with past practice; provided further, that if the
Closing Date is more than forty-five (45) after the immediately preceding First
Xxxx Bancorp Common Stock dividend record date, First Xxxx Bancorp may declare
and pay to stockholders a final cash dividend per share at the quarterly rate of
$0.15 per share, with the exact amount per share to be an amount that is
prorated through the payment date (from the preceding payment date), and (ii)
dividends may be paid by a wholly-owned Subsidiary to First Xxxx Bancorp or
another wholly-owned Subsidiary of First Xxxx Bancorp;
(iv) grant or agree to pay any bonus, severance or
termination to, or enter into, extend or amend any employment agreement,
severance agreement and/or supplemental executive agreement with, or increase in
any manner the compensation or fringe benefits of, any employee, officer or
director, except as provided in First Xxxx Bancorp Disclosure Schedule
5.01(a)(iv) and except (i) for normal increases in the ordinary course of
business consistent with past practice (it being understood that aggregate
salary increases of 4.5% or less, and, in the case of an individual, 4.5% or
less of such individual's current annual compensation, shall be deemed an
increase in the ordinary course of business consistent with past practice), and
(ii) as otherwise provided in Section 5.11 hereof;
(v) hire any person as an employee of First Xxxx Bancorp or
any Subsidiary of First Xxxx Bancorp, except persons hired to fill any vacancies
existing on or arising after the date hereof and whose employment is terminable
at the will of First Xxxx Bancorp or a Subsidiary of First Xxxx Bancorp;
(vi) enter into, establish, adopt or amend (except as may be
required by law to maintain the qualified status thereof or otherwise required
by law, or, in the case of the Xxxx Federal Savings ESOP, as may be necessary to
obtain the determination letter referred to in Section 5.11(d)), any pension,
retirement, stock option, stock purchase, stock appreciation right, stock grant,
savings, profit sharing, deferred compensation, supplemental retirement,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare contract, plan or
33
arrangement, or any trust agreement related thereto, in respect of any of its
directors, officers or employees, or former directors, officers or employees,;
or make any contributions to any defined contribution or defined benefit plan
not in the ordinary course of business consistent with past practice;
(vii) except as otherwise provided in Section 5.06 of this
Agreement, merge or consolidate with any other corporation; sell or lease all or
any substantial portion of its assets or business; make any acquisition of all
or any substantial portion of the business or assets of any other Person, firm,
association, corporation or business organization other than in connection with
foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between First
Xxxx Bancorp, or Xxxx Federal Savings, and any other Person; enter into a
purchase and assumption transaction with respect to deposits and liabilities;
permit the revocation or surrender of its certificate of authority to maintain,
or file an application for the relocation of, any existing branch office, or
file an application for a certificate of authority to establish a new branch
office;
(viii) sell or otherwise dispose of the capital stock of Xxxx
Federal Savings, or sell or otherwise dispose of any asset other than in the
ordinary course of business consistent with past practice; subject any asset to
a lien, pledge, security interest or other encumbrance (other than in connection
with deposits, the collections and/or processing of checks, drafts, notes,
instruments or letters of credit, liens granted to the FHLB of Pittsburgh to
secure advances to Xxxx Federal Savings from the FHLB of Pittsburgh, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business and transactions in "federal funds" and the
satisfaction of legal requirements in the exercise of trust powers) other than
in the ordinary course of business consistent with past practice; incur any
liability or indebtedness for borrowed money (or guarantee any indebtedness for
borrowed money), except in the ordinary course of business consistent with past
practice;
(ix) make any change in policies with regard to: the
extension of credit, or the establishment of reserves with respect to the
possible loss thereon or the charge off of losses incurred thereon; investments;
asset/liability management; or other material banking policies in any material
respect except as may be required by changes in applicable law or regulations,
or GAAP;
(x) except as set forth in First Xxxx Bancorp Disclosure
Schedule 5.01(a)(x), acquire any new loan participation or loan servicing rights
(other than in connection with the origination of loans in the ordinary course
of business);
(xi) except for any commitments disclosed on the First Xxxx
Bancorp Disclosure Schedule 5.01(a)(x): make any new loan or other credit
facility commitment (including without limitation, lines of credit and letters
of credit) in excess of $500,000; or increase, compromise, extend, renew or
modify any existing loan or commitment outstanding in excess of $500,000; or
make any new loan or other credit facility commitment (including without
limitation, lines of credit and letters of credit) in any amount if thereafter
the exposure to any one borrower or group of affiliated borrowers (including
obligors under loan participations) in the aggregate would exceed $500,000;
34
(xii) except for automatically renewing leases, renew or
extend any lease, or by any act, or omission to act, allow any lease to renew or
be extended;
(xiii) except as set forth in First Xxxx Bancorp Disclosure
Schedule 5.01(a)(xiii), make any capital expenditures in excess of $25,000
individually or $50,000 in the aggregate, other than pursuant to binding
commitments existing on the date hereof;
(xiv) except for the execution of, and as otherwise provided
for, contemplated in, or permitted by, this Agreement, the Schedules, and the
Exhibits hereto, take any action that would give rise to a right of payment to
any individual under any employment agreement, or take any action that would
give rise to a right of payment to any individual under any Compensation and
Benefit Plan except as required by the terms of any such agreement or
Compensation and Benefit Plan and other than as a result of payments on the loan
to the Xxxx Federal Savings ESOP;
(xv) purchase any security for its investment portfolio not
rated "A" or higher by Standard & Poor's Corporation or "A2" or higher by
Xxxxx'x Investor Services, Inc.;
(xvi) engage in any new loan transaction with an officer or
director;
(xvii) change the pricing strategies of Xxxx Federal Savings
with respect to its deposit or loan accounts other than in the ordinary course
of business consistent with past practice;
(xviii) enter into any agreement, arrangement or commitment
not made in the ordinary course of business;
(xix) change its method of accounting in effect prior to the
Merger Effective Date, except as required by changes in laws or regulations, by
Regulatory Authorities having jurisdiction over First Xxxx Bancorp or Xxxx
Federal Savings, or by GAAP concurred in by First Xxxx Bancorp's independent
certified public accountants;
(xx) enter into any futures contract, option, interest rate
caps, interest rate floors, interest rate exchange agreement or other agreement
or take any other action for purposes of hedging the exposure of its
interest-earning assets and interest-bearing liabilities to changes in market
rates of interest;
(xxi) invest in "high risk" mortgage derivative investments
as defined by the Federal Financial Institutions Examination Council;
(xxii) discharge or satisfy any lien or encumbrance or pay
any material obligation or liability (absolute or contingent) other than at
scheduled maturity or in the ordinary course of business;
35
(xxiii) enter or agree to enter into any agreement or
arrangement granting any preferential right to purchase any of its assets or
rights or requiring the consent of any party to the transfer and assignment of
any such assets or rights;
(xxiv) take any action that would result in any of the
representations or warranties of First Xxxx Bancorp or Xxxx Federal Savings
contained in this Agreement not to be true and correct in any material respect
as of any date after the date hereof or in any of the conditions set forth in
Article VI hereof not being satisfied, except in each case as may be required by
applicable law;
(xxv) foreclose upon or otherwise take title to or possession
or control of any real property without first obtaining a phase one
environmental report thereon indicating that there is no apparent violation of
or liability under the Environmental Laws, provided, however, that it shall not
be required to obtain such a report with respect to one- to four-family,
non-agricultural residential property of five (5) acres or less to be foreclosed
upon unless it has reason to believe that such property might be in violation of
or require remediation under Environmental Laws;
(xxvi) except in the ordinary course of business consistent
with past practice and involving an amount not in excess of $50,000, settle any
claim, action or proceeding; provided that no settlement shall be made if it
involves a precedent for other similar claims, which in the aggregate, could be
material to First Xxxx Bancorp and Xxxx Federal Savings, taken as a whole; or
(xxvii) agree to do any of the foregoing.
Except as otherwise set forth above in this Section 5.01, for purposes
of this Section 5.01, unless provided for in a business plan, budget or similar
document delivered to Northwest Bancorp prior to the date of this Agreement, it
shall not be considered in the ordinary course of business for First Xxxx
Bancorp or Xxxx Federal Savings to do any of the following: (i) make any sale,
assignment, transfer, pledge, hypothecation or other disposition of any assets
having a book or market value, whichever is greater, in the aggregate in excess
of $200,000, other than (w) pledges of, or liens on, assets to secure government
deposits, advances made to Xxxx Federal Savings by the FHLB of Pittsburgh, the
payment of taxes, assessments, or similar charges which are not yet due and
payable, the payment of deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts consistent with past practices, or the
collection and/or processing of checks, drafts or letters of credit consistent
with customary banking practices, or to exercise trust powers, (x) sales of
assets received in satisfaction of debts previously contracted in the ordinary
course of banking business, or (y) issuance of loans, sales of previously
purchased government guaranteed loans, or transactions in the investment
securities portfolio by First Xxxx Bancorp or a Xxxx Federal Savings or
repurchase agreements made, in each case, in the ordinary course of banking
business; or (ii) undertake or enter any lease, contract or other commitment for
its account, other than in the ordinary course of providing credit to customers
as part of its banking business, involving a payment by First Xxxx Bancorp or
Xxxx Federal Savings of more than $50,000 annually, or containing a material
financial commitment and extending beyond twelve (12) months from the date
hereof.
36
Section 5.02. Access; Confidentiality.
(a) Each of First Xxxx Bancorp and Xxxx Federal Savings shall permit
Northwest Bancorp and its representatives reasonable access to its properties,
and shall disclose and make available to them all books, papers and records
relating to the assets, properties, operations, obligations and liabilities of
First Xxxx Bancorp and Xxxx Federal Savings, including, but not limited to, all
books of account (including the general ledger), tax records, minute books of
meetings of boards of directors (and any committees thereof) (other than minutes
of any confidential discussion of this Agreement and the transactions
contemplated hereby), and stockholders, organizational documents, bylaws,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting employees, and any
other business activities or prospects in which Northwest Bancorp may have a
reasonable interest (provided that First Xxxx Bancorp shall not be required to
provide access to any information that would violate its, or Xxxx Federal
Savings', attorney-client privilege or would violate applicable laws or
regulations). First Xxxx Bancorp and Xxxx Federal Savings shall make their
respective officers, employees and agents and authorized representatives
(including counsel and independent public accountants) available to confer with
Northwest Bancorp and its representatives. In addition, from the date of this
Agreement through the Closing Date, First Xxxx Bancorp and Xxxx Federal Savings
shall permit employees of Northwest Bancorp reasonable access to information
relating to problem loans, loan restructurings and loan workouts of First Xxxx
Bancorp and Xxxx Federal Savings. The parties will hold all such information
delivered in confidence to the extent required by, and in accordance with, the
provisions of the Confidentiality Agreement and applicable laws and regulations.
(b) Northwest Bancorp agrees to conduct such investigations and
discussions hereunder in a manner so as not to interfere unreasonably with
normal operations and customer and employee relationships of First Xxxx Bancorp
and Xxxx Federal Savings.
Section 5.03. Regulatory Matters and Consents.
(a) Northwest MHC, Northwest Bancorp and Northwest Savings Bank will
prepare all Applications, make all filings, and pay all filing fees for all
Regulatory Approvals necessary or advisable to consummate the transactions
contemplated by this Agreement; and Northwest MHC, Northwest Bancorp and
Northwest Savings Bank will and use their best efforts to obtain as promptly as
practicable after the date hereof, all Regulatory Approvals necessary or
advisable to consummate the transactions contemplated by this Agreement. The
information supplied, or to be supplied, by Northwest MHC, Northwest Bancorp or
Northwest Savings Bank for inclusion in the Applications will, at the time such
documents are filed with any Regulatory Authority, be accurate in all material
aspects. The initial Applications shall be prepared and filed by Northwest MHC,
Northwest Bancorp and Northwest Savings Bank as applicable, within forty (40)
days after the date hereof.
(b) First Xxxx Bancorp will furnish Northwest Bancorp with all
information concerning First Xxxx Bancorp and Xxxx Federal Savings as may be
necessary or advisable in connection with any Application or filing made by or
on behalf of Northwest Bancorp to any
37
Regulatory Authority in connection with the transactions contemplated by this
Agreement. The information supplied, or to be supplied, by First Xxxx Bancorp
for inclusion in the Applications will, at the time such documents are filed
with any Regulatory Authority, be accurate in all material respects.
(c) Northwest Bancorp and First Xxxx Bancorp will promptly furnish each
other with copies of all material written communications to, or received by them
from any Regulatory Authority, and notice of material oral communications with
the Regulatory Authorities, in respect of the transactions contemplated hereby.
(d) The parties hereto agree that they will consult with each other
with respect to the obtaining of all Regulatory Approvals and other necessary
permits, consents, approvals and authorizations of Regulatory Authorities.
Northwest Bancorp will furnish First Xxxx Bancorp with (i) copies of all
Applications prior to filing with any Regulatory Authority and provide First
Xxxx Bancorp a reasonable opportunity to provide changes to such Applications,
(ii) copies of all Applications filed by Northwest Bancorp and (iii) copies of
all Regulatory Reports filed by Northwest Bancorp after the date hereof.
(e) First Xxxx Bancorp and Xxxx Federal Savings, and Northwest Bancorp,
will cooperate with each other in the foregoing matters and will furnish the
responsible party with all information concerning it as may be necessary or
advisable in connection with any Application or filing (including the Proxy
Statement and any report filed with the SEC) made by or on behalf of Northwest
Bancorp or First Xxxx Bancorp to any Regulatory Authority in connection with the
transactions contemplated by this Agreement, and such information will be
accurate and complete in all material respects.
Section 5.04. Taking of Necessary Action.
(a) Subject to the terms and conditions of this Agreement, Northwest
MHC, Northwest Bancorp and First Xxxx Bancorp shall each use its reasonable best
efforts in good faith, and each of them shall cause its Subsidiaries to use
their reasonable best efforts in good faith, to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws so as to permit consummation of the Merger and
the other transactions contemplated hereby as soon as practicable after the date
hereof, and otherwise to enable consummation of such transactions, including the
satisfaction of the conditions set forth in Article VI hereof, and shall
cooperate fully with the other parties hereto to that end. No party hereto shall
take, or cause, or to the best of its ability permit to be taken, any action
that would substantially impair the prospects of completing the Merger and the
other transactions contemplated hereby pursuant to this Agreement; provided that
nothing herein contained shall preclude a party to this Agreement from
exercising its rights under this Agreement.
(b) First Xxxx Bancorp shall prepare, subject to the review and consent
by Northwest Bancorp with respect to matters relating to Northwest Bancorp and
the transactions contemplated by this Agreement, a Proxy Statement to be filed
by First Xxxx Bancorp with the SEC and to be mailed to the stockholders of First
Xxxx Bancorp in connection with the meeting of its stockholders to consider the
adoption of this Agreement, which Proxy Statement shall conform
38
to all applicable legal requirements and be filed in preliminary form within
forty (40) days after the date hereof. The parties shall cooperate with each
other with respect to the preparation of the Proxy Statement and shall use their
reasonable best efforts to have the Proxy Statement mailed to stockholders as
promptly as practicable after such filing. First Xxxx Bancorp will promptly
advise Northwest Bancorp of the time when the Proxy Statement has been filed and
mailed, or of any comments from the SEC or any request by the SEC for additional
information. The information to be supplied by Northwest Bancorp for inclusion
in the Proxy Statement will not, at the time the Proxy Statement is mailed to
First Xxxx Bancorp stockholders and the date of the meeting of stockholders of
First Xxxx Bancorp to which such Proxy Statement relates, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein not misleading.
Section 5.05. Certain Agreements.
(a) From and after the Merger Effective Date, Northwest Bancorp and
Northwest Savings Bank, jointly and severally shall to the fullest extent
permitted under applicable law, agree to indemnify, defend and hold harmless
each present and former director and/or officer of First Xxxx Bancorp or a First
Xxxx Bancorp Subsidiary as of the Merger Effective Date (the "Indemnified
Parties") against all losses, claims, damages, costs, expenses (including
reasonable attorneys' fees and expenses), liabilities, judgments or amounts paid
in settlement (with the approval of Northwest Bancorp, which approval shall not
be unreasonably withheld) or in connection with any claim, action, suit,
proceeding or investigation arising out of matters existing or occurring at or
prior to the Merger Effective Date (a "Claim") in which an Indemnified Party is,
or is threatened to be made, a party or a witness based in whole or in part on,
or arising in whole or in part out of, (i) the fact that he or she was a
director or officer of First Xxxx Bancorp or a Subsidiary of First Xxxx Bancorp
or is or was serving at the request of First Xxxx Bancorp or a Subsidiary of
First Xxxx Bancorp as a director, officer, employee, fiduciary or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including services with respect to an employee benefit plan, and
(ii) matters related to the negotiation, execution and performance of this
Agreement or any of the transactions contemplated hereby, regardless of whether
such Claim is asserted or claimed prior to, at or after the Merger Effective
Date, to the fullest extent to which such Indemnified Parties are entitled under
the DGCL, First Xxxx Bancorp's certificate of incorporation and bylaws, the
equivalent documents of any First Xxxx Bancorp Subsidiary or other applicable
law as in effect on the date hereof (and Northwest Bancorp shall pay expenses in
advance of the final disposition of any such action or proceeding to each
Indemnified Party to the extent permissible to a Delaware corporation under the
DGCL and First Xxxx Bancorp's certificate of incorporation and bylaws as in
effect on the date hereof; provided, that the Indemnified Party to whom expenses
are advanced provides an undertaking to repay such expenses if it is ultimately
determined that such Indemnified Party is not entitled to indemnification). All
rights to indemnification in respect of a Claim shall continue until the final
disposition of such Claim. No indemnification shall be required under this
Section 5.05(a) if prohibited by applicable law. Without limiting the foregoing,
Northwest Bancorp and Northwest Savings Bank also agree that limitations on
liability existing in favor of the Indemnified Parties in the certificate of
incorporation or bylaws of First Xxxx Bancorp or the equivalent documents of a
First Xxxx Bancorp Subsidiary as in effect on the date hereof with respect to
matters occurring
39
prior to the Merger Effective Date shall survive the Mergers and shall continue
in full force and effect after the Merger Effective Date.
(b) Any Indemnified Party wishing to claim indemnification under
Section 5.05(a), upon learning of any Claim, shall promptly notify Northwest
Bancorp, but the failure to so notify shall not relieve Northwest Bancorp of any
liability it may have to such Indemnified Party except to the extent that such
failure materially prejudices Northwest Bancorp. In the event of any Claim,
Northwest Bancorp shall have the right to assume the defense thereof (with
counsel reasonably satisfactory to the Indemnified Party) and shall not be
liable to such Indemnified Party for any legal expenses of other legal counsel
or any other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof, except that, if Northwest Bancorp elects
not to assume such defense or counsel for the Indemnified Party advises that
there are issues which raise conflicts of interest between Northwest Bancorp and
the Indemnified Party, the Indemnified Party may retain counsel satisfactory to
him or her, and Northwest Bancorp shall pay all reasonable fees and expenses of
such counsel for the Indemnified Party promptly as statements therefor are
received, provided that (1) Northwest Bancorp shall be obligated pursuant to
this Section 5.05(b) to pay for only one firm of counsel for all Indemnified
Parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same allegations or
circumstances, (2) the Indemnified Party will cooperate in the defense of any
such Claim and (3) Northwest Bancorp shall not be liable for any settlement
effected without its prior written consent (which consent shall not unreasonably
be withheld).
(c) Northwest Bancorp shall maintain in effect for six (6) years from
the Merger Effective Date, the current directors' and officers' liability
insurance policy maintained by First Xxxx Bancorp (provided that Northwest
Bancorp may substitute therefor policies of at least the same coverage
containing terms and conditions which are not materially less favorable) with
respect to matters occurring at or prior to the Merger Effective Date, provided
that in no event shall Northwest Bancorp be required to spend for any one year
an amount in excess of 175% of the annual premium currently paid by First Xxxx
Bancorp for such insurance (the "Insurance Amount"). In the event that Northwest
Bancorp is unable to maintain or obtain the insurance called for by this Section
5.05(c) as a result of the previous sentence, Northwest Bancorp shall use its
reasonable best efforts to maintain or obtain the most advantageous coverage as
is available for the Insurance Amount. In connection with the foregoing, First
Xxxx Bancorp agrees to provide such insurer or substitute insurer with such
representations as such insurer may reasonably request with respect to the
reporting of any prior claims. Northwest Bancorp agrees to provide to First Xxxx
Bancorp legally binding evidence of the foregoing insurance not less than two
(2) Business Days prior to the Closing Date.
(d) In the event Northwest Bancorp, Northwest Savings Bank or any of
its respective successors or assigns (1) consolidates with or merges into any
other Person and shall not continue or survive such consolidation or merger, or
(2) transfers or conveys all or substantially all of its properties and assets
to any Person, then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of Northwest Bancorp
or Northwest Savings Bank, as applicable, assume the obligations set forth in
this Section 5.05.
40
(e) The provisions of this Section 5.05 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
Section 5.06. No Other Bids and Related Matters. From and after the
date hereof until the termination of this Agreement, neither First Xxxx Bancorp,
nor Xxxx Federal Savings will, nor will they permit any of their respective
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by First Xxxx Bancorp or Xxxx Federal Savings) to, directly or
indirectly, initiate, solicit or encourage (including by way of furnishing
non-public information or assistance), or facilitate, any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal (as defined below), or enter into or maintain or
continue discussions or negotiate with any Person in furtherance of such
inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, or authorize or permit any of its officers, directors,
employees, investment bankers, financial advisors, attorneys, accountants or
other representatives to take any such action, and First Xxxx Bancorp shall
notify Northwest Bancorp orally (within one Business Day) and in writing (as
promptly as practicable but no later than three Business Days) of all of the
relevant details relating to all inquiries and proposals that it or Xxxx Federal
Savings or any such officer, director employee, investment banker, financial
advisor, attorney, accountant or other representative may receive relating to
any of such matters and provide Northwest Bancorp a copy of all written
communication between First Xxxx Bancorp and the third party, provided, however,
that nothing contained in this Section 5.06 shall prohibit the Board of
Directors of First Xxxx Bancorp from (i) furnishing information to, or entering
into discussions or negotiations with any Person that makes an unsolicited
written, bona fide proposal, to acquire First Xxxx Bancorp or Xxxx Federal
Savings pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar transaction, if, and only
to the extent that, (A) the Board of Directors of First Xxxx Bancorp is advised
in writing by its independent financial advisor that such proposal may be
superior to the Merger from a financial point-of-view to First Xxxx Bancorp's
stockholders, (B) the Board of Directors of First Xxxx Bancorp, after
consultation with and based upon the advice of independent legal counsel,
determines in good faith that failure to take such action could reasonably be
expected to constitute a breach of such directors' fiduciary duties under
applicable law (any proposal that satisfies (A) and (B) being referred to herein
as a "Superior Proposal"), (C) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity, First
Xxxx Bancorp (x) provides reasonable notice to Northwest Bancorp to the effect
that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity (identifying such person or entity) and
(y) receives from such person or entity an executed confidentiality agreement
substantially identical in all material respects to the Confidentiality
Agreement, and (D) the First Xxxx Bancorp meeting of stockholders convened to
approve this Agreement has not occurred, (ii) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer, or
(iii) prior to the meeting of stockholders of First Xxxx Bancorp convened to
approve this Agreement, failing to make or withdrawing or modifying its
recommendation to stockholders, if the Board of Directors of First Xxxx Bancorp
determines after consultation with and based upon the advice of independent
legal counsel, that failure to take such action could reasonably be expected to
constitute a breach of such directors' fiduciary duties under applicable law.
For purposes of this Agreement, "Acquisition Proposal" shall mean any of the
following (other than the transactions contemplated hereunder) involving First
Xxxx
41
Bancorp or any of its Subsidiaries: (i) any offer or proposal for, or any
indication of interest in, any merger, consolidation, share exchange,
recapitalization, business combination, or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 20% or
more of the assets of First Xxxx Bancorp, taken as a whole, in a single
transaction or series of transactions; (iii) any tender offer or exchange offer
for 20% or more of the outstanding shares of capital stock of First Xxxx Bancorp
or the filing of a registration statement under the Securities Act in connection
therewith; or (iv) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.
Section 5.07. Duty to Advise; Duty to Update First Xxxx Bancorp's
Disclosure Schedules. First Xxxx Bancorp shall promptly advise Northwest Bancorp
in writing of any change or event having a Material Adverse Effect on it or on
Xxxx Federal Savings or that it believes would or would be reasonably likely to
cause or constitute a material breach of any of its representations, warranties
or covenants set forth herein. First Xxxx Bancorp shall update First Xxxx
Bancorp's Disclosure Schedules as promptly as practicable after the occurrence
of an event or fact that, if such event or fact had occurred prior to the date
of this Agreement, would have been disclosed in the First Xxxx Bancorp
Disclosure Schedules. The delivery of such updated Schedule shall not relieve
First Xxxx Bancorp from any breach or violation of this Agreement and shall not
have any effect for the purposes of determining the satisfaction of the
condition set forth in Section 6.02(c) hereof.
Section 5.08. Conduct of Business of Northwest MHC, Northwest Bancorp
and Northwest Savings Bank. From the date of this Agreement to the Closing Date,
Northwest MHC, Northwest Bancorp and Northwest Savings Bank each will use its
reasonable good faith efforts to (x) preserve its business organizations intact,
(y) maintain good relationships with its employees, and (z) preserve for itself
the goodwill of its customers. From the date of this Agreement to the Merger
Effective Date, none of Northwest MHC, Northwest Bancorp, Northwest Savings Bank
and Northwest Merger Subsidiary will (i) amend its charter or bylaws or
equivalent documents in any manner inconsistent with the prompt and timely
consummation of the transactions contemplated by this Agreement; (ii) take any
action that would result in any of the representations and warranties of
Northwest MHC, Northwest Bancorp or Northwest Savings Bank set forth in this
Agreement becoming untrue as of any date after the date hereof or in any of the
conditions set forth in Article VI hereof not being satisfied, except in each
case as may be required by applicable law; (iii) take any action which would or
is reasonably likely to adversely effect or materially delay the receipt of the
Regulatory Approvals or other necessary approvals; (iv) take action which would
or is reasonably likely to materially and adversely affect Northwest MHC's,
Northwest Bancorp's, Northwest Savings Bank's or Northwest Merger Subsidiary's
ability to perform its covenants and agreements under this Agreement; (v) take
any action that would result in any of the conditions to the Merger not being
satisfied, including without limitation the condition set forth at Section
6.02(h); or (vi) agree to do any of the foregoing.
Section 5.09. Board and Committee Minutes. First Xxxx Bancorp and Xxxx
Federal Savings shall each provide to Northwest Bancorp, within thirty (30) days
after any meeting of their respective Board of Directors, or any committee
thereof, or any senior management committee, a copy of the minutes of such
meeting, except for information relating to
42
the transactions contemplated by this Agreement and deemed confidential by the
Board of Directors (including without limitation matters relating to (i) merger
negotiations, (ii) Section 5.06 or (iii) discussions of possible breaches of
this Agreement by Northwest MHC, Northwest Bancorp and Northwest Savings Bank)
or subject to the attorney-client privilege, except that with respect to any
meeting held within thirty (30) days of the Closing Date, such minutes shall be
provided to each party prior to the Closing Date.
Section 5.10. Undertakings by First Xxxx Bancorp and Northwest Bancorp.
(a) From and after the date of this Agreement:
(i) Outside Service Bureau Contracts. If requested to do so
by Northwest Bancorp, First Xxxx Bancorp shall use its reasonable best efforts
to obtain an extension of any contract with an outside service bureau or other
vendor of services to First Xxxx Bancorp, on terms and conditions mutually
acceptable to First Xxxx Bancorp and Northwest Bancorp;
(ii) List of Nonperforming Assets. First Xxxx Bancorp shall
provide Northwest Bancorp, within fifteen (15) days of the end of each calendar
month, a written list of nonperforming assets (the term "nonperforming assets,"
for purposes of this Section 5.10(a)(ii), means (i) loans that are "troubled
debt restructurings" as defined in Statement of Financial Accounting Standards
No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructuring,"
(ii) loans on nonaccrual, (iii) real estate owned, (iv) all loans ninety (90)
days or more past due as of the end of such month and (iv) impaired loans;
(iii) Reserves and Merger Related Costs. On or before the
Merger Effective Date, and at the request of Northwest Bancorp, First Xxxx
Bancorp shall establish such additional accruals and reserves as may be
necessary to conform the accounting reserve practices and methods (including
credit loss practices and methods) of First Xxxx Bancorp to those of Northwest
Bancorp (as such practices and methods are to be applied to First Xxxx Bancorp
from and after the Merger Effective Date) and Northwest Bancorp's plans with
respect to the conduct of the business of First Xxxx Bancorp following the
Merger Effective Date and otherwise to reflect Merger related expenses and costs
incurred by First Xxxx Bancorp; provided, however, that First Xxxx Bancorp shall
not be required to take any such action unless Northwest Bancorp agrees in
writing that all conditions to closing set forth in Section 6.02 have been
satisfied or waived (except for the expiration of any applicable waiting
periods); prior to the delivery by Northwest Bancorp of the writing referred to
in the preceding clause, First Xxxx Bancorp shall provide Northwest Bancorp a
written statement, certified without personal liability by the chief executive
officer of First Xxxx Bancorp and dated the date of such writing, that the
representation made in Section 3.15 hereof is true as of such date or,
alternatively, setting forth in detail the circumstances that prevent such
representation from being true as of such date; and no accrual or reserve made
by First Xxxx Bancorp or Xxxx Federal Savings pursuant to this Section
5.10(a)(iii), or any litigation or regulatory proceeding arising out of any such
accrual or reserve, shall constitute or be deemed to be a breach or the
occurrence of a Material Adverse Effect with respect to First Xxxx Bancorp or
Xxxx Federal Savings or violation of any representation, warranty, covenant,
condition or other provision of this Agreement or to constitute a termination
event within the meaning of Section 7.01(b) hereof. No action shall be required
to be taken by
43
First Xxxx Bancorp pursuant to this Section 5.10(a)(iii) if it would contravene
applicable law or regulation or, in the opinion of First Xxxx Bancorp's
independent auditors, GAAP;
(iv) Stockholders' Meeting. Subject to the terms and
conditions of this Agreement, First Xxxx Bancorp shall submit this Agreement to
its stockholders for approval at a meeting to be held as soon as practicable,
and, subject to the next sentence, its Board of Directors shall recommend
approval of this Agreement to the First Xxxx Bancorp stockholders. The Board of
Directors of First Xxxx Bancorp may fail to make such a recommendation, or
withdraw, modify or change any such recommendation if such Board of Directors,
after having consulted with and considered the advice of outside counsel to
First Xxxx Bancorp, has determined that the making of such recommendation, or
the failure so to withdraw, modify or change such recommendation, could
reasonably be deemed to constitute a breach of the fiduciary duties of such
directors under Delaware law, provided that Section 5.06 shall govern the
withdrawal, modification or change of such recommendation in the circumstances
described therein. First Xxxx Bancorp shall take all steps necessary in order to
hold a meeting of stockholders for the purpose of approving this Agreement
within three (3) months of the date of this Agreement, or as soon thereafter as
is practicable. The Proxy Statement will not, at the time it is mailed to First
Xxxx Bancorp stockholders and up to and including the date of the meeting of
stockholders of First Xxxx Bancorp to which the Proxy Statement relates, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading; except that
First Xxxx Bancorp assumes no responsibility for any statement of a material
fact, or failure to state a material fact necessary in order to make the
statements therein not misleading, concerning Northwest MHC, Northwest Bancorp
or Northwest Savings Bank that is included in the Proxy Statement and that is
provided in writing by Northwest Bancorp. First Xxxx Bancorp shall retain a
proxy solicitor in connection with the solicitation of stockholder approval of
this Agreement.
(b) From and after the date of this Agreement, Northwest Bancorp and
First Xxxx Bancorp shall each:
(i) Public Announcements. Cooperate and cause their
respective officers, directors, employees and agents to cooperate in good faith,
consistent with their respective legal obligations, in the preparation and
distribution of, and agree upon the form and substance of, any press release
related to this Agreement and the transactions contemplated hereby, and any
other public disclosures related thereto, including without limitation
communications to stockholders, internal announcements and customer disclosures,
but nothing contained herein shall prohibit any party from making any disclosure
that its counsel deems necessary, provided that the disclosing party notifies
the other party reasonably in advance of the timing and contents of such
disclosure;
(ii) Systems Conversions. First Xxxx Bancorp and Northwest
Bancorp shall meet on a regular basis to discuss and plan for the conversion of
Xxxx Federal Savings and First Xxxx Bancorp's data processing and related
electronic informational systems to those used by Northwest Savings Bank and
Northwest Bancorp, which planning shall include, but not be limited to,
discussion of the possible termination by First Xxxx Bancorp of third-party
service provider arrangements effective at the Merger Effective Date or at a
date thereafter, non-renewal
44
of personal property leases and software licenses used by First Xxxx Bancorp in
connection with its systems operations, retention of outside consultants and
additional employees to assist with the conversion, and outsourcing, as
appropriate, of proprietary or self-provided system services, it being
understood that First Xxxx Bancorp shall not be obligated to take any such
action prior to the Merger Effective Date and, no conversion shall take place
prior to the Merger Effective Date. In the event that First Xxxx Bancorp takes,
at the request of Northwest Bancorp, any action relative to third parties to
facilitate the conversion that results in the imposition of any termination fees
or charges or the incurrence of expenses by First Xxxx Bancorp, Northwest
Bancorp shall indemnify First Xxxx Bancorp for any such fees, charges, and
expenses, as well as the costs of reversing the conversion process, if the
Merger is not consummated for any reason other than a breach of this Agreement
by First Xxxx Bancorp, or a termination of this Agreement under Section
7.01(c)(iv) or (d)(iii);
(iii) Maintenance of Insurance. Maintain, and cause their
respective Subsidiaries to maintain, insurance in such amounts as are reasonable
to cover such risks as are customary in relation to the character and location
of its properties and the nature of its business;
(iv) Maintenance of Books and Records. Maintain, and cause
their respective Subsidiaries to maintain, books of account and records in
accordance with GAAP applied on a basis consistent with those principles used in
preparing the financial statements heretofore delivered;
(v) Delivery of Securities Documents. Deliver to the other,
copies of all Securities Documents and Regulatory Reports within one (1)
Business Day of the filing thereof; and
(vi) Taxes. File all federal, state, and local tax returns
required to be filed by them or their respective Subsidiaries on or before the
date such returns are due (including any extensions) and pay all taxes shown to
be due on such returns on or before the date such payment is due, except those
being contested in good faith.
Section 5.11. Employee and Termination Benefits; Directors and
Management.
(a) Employee Benefits. As of or after the Merger Effective Date, and at
Northwest Bancorp's election and subject to the requirements of applicable laws
and regulations, the Compensation and Benefit Plans may continue to be
maintained separately, consolidated, or terminated in accordance with their
terms. Following the Merger Effective Date, Northwest Bancorp and its
Subsidiaries shall honor and perform in accordance with their terms all benefit
obligations to, and contractual rights of, current and former employees and
directors of First Xxxx Bancorp and its Subsidiaries existing as of the Merger
Effective Date, under any Compensation and Benefit Plan that has not been
terminated and fully distributed as of the Merger Effective Date and which has
been disclosed to Northwest Bancorp on First Xxxx Bancorp Disclosure Schedule
3.12(a), except as otherwise provided by the Termination and Release Agreements
referred to in Section 5.11(e). If requested by Northwest Bancorp in writing not
later than ten (10) days before the Merger Effective Date and provided that
Northwest Bancorp has indicated in writing that the conditions to its
obligations set forth in Section 6.02 hereof have been satisfied
45
or waived, First Xxxx Bancorp shall take such steps within its power to
effectuate a termination of any Compensation and Benefit Plan as of the Merger
Effective Date, provided that the Compensation and Benefit Plan can be
terminated in accordance with its terms within such period. In the event of a
consolidation of any or all of such plans or in the event of termination of any
Compensation and Benefit Plan, employees of First Xxxx Bancorp or Xxxx Federal
Savings who continue as employees of Northwest Bancorp or Northwest Savings Bank
after the Merger Effective Date ("Continuing Employee(s)") shall be eligible to
participate in any Northwest Savings Bank employee plan of similar character
immediately upon such consolidation or as of the first entry date coincident
with or immediately following such termination. Continuing Employees shall
receive credit for service with First Xxxx Bancorp or Xxxx Federal Savings for
purposes of determining eligibility and vesting (but not for purposes of
accruing or computing benefits under any defined benefit plan) under (i) any
similar existing Northwest Bancorp benefit plan except that Continuing Employees
shall be treated as new employees under the Northwest Savings Bank Employee
Stock Ownership Plan and Northwest Savings Bank's annual holiday bonus program,
or (ii) any new Northwest Bancorp benefit plan in which Continuing Employees or
their dependents would be eligible to enroll, subject to any pre-existing
conditions or other exclusions to which such person were subject under the
Compensation and Benefit Plans. Such service shall also apply for purposes of
satisfying any waiting periods, actively-at-work requirements and evidence of
insurability requirements. Continuing Employees shall have no rights in
Northwest Savings Bank's terminated post-retirement health benefit plan.
(b) In the event of the termination of any First Xxxx Bancorp or Xxxx
Federal Savings health, disability or life insurance plan, or the consolidation
of any First Xxxx Bancorp or Xxxx Federal Savings health, disability or life
insurance plan with any Northwest Bancorp or Northwest Savings Bank health,
disability or life insurance plan, Northwest Bancorp shall as soon as
practicable make available to Continuing Employees and their dependents
employer-provided health, disability or life insurance coverage on the same
basis as it provides such coverage to employees of Northwest Bancorp or
Northwest Savings Bank. Unless a Continuing Employee affirmatively terminates
coverage under a First Xxxx Bancorp or Xxxx Federal Savings health, disability
or life insurance plan prior to the time that such Continuing Employee becomes
eligible to participate in the Northwest Bancorp or Northwest Savings Bank
health, disability or life insurance plan, no coverage of any of the Continuing
Employees or their dependents shall terminate under any of the First Xxxx
Bancorp or Xxxx Federal Savings health, disability or life insurance plans prior
to the time such Continuing Employees and their dependents become eligible to
participate in such plans, programs and benefits common to all employees of
Northwest Bancorp or Northwest Savings Bank and their dependents. Terminated
First Xxxx Bancorp and Xxxx Federal Savings employees and qualified
beneficiaries will have the right to continue coverage under group health plans
of Northwest Bancorp and/or Northwest Bancorp Subsidiaries in accordance with
Code Section 4980B(f). Continuing Employees who become covered under a Northwest
Bancorp or Northwest Savings Bank health plan shall be required to satisfy the
deductible limitations of the Northwest Bancorp or Northwest Savings Bank health
plan for the plan year in which the coverage commences, with offset for
deductibles paid under the First Xxxx Bancorp or Xxxx
46
Federal Savings health plan, but only to the extent that either the Continuing
Employee or Xxxx Federal Savings provides substantiation in a form reasonably
satisfactory to Northwest Bancorp that the dollar amount of such deductible has
been paid by such Continuing Employee. In the event of any termination of any
First Xxxx Bancorp or Xxxx Federal Savings health plan, or consolidation of any
First Xxxx Bancorp or Xxxx Federal Savings health plan with any health plan of
Northwest Bancorp and/or Northwest Bancorp Subsidiaries, the Health Insurance
Portability Accountability Act of 1996 ("HIPAA") will govern any coverage
limitations due to pre-existing conditions.
(c) Xxxx Federal Savings shall cause contributions under the Xxxx
Federal Savings 401(k) plan to be frozen, effective on or before the Merger
Effective Date. Continuing Employees shall be eligible to participate in the
Northwest Savings Bank 401(k) Plan as of the first entry date coincident with or
following the Merger Effective Date. Following the Merger Effective Date,
Northwest Savings Bank shall take all action necessary to cause the Xxxx Federal
Savings 401(k) Plan to be merged into the Northwest Savings Bank 401(k) Plan, in
accordance with applicable tax laws.
(d) The Xxxx Federal Savings ESOP shall be terminated as of the Merger
Effective Date, all outstanding Xxxx Federal Savings ESOP indebtedness shall be
repaid from the proceeds of the Merger Consideration for the unallocated shares
of First Xxxx Bancorp Common Stock, and the remaining balance shall be allocated
to Xxxx Federal Savings employees, in accordance with the Xxxx Federal Savings
ESOP, and applicable laws and regulations as soon as practicable after the later
of (i) the Merger Effective Date and (ii) the receipt of a favorable
determination letter for termination of the Xxxx Federal Savings ESOP from the
IRS. In connection with the termination of the Xxxx Federal Savings ESOP, Xxxx
Federal Savings shall promptly apply to the IRS for a favorable determination
letter on the tax-qualified status of the Xxxx Federal Savings ESOP on
termination and any amendments made to the Xxxx Federal Savings ESOP in
connection with its termination or otherwise, if such amendments have not
previously received a favorable determination letter from the IRS with respect
to their qualification under Code Section 401(a). Any and all distributions from
the Xxxx Federal Savings ESOP after its termination shall be made consistent
with the aforementioned determination letter. Prior to the Merger Effective
Date, First Xxxx Bancorp and Xxxx Federal Savings shall make contributions to,
and payments on the loan of, the Xxxx Federal Savings ESOP consistent with past
practices on regularly scheduled payment dates.
(e) Concurrently with the execution of this Agreement by the parties
hereto, (i) each of Xxxxxx X. Xxxxxx, XX and Xxxxxxx X. Xxxxx and First Xxxx
Bancorp and Xxxx Federal Savings shall enter into a Termination and Release
Agreement substantially in the form of Exhibit D hereto and (ii) each of Messrs.
Xxxxxx and Xxxxx and Northwest Bancorp shall enter into a Noncompetition
Agreement substantially in the form of Exhibit E hereto.
(f) After the Merger Effective Date, any former employee of First Xxxx
Bancorp or Xxxx Federal Savings whose employment is actually terminated by
Northwest Bancorp within six (6) months of the Merger Effective Date, other than
the employees receiving severance benefits pursuant to existing employment
agreements, change in control agreements or severance agreements, shall receive,
upon termination of employment, a payment from Northwest Savings Bank in an
amount equal to two (2) weeks salary for each year of service with First Xxxx
Bancorp or Xxxx Federal Savings, with a minimum of four (4) weeks of salary and
a maximum of twenty-six (26) weeks of salary, as well as health benefit coverage
substantially similar to the coverage received by such person immediately prior
to termination of employment in accordance with
47
Code Section 4980B(f). Northwest Savings Bank shall provide out-placement
services to terminated employees of First Xxxx Bancorp and Xxxx Federal Savings
consistent with past practices of Northwest Bancorp and Northwest Savings Bank.
(g) Each person who serves on the Board of Directors of First Xxxx
Bancorp or Xxxx Federal Savings both on the date of this Agreement and
immediately prior to the Merger Effective Date shall be offered a position as an
advisory director on Northwest Savings Bank's Allegheny County Advisory Board
immediately following the Merger Effective Date. For service on such advisory
board for the first year following the Merger Effective Date, the former
directors of First Xxxx Bancorp or Xxxx Federal Savings shall each receive
$1,250 per month (which is equal to the annual rate paid to such directors by
First Xxxx Bancorp and Xxxx Federal Savings as of the date of this Agreement).
After one year, fees paid to former directors of First Xxxx Bancorp or Xxxx
Federal Savings shall be modified to conform to Northwest Savings Bank's
advisory board fee schedule.
(h) Prior to the Merger Effective Date, First Xxxx Bancorp shall take
all actions necessary to terminate the First Xxxx Bancorp Stock Option Plan and
Xxxx Federal Savings Restricted Stock Plan, effective as of the Merger Effective
Date.
(i) First Xxxx Bancorp Disclosure Schedule 3.18 sets forth the accrued
but unpaid vacation pay for employees of First Xxxx Bancorp and Xxxx Federal
Savings as of February 28, 2003. Upon Northwest Savings Bank's actual
termination prior to December 31, 2003 of any Xxxx Federal Savings employee
identified in Schedule 3.18 for whom vacation pay was accrued and expensed based
on employment in or before 2002 with Xxxx Federal Savings or for whom vacation
pay was accrued during 2003 prior to the Merger Effective Date, such employee
shall be entitled to payment of any such accrued and expensed vacation pay. Any
Continuing Employee will be entitled to any such unused vacation during 2003,
provided, however if such Continuing Employee does not use such accrued vacation
on or prior to December 31, 2003, such accrued but unused vacation pay shall be
paid to such Continuing Employee as of December 31, 2003.
Section 5.12. Duty to Advise; Duty to Update Northwest Bancorp's
Disclosure Schedules. Northwest Bancorp shall promptly advise First Xxxx Bancorp
of any change or event having a Material Adverse Effect on it or on any
Northwest Bancorp Subsidiary or that it believes would or would be reasonably
likely to cause or constitute a material breach of any of its representations,
warranties or covenants set forth herein. Northwest Bancorp shall update the
Northwest Bancorp Disclosure Schedules as promptly as practicable after the
occurrence of an event or fact that, if such event or fact had occurred prior to
the date of this Agreement, would have been disclosed in the Northwest Bancorp
Disclosure Schedule. The delivery of such updated Schedules shall not relieve
Northwest Bancorp from any breach or violation of this Agreement and shall not
have any effect for the purposes of determining the satisfaction of the
condition set forth in Section 6.01(c) hereof.
48
Section 5.13. Bank and Related Merger Transactions.
(a) As soon as practicable following the Merger Effective Date,
Northwest Bancorp shall, and it shall cause First Xxxx Bancorp (as the Surviving
Corporation in the Merger) to, effect the Company Merger by executing a merger
agreement and filing a certificate of merger with the Secretary of State of the
State of Delaware pursuant to the DGCL, and articles of combination with the
OTS. The Company Merger shall become effective at the time specified in the
certificate of merger and articles of combination. As a result of the Company
Merger, the separate corporate existence of First Xxxx Bancorp shall cease and
Northwest Bancorp shall be the surviving corporation and continue its corporate
existence under the laws of the United States.
(b) As soon as practicable after consummation of the Merger, Northwest
Savings Bank and Xxxx Federal Savings shall take all actions necessary and
appropriate, including entering into the Bank Merger Agreement, to cause Xxxx
Federal Savings to effect the Bank Merger in accordance with applicable laws and
regulations and the terms of the Bank Merger Agreement. As a result of the Bank
Merger, the separate corporate existence of Xxxx Federal Savings shall cease and
Northwest Savings Bank shall be the surviving corporation and continue its
corporate existence under the laws of the Commonwealth of Pennsylvania.
Section 5.14. Northwest MHC. Northwest MHC agrees to cause Northwest
Bancorp, its majority-owned subsidiary, to perform its obligations hereunder,
and Northwest MHC and Northwest Bancorp shall be jointly and severally obligated
and liable for all of the agreements and obligations of Northwest Bancorp
hereunder. The parties hereto acknowledge and agree that First Xxxx Bancorp and
Xxxx Federal Savings, as well as any party seeking to enforce rights under
Section 5.05 or Sections 5.11(e), (f) or (g) hereof, may pursue Northwest MHC
for the payment or enforcement of any obligation or liability of Northwest
Bancorp hereunder or thereunder without pursuing or exhausting remedies against
Northwest Bancorp or Northwest Savings Bank or prior notification to either of
the same and without regard to any regulatory restrictions which are applicable
to Northwest Bancorp or Northwest Savings Bank but not to Northwest MHC.
ARTICLE VI
CONDITIONS
Section 6.01. Conditions to First Xxxx Bancorp's Obligations under this
Agreement. The obligations of First Xxxx Bancorp and Xxxx Federal Savings to
consummate the Merger and the Bank Merger hereunder shall be subject to
satisfaction as of or prior to the Merger Effective Date of each of the
following conditions, unless waived by First Xxxx Bancorp pursuant to Section
8.03 hereof:
(a) Approval of First Xxxx Bancorp's Stockholders. This Agreement shall
have been approved by the stockholders of First Xxxx Bancorp by such vote as is
required under the DGCL, First Xxxx Bancorp's certificate of incorporation and
bylaws, and under Nasdaq requirements applicable to it;
49
(b) Covenants. The obligations and covenants of Northwest MHC,
Northwest Bancorp, Northwest Savings Bank and Northwest Merger Subsidiary
required by this Agreement to be performed by Northwest MHC, Northwest Bancorp,
Northwest Savings Bank and Northwest Merger Subsidiary as of or prior to the
Merger Effective Date shall have been duly performed and complied with in all
material respects;
(c) Accuracy of Representations and Warranties. Each of the
representations and warranties of First Xxxx Bancorp and Xxxx Federal Savings in
this Agreement, subject in all cases to the standard set forth in Article III,
shall be true and correct as of the date of this Agreement and as of the Merger
Effective Date as though made on and as of the Merger Effective Date (except
that representations and warranties that by their terms speak as of the date of
this Agreement or some other date shall be true and correct as of such date);
(d) Approvals of Regulatory Authorities. All Regulatory Approvals
necessary to effect the Merger shall have been obtained and shall remain in full
force and effect, and all notice and waiting periods required thereunder shall
have expired or been terminated;
(e) No Injunction. There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction that enjoins or
prohibits consummation of the transactions contemplated hereby; and
(f) Officer's Certificate. Northwest Bancorp shall have delivered to
First Xxxx Bancorp a certificate, dated the Closing Date and signed, without
personal liability, by its president, to the effect that the conditions set
forth in subsections (a) through (e) (but excluding (d)) of this Section 6.01
have been satisfied, to the Knowledge of the officer executing the same.
Section 6.02. Conditions to Northwest Bancorp's Obligations under this
Agreement. The obligations of Northwest Bancorp and Northwest Savings Bank to
consummate the Merger and the Bank Merger hereunder shall be subject to
satisfaction as of or prior to the Merger Effective Date of each of the
following conditions, unless waived by Northwest Bancorp pursuant to Section
8.03 hereof:
(a) Approval of First Xxxx Bancorp's Stockholders. This Agreement shall
have been approved by the stockholders of First Xxxx Bancorp by such vote as is
required under the DGCL, First Xxxx Bancorp's certificate of incorporation and
bylaws, and under Nasdaq requirements applicable to it;
(b) Covenants. The obligations and covenants of First Xxxx Bancorp and
Xxxx Federal Savings required by this Agreement to be performed as of or prior
to the Merger Effective Date shall have been duly performed and complied with in
all material respects;
(c) Accuracy of Representations and Warranties. Each of the
representations and warranties of Northwest MHC, Northwest Bancorp and Northwest
Savings Bank in this Agreement, subject in all cases to the standard set forth
in Article IV, shall be true and correct as of the date of this Agreement and as
of the Merger Effective Date as though made on and as of the
50
Merger Effective Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall be true
and correct as of such date);
(d) Approvals of Regulatory Authorities. All Regulatory Approvals
necessary to effect the Merger shall have been obtained and shall remain in full
force and effect, all notice and waiting periods required thereunder shall have
expired or been terminated and no such approvals shall contain any condition
(excluding conditions that are normally imposed by a Regulatory Authority in
transactions involving the acquisition of insured institutions and their holding
companies) which the Board of Directors of Northwest Bancorp reasonably
determines in good faith would materially reduce the benefits of the Merger to
such a degree that Northwest Bancorp, in its good faith judgment, would not have
entered into this Agreement had such condition been known at the date hereof;
(e) No Injunction. There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction that enjoins or
prohibits consummation of the transactions contemplated hereby;
(f) Limitation on Dissenters' Shares. As of the Merger Effective Date,
the holders of no more than 10% of the First Xxxx Bancorp Common Stock that is
issued and outstanding shall have taken the actions required by Section
262(d)(1) of the DGCL to qualify their First Xxxx Bancorp Common Stock as
Dissenters' Shares;
(g) Officer's Certificate. First Xxxx Bancorp shall have delivered to
Northwest Bancorp a certificate, dated the Closing Date and signed, without
personal liability, by its chairman of the board or president, to the effect
that the conditions set forth in subsections (a) through (h) (but excluding (d))
of this Section 6.02 have been satisfied, to the Knowledge of the officer
executing the same; and
(h) Tax Opinion. Northwest Bancorp shall have received an opinion or
opinions of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel to Northwest Bancorp,
substantially to the effect set forth on Exhibit C.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.01. Termination. This Agreement may be terminated at any time
prior to the Merger Effective Date, whether before or after approval of the
stockholders of First Xxxx Bancorp referred to in Section 5.10(a)(iv) hereof:
(a) by mutual written consent of the parties authorized by their
respective boards of directors;
(b) by Northwest Bancorp or First Xxxx Bancorp (i) if the Merger
Effective Date shall not have occurred on or prior to December 31, 2003, (ii) if
a vote of the stockholders of First Xxxx Bancorp is taken and such stockholders
fail to approve this Agreement at the meeting of stockholders (or any
adjournment thereof) of First Xxxx Bancorp contemplated by Section
51
5.10(a)(iv) hereof, or (iii) any Regulatory Authority formally disapproves the
issuance of any Regulatory Approval or other necessary approval, unless in the
case of clause (ii) of this Section 7.01(b) such failure is due to the failure
of the party seeking to terminate this Agreement to perform or observe its
agreements set forth herein to be performed or observed by such party on or
before such meeting of stockholders, and in the case of clause (i) of this
Section 7.01(b), the right to terminate shall not be available to any party
whose failure to perform an obligation under this Agreement has been the cause
of, or resulted in, the failure of the Merger and the other transactions
contemplated hereby to be consummated by December 31, 2003;
(c) by Northwest Bancorp if (i) at the time of such termination any of
the representations and warranties of First Xxxx Bancorp or Xxxx Federal Savings
contained in this Agreement shall not be true and correct to the extent that the
condition set forth in Section 6.02(c) hereof cannot be satisfied and such
failure is not remedied within thirty (30) days after receipt by First Xxxx
Bancorp of notice in writing from Northwest Bancorp specifying the nature of
such breach and requesting that it be remedied, (ii) there shall have been any
material breach of any covenant, agreement or obligation of First Xxxx Bancorp
or Xxxx Federal Savings hereunder and such breach shall have not been remedied
by First Xxxx Bancorp, Xxxx Federal Savings or any other Person within thirty
(30) days after receipt by First Xxxx Bancorp of notice in writing from
Northwest Bancorp specifying the nature of such breach and requesting that it be
remedied, (iii) any Regulatory Authority approves the transactions contemplated
by this Agreement with a condition or conditions such that the requirements of
Section 6.02(d) are not satisfied, or (iv) First Xxxx Bancorp has received a
Superior Proposal, and in accordance with Section 5.06 of this Agreement, the
Board of Directors of First Xxxx Bancorp has entered into an acquisition
agreement with respect to the Superior Proposal or withdraws its recommendation
of this Agreement, fails to make such recommendation or modifies or qualifies
its recommendation in a manner adverse to Northwest Bancorp;
(d) by First Xxxx Bancorp if (i) at the time of such termination any of
the representations and warranties of Northwest MHC, Northwest Bancorp and
Northwest Savings Bank contained in this Agreement shall not be true and correct
to the extent that the condition set forth in Section 6.01(c) hereof cannot be
satisfied and such failure is not remedied within thirty (30) days after receipt
by Northwest Bancorp of notice in writing by First Xxxx Bancorp specifying the
nature of such breach and requesting that it be remedied, (ii) there shall have
been any material breach of any covenant, agreement or obligation of Northwest
MHC, Northwest Bancorp or Northwest Savings Bank hereunder and such breach shall
not have been remedied by Northwest MHC, Northwest Bancorp, Northwest Savings
Bank or any other Person within thirty (30) days after receipt by Northwest
Bancorp of notice in writing from First Xxxx Bancorp specifying the nature of
such breach and requesting that it be remedied, or (iii) First Xxxx Bancorp has
received a Superior Proposal, and in accordance with Section 5.06 of this
Agreement, the Board of Directors of First Xxxx Bancorp has made a determination
to accept such Superior Proposal subject to approval thereof by First Xxxx
Bancorp's stockholders, and simultaneously with the termination of this
Agreement pursuant to this Section 7.01(d)(iii) First Xxxx Bancorp enters into
an acquisition agreement with respect to the Superior Proposal, provided that
First Xxxx Bancorp shall not terminate this Agreement pursuant to this Section
7.01(d)(iii) and enter in a definitive agreement with respect to the Superior
Proposal until the expiration of five (5) Business Days following Northwest
Bancorp's receipt of written notice
52
advising Northwest Bancorp that First Xxxx Bancorp has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
(and including a copy thereof with all accompanying documentation, if in
writing) identifying the Person making the Superior Proposal and stating whether
First Xxxx Bancorp intends to enter into a definitive agreement with respect to
the Superior Proposal. After providing such notice, First Xxxx Bancorp shall
provide a reasonable opportunity to Northwest Bancorp during the five-Business
Day period to make such adjustments in the terms and conditions of this
Agreement as would enable First Xxxx Bancorp to proceed with the Merger on such
adjusted terms.
Section 7.02. Effect of Termination. Except as otherwise provided in
Section 8.01 of this Agreement, if this Agreement is terminated pursuant to
Section 7.01 hereof, this Agreement shall forthwith become void, and there shall
be no further obligation or liability on the part of any party to this
Agreement, except (i) as set forth in the last sentence of Section 5.02(a) and
Section 8.01 and (ii) that termination will not relieve a breaching party from
liability for any willful breach of any covenant, agreement, representation or
warranty of this Agreement giving rise to such termination, except as otherwise
provided in Section 8.01.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Expenses.
(a) Except as otherwise provided in paragraph (b) below, each party
hereto shall bear and pay all costs and expenses incurred by it in connection
with the transactions contemplated by this Agreement, including fees and
expenses of its own financial advisors, consultants, accountants and counsel,
and other costs and expenses ("Costs and Expenses").
(b) As an inducement to Northwest Bancorp to enter into this Agreement,
to incur the costs and expenses related hereto and to consummate the
transactions contemplated hereby, First Xxxx Bancorp hereby agrees to pay
Northwest Bancorp, and Northwest Bancorp shall be entitled to payment of, a fee
of $6.0 million (the "Northwest Bancorp Fee"), within five (5) Business Days
after written demand for payment is made by Northwest Bancorp, following the
occurrence of the earliest of any of the events set forth below:
(i) First Xxxx Bancorp terminates this Agreement pursuant to
Section 7.01(d)(iii) or Northwest Bancorp terminates this Agreement pursuant to
Section 7.01(c)(iv); or
(ii) the entering into of a definitive agreement by First
Xxxx Bancorp or Xxxx Federal Savings relating to a Superior Proposal or the
consummation of a Superior Proposal involving First Xxxx Bancorp or Xxxx Federal
Savings within twelve (12) months after the occurrence of any of the following:
(x) the failure of the stockholders of First Xxxx Bancorp to approve this
Agreement after the occurrence of an Acquisition Proposal or the public
announcement by any Person (other than First Xxxx Bancorp or Northwest Bancorp)
that such Person has made, or is disclosing the intention to make, a bona fide
offer to engage in an Acquisition Proposal, or (y) December 31, 2003 if prior
thereto the First Xxxx Bancorp stockholders have not adopted this Agreement.
53
If demand for payment of the Northwest Bancorp Fee is made pursuant to
this Section 8.01(b) and payment is timely made, then none of Northwest MHC,
Northwest Bancorp or Northwest Savings Bank will have any other rights or claims
against First Xxxx Bancorp, Xxxx Federal Savings and their respective officers,
directors, attorneys and financial advisors under this Agreement, it being
agreed that the acceptance of the Northwest Bancorp Fee under this Section
8.01(b) will constitute the sole and exclusive remedy of Northwest MHC,
Northwest Bancorp and Northwest Savings Bank against First Xxxx Bancorp, Xxxx
Federal Savings and their respective officers, directors, attorneys and
financial advisors.
Section 8.02. Survival. No representations, warranties, covenants and
agreements contained in this Agreement shall survive the Merger Effective Date,
other than agreements or covenants which by their express terms are to be
performed after the Merger Effective Date, including without limitation the
covenants and agreements set forth in Article II and Sections 5.02, 5.05 and
5.11 hereof.
Section 8.03. Amendment, Extension and Waiver. Subject to applicable
law, at any time prior to the consummation of the transactions contemplated by
this Agreement, the parties may (a) amend this Agreement, (b) extend the time
for the performance of any of the obligations or other acts of either party
hereto, (c) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or (d) waive
compliance with any of the agreements or conditions contained in Articles V and
VI hereof or otherwise; provided, however, that after any approval of the
transactions contemplated by this Agreement by First Xxxx Bancorp's
stockholders, there may not be, without further approval of such stockholders,
any amendment of this Agreement which reduces the amount or changes the form of
the consideration to be delivered to First Xxxx Bancorp stockholders hereunder.
This Agreement may not be amended except by an instrument in writing authorized
by the respective Boards of Directors and signed, by duly authorized officers,
on behalf of the parties hereto. Any agreement on the part of a party hereto to
any extension or waiver shall be valid only if set forth in an instrument in
writing signed by a duly authorized officer on behalf of such party, but such
waiver or failure to insist on strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
Section 8.04. Entire Agreement. This Agreement, including the documents
and other writings referred to herein or delivered pursuant hereto, contains the
entire agreement and understanding of the parties with respect to its subject
matter. This Agreement supersedes all prior arrangements and understandings
between the parties, both written and oral with respect to its subject matter.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
Person, other than the parties hereto and their respective successors, any
rights, remedies, obligations or liabilities other than pursuant to Article II
and Sections 5.05 and 5.11(e), 5.11(f) and 5.11(g).
Section 8.05. Successors and Assigns. No party hereto may assign any of
its rights or obligations hereunder to any other Person, without the prior
written consent of the other parties
54
hereto. Subject to the preceding sentence, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
Section 8.06. Notices. All notices or other communications hereunder
shall be in writing and shall be deemed given if delivered personally, or mailed
by prepaid registered or certified mail (return receipt requested), addressed as
follows:
(a) If to Northwest MHC, Northwest Bancorp, Northwest Savings
Bank or Northwest Merger Subsidiary, to:
Northwest Bancorp, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
with a copy to:
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxx, Esq.
Xxxx Xxxx, Esq.
(b) If to First Xxxx Bancorp or Xxxx Federal Savings, to:
First Xxxx Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, XX
President and Chief Executive Officer
with a copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Section 8.07. Captions. The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.
Section 8.08. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 8.09. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
55
Section 8.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic internal law (including the law of
conflicts of law) of the Commonwealth of Pennsylvania, except to the extent
federal law and regulations applicable to financial institutions shall be
controlling.
Section 8.11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
this Agreement were 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 thereof 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.
56
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
NORTHWEST BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
NORTHWEST MERGER SUBSIDIARY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
NORTHWEST SAVINGS BANK
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
NORTHWEST BANCORP, MHC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
FIRST XXXX BANCORP, INC.
By: /s/ Xxxxxx X. Xxxxxx, XX
--------------------------------------
Xxxxxx X. Xxxxxx, XX
President and Chief Executive Officer
XXXX FEDERAL SAVINGS AND LOAN ASSOCIATION
OF BELLEVUE
By: /s/ Xxxxxx X. Xxxxxx, XX
--------------------------------------
Xxxxxx X. Xxxxxx, XX
President and Chief Executive Officer
EXHIBIT A
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan") is dated as of ________, 2003, by and
between Northwest Savings Bank ("Northwest Savings Bank"), a Pennsylvania
savings bank, and Xxxx Federal Savings and Loan Association of Bellevue ("Xxxx
Federal Savings"), a federal savings and loan association.
RECITALS
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated as of March 11, 2003, by and among Northwest Bancorp, MHC,
Northwest Bancorp, Inc. ("Northwest Bancorp"), each a Federal corporation,
Northwest Merger Subsidiary, Inc. ("Northwest Merger Subsidiary"), a Delaware
corporation and a wholly-owned subsidiary of Northwest Bancorp, Northwest
Savings Bank, and First Xxxx Bancorp, Inc. ("First Xxxx Bancorp"), a Delaware
corporation, and Xxxx Federal Savings, Northwest Merger Subsidiary will be
merged with and into First Xxxx Bancorp (the "Subsidiary Merger"); and
WHEREAS, the Merger Agreement provides that subsequent to consummation
of the Subsidiary Merger, Xxxx Federal Savings shall be merged with and into
Northwest Savings Bank, with Northwest Savings Bank as the Surviving Bank;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Merger Agreement and for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxx Federal Savings and Northwest Savings Bank hereby agree that,
subject to the terms and conditions hereinafter set forth, and in accordance
with all applicable laws and regulations, Xxxx Federal Savings shall be merged
with and into Northwest Savings Bank on even date herewith. The parties hereto
do hereby agree and covenant as follows:
ARTICLE I
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
1.1 "Bank Merger" shall refer to the merger of Xxxx Federal Savings
with and into Northwest Savings Bank as provided in Section 2.1 of this Plan of
Merger.
1.2 "Department" shall mean the Pennsylvania Department of Banking.
1.3 "Effective Time" shall mean the date and time at which the merger
contemplated by this Plan of Merger becomes effective as provided in Section 2.2
of this Plan of Merger.
A-1
1.4 "Merging Banks" shall collectively refer to Xxxx Federal Savings
and Northwest Savings Bank.
1.5 "Surviving Bank" shall refer to Northwest Savings Bank as the
surviving bank of the Bank Merger.
ARTICLE II
TERMS OF THE BANK MERGER
2.1 The Bank Merger.
(a) Subject to the terms and conditions set forth in the Merger
Agreement, at the Effective Time, Xxxx Federal Savings shall be merged with and
into Northwest Savings Bank pursuant to Chapter 16 of the Banking Code of 1965.
Northwest Savings Bank shall be the Surviving Bank of the Bank Merger and shall
continue to be governed by the Pennsylvania Banking Act of 1965.
(b) As a result of the Bank Merger, (i) each share of common stock, par
value $1.00 per share, of Xxxx Federal Savings issued and outstanding
immediately prior to the Effective Time shall be canceled and (ii) each share of
common stock, par value $0.10 per share, of Northwest Savings Bank issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding and shall constitute the only shares of capital stock of the
Surviving Bank issued and outstanding immediately after the Effective Time.
(c) At the Effective Time, the Surviving Bank shall be considered the
same business and corporate entity as each of the Merging Banks and thereupon
and thereafter all the property, rights, powers and franchises of each of the
Merging Banks shall vest in the Surviving Bank and the Surviving Bank shall be
subject to and be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Merging Banks and shall have succeeded to
all of each of their relationships, fiduciary or otherwise, as fully and to the
same extent as if such property, rights, privileges, powers, franchises, debts,
obligations, duties and relationship had been originally acquired, incurred or
entered into by the Surviving Bank. The deposit taking offices of Xxxx Federal
Savings shall be operated by the Surviving Bank. In addition, any reference to
either of the Merging Banks in any contract, will or document, whether executed
or taking effect before or after the Effective Time, shall be considered a
reference to the Surviving Bank if not inconsistent with the other provisions of
the contract, will or document; and any pending action or other judicial
proceeding to which either of the Merging Banks is a party shall not be deemed
to have abated or to have been discontinued by reason of the Bank Merger, but
may be prosecuted to final judgment, order or decree in the same manner as if
the Bank Merger had not been made or the Surviving Bank may be substituted as a
party to such action or proceeding, and any judgment, order or decree may be
rendered for or against it that might have been rendered for or against either
of the Merging Banks if the Bank Merger had not occurred.
A-2
2.2 Effective Time. The Bank Merger shall become effective as of the
date the Articles of Merger are filed with the Pennsylvania Department of State.
2.3 Name of Surviving Bank. The name of the Surviving Bank shall be
"Northwest Savings Bank."
2.4 Charter. On and after the Effective Time, the Articles of
Incorporation of Northwest Savings Bank shall be the Articles of Incorporation
of the Surviving Bank until amended in accordance with applicable law.
2.5 Bylaws. On and after the Effective Time, the Bylaws of Northwest
Savings Bank shall be the Bylaws of the Surviving Bank until amended in
accordance with applicable law.
2.6 Directors and Officers. Except as otherwise provided in the Merger
Agreement, on and after the Effective Time, until changed in accordance with the
Articles of Incorporation and Bylaws of the Surviving Bank, (i) the directors of
the Surviving Bank shall be the directors of Northwest Savings Bank immediately
prior to the Effective Time and (ii) the officers of the Surviving Bank shall be
the officers of Northwest Savings Bank immediately prior to the Effective Time.
The directors and officers of the Surviving Bank shall hold office in accordance
with the Articles of incorporation and Bylaws of the Surviving Bank.
2.7 Liquidation Account. The liquidation account of Xxxx Federal
Savings established pursuant to regulations of the Office of Thrift Supervision
in connection with the conversion of Xxxx Federal Savings from mutual to stock
form shall be assumed by the Surviving Bank as of the Effective Time.
ARTICLE III
MISCELLANEOUS
3.1 Conditions Precedent. The respective obligations of each party
under this Plan of Merger shall be subject to (i) the consummation of the
Subsidiary Merger pursuant to the Merger Agreement and (ii) the approval of this
Plan of Merger by the respective sole stockholder of Northwest Savings Bank and
Xxxx Federal Savings.
3.2 Termination. This Plan of Merger shall be terminated automatically
without further act or deed of either of the parties hereto in the event of the
termination of the Merger Agreement in accordance with Section 7.01 thereof.
3.3 Amendments. To the extent permitted by the Banking Code of 1965,
this Plan of Merger may be amended by a subsequent writing signed by the parties
hereto upon the approval of the board of directors of each of the parties
hereto.
3.4 Successors. This Plan of Merger shall be binding on the successors
of Xxxx Federal Savings and Northwest Savings Bank.
A-4
IN WITNESS WHEREOF, Xxxx Federal Savings and Northwest Savings Bank
have caused this Plan of Merger to be executed by their duly authorized officers
as of the day and year first above written.
Northwest Savings Bank
ATTEST:
By:
-------------------------------- --------------------------------
Xxxxxxx X. XxXxxxx Xxxxxxx X. Xxxxxx
Secretary President and Chief Executive
Officer
Xxxx Federal Savings and Loan
Association of Bellevue
ATTEST:
By:
-------------------------------- --------------------------------
Xxxxxx X. Xxxxxxx, Xx. Xxxxxx X. Xxxxxx, XX
Secretary President and Chief Executive
Officer
EXHIBIT B
March 11, 2003
Northwest Bancorp, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
Northwest Bancorp, MHC, Northwest Bancorp, Inc. ("Northwest Bancorp"),
Northwest Savings Bank ("Northwest Savings Bank"), Northwest Merger Subsidiary
("Northwest Merger Subsidiary"), and First Xxxx Bancorp, Inc. ("First Xxxx
Bancorp") and Xxxx Federal Savings and Loan Association of Bellevue ("Xxxx
Federal Savings") have entered into an Agreement and Plan of Merger, dated as of
March 11, 2003 (the "Merger Agreement"), pursuant to which, and subject to the
terms and conditions set forth therein, Northwest Merger Subsidiary will merge
with and into First Xxxx Bancorp (the "Merger"), with First Xxxx Bancorp
surviving the merger, and in connection therewith, each share of First Xxxx
Bancorp common stock which is outstanding immediately prior to consummation of
the Merger (except as otherwise provided in the Merger Agreement) shall be
automatically converted into the right to receive $26.25 per share, without
interest.
Northwest Bancorp has requested, as a condition to its execution and
delivery to First Xxxx Bancorp of the Merger Agreement, that the undersigned,
being directors of First Xxxx Bancorp, execute and deliver to Northwest Bancorp
this Letter Agreement.
Each of the undersigned, in order to induce Northwest Bancorp to
execute and deliver to First Xxxx Bancorp the Merger Agreement, hereby
irrevocably:
(a) Agrees to be present (in person or by proxy) at all meetings of
stockholders of First Xxxx Bancorp called to vote for approval of the Merger
Agreement so that all shares of common stock of First Xxxx Bancorp then
beneficially owned by the undersigned, and as to which the undersigned has
voting power, will be counted for the purpose of determining the presence of a
quorum at such meetings and to vote all such shares (i) in favor of approval and
adoption of the Merger Agreement and the transactions contemplated thereby
(including any amendments or modifications of the terms thereof approved by the
Board of Directors of First Xxxx Bancorp), and (ii) against approval or adoption
of any other merger, business combination, recapitalization, partial liquidation
or similar transaction involving First Xxxx Bancorp;
(b) Agrees not to vote or execute any written consent to rescind or
amend in any manner any prior vote or written consent, as a stockholder of First
Xxxx Bancorp, to approve or adopt the Merger Agreement;
B-1
(c) Agrees not to sell, transfer or otherwise dispose of any common
stock of First Xxxx Bancorp on or prior to the date of the meeting of First Xxxx
Bancorp stockholders to vote on the Merger Agreement, except for transfers
effected in the undersigned's capacity as a fiduciary, and except for transfers
to a lineal descendant or a spouse of the undersigned, or to a trust for the
benefit of one or more of the foregoing persons, providing that in each such
case the transferee agrees in writing to be bound by the terms of this Letter
Agreement; and
(d) Represents that the undersigned has the capacity to enter into this
Letter Agreement and that it is a valid and binding obligation enforceable
against the undersigned in accordance with its terms, subject to bankruptcy,
insolvency and other laws affecting creditors' rights and general equitable
principles.
The agreements of the undersigned contained herein shall apply to the
undersigned solely in his capacity as a stockholder of First Xxxx Bancorp, and
no agreement contained herein shall apply in his capacity as a director, officer
or employee of First Xxxx Bancorp or in any other capacity. Nothing contained in
this Letter Agreement shall be deemed to apply to, or limit in any manner, the
obligations of the undersigned to comply with his fiduciary duties as a director
or officer of First Xxxx Bancorp.
The obligations set forth herein shall terminate concurrently with any
termination of the Merger Agreement.
____________________________
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Letter Agreement as of the date first written above, intending to be legally
bound hereby.
Sincerely,
____________________________________________
Name: ______________________________________
Title: _____________________________________
B-2
EXHIBIT C
[Matters to be covered in Opinion of Counsel to be delivered to Northwest
Bancorp pursuant to Section 6.02(h) of the Agreement]
1. The formation of Northwest Merger Subsidiary and its merger with and into
First Xxxx Bancorp will be disregarded for federal income tax purposes, and the
transaction will be treated as a purchase by Northwest Bancorp of the
outstanding shares of First Xxxx Bancorp Common Stock. See 90-95, 1990-2 C.B.
67; Rev. Rul. 73-427, 1973-2 C.B. 301. The purchase will be treated as a
qualified stock purchase within the meaning of Section 338(d)(3) of the Code.
2. For federal income tax purposes, no gain or loss will be recognized by
Northwest Bancorp, Northwest Merger Subsidiary or First Xxxx Bancorp as a result
of the Merger.
3. For federal income tax purposes, the statutory merger of First Xxxx Bancorp
into Northwest Bancorp pursuant to applicable law (the "Company Merger") will be
treated as a distribution by First Xxxx Bancorp in complete liquidation within
the meaning of Section 332 of the Code. See Section 1.332-2(d) of the Treasury
Regulations.
4. For federal income tax purposes, no gain or loss will be recognized by
Northwest Bancorp on its receipt of the assets of First Xxxx Bancorp distributed
in the Company Merger. See Section 332(a) of the Code.
5. For federal income tax purposes, no gain or loss will be recognized by First
Xxxx Bancorp on the distribution of its assets to Northwest Bancorp in the
Company Merger. See Section 337(a) of the Code.
6. For federal income tax purposes, the basis of the assets of First Xxxx
Bancorp in the hands of Northwest Bancorp will be the same as the basis of those
assets in the hands of First Xxxx Bancorp immediately preceding the Company
Merger. See Section 334(b)(1) of the Code.
7. The holding period of the assets received by Northwest Bancorp in the Company
Merger will include the period during which such property was held by First Xxxx
Bancorp. See Section 1223(2) of the Code.
8. As provided in Section 381(c)(2) of the Code and Section 1.381(c)(2)-1 of the
Treasury Regulations, Northwest Bancorp will succeed to and take into account
the earnings and profits, or deficit in earnings and profits, of First Xxxx
Bancorp as of the date of the Company Merger, subject to the limitations of
Sections 382 and 383 of the Code.
9. For federal income tax purposes, the statutory merger of Xxxx Federal Savings
into Northwest Savings Bank pursuant to applicable law (the "Bank Merger") will
be treated as tax-free reorganization within the meaning of Section 368(a) of
the Code.
C-1
10. For federal income tax purposes, no gain or loss will be recognized by
Northwest Savings Bank on its receipt of the assets of Xxxx Federal Savings in
constructive exchange for Northwest Savings Bank common stock in the Bank
Merger. See Code Section 1032(a).
11. For federal income tax purposes, no gain or loss will be recognized by Xxxx
Federal Savings on the distribution of its assets to Northwest Savings Bank in
constructive exchange for Northwest Savings Bank common stock and the assumption
by Northwest Savings Bank of the liabilities of Xxxx Federal Savings in the Bank
Merger. Code Sections 361(a) and 357(a).
12. For federal income tax purposes, the basis of the assets of Xxxx Federal
Savings in the hands of Northwest Savings Bank will be the same as the basis of
those assets in the hands of Xxxx Federal Savings immediately preceding the Bank
Merger. See Section 362(b) of the Code.
13. The holding period of the assets received by Northwest Savings Bank in the
Bank Merger will include the period during which such property was held by Xxxx
Federal Savings. See Section 1223(2) of the Code.
14. As provided in Section 381(c)(2) of the Code and Section 1.381(c)(2)-1 of
the Treasury Regulations, Northwest Savings Bank will succeed to and take into
account the earnings and profits, or deficit in earnings and profits, of Xxxx
Federal Savings as of the date of the Bank Merger, subject to the limitations of
Sections 382 and 383 of the Code.
C-2
EXHIBIT D
TERMINATION AND RELEASE AGREEMENT
This Termination and Release Agreement (this "Agreement") is entered
into effective as of March 11, 2003 by and among _______________ (the
"Executive"), residing at ___________________________________, and Xxxx Federal
Savings and Loan Association of Bellevue ("Xxxx Federal Savings") and First Xxxx
Bancorp, Inc. ("First Xxxx Bancorp") with their principal offices located at 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
RECITALS
WHEREAS, Northwest Bancorp, MHC, Northwest Bancorp, Inc. ("Northwest
Bancorp"), Northwest Savings Bank and Northwest Merger Subsidiary, Inc.
(collectively referred to as "Northwest") and First Xxxx Bancorp and Xxxx
Federal Savings (collectively referred to as "Xxxx") have entered into that
certain Agreement and Plan of Merger, dated March 11, 2003 (the "Merger
Agreement"); and
WHEREAS, Section 5.11(f) of the Merger Agreement provides that First
Xxxx Bancorp, Xxxx Federal Savings and the Executive shall enter into this
Agreement which shall terminate the Employment Agreement between Executive and
Xxxx Federal Savings, dated November 16, 1998 (the "Bank Employment Agreement")
and between Executive and First Xxxx Bancorp, dated November 16, 1998 (the
"Bancorp Employment Agreement") (collectively, the "Employment Agreements") as
of the Merger Effective Date, and in lieu of any rights and payments under said
Employment Agreements, Executive shall be entitled to the rights and payments
set forth herein.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the Executive, First Xxxx Bancorp and Xxxx Federal Savings agree
as follows:
1. Acknowledgement of Payment, Release and Waiver.
(a) In consideration of the payment by Xxxx Federal Savings and/or
First Xxxx Bancorp to the Executive of $_____________1 (subject to applicable
withholding taxes) on the Merger Effective Date, the Executive, First Xxxx
Bancorp and Xxxx Federal Savings hereby agree that, except as provided in
Section 2(a) below, the Employment Agreements shall be terminated without any
further action of any parties hereto, effective immediately prior to the Merger
Effective Date.
(b) If the payment pursuant to Section 1(a) hereof, either alone or
together with other payments and benefits which the Executive has the right to
receive from First Xxxx Bancorp or Xxxx Federal Savings (but excluding amounts
payable pursuant to the Noncompetition Agreement and the Consulting Agreement as
defined below), would constitute a "parachute payment" under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), the payment payable by
First Xxxx Bancorp or Xxxx Federal Savings pursuant to Section (1)(a) hereof
shall be reduced by the amount which is the minimum necessary to result in no
portion of the payment payable by First Xxxx Bancorp and Xxxx Federal Savings
under Section(1)(a) being
--------------------
1. $1,480,000 and $665,000 in the case of Messrs. Xxxxxx and Xxxxx,
respectively.
non-deductible to First Xxxx Bancorp and Xxxx Federal Savings (or any successors
thereto) pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. The parties hereto agree that the
present value of the payments and benefits payable pursuant to this Agreement to
the Executive upon termination of the Executive's employment pursuant to Section
(1)(a) shall be limited to three times the Executive's "base amount," as that
term is defined in Section 280G(b)(3) of the Code, less one dollar. The
determination of any reduction in the payment to be made pursuant to Section
(1)(a) shall be based upon an analysis prepared by Elias, Matz, Xxxxxxx &
Xxxxxxx L.L.P. ("EMTH") and paid for by First Xxxx Bancorp. EMTH shall update
the analysis which it has previously prepared in this regard no later than ten
(10) days prior to the Merger Effective Date, and may use such actuaries as it
may deem necessary or advisable for the purpose.
2. Releases.
(a) Except as noted in the next succeeding sentence, upon payment of
the amount set forth in Section 1(a) hereof, the Executive, for himself and for
his heirs, successors and assigns, does hereby release completely and forever
discharge First Xxxx Bancorp and Xxxx Federal Savings from any obligation under
the Employment Agreements, provided that, notwithstanding the foregoing, the
Executive does not hereby release First Xxxx Bancorp or Xxxx Federal Savings
from any obligation to the Executive under Section 6 of the Bancorp Employment
Agreement (as amended below), which the parties hereto agree shall remain in
full force and effect, or any obligation which First Xxxx Bancorp or Xxxx
Federal Saving may have to the Executive under any Compensation and Benefit Plan
or otherwise.
(b) For and in consideration of the commitments made herein by the
Executive, each of First Xxxx Bancorp and Xxxx Federal Savings, for itself, and
for its successors and assigns, does hereby release completely and forever
discharge the Executive and his heirs, successors and assigns, to the fullest
extent permitted by applicable law, from any obligation under the Employment
Agreements, provided that, notwithstanding the foregoing, First Xxxx Bancorp and
Xxxx Federal Savings do not hereby release the Executive from any obligation
under paragraph (c) of Section 6 of the Bancorp Employment Agreement (as amended
below).
3. Amendment to the Bancorp Employment Agreement. Section 6 of the
Bancorp Employment Agreement is hereby amended by (i) deleting the phrase "shall
be made by Deloitte & Touche or such successor thereto (the "Accounting Firm")
and substituting therefor the phrase "shall be made by Elias, Matz, Xxxxxxx &
Xxxxxxx L.L.P. (the "Law Firm")" and (ii) changing all references therein to
"the Accounting Firm" to "the Law Firm."
4. General.
(a) Heirs, Successors and Assigns. The terms of this Agreement shall be
binding upon the parties hereto and their respective heirs, successors and
assigns.
(b) Final Agreement. This Agreement represents the entire understanding
of the parties with respect to the subject matter thereof and supersedes all
prior understandings, written or oral. The terms of this Agreement may be
changed, modified or discharged only by an instrument in writing signed by each
of the parties hereto.
D-2
(c) Governing Law. This Agreement shall be construed, enforced and
interpreted in accordance with and governed by the laws of the Commonwealth of
Pennsylvania, without reference to its principles of conflicts of law, except to
the extent that Federal law shall be deemed to preempt such state laws.
(d) Defined Terms. Any capitalized terms not defined in this Agreement
shall have as their meaning the definitions contained in the Merger Agreement.
(e) Voluntary Action and Waiver. The Executive acknowledges that by his
free and voluntary act of signing below, the Executive agrees to all of the
terms of this Agreement and intends to be legally bound thereby. The Executive
acknowledges that he has been advised to consult with an attorney prior to
executing this Agreement.
5. Effectiveness. Notwithstanding anything to the contrary contained
herein, this Agreement shall be subject to consummation of the Merger in
accordance with the terms of the Merger Agreement, as the same may be amended by
the parties thereto in accordance with its terms.
[Signature Page Follows]
D-3
IN WITNESS WHEREOF, Xxxx Federal Savings and First Xxxx Bancorp have
caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, effective as of the date first above
written.
WITNESS: EXECUTIVE:
---------------------------- -----------------------------
Name: Name:
Title:
ATTEST: XXXX FEDERAL SAVINGS AND LOAN
ASSOCIATION OF BELLEVUE
---------------------------- -----------------------------
Name: Name:
Title:
ATTEST: FIRST XXXX BANCORP, INC.
---------------------------- -----------------------------
Name: Name:
Title:
D-4
EXHIBIT E
NONCOMPETITION AGREEMENT
This Agreement (this "Agreement"), is entered into effective March 11,
2003 ("Effective Date"), by and between Northwest Bancorp, Inc., a Federal
corporation ("Northwest Bancorp"), and ________________ (the "Executive"),
____________________ of First Xxxx Bancorp, Inc., a corporation organized under
the laws of Delaware ("First Xxxx Bancorp") that conducts its business through
its wholly-owned subsidiary, Xxxx Federal Savings and Loan Association of
Bellevue ("Xxxx Federal Savings").
RECITALS:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of March
11, 2003 (the "Merger Agreement"), by and among (a) Northwest Bancorp, MHC,
Northwest Bancorp, Northwest Merger Subsidiary, Inc. and Northwest Savings Bank,
and (b) First Xxxx Bancorp and Xxxx Federal Savings, the following will occur:
(i) Northwest Merger Subsidiary, Inc. will merge with and into First Xxxx
Bancorp, with First Xxxx Bancorp as the surviving entity (the "Merger"), and
(ii) Xxxx Federal Savings will merge with and into Northwest Savings Bank, with
Northwest Savings Bank as the surviving entity (collectively, the "Mergers");
and
WHEREAS, the Executive is the ___________________________ of First Xxxx
Bancorp and Xxxx Federal Savings and as a result of the Mergers will no longer
hold such positions; and
WHEREAS, the parties hereto recognize and acknowledge the interest of
Northwest Savings Bank and Northwest Bancorp in protecting the business and
goodwill associated with Xxxx Federal Savings and Northwest Savings Bank
following the Mergers by having Executive enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Any capitalized terms not defined in this Agreement shall have as
their meanings the definitions contained in the Merger Agreement.
2. The Executive agrees that during the one-year period following the
Merger Effective Date, the Executive will not, directly or indirectly, (i)
become a director, officer, employee, shareholder, principal, agent, consultant
or independent contractor of any insured depository institution, trust company
or parent holding company of any such institution or company which has an office
in Allegheny, Armstrong, Beaver, Xxxxxx, Washington and Xxxxxxxxxxxx Counties in
the Commonwealth of Pennsylvania (a "Competing Business"), provided, however,
that this provision shall not prohibit the Executive from owning bonds,
non-voting preferred stock or up to five percent (5%) of the outstanding common
stock of any such entity if such common stock is publicly traded, or (ii)
solicit or induce, or cause others to solicit or induce, any employee of
Northwest Bancorp or any of its subsidiaries to leave the employment of such
entities.
3. In consideration of the obligations and commitments of the Executive
under this Agreement, Northwest Bancorp shall pay to the Executive an amount
equal to _______________ Dollars ($_________)1 on the Merger Effective Date or
on such other date as may be mutually agreeable to the parties hereto.
4. Notwithstanding any other provision hereof, the Executive agrees to
treat as confidential all information (excluding, however, information contained
in publicly available reports filed by Northwest Bancorp with any governmental
entity and information published or disclosed to the public by a third party)
concerning the records, properties, books, contracts, commitments and affairs of
Northwest Bancorp and/or its subsidiaries and affiliates, including but not
limited to, information regarding accounts, shareholders, finances, strategies,
marketing, customers and potential customers (their identities, preferences,
likes and dislikes) and other information of a similar nature not available to
the public.
5. The term of this Agreement shall expire one (1) year after the
effective date of this Agreement.
6. No rights under this Agreement shall be assignable nor duties
delegable by either party, except that Northwest Bancorp may assign any of its
rights hereunder to any acquiror of all or substantially all of the assets of
Northwest Bancorp. This Agreement will inure to the benefit of and be binding
upon any successor to Northwest Bancorp by merger or consolidation or any other
change in form or any other person or firm or entity to which all or
substantially all of the assets and business of Northwest Bancorp may be sold or
otherwise transferred. Nothing contained in this Agreement is intended to confer
upon any person or entity, other than the parties hereto, their successors in
interest and permitted transferees, any rights or remedies under or by reason of
this Agreement unless expressly so stated to the contrary.
7. This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the Commonwealth of Pennsylvania,
without reference to its principles of conflict of laws, except to the extent
that Federal law shall be deemed to preempt such state laws.
8. It is the intention of the parties hereto that the provisions of
this Agreement shall be enforced to the fullest extent permissible under all
applicable laws and public policies, but that the unenforceability or the
modification to conform with such laws or public policies of any provision
hereof shall not render unenforceable or impair the remainder of the Agreement.
The covenants in Section 2 of this Agreement with respect to Allegheny,
Armstrong, Beaver, Xxxxxx, Washington and Xxxxxxxxxxxx Counties shall be deemed
to be separate covenants with respect to each of the above counties, and should
any court of competent jurisdiction conclude or find that this Agreement or any
portion is not enforceable with respect to any of the counties, such conclusion
or finding shall in no way render invalid or unenforceable the covenants herein
with respect to the other county. Accordingly, if any provision shall be
determined to be invalid or unenforceable either in whole or in part, this
Agreement shall be deemed amended to delete or
--------
1 $600,000 and $450,000 in the case of Messrs. Xxxxxx and Xxxxx, respectively.
E-2
modify as necessary, the invalid or unenforceable provisions to alter the
balance of this Agreement in order to render the same valid and enforceable.
9. The Executive acknowledges that Northwest Bancorp would not have
entered into or consummated the Mergers unless the Executive had, among other
things, entered into this Agreement. Any breach of this Agreement will result in
irreparable damage to Northwest Bancorp for which Northwest Bancorp will not
have an adequate remedy at law. The Executive further acknowledges that
Northwest Bancorp shall be entitled to injunctive relief hereunder and the
parties hereby consent to an injunction in favor of Northwest Bancorp, enjoining
any breach of any of the foregoing by any court of competent jurisdiction,
without prejudice to any other right or remedy to which Northwest Bancorp may be
entitled.
10. If an action is instituted to enforce any of the provisions of this
Agreement, the prevailing party in such action shall be entitled to recover from
the losing party its, her or his reasonable attorneys' fees and costs.
11. Notwithstanding anything to the contrary contained in this
Agreement, the effectiveness of this Agreement shall be subject to consummation
of the Merger in accordance with the terms of the Merger Agreement, as the same
may be amended by the parties thereto in accordance with its terms.
[Signature Page Follows]
E-3
IN WITNESS WHEREOF, Northwest Bancorp has caused this Agreement to be
executed by its duly authorized officer, and Executive has signed this
Agreement, effective as of the date first above written.
WITNESS: EXECUTIVE:
-------------------------- ---------------------------
Name: Name:
Title:
ATTEST: NORTHWEST BANCORP, INC.
By:
-------------------------- ------------------------
Name: Name: Xxxxxxx X. Xxxxxx
Title: President
E-4
