SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 16, 1999
Fidelity FINANCIAL OF OHIO, INC.
(Exact name of registrant as specified in its charter)
OHIO 0-27868 31-1455721
(State or other jurisdiction (Commission File No.) (IRS Employer I.D. No.)
of incorporation)
5535 Glenway Avenue, Cincinnati, Ohio 45238
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 922-5959
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Item 5. Other Events.
On August 16, 1999, Provident Financial Group, Inc., an Ohio
corporation ("PFGI"), The Provident Bank, an Ohio banking corporation and
wholly-owned subsidiary of PFGI ("Provident"), Fidelity Financial of Ohio, Inc.,
an Ohio corporation ("Fidelity"), Fidelity Acquisition Corporation, an Ohio
corporation ("FAC") and Centennial Bank, an Ohio savings bank ("Centennial"),
entered into an Agreement and Plan of Merger, a copy of which is attached hereto
as Exhibit 2 (the "Agreement"). The Agreement provides for the merger of
Fidelity with and into PFGI (the "Holding Company Merger"), followed by the
merger of Centennial into Provident (the "Bank Merger"). The following summary
of some the material terms and conditions of the Agreement is qualified in its
entirety by reference to Exhibit 2.
In accordance with the terms and subject to the conditions of the
Agreement, each of the outstanding shares of Fidelity will be canceled and
exchanged on the effective date of the Holding Company Merger in consideration
and exchange for shares of PFGI. The final exchange ratio shall be determined
based on PFGI's ten day average closing price ending on the date upon which the
last regulatory approval required to consummate the merger is granted (the
"Common Exchange Value"). Fidelity shareholders shall receive $21.00 worth of
PFGI common stock if PFGI's average per share price during the pricing period is
between $40.00 and $44.50. If the Common Exchange Value is less than $40.00,
Fidelity shareholders will receive a fixed exchange ratio of 0.525 shares of
PFGI. If the Common Exchange Value is more than $44.50, Fidelity shareholders
shall receive a fixed exchange ratio of 0.4719 shares of PFGI. Based on PFGI's
closing price of $42.625 on August 13, 1999, Fidelity shareholders would receive
0.4927 shares of PFGI common stock for each Fidelity share.
On August 16, 1999, there were 9,125,406 shares of Fidelity issued and
outstanding and 291,205 shares of Fidelity subject to outstanding options (the
"Fidelity Options"). At the effective time of the Holding Company Merger, the
unexercised Fidelity Options will be assumed by PFGI and, upon exercise, each
holder of Fidelity Options will receive a number of PFGI shares equal to the
number of Fidelity shares subject to the Fidelity Option multiplied by the
Option Exchange Ratio. The Option Exchange Ratio shall be equal to $21.00
divided by the Common Exchange Value. The per share exercise price of the
Fidelity Options after the effective time of the Holding Company Merger will
equal the per share exercise price of the Fidelity Options immediately before
the closing of the Holding Company Merger divided by the Option Exchange Ratio.
In connection with the Agreement, PFGI and Fidelity entered into a
Stock Option Agreement, dated August 17, 1999, pursuant to which Fidelity
granted PFGI an option to purchase up to 1,815,955 shares of Fidelity (subject
to adjustment as set forth therein), which represents 19.9% of Fidelity's
outstanding shares of common stock, at a purchase price of $15.75 per share
(subject to adjustment as set forth therein). The options will become excisable
on the occurrence of certain events as specified in the Stock Option Agreement.
The consummation of the Holding Company Merger is subject to a number
of conditions, including, but not limited to the approval of the appropriate
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regulatory agencies and the approval of the requisite numbers of shareholders of
Fidelity. The Agreement may be terminated by the Board of Directors of PFGI or
Fidelity if the Holding Company Merger is not consummated on or before June 30,
2000.
Item 7. Financial Statements and Exhibits.
(a) and (b). Not applicable.
(c) Exhibits.
See Index to Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
FIDELITY FINANCIAL OF OHIO, INC.
By:/s/ Robert R. Sudbrook
Robert R. Sudbrook,
President and Chief Executive Officer
Date: August 17, 1999
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INDEX TO EXHIBITS
Exhibit Number Description
2 Agreement and Plan of Merger, dated August 16, 1999,
among Provident Financial Group, Inc., The Provident
Bank, Fidelity Financial of Ohio, Inc., Fidelity
Acquisition Corporation and Centennial Bank
99.1 News Release of Provident Financial Group, Inc. dated
August 16, 1999
5
AGREEMENT AND PLAN OF MERGER
among
PROVIDENT FINANCIAL GROUP, INC.
an Ohio corporation,
THE PROVIDENT BANK
an Ohio banking corporation,
FIDELITY FINANCIAL OF OHIO, INC.
an Ohio corporation,
FIDELITY ACQUISITION CORPORATION
an Ohio corporation
and
CENTENNIAL BANK,
an Ohio savings bank
Dated August 16, 1999
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TABLE OF CONTENTS
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ARTICLE 1 TERMS OF MERGERS AND CLOSING.......................................................2
Section 1.1 Definitions. ......................................................................2
Section 1.2 Merger Transactions. ..............................................................5
Section 1.3 Merging ...........................................................................5
Section 1.4 Surviving Corporations.............................................................5
Section 1.5 Effect of Mergers..................................................................6
Section 1.6 Conversion of Stock................................................................6
Section 1.7 Share Adjustments..................................................................8
Section 1.8 Closing. .........................................................................8
Section 1.9 Exchange Procedures; Surrender of Certificates.....................................8
Section 1.10 Closing Date and Effective Time....................................................9
Section 1.11 Closing Deliveries.................................................................10
Section 1.12 Dissenter's Rights.................................................................12
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF FIDELITY.........................................12
Section 2.1 Organization and Capital Stock.....................................................13
Section 2.2 Authorization......................................................................15
Section 2.3 Subsidiaries.......................................................................16
Section 2.4 No Defaults........................................................................16
Section 2.5 Financial Information..............................................................16
Section 2.6 Absence of Changes.................................................................17
Section 2.7 Litigation and Related Matters.....................................................17
Section 2.8 Regulatory Matters.................................................................17
Section 2.9 Reports............................................................................18
Section 2.10 Non-Banking Activities of Fidelity and Subsidiaries................................18
Section 2.11 Fiduciary Responsibilities.........................................................18
Section 2.12 Fair Lending; Community Reinvestment Act...........................................19
Section 2.13 Employment Agreements..............................................................19
Section 2.14 Employee Matters and ERISA.........................................................19
Section 2.15 Title to Properties; Insurance.....................................................21
Section 2.16 Intellectual Property Rights.......................................................21
Section 2.17 Environmental Matters..............................................................22
Section 2.18 Year 2000 Compliance...............................................................23
Section 2.19 Certain Operational Matters........................................................23
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Section 2.20 Material Contracts and Agreements..................................................24
Section 2.21 Interest Rate Risk Management Instruments..........................................24
Section 2.22 State Takeover Laws................................................................24
Section 2.23 Tax Matters........................................................................25
Section 2.24 Brokerage..........................................................................25
Section 2.25 Compliance with Law................................................................26
Section 2.26 No Undisclosed Liabilities.........................................................26
Section 2.27 Pooling............................................................................26
Section 2.28 Statements True and Correct........................................................26
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PFGI AND PROVIDENT BANK..........................26
Section 3.1 Organization and Capital Stock.....................................................26
Section 3.2 Authorization......................................................................27
Section 3.3 Subsidiaries.......................................................................28
Section 3.4 No Defaults........................................................................28
Section 3.5 Financial Information..............................................................28
Section 3.6 Absence of Changes.................................................................28
Section 3.7 Litigation and Related Matters.....................................................29
Section 3.8 Regulatory Matters.................................................................29
Section 3.9 Reports............................................................................29
Section 3.10 Tax Matters........................................................................29
Section 3.11 Brokerage..........................................................................29
Section 3.12 Compliance With Law................................................................29
Section 3.13 No Undisclosed Liabilities.........................................................30
Section 3.14 Statements True and Correct........................................................30
Section 3.15 Year 2000 Compliance...............................................................30
Section 3.16 Interested Shareholder Provision...................................................31
Section 3.17 Accounting Changes.................................................................31
ARTICLE 4 AGREEMENTS OF FIDELITY AND ITS SUBSIDIARIES .......................................31
Section 4.1 Business in Ordinary Course........................................................31
Section 4.2 Breaches...........................................................................34
Section 4.3 Submission to Management and Shareholders..........................................35
Section 4.4 Consents to Contracts and Leases...................................................35
Section 4.5 Consummation of Agreement..........................................................35
Section 4.6 Employee Benefit Plans.............................................................36
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Section 4.7 Access to Information..............................................................38
Section 4.8 Plan of Merger.....................................................................38
Section 4.9 Cooperation........................................................................39
ARTICLE 5 AGREEMENTS OF PFGI AND PROVIDENT BANK..............................................39
Section 5.1 Regulatory Approvals; Other Agreements.............................................39
Section 5.2 Breaches...........................................................................40
Section 5.3 Consummation of Agreement..........................................................40
Section 5.4 Employee Benefits..................................................................40
Section 5.5 Advisory Board.....................................................................41
Section 5.6 Director and Officer Matters.......................................................42
Section 5.7 Access to Information..............................................................42
Section 5.8 Employment Agreements..............................................................43
ARTICLE 6 CONDITIONS PRECEDENT TO MERGER.....................................................43
Section 6.1 Conditions to Obligations of PFGI and Provident Bank...............................43
Section 6.2 Conditions to Obligations of Fidelity and its Subsidiaries.........................46
ARTICLE 7 TERMINATION OR ABANDONMENT.........................................................48
Section 7.1 Mutual Agreement...................................................................48
Section 7.2 Breach of Agreements...............................................................48
Section 7.3 Failure of Conditions..............................................................48
Section 7.4 Regulatory Approval Denial; Burdensome Condition...................................48
Section 7.5 Shareholder Approval Denial; Withdrawal/Modification of Board Recommendation.......49
Section 7.6 Regulatory Enforcement Matters.....................................................49
Section 7.7 Outside Closing Date...............................................................49
Section 7.8 Termination for Materially Improved Offer..........................................49
Section 7.9 Upset Provision....................................................................50
Section 7.10 Effect of Termination..............................................................51
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ARTICLE 8 GENERAL............................................................................51
Section 8.1 Disclosure Schedule................................................................51
Section 8.2 Confidential Information...........................................................52
Section 8.3 Publicity..........................................................................52
Section 8.4 Return of Documents................................................................52
Section 8.5 Notices............................................................................52
Section 8.6 Liabilities and Expenses...........................................................53
Section 8.7 Survival of Representations and Warranties.........................................54
Section 8.8 Entire Agreement...................................................................54
Section 8.9 Headings and Captions..............................................................54
Section 8.10 Waiver, Amendment or Modification..................................................55
Section 8.11 Rules of Construction..............................................................55
Section 8.12 Counterparts. .....................................................................55
Section 8.13 Successors and Assigns.............................................................55
Section 8.14 Severability.......................................................................55
Section 8.15 Governing Law; Assignment. ........................................................56
Section 8.16 Enforcement of Agreement...........................................................56
Section 8.17 Objections under Antitrust Laws....................................................56
Section 8.18 Current Information................................................................56
Section 8.19 Integration of Operations..........................................................56
Section 8.20 Option Agreement...................................................................57
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EXHIBITS
Exhibits have been omitted.
SCHEDULES
Disclosure Schedule has been omitted.
<PAGE>
INDEX TO DEFINITIONS
Aggregate Merger Consideration ............................................ 2
Agreement ................................................................. 1
Allocated Shares .......................................................... 36
AMEX ...................................................................... 2
BHCA ...................................................................... 16
Burdensome Condition ...................................................... 44
Centennial ................................................................ 1
Centennial Common Shares .................................................. 2
Centennial ESOP ........................................................... 36
Certificates .............................................................. 7
Closing ................................................................... 8
Closing Date .............................................................. 9
Code ...................................................................... 1
Common Exchange Value ..................................................... 2
Competing Transaction ..................................................... 2
Continued Employee ........................................................ 41
Contract .................................................................. 2
CRA ....................................................................... 19
CSLSC ..................................................................... 2
Disclosure Schedule ....................................................... 51
Disqualified Individual ................................................... 25
Effective Termination Date ................................................ 50
Effective Time ............................................................ 10
Environmental Laws ........................................................ 22
ERISA ..................................................................... 19
Exchange Act .............................................................. 16
Exchange Agent ............................................................ 8
FDIC ...................................................................... 2
Federal Reserve Board ..................................................... 16
Fidelity .................................................................. 1
Fidelity Acquisition ...................................................... 1
Fidelity Common Shares .................................................... 2
Fidelity Employee Plans ................................................... 19
Fidelity Financial Statements ............................................. 17
Final Index Price ......................................................... 3
Final PFGI Price .......................................................... 3
Forfeited Shares .......................................................... 36
Holding Company Merger .................................................... 1
HSR Act ................................................................... 16
Index Companies ........................................................... 3
Index Ratio ............................................................... 50
Initial Exchange Value .................................................... 3
Initial Index Price ....................................................... 3
Injunction ................................................................ 43
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IRS ....................................................................... 3
Material Adverse Effect ................................................... 3
Material Contracts ........................................................ 24
Maximum Exchange Value .................................................... 3
Merger Consideration ...................................................... 3
Merger Letter of Transmittal .............................................. 9
Mergers ................................................................... 3
Minimum Exchange Value .................................................... 4
NASDAQ .................................................................... 4
NYSE ...................................................................... 4
OGCL ...................................................................... 5
Option Exchange Ratio ..................................................... 7
OTS ....................................................................... 4
Outstanding Centennial Shares ............................................. 4
Outstanding Fidelity Shares ............................................... 4
Per Share Consideration ................................................... 4
Person .................................................................... 4
PFGI ...................................................................... 1
PFGI Common Shares ........................................................ 4
PFGI Employee Plans ....................................................... 41
PFGI Financial Statements ................................................. 28
PFGI Ratio ................................................................ 50
Pledged PFGI Shares ....................................................... 36
Pledged Shares ............................................................ 36
Pre-Closing Financial Statements .......................................... 45
Provident Bank ............................................................ 1
Registration Statement .................................................... 4
Regulatory Agency ......................................................... 4
Regulatory Agreement ...................................................... 18
Required Regulatory Actions ............................................... 16
SEC ....................................................................... 5
Securities Act ............................................................ 5
SGFSC ..................................................................... 5
Share Adjustment .......................................................... 8
Shareholders' Meeting ..................................................... 35
Stock Option Agreement .................................................... 5
Subsidiaries .............................................................. 5
Subsidiary Merger ......................................................... 1
Tax Return ................................................................ 5
Taxes ..................................................................... 5
Year 2000 Compliant ....................................................... 23
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of
August 16, 1999, among PROVIDENT FINANCIAL GROUP, INC., an Ohio corporation
("PFGI"), THE PROVIDENT BANK, an Ohio banking corporation ("Provident Bank"),
FIDELITY FINANCIAL OF OHIO, INC., an Ohio corporation ("Fidelity"), FIDELITY
ACQUISITION CORPORATION, an Ohio corporation ("Fidelity Acquisition") and
CENTENNIAL BANK, an Ohio savings bank ("Centennial").
RECITALS
A. The respective Boards of Directors of PFGI, Provident Bank,
Fidelity, Fidelity Acquisition and Centennial have approved, and deem it
advisable and in the best interests of their respective shareholders to
consummate, the business combination transactions provided for herein in which
Centennial shall, subject to the terms and conditions set forth herein, merge
with and into Provident Bank, a subsidiary of PFGI (the "Subsidiary Merger") and
Fidelity shall, subject to the terms and conditions set forth herein, merge with
and into PFGI (the "Holding Company Merger").
B. The respective Boards of Directors of PFGI, Provident Bank,
Fidelity, Fidelity Acquisition and Centennial have each determined that the
Mergers and the other transactions contemplated by this Agreement are consistent
with, and in furtherance of, their respective business strategies and goals and
in the best interests of the shareholders of the respective companies.
D. For federal income tax purposes, it is intended that the Mergers
shall constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and, as such,
shareholders of Fidelity will receive certain federal income tax-deferral
benefits with respect to shares of PFGI received in the Holding Company Merger.
This Agreement shall constitute a "plan of reorganization" for purposes of the
Code.
E. For accounting purposes, it is intended that the Mergers shall be
accounted for under the pooling of interests method of accounting.
F. PFGI, Provident Bank, Fidelity, Fidelity Acquisition and Centennial
desire to make certain representations, warranties and agreements in connection
with the Mergers and also to prescribe certain conditions to the Mergers.
G. In consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth herein, PFGI,
Provident Bank, Fidelity, Fidelity Acquisition and Centennial hereby agree as
follows:
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ARTICLE 1
TERMS OF MERGERS AND CLOSING
Section 1.1 Definitions. In addition to terms defined elsewhere
in this Agreement, the following terms shall have the meanings indicated:
"AMEX" shall mean the American Stock Exchange.
"Aggregate Merger Consideration" shall mean the aggregate consideration
payable in respect of the Outstanding Fidelity Shares at the Effective Time.
"CSLSC" shall mean Centennial Savings and Loan Services Corporation, an
Ohio corporation and a wholly-owned Subsidiary of Centennial.
"Centennial Common Shares" shall mean the shares of common stock of
Centennial, par value $.01 per share.
"Common Exchange Value" shall mean the average of the closing sale
prices per share for PFGI Common Shares as reported on the NASDAQ and published
in The Wall Street Journal (or if not published therein, as published by another
authoritative source) during the ten (10) consecutive trading-day period during
which the PFGI Common Shares are traded on the NASDAQ ending on the date on
which the last regulatory approval required to consummate the Mergers is
granted, but the per share Common Exchange Value so determined shall be not less
than the Minimum Exchange Value and not greater than the Maximum Exchange Value.
"Competing Transaction" shall mean any of the following involving
Fidelity or its Subsidiaries (other than the transaction contemplated by this
Agreement): (a) any merger, consolidation, share exchange for a controlling
interest, business combination or other similar transaction; or (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of Fifty
Percent (50%) or more of the assets of Fidelity or any of its Subsidiaries in a
single transaction or series of related transactions.
"Contract" shall mean, with respect to any person, any agreement,
indenture, undertaking, debt instrument, contract, lease or other commitment to
which such person is a party or by which it is bound or to which any of its
properties is subject.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"Fidelity Common Shares" shall mean the shares of common stock of
Fidelity, par value $.10 per share.
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"Final Index Price" shall mean the weighted average of the average
closing prices per share of each of the common stocks of the Index Companies as
reported on NYSE, NASDAQ or AMEX for the trading days during which the Common
Exchange Value is determined, with the weighting percentages as set forth on
Exhibit 7.9.
"Final PFGI Value" shall mean the Common Exchange Value of PFGI Common
Shares determined without regard to the Minimum Exchange Value.
"Index Companies" shall mean the companies listed on Exhibit 7.9;
provided, however, that any company shall be excluded from the Index Companies
(and thus not used in the computation of the Initial Index Price and Final Index
Price) as to which, between the date of this Agreement and the last trading day
of the period in which the Final Index Price is determined, any of the following
either occurs or is announced: (a) a proposed merger, acquisition, or business
combination in which that company is not or will not be the survivor, or (b) a
tender offer, exchange offer, or other transaction or involving the acquisition
of a majority of that company's common stock or assets.
"Initial Exchange Value" shall mean the closing price per share of PFGI
Common Shares as of the same date the Initial Index Price is determined.
"Initial Index Price" shall mean the weighted average of the closing
prices per share of each of the common stocks of the Index Companies as reported
on the NYSE, NASDAQ or AMEX on August 13, 1999, subject to adjustment as
provided in this Agreement, with the weighting percentages as set forth on
Exhibit 7.9.
"IRS" shall mean the United States Internal Revenue Service.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on the financial condition, the results of operations,
the business or assets of such Person.
"Maximum Exchange Value" shall mean a value fixed for setting the
maximum Common Exchange Value equal to Forty-Four and 50/100 Dollars ($44.50)
per PFGI Common Share.
"Merger Consideration" shall mean the Per Share Consideration and cash
to be payable in exchange for any fractional share of PFGI Common Shares which
would otherwise be distributable to a holder of Outstanding Fidelity Shares as
provided in Section 1.6(b) of this Agreement.
"Mergers" shall mean the Holding Company Merger and the Subsidiary
Merger.
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"Minimum Exchange Value" shall mean a value fixed for setting the
minimum Common Exchange Value equal to Forty Dollars ($40.00) per PFGI Common
Share.
"NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotation System National Market.
"NYSE" shall mean the New York Stock Exchange.
"OTS" shall mean the Office of Thrift Supervision of the U.S.
Department of the Treasury and its predecessor, the Federal Home Loan Bank
Board, or any successor thereto.
"Outstanding Centennial Shares" shall mean, as of any given date, the
shares of common stock of Centennial issued and outstanding.
"Outstanding Fidelity Shares" shall mean, as of any given date, the
shares of common stock of Fidelity issued and outstanding.
"Per Share Consideration" shall mean the number of PFGI Common Shares
issuable with respect to each of the Outstanding Fidelity Shares, rounded to
four decimal places, determined by dividing Twenty-One and 00/100 Dollars
($21.00) by the Common Exchange Value. If the Common Exchange Value is equal to
the Minimum Exchange Value, the Per Share Consideration shall be .5250 PFGI
Common Shares and if the Common Exchange Value is equal to the Maximum Exchange
Value, the Per Share Consideration shall be .4719 PFGI Common Shares.
"Person" means any individual, bank, corporation, limited liability
company, partnership, association, joint-stock company, business trust or
unincorporated organization.
"PFGI Common Shares" shall mean shares of the common stock of PFGI, no
par value.
"Registration Statement" shall mean a registration statement on Form
S-4 relating to the PFGI Common Shares to be issued to the shareholders of
Fidelity in connection with the Holding Company Merger.
"Regulatory Agency" shall mean any federal or state agency engaged in
the insurance of bank or savings and loan deposits or charged with the
supervision or regulation of banks or bank holding companies, savings banks or
savings bank holding companies, savings and loans or savings and loan holding
companies, mortgage brokerage companies, or insurance agencies, or any court,
administrative agency or commission or other governmental agency, authority or
instrumentality having supervisory or regulatory authority with respect to any
of PFGI, Provident Bank, Fidelity or its Subsidiaries.
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"SEC" means the United States Securities and Exchange Commission.
"SGFSC" shall mean Spring Garden Financial Service Corp., an Ohio
corporation and a wholly-owned Subsidiary of Fidelity.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Stock Option Agreement" shall mean the Stock Option Agreement between
PFGI and Fidelity entered into in accordance with Section 8.20 hereof.
"Subsidiaries" shall mean, in reference to any party, any bank,
corporation, partnership, limited liability company, or other organization,
whether incorporated or unincorporated, that is consolidated with such party for
financial reporting purposes.
"Tax Return" shall mean any return, declaration, estimate, statement or
report, information return or other document (including any related or
supporting information) with respect to Taxes.
"Taxes" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or
undisputed.
Section 1.2 Merger Transactions. Pursuant to the terms and provisions
set forth herein, the Ohio General Corporation Law (the "OGCL"), and other
applicable federal and state laws and regulations, Fidelity shall merge with and
into PFGI and Centennial shall merge with and into Provident Bank. The
Subsidiary Merger shall occur following the Holding Company Merger.
Section 1.3 Merging Corporations. Fidelity shall be the merging
corporation under the Holding Company Merger and its corporate identity and
existence, separate and apart from PFGI, shall cease upon consummation of the
Holding Company Merger. Centennial shall be the merging corporation under the
Subsidiary Merger and its corporate identity and existence, separate and apart
from Provident Bank, shall cease upon consummation of the Subsidiary Merger.
Section 1.4 Surviving Corporations. PFGI shall be the surviving
corporation in the Holding Company Merger. The Holding Company Merger shall not
cause, result in or require any changes in the Articles of Incorporation or Code
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of Regulations of PFGI. Provident Bank shall be the surviving corporation in the
Subsidiary Merger. The place in Ohio where the surviving corporation's principal
place of business is to be located is One East Fourth Street, Cincinnati, Ohio,
and the names and addresses of the directors of Provident Bank are set forth on
Exhibit 1.4. The Subsidiary Merger shall not cause, result in or require any
changes in the Articles of Incorporation or Code of Regulations of Provident
Bank. Neither of the Mergers shall result in any change to the composition of
the Boards of Directors of PFGI or Provident Bank or in the corporate officers
appointed to serve PFGI or Provident Bank.
Section 1.5 Effect of Mergers. The Mergers shall have all of the
effects provided for in this Agreement, the OGCL, and under other applicable
state and federal law. Without limiting the generality of the foregoing, at the
Effective Time (as hereinafter defined): the separate existence of Fidelity and
Centennial shall cease; PFGI shall possess all assets and property of every
description, and every interest therein, wherever located, and the rights,
privileges, immunities, powers, franchises and authority, of a public as well as
of a private nature, of both Fidelity and PFGI; subject to the provisions of
Ohio Revised Code Section 1115.11(H), Provident Bank shall possess all assets
and property of every description, and every interest therein, wherever located,
and the rights, privileges, immunities, powers, franchises and authority, of a
public as well as of a private nature, of both Centennial and Provident Bank;
all of the separate rights and obligations of both Fidelity and PFGI shall
become the rights and obligations of PFGI after the Effective Time; and all of
the separate rights and obligations of both Provident Bank and Centennial shall
become the rights and obligations of Provident Bank after the Effective Time,
without impairing the rights of any of the constituent corporations to the
Mergers. As soon as practicable after the Effective Time, Fidelity Acquisition
shall be dissolved and its separate existence shall cease (or, at the election
of PFGI, Fidelity Acquisition shall be merged with and into PFGI or Provident
Bank).
Section 1.6 Conversion of Stock.
(a) At the Effective Time, by virtue of the Holding Company Merger and
without any action on the part of any of the parties to this Agreement or their
respective shareholders, each of the Outstanding Fidelity Shares shall be
converted into and become the right to receive, the Per Share Consideration
subject only to adjustment as set forth in Section 1.7 hereof. At the Effective
Time, by virtue of the Subsidiary Merger and without any action on the part of
any of the parties to this Agreement or their respective shareholders, each of
the Outstanding Centennial Shares shall be canceled and the Centennial Common
Shares shall be extinguished.
(b) No fractional PFGI Common Shares shall be issued. PFGI shall, in
lieu of issuing fractional shares to which the holder of Outstanding Fidelity
Shares would otherwise be entitled (after taking into account all Outstanding
Fidelity Shares held by such holder), pay such holder an amount in cash equal to
the product of such fractional share interest and the Common Exchange Value.
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(c) At the Effective Time, all of the Fidelity Common Shares, by virtue
of the Holding Company Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of any certificate or certificates which
immediately prior to the Effective Time represented Outstanding Fidelity Shares
(the "Certificates") shall thereafter cease to have any rights with respect to
such shares, except the right of such holders to receive, without interest, the
Per Share Consideration upon the surrender of such Certificate or Certificates
in accordance with Section 1.9 hereof.
(d) At the Effective Time, each Fidelity Common Share, if any, held in
the treasury of Fidelity immediately prior to the Effective Time shall be
canceled and not converted into PFGI Common Shares.
(e) At the Effective Time, each option granted by Fidelity to purchase
shares of Fidelity Common Shares which is outstanding and unexercised
immediately prior thereto shall cease to represent a right to acquire shares of
Fidelity Common Shares and shall be converted automatically into an option to
purchase PFGI Common Shares. The number of PFGI Common Shares to be issued upon
the exercise of such option shall be equal to the number of Fidelity Common
Shares subject to such option immediately prior to the Effective Time multiplied
by the Option Exchange Ratio, with the product rounded down to the next whole
share. The "Option Exchange Ratio" shall equal Twenty-One and 00/100 Dollars
($21.00) divided by the Common Exchange Value. The per share exercise price of
such option shall be adjusted by dividing the exercise price per share of
Fidelity Common Shares by the Option Exchange Ratio, with the quotient rounded
up to the next whole cent.
References in any Fidelity Stock Option Plan to a Compensation
Committee or Stock Option Committee shall be deemed to refer to a similar
committee presently constituted, or which will be constituted, by the Board of
Directors of PFGI. Further, any "incentive stock option" for federal income tax
purposes shall be adjusted as required by Section 424 of the Code so as not to
constitute a modification, extension or renewal of the option within the meaning
of Code Section 424(h). Otherwise the duration and other terms of the new option
shall be the same as the original option except that all references to Fidelity
or its Subsidiaries (or their corporate predecessors) shall be deemed to be
references to PFGI. Nothing in this Agreement shall be deemed to limit or
restrict the ability of any holder of options to acquire Fidelity Common Shares
to exercise such options at any time prior to the Effective Time in accordance
with, and to the extent permissible under, the agreements and plans governing
the issuance of such options.
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(f) PFGI Common Shares to be issued in exchange for options for
Fidelity Common Shares shall be covered by an effective registration statement
of PFGI and PFGI shall maintain the effectiveness of such registration statement
until all such options have been exercised. As and when PFGI Common Shares are
issued upon the exercise of any such options for Fidelity Common Shares, such
PFGI Common Shares shall be duly authorized, validly issued, fully paid and
nonassessable and not subject to, or issued in violation of, any preemptive
rights. PFGI shall reserve sufficient PFGI Common Shares for issuance with
respect to such options. PFGI shall take any reasonable action required to be
taken under applicable state Blue Sky or securities laws in connection with the
issuance of such shares. After the Effective Time, each option for PFGI Common
Shares shall be subject to adjustment in the manner provided in the existing
agreement or plan pursuant to which such option was issued (or, if no provision
is made for adjustment, in the manner provided in Section 1.7) to reflect any
recapitalization, splitup, exchange of shares, stock dividend, or similar
transaction.
(g) All of the capital stock of PFGI and Provident Bank, and any
options, warrants or other rights to receive the stock or securities of PFGI and
Provident Bank, outstanding immediately prior to the Effective Time shall remain
outstanding and unaffected by the Mergers.
Section 1.7 Share Adjustments.
(a) If, after the commencement of the period during which the Common
Exchange Value is determined and before the Effective Time, the number of PFGI
Common Shares shall be changed (a "Share Adjustment") by reason of
recapitalization, splitup, exchange of shares or readjustment, or stock
dividend, then the number of PFGI Common Shares into which each Fidelity Common
Share shall be converted pursuant to Section 1.6(a) hereof shall be
appropriately and proportionately adjusted so that each shareholder of Fidelity
shall be entitled to receive such number of PFGI Common Shares as such
shareholder would have received had such Share Adjustment immediately followed
the Effective Time.
(b) At the Effective Time, the stock transfer agent for Fidelity shall
deliver to PFGI a written certification of the number of Outstanding Fidelity
Shares as of the Effective Time and a copy of either the stock transfer ledger
of Fidelity or a complete list of shareholders. If the number of Fidelity Common
Shares certified as outstanding by the stock transfer agent plus the number of
Fidelity Common Shares issuable upon the exercise of options unexercised as of
the Effective Time shall be greater than 9,416,611, then the Per Share
Consideration shall be appropriately and proportionately decreased to take into
account such additional issued and outstanding, and issuable, pursuant to
outstanding options, Fidelity Common Shares.
Section 1.8 Closing. The closing of the Mergers (the "Closing") shall
take place at the offices of PFGI at such time as the parties may reasonably
agree on the Closing Date described in Section 1.10 hereof.
Section 1.9 Exchange Procedures; Surrender of Certificates.
(a) Provident Bank shall act as Exchange Agent in the Holding Company
Merger (the "Exchange Agent").
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(b) As soon as reasonably practicable after the Effective Time, not
later than three (3) business days after the Effective Time, the Exchange Agent
shall mail to each record holder of Outstanding Fidelity Shares a letter of
transmittal (the "Merger Letter of Transmittal") and instructions for use in
effecting the surrender of Certificates in exchange for the Merger
Consideration. The Merger Letter of Transmittal shall specify that delivery of
share Certificates shall be effected, and risk of loss and title to such
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent and shall be in such form and have such other provisions as PFGI
may reasonably specify. Upon surrender to the Exchange Agent of a Certificate,
together with a Merger Letter of Transmittal duly executed and any other
required documents, the holder of such Certificate shall be entitled to receive
in exchange therefor solely the Per Share Consideration, plus dividends paid
with respect to such consideration having a record date after the Effective Time
as provided in Section 1.9(c) hereof. No interest on any consideration payable
upon the surrender of the Certificates shall be paid or accrued for the benefit
of holders of Certificates. If any of the Merger Consideration is to be issued
to a person other than a person in whose name a surrendered Certificate is
registered, it shall be a condition of issuance that the surrendered Certificate
shall be properly endorsed or otherwise in proper form for transfer and that the
person requesting such issuance shall pay to the Exchange Agent any required
transfer taxes or other taxes or establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.
(c) No dividends that are otherwise payable on PFGI Common Shares
constituting the Merger Consideration shall be paid to persons entitled to
receive such PFGI Common Shares until such persons surrender their Certificates.
Upon such surrender, there shall be paid to the person in whose name the PFGI
Common Shares shall be issued any dividends which shall have become payable with
respect to such PFGI Common Shares (without interest and less the amount of
taxes, if any, which may have been imposed thereon), between the Effective Time
and the time of such surrender.
(d) If any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and, if required by PFGI in its sole discretion,
the posting by such person of a bond in such amount as PFGI may determine is
reasonably necessary as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent shall issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration deliverable
in respect thereof.
(e) At or after the Effective Time there shall be no transfers on the
stock transfer books of Fidelity of any Fidelity Common Shares. If, after the
Effective Time, Certificates are presented for transfer, they shall be canceled
and exchanged for the Merger Consideration as provided in, and subject to the
provisions of, this Section 1.9.
Section 1.10 Closing Date and Effective Time. At PFGI's election, the
Closing shall take place on the Friday following the last business day of the
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month following the month in which each of the conditions in Sections 6.1(d) and
6.2(d) hereof is satisfied or waived by the appropriate party or on such other
date after such satisfaction or waiver as Fidelity and PFGI may agree (the
"Closing Date"). The parties shall use their best efforts to effectuate a
Closing Date of March 3, 2000, but in any event the Closing Date shall not occur
later than June 30, 2000. Each of the Mergers shall be effective only after
receipt of any required approval from Regulatory Agencies and then upon the
completion of filing of all required certificates of merger with the Secretary
of State of the State of Ohio (the "Effective Time"), which the parties shall
use their best efforts to cause to occur as of the Closing Date.
Section 1.11 Closing Deliveries.
(a) At the Closing, Fidelity, Fidelity Acquisition and Centennial shall
deliver to PFGI and Provident Bank:
(i) certified copies of the Articles of Incorporation, Code of
Regulations or Bylaws and minutes of Fidelity and similar charter
documents and minutes of each Fidelity Subsidiary;
(ii) certificates signed by appropriate officers of Fidelity,
Fidelity Acquisition and Centennial stating that, to their best
knowledge and belief, (A) each of the representations and warranties
contained in Article 2 hereof is true and correct at the time of the
Closing with the same force and effect as if such representations and
warranties had been made at Closing (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 only as of such date), and
(B) all of the conditions set forth in Sections 6.1(b) and 6.1(d)
hereof have been satisfied or waived as provided therein;
(iii) certified copies of the resolutions of the Boards of
Directors of Fidelity, Fidelity Acquisition and Centennial and their
shareholders as required for valid approval of the execution of this
Agreement and the consummation of the Mergers and the other
transactions contemplated by this Agreement;
(iv) certificates of the Secretary of State of the State of
Ohio, dated not more than 30 days prior to Closing, stating that
Fidelity and its Subsidiaries are in good standing;
(v) certificates of merger executed by Fidelity and Centennial
in proper form for filing with the Secretary of State of the State of
Ohio, the OTS (if required) and with the Ohio Superintendent of
Financial Institutions in order to cause the Mergers to become
effective; and
(vi) a legal opinion from counsel for Fidelity and its
Subsidiaries, in form reasonably acceptable to counsel to PFGI and
Provident Bank, opining with respect to the matters listed on Exhibit
1.11(a) hereto.
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(b) At the Closing, PFGI and Provident Bank shall deliver to Fidelity,
Fidelity Acquisition and Centennial:
(i) certified copies of the Articles of Incorporation
and Code of Regulations of PFGI and similar charter documents of
Provident Bank;
(ii) certificates signed by appropriate officers of PFGI and
Provident Bank stating that, to their best knowledge and belief, (A)
each of the representations and warranties contained in Article 3
hereof is true and correct at the time of the Closing with the same
force and effect as if such representations and warranties had been
made at Closing (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 only as of such date), and (B) all of the
conditions set forth in Section 6.2(b) and 6.2(d) hereof (but excluding
the approval of Fidelity's shareholders) have been satisfied or waived
as provided therein;
(iii) certified copies of the resolutions of the Boards of
Directors of PFGI and Provident Bank and their respective shareholders
as required for valid approval of the execution of this Agreement and
the consummation of the transactions contemplated by this Agreement;
(iv) a legal opinion from counsel for PFGI and Provident Bank,
in form reasonable acceptable to counsel for Fidelity and its
Subsidiaries, opining with respect to the matters listed on Exhibit
1.11(b) hereto;
(v) certificates of the Secretary of State of the State of
Ohio, dated not more than 30 days prior to Closing, stating that PFGI
and Provident Bank are in good standing;
(vi) Certificates of merger executed by PFGI and Provident
Bank, reflecting the terms and) provisions hereof and in proper form
for filing with the Secretary of State of the State of Ohio, the OTS
(if required) and with the Ohio Superintendent of Financial
Institutions, in order to cause the Mergers to become effective; and
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(vii) evidence that PFGI shall have delivered to the Exchange
Agent so much of the Aggregate Merger Consideration as is required to
effect the delivery of the Per Share Consideration to the holders of
Outstanding Fidelity Shares as contemplated by Section 1.9 hereof and a
statement, in which Fidelity has concurred, showing the manner in which
the Aggregate Merger Consideration and Common Exchange Value have been
calculated.
Section 1.12 Dissenter's Rights. Fidelity agrees to either (i) furnish
PFGI with an opinion of its legal counsel to the effect that Fidelity
shareholders are not entitled to dissenter's rights under the OGCL or pursuant
to any provision in the Articles of Incorporation of Fidelity, or (ii) include
in the notice of meeting to approve the Holding Company Merger, a statement
sufficient under Ohio law to inform Fidelity's shareholders of any entitlement
to dissenter's rights pursuant to the OGCL Sections 1701.84 and 1701.85. If
there are any Outstanding Fidelity Shares held by shareholders entitled to
assert, and who have perfected their rights to assert, their dissenter's rights
under OGCL Sections 1701.84 and 1701.85 as to their shares, such holders shall
cease at the Effective Time to have any of the rights of a shareholder in
respect of their Outstanding Fidelity Shares, such shares shall not be converted
into or be exchangeable for the right to receive the Merger Consideration
(unless and until such holders shall have failed to perfect or shall have
effectively withdrawn or lost their appraisal rights under the OGCL), and shall
only have the right to be paid the fair cash value of such shares under OGCL
Section 1701.85 and such other rights as may be granted by the OGCL. If any such
holder shall have failed to perfect or shall have effectively withdrawn or lost
such dissenter's rights, such holder's Fidelity Common Shares shall thereupon be
converted into and become exchangeable for the right to receive, as of the
Effective Time, the Merger Consideration, as applicable, without interest.
Fidelity shall give PFGI (i) prompt notice of any written demands for
payment for any Fidelity Common Shares under OGCL Sections 1701.84 and 1701.85,
attempted withdrawals of such demands, and any other instruments served pursuant
to the OGCL and received by Fidelity relating to dissenter's rights, and (ii)
the opportunity to participate in all negotiations and proceedings with respect
to the exercise of dissenter's rights under the OGCL. Fidelity shall not, except
with the prior written consent of PFGI, voluntarily make any payment with
respect to any demands for payment for Fidelity Common Shares under the OGCL,
offer to settle or settle any such demands or approve any withdrawal of any such
demands.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF FIDELITY, FIDELITY ACQUISITION AND CENTENNIAL
Fidelity, Fidelity Acquisition and Centennial hereby make the following
representations and warranties:
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Section 2.1 Organization and Capital Stock.
(a) Fidelity is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio and has the corporate power to
own all of its property and assets, to incur all of its liabilities and to carry
on its business as now being conducted.
(b) Fidelity Acquisition is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio and has the
corporate power to own all of its property and assets, to incur all of its
liabilities and to carry on its business as now being conducted.
(c) Centennial is a savings bank duly organized, validly existing and
in good standing under Chapter 1161 of the Ohio Revised Code and has the
corporate power to own all of its property and assets, to incur all of its
liabilities and to carry on its business as now being conducted.
(d) CSLSC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio and has the corporate power to own
all of its property and assets, to incur all of its liabilities and to carry on
its business as now being conducted.
(e) SGFSC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio and has the corporate power to own
all of its property and assets, to incur all of its liabilities and to carry on
its business as now being conducted.
(f) True, complete and correct copies of the articles of incorporation,
code of regulations, bylaws, constitutions and similar charter documents of
Fidelity and its Subsidiaries, as amended and as in effect on the date of this
Agreement, have been previously delivered to PFGI by Fidelity.
(g) The authorized capital stock of Fidelity consists of (i) 15,000,000
common shares, par value $.10 each, of which as of the date hereof, 9,125,406
are issued and outstanding and 291,205 are subject to outstanding stock option
agreements and (ii) 5,000,000 serial preferred, par value $.10 each, of which as
of the date hereof, none are issued and outstanding. All of the Outstanding
Fidelity Shares are duly and validly issued and outstanding and are fully paid
and non-assessable and free of preemptive rights. None of the Outstanding
Fidelity Shares has been issued in violation of any preemptive rights of the
current or past shareholders of Fidelity. To the best knowledge of Fidelity,
each Certificate issued by Fidelity in replacement of any Certificate
theretofore issued by it which was claimed by the record holder thereof to have
been lost, stolen or destroyed was issued by Fidelity only upon receipt of an
affidavit of lost stock certificate and indemnity agreement of such shareholder
indemnifying Fidelity against any claim that may be made against it on account
of the alleged loss, theft or destruction of any such Certificate or the
issuance of such replacement Certificate.
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(h) The authorized capital stock of Fidelity Acquisition consists of
1,000 common shares, par value $.10 each, all of which as of the date hereof are
wholly owned by Fidelity, free and clear of all liens, encumbrances, rights of
first refusal, options or other restrictions of any nature whatsoever. Fidelity
Acquisition has no assets or liabilities other than the common shares of
Centennial.
(i) The authorized capital stock of Centennial consists of 3,000,000
common shares, par value $.01 each, all of the issued and outstanding shares of
which as of the date hereof are wholly owned by Fidelity Acquisition free and
clear of all liens, encumbrances, rights of first refusal, options or other
restrictions of any nature whatsoever.
(j) The authorized capital stock of CSLSC consists of 500 common
shares, no par value, all of the issued and outstanding shares of which as of
the date hereof are wholly owned by Centennial, free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions of any
nature whatsoever.
(k) The authorized capital stock of SGFSC consists of 1,000 common
shares, no par value, all of the issued and outstanding shares of which as of
the date hereof are wholly owned by Fidelity, free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions of any
nature whatsoever.
(l) Except as described in this Section, (i) there are no shares of
capital stock or other equity securities of Fidelity or its Subsidiaries
outstanding and no outstanding options, warrants, rights to subscribe for,
calls, or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, any capital stock of Fidelity or
any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which any of Fidelity or any of its Subsidiaries is or may be
obligated to issue additional shares of its capital stock or options, warrants
or rights to purchase or acquire any additional shares of its capital stock, and
(ii) there are no outstanding stock appreciation, phantom stock or similar
rights.
(m) Except as set forth in Section 2.1(m) of the Disclosure Schedule,
Fidelity and its Subsidiaries are not a party to any partnership or joint
venture arrangement and do not own an equity interest in any other business or
enterprise.
(n) Except for minutes of meetings held after June 30, 1999, none of
which shall reflect any corporate action taken inconsistent with or in
contravention of this Agreement, the minute books of Fidelity and each of its
Subsidiaries accurately reflect all corporate actions held or taken by their
respective shareholders and Boards of Directors (including board committees)
since each was originally organized.
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Section 2.2 Authorization.
(a) The respective Boards of Directors of Fidelity, Fidelity
Acquisition and Centennial have, by all appropriate action, approved this
Agreement and the Mergers and have authorized the due execution, delivery and
performance hereof by their respective officers. Fidelity's Board of Directors
has directed that this Agreement and the transactions contemplated by this
Agreement, including the Holding Company Merger, be submitted to the
shareholders of Fidelity for approval at a specially-called meeting of the
Fidelity shareholders (as provided in Section 4.3 hereof). Fidelity, in its
capacity as the sole shareholder of Fidelity Acquisition, has duly adopted and
approved this Agreement and the Subsidiary Merger. Fidelity Acquisition, in its
capacity as the sole shareholder of Centennial, has duly adopted and approved
this Agreement and the Subsidiary Merger Except for the adoption and approval of
this Agreement by the affirmative vote of the holders of a majority of the
Outstanding Fidelity Shares, no other corporate acts or proceedings are required
to be taken by Fidelity or its Subsidiaries to authorize the execution, delivery
and performance of this Agreement and to consummate the Mergers and the other
transactions contemplated by this Agreement.
(b) This Agreement has been duly and validly executed and delivered by
Fidelity, Fidelity Acquisition and Centennial and constitutes a legal, valid and
binding obligation of Fidelity, Fidelity Acquisition and Centennial, enforceable
against them in accordance with its terms, except to the extent that (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance of other laws relating to or from time to time
affecting the enforcement of creditors' rights generally or the rights of
creditors of savings and loan holding companies or savings banks, the accounts
of whose subsidiaries are insured by the Federal Deposit Insurance Corporation;
and (ii) the availability of certain remedies may be precluded by general
principles of equity.
(c) Neither the execution, delivery and performance by Fidelity,
Fidelity Acquisition and Centennial of this Agreement, nor the consummation by
them of the transactions contemplated hereby, nor compliance by them with any of
the provisions hereof, will violate, conflict with or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien upon any of the
properties or assets of Fidelity or its Subsidiaries under the terms, conditions
or provisions of (A) their respective articles of incorporation, charter,
constitution, by-laws or code of regulations, or (B) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Fidelity or its Subsidiaries is a party or by which they or
their respective properties or assets may be bound, or to which such parties may
be subject, or violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Fidelity or its Subsidiaries or any of
their respective properties or assets, or any license or permit held by Fidelity
or its Subsidiaries.
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(d) Section 2.2(d) of the Disclosure Schedule details all of the
notices, consents, authorizations, approvals or exemptions required of Fidelity
or any of its Subsidiaries in connection with the execution and delivery of this
Agreement and the consummation of Mergers and other transactions contemplated by
this Agreement, other than (i) the approval of the shareholders of Fidelity at
the Shareholders' Meeting, (ii) the actions required to be taken by any party to
this Agreement to comply with the provisions of the OGCL, Ohio laws relating to
banks and savings banks, the Securities Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the "Exchange Act"),
the securities or blue sky laws of the various states or filings, the Bank
Holding Company Act of 1956, as amended (the "BHCA"), the Bank Merger Act, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), and the
rules and regulations of the Regulatory Agencies having jurisdiction over the
parties, including without limitation the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), the OTS, the Ohio Division of
Financial Institutions, and the U.S. Department of Justice (all such regulatory
actions being referred to as the "Required Regulatory Actions").
Section 2.3 Subsidiaries. Except for Centennial, Fidelity
Acquisition, SGFSC and CSLSC, Fidelity does not have any other direct or
indirect Subsidiaries.
Section 2.4 No Defaults. Fidelity and its Subsidiaries are neither in
default under nor in violation of any provision of their articles of
incorporation or charter instruments, as the case may be, bylaws, regulations,
constitution, or any promissory note, indenture or any evidence of indebtedness
or security therefor, lease, contract, insurance policy, purchase or other
commitment or any other agreement or arrangement (however evidenced), whether
written or oral, and there has not occurred any event that, with the lapse of
time or giving of notice or both, would constitute such a default or violation,
which default could reasonably be expected to cause a Material Adverse Effect on
Fidelity or its Subsidiaries.
Section 2.5 Financial Information. The consolidated balance sheets of
Fidelity and its Subsidiaries as of December 31, 1998 and 1997, and related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended, together with the notes thereto, included in
Fidelity's Annual Report on Form 10-K for the year ended December 31, 1998,
together with the consolidated balance sheets of Glenway Financial Corporation
and its Subsidiaries as of June 30, 1998 and 1997, and related consolidated
statements of income, changes in shareholders' equity and cash flows for the
years then ended, together with the notes thereto, included in Glenway Financial
Corporation's Annual Report on Form 10-K for the year ended June 30, 1998, as
currently on file with the SEC, and the unaudited consolidated balance sheets of
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Fidelity and its Subsidiaries as of March 31, 1999, and the related unaudited
consolidated income statements and statements of changes in shareholders' equity
and cash flows for the quarters then ended included in Fidelity's Quarterly
Report on Form 10-Q for such quarter, as currently on file with the SEC, and the
periodic financial reports as filed with the applicable Regulatory Agencies
(together, the "Fidelity Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be disclosed therein and except for any regulatory
reporting differences required by the reports of Centennial) and fairly present
in all material respects the consolidated financial position and the
consolidated results of operations, changes in shareholders' equity and cash
flows of Fidelity and its consolidated Subsidiaries as of the dates and for the
periods indicated (subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which shall be material). The
books and records of Fidelity and its Subsidiaries have been, and are being,
maintained in accordance with generally accepted accounting principles and any
other applicable legal and accounting requirements and reflect only actual
transactions.
Section 2.6 Absence of Changes. Since March 31, 1999, there has been no
material adverse change in the financial condition, the results of operations or
the business of Fidelity nor its Subsidiaries. Since July 15, 1999, Fidelity has
not declared or paid any dividend or made any other distribution to its
shareholders, whether in cash, stock or other property.
Section 2.7 Litigation and Related Matters. Except as set forth in
Section 2.7 of the Disclosure Schedule, there is no litigation, claim or other
proceeding pending or, to the knowledge of Fidelity or its Subsidiaries,
threatened, against Fidelity or its Subsidiaries, or of which the property of
Fidelity or its Subsidiaries is or would be subject, and there is no injunction,
order, judgment, decree or regulatory restriction imposed upon Fidelity or its
Subsidiaries or the assets of Fidelity or its Subsidiaries which would have a
Material Adverse Effect on Fidelity or its Subsidiaries. For purposes of this
Section only, the term "Material Adverse Effect" shall mean any litigation,
claim or other proceeding, pending or threatened, in which an adverse outcome
would result in a liability to Fidelity or its Subsidiaries in excess of
Twenty-Five Thousand Dollars ($25,000.00).
Section 2.8 Regulatory Matters. Fidelity is a registered, unitary
savings and loan holding company under Section 10 of the Home Owners Loan Act,
as amended, and Centennial is an Ohio-chartered savings bank subject to
regulation, examination and supervision by the Ohio Division of Financial
Institutions and the FDIC. Centennial is a member of the Federal Home Loan Bank
System. Centennial is an insured institution (within the meaning of the Federal
Deposit Insurance Act) and the deposits of Centennial are insured by the FDIC up
to the FDIC limits. Neither Fidelity nor Centennial is subject or is party to,
or has received any notice or advice that it may become subject or party to, any
investigation with respect to, any cease-and-desist order, agreement, consent
agreement, memorandum of understanding or other regulatory enforcement action,
proceeding or order with or by, or is a party to any commitment letter or
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similar undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board resolutions
at the request of, any Regulatory Agency that currently restricts the conduct of
its business or that currently affects its capital adequacy, its credit
policies, its management or its business (each, a "Regulatory Agreement"), nor
has Fidelity or its Subsidiaries been advised by any Regulatory Agency that it
is considering issuing or requesting any such Regulatory Agreement. Except as
set forth in Section 2.8 of the Disclosure Schedule, there is no unresolved
violation, criticism or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations of Fidelity or Centennial, or
any corporations or financial institutions merged with and into Fidelity or its
Subsidiaries.
Section 2.9 Reports. Fidelity and its Subsidiaries have filed all
reports and statements, together with any amendments required to be made with
respect thereto, if any, that they have been required to file with (i) the
Federal Reserve Board, (ii) the FDIC, (iii) the Ohio Division of Financial
Institutions, (iv) the SEC and any state securities authorities, (v) the OTS, or
(vi) any other Regulatory Agency with jurisdiction over Fidelity or its
Subsidiaries, and have paid all fees and assessments due and payable in
connection therewith. As of their respective dates, each of such reports and
documents, as amended, including any financial statements, exhibits and
schedules thereto, complied with the relevant statutes, rules and regulations
enforced or promulgated by the regulatory authority with which they were filed,
and did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 2.10 Non-Banking Activities of Fidelity and Subsidiaries.
Fidelity is not engaged in any activity, either directly or indirectly through
one or more of its Subsidiaries or other equity investments, which is not
permitted of a savings and loan holding company or of the subsidiary or other
enterprises through which such activity is conducted. Centennial is not engaged
in any activity, either directly or indirectly through one or more of its
Subsidiaries or other equity investments, which is not permitted of an Ohio
savings bank.
Section 2.11 Fiduciary Responsibilities. During the applicable statute
of limitations period, (i) Fidelity and its Subsidiaries have properly
administered all accounts (if any) for which it acts as a fiduciary or agent,
including but not limited to accounts for which it serves as a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents and applicable state and
federal law and regulation and common law, and (ii) neither Fidelity, its
Subsidiaries, nor any director, officer or employee of Fidelity or any of its
Subsidiaries acting on behalf of Fidelity or its Subsidiaries, has committed any
breach of trust with respect to any such fiduciary or agency account, and the
accountings for each such fiduciary or agency account are true and correct and
accurately reflect the assets of such fiduciary or agency account. There is no
investigation or inquiry by any Regulatory Agency pending, or to the knowledge
of Fidelity, threatened, against or affecting Fidelity or its Subsidiaries
relating to the compliance by Fidelity or its Subsidiaries with sound fiduciary
principles and applicable regulations.
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Section 2.12 Fair Lending; Community Reinvestment Act. With the
exception of routine investigation of consumer complaints, neither Fidelity,
Centennial nor any other Subsidiary of Fidelity has been advised by any
Regulatory Agency that it is or may be in violation of the Equal Credit
Opportunity Act or the Fair Housing Act or any similar federal or state statute.
Centennial received a Community Reinvestment Act ("CRA") rating of
"satisfactory" in its most recent CRA examination.
Section 2.13 Employment Agreements. Section 2.13 of the Disclosure
Schedule lists each agreement, arrangement, commitment or contract (whether
written or oral) for the employment, retention or engagement, or with respect to
the severance, of any present or former officer, director, employee, agent,
consultant or other person or entity to which Fidelity or its Subsidiaries is a
party to or bound by and which, by its terms, is not terminable by Fidelity or
its Subsidiaries on thirty (30) days written notice or less without the payment
of any amount by reason of such termination. Copies of each written (and
summaries of each oral) agreement, arrangement, commitment or contract listed in
Section 2.13 of the Disclosure Schedule have been previously delivered to PFGI.
Section 2.14 Employee Matters and ERISA.
(a) Neither Fidelity nor any of its Subsidiaries has entered into any
collective bargaining agreement with any labor organization with respect to any
group of employees of Fidelity or its Subsidiaries and to the knowledge of
Fidelity there is no present effort nor existing proposal to attempt to unionize
any group of employees of Fidelity or its Subsidiaries.
(b) (i) Fidelity and its Subsidiaries are and have been in compliance
in all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment
discrimination and occupational safety and health requirements, and neither
Fidelity nor its Subsidiaries is engaged in any unfair labor practice, (ii)
there is no unfair labor practice complaint against Fidelity or its Subsidiaries
pending or, to the knowledge of Fidelity or its Subsidiaries, threatened before
the National Labor Relations Board, (iii) there is no labor dispute, strike,
slowdown or stoppage actually pending or, to the knowledge of Fidelity,
threatened against or directly affecting Fidelity or its Subsidiaries (iv)
neither Fidelity nor its Subsidiaries has experienced any work stoppage or other
labor difficulty during the past five (5) years, and (v) there are no EEOC or
similar agency complaints against Fidelity or its Subsidiaries pending, or to
the knowledge of Fidelity or its Subsidiaries, threatened.
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(c) Section 2.14(c) of the Disclosure Schedule lists each employee
benefit plan, as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and each nonqualified employee
benefit plan, deferred compensation, bonus, stock and incentive plan, and each
other employee benefit and fringe benefit program for the benefit of former or
current officers, directors or employees of Fidelity or its Subsidiaries (the
"Fidelity Employee Plans") which Fidelity or its Subsidiaries maintain,
contribute to or participate in or have any liability under (other than
incidental employee benefits as described by U.S. Department of Labor Regulation
2510.3-1(b) through (k)). No present or former employee of Fidelity or its
Subsidiaries has been charged with breaching, or has breached in any material
respect, a fiduciary duty under any of the Fidelity Employee Plans. Neither
Fidelity nor any of its Subsidiaries participates in, nor has it in the past
five (5) years participated in, nor has it any present or future obligation or
liability under, any multi-employer plan (as defined at Section 3(37) of ERISA).
Section 2.14(c) of the Disclosure Schedule lists all plans that provides health,
major medical, disability or life insurance benefits to former employees of
Fidelity or its Subsidiaries that any of them maintain, contribute to, or
participate in.
(d) Fidelity and its Subsidiaries do not maintain, and have not
maintained for the past five years, any Fidelity Employee Plans subject to Title
IV of ERISA or Section 412 of the Code. No claim is pending, and neither
Fidelity nor any of its Subsidiaries has received notice of any threatened or
imminent claim with respect to any Fidelity Employee Plan (other than a routine
claim for benefits for which plan administrative review procedures have not been
exhausted) for which Fidelity or its Subsidiaries would be liable after December
31, 1998, except as reflected on the Fidelity Financial Statements. All
insurance premiums have been paid in full, subject only to normal retrospective
adjustments in the ordinary course. Fidelity and its Subsidiaries do not have
any liabilities for excise taxes under Sections 4971, 4975, 4976, 4977, 4979 or
4980B of the Code or for a fine under Section 502 of ERISA with respect to any
Fidelity Employee Plan. All Fidelity Employee Plans have been operated,
administered and maintained substantially in accordance with the terms thereof
and in substantial compliance with the requirements of all applicable laws,
including, without limitation, ERISA and the Code. Any employee benefit plan (as
defined in Section 3(3) of ERISA) terminated by Fidelity or its Subsidiaries
prior to the date hereof was terminated in compliance with the requirements of
all applicable laws, including without limitation, ERISA and the Code.
(e) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement (either alone or
upon the occurrence of any additional acts or events) would (i) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director, officer or employee
of Fidelity or its Subsidiaries from Fidelity or its Subsidiaries under any
contractual arrangement (except for the Employment Agreements with the executive
officers of Fidelity described in Section 2.13 of the Disclosure Schedule),
Fidelity Employee Plan or otherwise, (ii) increase any benefits otherwise
payable under any Fidelity Employee Plan (other than expressly by the terms of
such Plan) or (iii) result in any acceleration of the time of payment or vesting
of any such benefits (other than expressly by the terms of such agreement or
Plan), including, without limitation, the vesting of any additional Fidelity
Common Shares in any participant in any Fidelity Employee Plan.
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(f) Copies of each Fidelity Employee Plan described in Section 2.14(c)
of the Disclosure Schedule, and all amendments or supplements thereto, have been
previously delivered to PFGI by Fidelity. Section 2.14(f) of the Disclosure
Schedule lists, for each Fidelity Employee Plan, to the extent applicable, all
of the following with respect thereto: (i) summary plan descriptions, (ii) lists
of all current participants and all participants with benefit entitlements,
(iii) contracts relating to plan documents, (iv) valuations for any plan as of
the most recent date, (vi) determination letters from the IRS, (vii) the most
recent annual report filed with the IRS, and (viii) trust agreements. Copies of
each of the documents described in the preceding sentence have been previously
delivered to PFGI by Fidelity.
Section 2.15 Title to Properties; Insurance. (i) Fidelity and its
Subsidiaries have good and marketable title, free and clear of all liens,
charges and encumbrances (except Taxes which are a lien but not yet payable and
liens, charges or encumbrances reflected in the Fidelity Financial Statements
and easements, rights-of-way, and other restrictions and imperfections not
material in nature, and rights of redemption under applicable law) to all of
their owned real properties, a list of which is included on Schedule 2.15 of the
Disclosure Schedule, (ii) all leasehold interests for real property and personal
property used by Fidelity and its Subsidiaries in their businesses are held
pursuant to lease agreements which are valid and enforceable in accordance with
their terms, a list of which is included on Schedule 2.15 of the Disclosure
Schedule and copies of which have been delivered to PFGI, (iii) all such
properties comply with all applicable private agreements, zoning requirements
and other governmental laws and regulations relating thereto and there are no
condemnation proceedings pending or, to our knowledge, threatened with respect
to such properties, (iv) all insurable properties owned or held by Fidelity or
its Subsidiaries are adequately insured by financially sound and reputable
insurers in such amounts and against fire and other risks insured against by
extended coverage and public liability insurance, as is customary with savings
banks and savings and loan holding companies of similar size, and there are
presently no claims pending under such policies of insurance and no notices have
been given by Fidelity or its Subsidiaries under such policies, and (v) all
tangible properties used in the businesses of Fidelity or its Subsidiaries are
in good condition, reasonable wear and tear excepted, and are useable in the
ordinary course of business consistent with past practices. Section 2.15 of the
Disclosure Schedule sets forth, for each policy of insurance maintained by
Fidelity and its Subsidiaries, the amount and type of insurance, the name of the
insurer and the amount of the annual premium.
Section 2.16 Intellectual Property Rights. Except as set forth in
Section 2.16 of the Disclosure Schedule, Fidelity and its Subsidiaries have
valid title or other ownership rights under royalty-free, perpetual and
exclusive licenses to all intangible personal or intellectual property necessary
to conduct the business and operations of Fidelity and its Subsidiaries as
presently conducted, including without limitation all franchises, trademarks,
tradenames, patents, software licenses and other rights necessary or appropriate
to conduct their respective businesses as currently conducted (none of which
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shall be adversely affected by the Mergers) and free and clear of any claim,
defense or right of any other person or entity except, in the case of licenses,
for the rights of the licensors pursuant to applicable license agreements, which
rights do not adversely interfere with the use of such property.
Section 2.17 Environmental Matters.
(a) As used herein, the term "Environmental Laws" shall mean all local,
state and federal environmental, health and safety laws and regulations and
common law standards in all jurisdictions in which Fidelity and its Subsidiaries
have done business or owned, leased or operated property, including, without
limitation, the Federal Resource Conservation and Recovery Act, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, the
Federal Clean Water Act, the Federal Clean Air Act, and the Federal Occupational
Safety and Health Act.
(b) Neither the conduct nor operation of Fidelity or any of its
Subsidiaries nor any condition of any property presently or previously owned,
leased or operated by any of them violates or violated or may violate,
Environmental Laws in a manner or to any extent exposing Fidelity or its
Subsidiaries to liability or potential liability and no condition has existed or
event has occurred with respect to any of them or any such property that, with
notice or the passage of time, or both, would constitute a violation of
Environmental Laws in a manner or to any extent that would obligate (or
potentially obligate) Fidelity or its Subsidiaries to remedy, stabilize,
neutralize or otherwise alter the environmental condition of any such property.
None of Fidelity or its Subsidiaries has received any notice from any person or
entity that Fidelity or its Subsidiaries or the operation or condition of any
property ever owned, leased or operated by any of them are or were in violation
of any Environmental Laws in a manner or to any extent exposing Fidelity or its
Subsidiaries to liability or potential liability or that any of them are
responsible (or potentially responsible) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on or beneath any such property and, to the knowledge of Fidelity
or its Subsidiaries and the operation and condition of any property ever owned,
leased or operated by any of them are not and were not in violation of any
Environmental Laws in a manner or to any extent exposing Fidelity or its
Subsidiaries to liability or potential liability and none of them are
responsible (or potentially responsible) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on or beneath any such property. No property presently owned,
leased or operated by Fidelity or its Subsidiaries contains any pollutants,
contaminants, or hazardous or toxic wastes, substances or materials at, on or
beneath any such property or otherwise violates any Environmental Laws.
(c) Neither Fidelity nor any of its Subsidiaries is aware of any
material violation of any Environmental Laws by their respective customers, or
any condition affecting any real estate owned by such customers and mortgaged to
Fidelity or its Subsidiaries which, if ever owned, leased or operated by
Fidelity or its Subsidiaries, as a result of foreclosure of such mortgage or
otherwise, could give rise to a liability under any Environmental Laws or
otherwise have a Material Adverse Effect on Fidelity or its Subsidiaries.
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Section 2.18 Year 2000 Compliance.
(a) Fidelity and its Subsidiaries have taken all actions reasonably
required to verify that all date-sensitive hardware, software, processes,
procedures, interfaces and similar operating systems used with the operations of
Fidelity and its Subsidiaries are designed and will perform such that they will
not abruptly end or provide invalid or incorrect results in manipulating date
data for years after 1999 and are otherwise compliant with standards recognized
to ensure year 2000 compatibility including, but not be limited to: date data
century recognition, calculations that accommodate same century and
multi-century formulas and date values, date data interface values that reflect
the century, and which include year 2000 leap year calculations ("Year 2000
Compliant").
(b) Fidelity and its Subsidiaries have used their best efforts to
confirm with all of their material vendors and customers that all date-sensitive
hardware, software, processes, procedures, interfaces and similar operating
systems used within their respective operations are Year 2000 Compliant.
(c) Centennial plans for being Year 2000 Compliant adhere to the terms,
deadlines, requirements, and conditions contained in the Year 2000 statements
and guidance issued by the Ohio Division of Financial Institutions and the
Federal Financial Institutions Examinations Council.
(d Centennial has not received, and does not expect to receive, a "Year
2000 Deficiency Notification Letter" (as such term is employed in the Federal
Reserve Board's Supervision and Regulation Letter No. SR 98-3(SUP), dated March
4, 1998), or any similar letter from any Regulatory Agency, and does not
anticipate any deficiency in its plans, or the implementation of its plans, for
addressing the issues set forth in the statements of the OTC and the Federal
Financial Institutions Examination Council concerning Year 2000 compliance.
Section 2.19 Certain Operational Matters.
(a Neither Fidelity nor any of its Subsidiaries is a party to any
agreement or subject to any arrangement which would prevent, limit or restrict
it from the sale, lease or other disposition of the its main offices or any
branch office.
(b Except as set forth in Section 2.19(b) of the Disclosure Schedule,
consummation of the Mergers shall not result in the termination or cancellation
before its stated expiration of any contract to which Fidelity or its
Subsidiaries is a party or cause them to incur any financial penalty, liquidated
damages, assessment or other costs solely by reason of the Mergers.
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Section 2.20 Material Contracts and Agreements. Section 2.20 of the
Disclosure Schedule contains a list of all contracts, agreements, indentures,
guaranties, arrangements or commitments, whether or not made in the ordinary
course of business, to which any of Fidelity or its Subsidiaries is a party or
by which any of them are bound and individually involving the payment or
commitment to pay of more than Fifty Thousand Dollars ($50,000.00) ("Material
Contracts"), other than (i) loan agreements or loan commitments with customers
made in the ordinary course of business of Centennial in an amount less than
$250,000.00 for any single family residential mortgage loan and less than
$500,000.00 for any commercial loan, and (ii) the contracts and benefit plans
listed in Sections 2.13 and 2.14 of the Disclosure Schedule. Except as described
in Section 2.20 of the Disclosure Schedule, neither Fidelity nor its
Subsidiaries is a party to, or is bound by, any other Material Contract.
Complete and accurate copies of each of the Material Contracts (other than loan
agreements and promissory notes) have been delivered to PFGI and Provident Bank.
Section 2.21 Interest Rate Risk Management Instruments. Neither
Fidelity nor any of its Subsidiaries is a party to any interest rate swaps,
caps, floors, option agreements, or any other interest rate risk management
agreements whatsoever.
Section 2.22 State Takeover Laws.
(a As a result of the required action of the Continuing Directors of
Fidelity (as defined in Fidelity's Articles of Incorporation), the provisions of
Paragraph A of Article XIV, and Paragraph A of Article XV of the Articles of
Incorporation of Fidelity shall be inapplicable to the Holding Company Merger
and the other transactions contemplated hereby.
(b The Board of Directors of Fidelity took action prior to the date of
this Agreement to approve PFGI as an "interested shareholder" for purposes of
Chapter 1704 of the Ohio Revised Code.
(c Provided that the representation of PFGI in Section 3.16 of this
Agreement is accurate, the transactions contemplated by this Agreement are not
subject to (or are considered exempt from) any applicable Ohio law which
purports to limit or restrict business combinations or the ability to acquire or
to vote shares. Fidelity is not aware of any further action required to be taken
by it or its Board of Directors to provide that this Agreement and the
transactions contemplated by this Agreement shall be exempt from the
requirements of any "moratorium," "control share," "fair price" or other
anti-takeover laws or regulations of any other state.
(d Contemporaneously with the execution of this Agreement, Fidelity has
delivered to PFGI a true and correct copy of resolutions adopted and actions
taken by the Board of Directors of Fidelity prior to the execution of this
Agreement and the Stock Option Agreement, consistent with the representations
and warranties made in this Section.
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Section 2.23 Tax Matters.
(a Except as set forth in Section 2.23 of the Disclosure Schedule,
Fidelity and its Subsidiaries have (i) duly and timely filed or will duly and
timely file (including applicable extensions granted without penalty) all Tax
Returns required to be filed at or prior to the Effective Time, and such Tax
Returns which have heretofore been filed are, and those to be hereinafter filed
will be, true, correct and complete and (ii) paid in full or, to the best
knowledge of Fidelity and its Subsidiaries, have made adequate provision for on
the financial statements of Fidelity and its Subsidiaries(in accordance with
generally accepted accounting principles) all Taxes and will pay in full or make
adequate provision for all Taxes. There are no liens for Taxes upon the assets
of either Fidelity or its Subsidiaries except for statutory liens for current
Taxes not yet due. Except as set forth in Section 2.23 of the Disclosure
Schedule, neither Fidelity nor its Subsidiaries has requested any extension of
time within which to file any Tax Returns in respect of any fiscal year which
have not since been filed and no request for waivers of the time to assess any
Taxes are pending or outstanding. The federal and state income Tax Returns of
Fidelity and its Subsidiaries have been audited by the Internal Revenue Service
or appropriate state tax authorities with respect to those periods and
jurisdictions set forth on Section 2.23 of the Disclosure Schedule. Neither
Fidelity nor any of its Subsidiaries has any liability for Taxes for any period
prior to the Effective Time (except as set forth in Section 2.23 of the
Disclosure Schedule) or any other deficiency for any Taxes. No deficiencies for
any Taxes, assessment or governmental charge have been proposed, asserted or
assessed in writing by any governmental or taxing authority against Fidelity or
its Subsidiaries which have not been settled or would not be covered by existing
reserves. Except as set forth in Schedule 2.23, neither Fidelity nor its
Subsidiaries (i) is a party to any agreement providing for the allocation or
sharing of Taxes; or (ii) is required to include in income any adjustment
pursuant to Section 481(a) of the Code, by reason of the voluntary change in
accounting method (nor has any taxing authority proposed in writing any such
adjustment or change of accounting method).
(b Any amount that will become receivable (whether in cash or property
or the vesting of property) as a result of any of the transactions contemplated
by this Agreement by any employee, officer or director of Fidelity or its
Subsidiaries who is a "Disqualified Individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any employment, severance
or termination agreement, other compensation arrangement or Fidelity Employee
Plan (as defined in Section 2.14(c) hereof) currently in effect will not be
characterized as an "excess parachute payment" (as such term is defined in
Section 1.280G-1) of the Code).
Section 2.24 Brokerage. There are no existing claims or agreements for
brokerage commissions, finders' fees, or similar compensation in connection with
the transactions contemplated by this Agreement payable by Fidelity or its
Subsidiaries, other than an agreement with Sandler O'Neill & Partners, L.P., a
copy of which has been previously delivered to PFGI, providing for the payment
of fees by Fidelity.
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Section 2.25 Compliance with Law. Fidelity and its Subsidiaries have
all licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their respective businesses and are
in compliance with all applicable laws and regulations.
Section 2.26 No Undisclosed Liabilities. Fidelity and its Subsidiaries
do not have any liability, including any liability for Taxes (and there is no
past or present fact, situation, circumstance, condition or other basis for any
present or future action, suit or proceeding, hearing, charge, complaint, claim
or demand against Fidelity or its Subsidiaries giving rise to any such
liability), except (i) for liabilities set forth in the Fidelity Financial
Statements, and (ii) normal fluctuation in the amount of the liabilities
referred to in clause (i) above occurring in the ordinary course of business of
Fidelity and its Subsidiaries since the date of the most recent balance sheet
included in the Fidelity Financial Statements.
Section 2.27 Pooling. Neither Fidelity nor any of its Subsidiaries has
taken or agreed to take any action that would prevent the business combination
to be effected by the Mergers from being accounted for as a "pooling of
interests" and Fidelity has no reason to believe that the Mergers will not
qualify for pooling of interests accounting.
Section 2.28 Statements True and Correct. None of the information
supplied or to be supplied by Fidelity and its Subsidiaries for inclusion in
this Agreement or in any documents filed with any Regulatory Agency in
connection with the transactions contemplated by this Agreement shall, at the
respective times such documents are filed, and at the time of the Fidelity
Shareholders' Meeting contain any untrue statement of a material fact, or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading. All documents that Fidelity and its Subsidiaries shall be
responsible for filing with any Regulatory Agency in connection with the
transactions contemplated by this Agreement shall comply as to form in all
material respects with the provisions of applicable law and the applicable rules
and regulations thereunder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PFGI AND PROVIDENT BANK
PFGI and Provident Bank hereby make the following representations and
warranties:
Section 3.1 Organization and Capital Stock.
(a PFGI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio and has the corporate power to own
all of its property and assets, to incur all of its liabilities and to carry on
its business as now being conducted.
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(b As of March 31, 1999, the authorized capital stock of PFGI consisted
of (i) 110,000,000 PFGI Common Shares, of which 43,383,979 shares were issued,
42,582,179 of which were outstanding and 801,800 were treasury stock, and (ii)
5,000,000 shares of preferred stock, of which 70,272 Series D were issued and
outstanding. All of the issued and outstanding PFGI capital stock is duly and
validly issued and outstanding and are fully paid and non-assessable and free of
preemptive rights. PFGI also had outstanding employee stock options pursuant to
existing stock option plans described in its SEC filings.
(c The PFGI Common Shares that are to be issued to the shareholders of
Fidelity pursuant to the Holding Company Merger shall have been duly authorized
prior to the Closing and, when so issued in accordance with the terms hereof,
shall be validly issued and outstanding, fully paid and non-assessable.
Section 3.2 Authorization.
(a The respective Boards of Directors of PFGI and Provident Bank have,
by all appropriate action, approved this Agreement and the Mergers and
authorized the due execution, delivery and performance hereof by their officers.
PFGI, in its capacity as the sole shareholder of Provident Bank, has duly
adopted and approved this Agreement and the Subsidiary Merger. No other
corporate acts or proceedings are required to be taken by PFGI or Provident Bank
to authorize the execution, delivery and performance of this Agreement and to
consummate the Mergers and the other transactions contemplated by this
Agreement.
(b This Agreement has been duly and validly executed and delivered by
PFGI and Provident Bank and constitutes a legal, valid and binding obligation of
PFGI and Provident Bank, enforceable against them in accordance with its terms.
(c Neither the execution, delivery and performance by PFGI or Provident
Bank of this Agreement, nor the consummation by PFGI or Provident Bank of the
transactions contemplated hereby, nor compliance by PFGI or Provident Bank with
any of the provisions hereof, will violate, conflict with or result in a breach
of any provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any lien upon any
of the properties or assets of either PFGI or Provident Bank under the terms,
conditions or provisions of (A) its articles of incorporation or code of
regulations, or (B) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which PFGI or Provident
Bank or any of the properties or assets of PFGI or Provident Bank is a party or
by which it may be bound, or to which such party may be subject, or violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to PFGI or Provident Bank or any of their respective properties or
assets, or any license or permit held by PFGI or Provident Bank.
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(d Except for the Required Regulatory Actions, no other notice to, or
filing with, exemption or review by, or authorization, consent or approval of,
any public body or authority is necessary for the execution and delivery of this
Agreement or the consummation of the Holding Company Merger of PFGI and Fidelity
or the Subsidiary Merger of Centennial and Provident Bank.
Section 3.3 Subsidiaries. Each of PFGI's significant Subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power to own its
respective properties and assets, to incur its respective liabilities and to
carry on its respective business as now being conducted.
Section 3.4 No Defaults. PFGI and Provident Bank are neither in default
under nor in violation of any provision of their articles of incorporation or
regulations, or any promissory note, indenture or any evidence of indebtedness
or security therefor, lease, contract, insurance policy, purchase or other
commitment or any other agreement or arrangement (however evidenced), whether
written or oral, and there has not occurred any event that, with the lapse of
time or giving of notice or both, would constitute such a default or violation,
which default could reasonably be expected to cause a Material Adverse Effect on
PFGI or Provident Bank.
Section 3.5 Financial Information. The consolidated balance sheets of
PFGI and its Subsidiaries as of December 31, 1998 and 1997, and related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended, together with the notes thereto, included in
PFGI's Annual Report on Form 10-K for the year ended December 31, 1998, as
currently on file with the SEC, and the unaudited consolidated balance sheets of
PFGI and its Subsidiaries as of March 31, 1999, and the related unaudited
consolidated income statements and statements of changes in shareholders' equity
and cash flows for the quarter then ended included in PFGI's Quarterly Report on
Form 10-Q for such quarter, as currently on file with the SEC, and the year-end
and quarterly Reports of Condition and Reports of Income of each of the
subsidiary banks of PFGI for 1998, and March 31, 1999, respectively, as
currently on file with the applicable Regulatory Agencies (together, the "PFGI
Financial Statements"), have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be disclosed
therein and except for regulatory reporting differences required by the reports
of Provident Bank) and fairly present in all material respects the consolidated
financial position and the consolidated results of operations, changes in
shareholders' equity and cash flows of PFGI and its consolidated Subsidiaries as
of the dates and for the periods indicated (subject, in the case of interim
financial statements, to normal recurring year-end adjustments, none of which
shall be material).
Section 3.6 Absence of Changes. Since March 31, 1999, there has been no
material adverse change in the financial condition, the results of operations or
the business of PFGI and its Subsidiaries, except as disclosed by PFGI since
March 31, 1999 in its periodic reports filed with the SEC under the Exchange
Act.
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Section 3.7 Litigation and Related Matters. There is no litigation,
claim or other proceeding pending or, to the knowledge of PFGI or Provident
Bank, threatened, against PFGI or its Subsidiaries, or of which the property of
PFGI or its Subsidiaries is or would be subject, and there is no injunction,
order, judgment, decree or regulatory restriction imposed upon PFGI or its
Subsidiaries or the assets of PFGI or its Subsidiaries which would have a
Material Adverse Effect on PFGI.
Section 3.8 Regulatory Matters. PFGI is a bank holding company
registered with the Federal Reserve Board under the BHCA and Provident Bank is a
state-chartered bank. Neither PFGI, Provident Bank nor any of PFGI's significant
Subsidiaries is subject or is party to, or has received any notice or advice
that it may become subject or party to, any Regulatory Agreement, nor has PFGI
or any of its significant Subsidiaries been advised by any Regulatory Agency
that it is considering issuing or requesting any such Regulatory Agreement.
There is no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any examinations of
PFGI or Provident Bank, or any corporations or financial institutions merged
with and into PFGI or its Subsidiaries, which is expected to have a material
adverse effect on PFGI and its Subsidiaries, taken as a whole.
Section 3.9 Reports. PFGI and each of its significant Subsidiaries has
filed all material reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file with the
Regulatory Agencies having jurisdiction over PFGI or any of its significant
Subsidiaries, and have paid all fees and assessments due and payable in
connection therewith. As of their respective dates, each of such reports and
documents, as amended, including any financial statements, exhibits and
schedules thereto, complied with the relevant statutes, rules and regulations
enforced or promulgated by the Regulatory Agency with which they were filed and
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 3.10 Tax Matters. Each of PFGI and its Subsidiaries has filed
with the appropriate governmental agencies all foreign, federal, state and local
Tax Returns required to be filed by it and has timely paid any Taxes shown on
such Tax Returns.
Section 3.11 Brokerage. There are no existing claims or agreements for
brokerage commissions, finders' fees, or similar compensation in connection with
the transactions contemplated by this Agreement payable by PFGI or Provident
Bank.
Section 3.12 Compliance With Law. PFGI and its significant Subsidiaries
have all licenses, franchises, permits and other governmental authorizations
that are legally required to enable them to conduct their respective businesses
and are in compliance with all applicable laws and regulations.
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Section 3.13 No Undisclosed Liabilities. As of the date hereof, PFGI
and its Subsidiaries do not have any liability, whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due, including any liability for Taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit or proceeding, hearing, charge, complaint, claim or demand against
PFGI or its Subsidiaries giving rise to any such liability), except (i) for
liabilities set forth in the PFGI Financial Statements, and (ii) normal
fluctuation in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of PFGI and its Subsidiaries since
the date of the March 31, 1999 balance sheet included in the PFGI Financial
Statements.
Section 3.14 Statements True and Correct. None of the information
supplied or to be supplied by PFGI and Provident Bank for inclusion in this
Agreement or in any other documents filed with any Regulatory Agency in
connection with the transactions contemplated by this Agreement shall contain
any untrue statement of a material fact, or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading. All documents that PFGI
or Provident Bank shall be responsible for filing with any Regulatory Agency in
connection with the transactions contemplated by this Agreement shall comply as
to form in all material respects with the provisions of applicable law and the
applicable rules and regulations thereunder.
Section 3.15 Year 2000 Compliance.
(a PFGI and its Subsidiaries have taken all actions reasonably required
to verify that their systems and operations are Year 2000 Compliant.
(b PFGI and its Subsidiaries have used their best efforts to confirm
with all of their material vendors and customers that all date-sensitive
hardware, software, processes, procedures, interfaces and similar operating
systems used within their respective operations are Year 2000 Compliant.
(c Provident Bank plans for being Year 2000 Compliant adhere to the
terms, deadlines, requirements, and conditions contained in the Year 2000
statements and guidance issued by the Ohio Division of Financial Institutions
and the Federal Financial Institutions Examinations Council.
(d Provident Bank has not received, and does not expect to receive, a
"Year 2000 Deficiency Notification Letter" (as such term is employed in the
Federal Reserve Board's Supervision and Regulation Letter No. SR 98-3(SUP),
dated March 4, 1998), or any similar letter from any Regulatory Agency, and does
not anticipate any deficiency in its plans, or the implementation of its plans,
for addressing the issues set forth in the statements of the OTC and the Federal
Financial Institutions Examination Council concerning Year 2000 compliance.
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Section 3.16 Interested Shareholder Provision. PFGI is not, and has not
been during the three (3) years prior to the date of this Agreement, an
"interested shareholder" of Fidelity within the meaning of Ohio Revised Code
Section 1704.01(C)(8).
Section 3.17 Accounting Changes. PFGI does not have a present intention
of making any material accounting changes, or changes in the presentation of the
PFGI Financial Statements, which if not disclosed, would render misleading the
representations and warranties of PFGI set forth in Section 3.5 concerning the
PFGI Financial Statements.
ARTICLE 4
AGREEMENTS OF FIDELITY AND ITS SUBSIDIARIES
Section 4.1 Business in Ordinary Course.
(a Fidelity shall not declare or pay any dividend or make any other
distribution to shareholders, whether in cash, stock or other property, after
the date hereof, except for quarterly dividends in the same amounts as the most
recent quarterly dividend, declared and paid in a manner consistent with past
practices; provided, however, that the declaration of the last quarterly
dividend by Fidelity prior to the Effective Time and the payment thereof shall
be coordinated with, and subject to the approval of, PFGI so as to preclude any
duplication of dividend benefit, it being the intention of the parties that the
shareholders of Fidelity receive dividends for any particular quarter on either
the Fidelity Common Shares or the PFGI Common Shares, but not both.
(b Fidelity and its Subsidiaries shall (1) continue to carry on after
the date hereof its respective business and the discharge or incurrence of
obligations and liabilities, only in the usual, regular and ordinary course of
business, as heretofore conducted and (2) use reasonable best efforts to
maintain and preserve intact its respective business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees. Fidelity and its Subsidiaries shall not, without the prior
written consent of PFGI:
(i issue any Fidelity Common Shares or other capital stock or
any options, warrants, or other rights to subscribe for or purchase
Fidelity Common Shares or any other capital stock or any securities
convertible into or exchangeable for any capital stock of Fidelity or
its Subsidiaries (except pursuant to options previously granted and
with respect to the options to be granted to PFGI pursuant to this
Agreement); or
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(ii directly or indirectly redeem, purchase or otherwise
acquire any Fidelity Common Shares or any other capital stock of
Fidelity or its Subsidiaries or effect a reclassification,
recapitalization, splitup, exchange of shares, readjustment or other
similar change in or to any capital stock or otherwise reorganize or
recapitalize Fidelity or its Subsidiaries; or
(iii change the Articles of Incorporation, Code of Regulations,
Bylaws, constitution or other charter or governing documents of
Fidelity or its Subsidiaries; or
(iv grant any increase, other than ordinary and normal
increases consistent with past practices, in the compensation payable
or to become payable to officers or salaried employees or, except as
required by law or as required by existing contractual obligations
which shall have been described in Sections 2.14(c) or 2.20 of the
Disclosure Schedule, adopt or make any material change in any bonus
(permitting the continued accrual of management bonuses at current
rates and payment of such bonuses in accordance with past practices,
the Board being permitted to consider the impact of the transactions
contemplated by this Agreement on the possible adverse performance of
Fidelity and its Subsidiaries), insurance, pension, or other Fidelity
Employee Plan (except as otherwise permitted by this Agreement),
agreement, payment or arrangement made to, for or with any of such
officers or employees; or
(v borrow or agree to borrow any material amount of funds
except in the ordinary course of business, or directly or indirectly
guarantee or agree to guarantee any material obligations of others,
except in the ordinary course of business; or
(vi make or commit to make any new loan or letter of credit or
any new or additional discretionary advance under any existing line of
credit, except in the ordinary course of business; or
(vii purchase or otherwise acquire any investment security for
its own account, except in a manner and pursuant to policies
consistent with past practice; or
(viii materially increase or decrease the rate of interest
paid on time deposits, or on certificates of deposit, except in a
manner and pursuant to policies consistent with past practices; or
(ix enter into any agreement, contract or commitment of a
material nature out of the ordinary course of business; or
(x except in the ordinary course of business, place on any of
its material assets or properties any mortgage, pledge, lien, charge,
or other encumbrance of a material nature; or
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(xi except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Fidelity or its
Subsidiaries or any claims which Fidelity or its Subsidiaries may
possess or waive any material rights with respect thereto; or
(xii sell, assign, transfer, convey, license, subcontract,
cancel, amend or alter in any other material respect any loan servicing
rights of Fidelity or its Subsidiaries, except for sales on the
secondary market in the ordinary course of business and in accordance
with past practices; or
(xiii except as set forth in Section 4.1(b)(xiii) of the
Disclosure Schedule, sell or otherwise dispose of any material real
property or any material amount of any tangible or intangible personal
property other than in the ordinary course of business and other than
properties acquired in foreclosure or otherwise in the ordinary
collection of indebtedness to Fidelity or its Subsidiaries; or
(xiv with respect to the branch operations of Centennial, take
any action to close any existing branch, open new branches, acquire by
purchase, merger or otherwise additional branches, or otherwise affect
the number, location, and nature of the branch operations, or to make
any public announcement regarding the continuation or discontinuation
of any branch operations; or
(xv foreclose upon or otherwise take title to or possession or
control of any real property without first obtaining a Phase I
environmental report thereon which indicates that the property is free
of pollutants, contaminants or hazardous or toxic waste materials;
provided, however, that no report shall be required with respect to
single family, non-agricultural residential property of one acre or
less to be foreclosed upon unless there is reason to believe that such
property might contain any such waste materials or otherwise might be
contaminated; or
(xvi commit any act or fail to do any act which would cause a
breach of any agreement, contract or commitment and which would have a
Material Adverse Effect on Fidelity or any of its Subsidiaries; or
(xvii purchase any real or personal property or make any
other capital expenditure in excess of $50,000.00; or
(xviii take, or cause to be taken, any action, whether before
or after the Effective Time, which would disqualify the Mergers as a
"reorganization" within the meaning of Section 368(a) of the Code or
preclude pooling of interests accounting treatment for the transaction;
or
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(xix take any action which would materially and adversely
affect or delay the ability of any party hereto to obtain any necessary
approvals of any Regulatory Agency or other governmental authority
required for the transactions contemplated by this Agreement or to
perform its covenants and agreements under this Agreement or the
Fidelity Option Agreement.
(c Fidelity and its Subsidiaries shall not, without the prior written
consent of PFGI, engage in any transaction or take any action that would render
untrue any of the representations and warranties of Fidelity and its
Subsidiaries contained in Article 2 hereof (except for any such representations
and warranties made only as of a specified date), if such representations and
warranties were given as of the date of such transaction or action.
(d Fidelity shall promptly notify PFGI in writing of the occurrence of
any matter or event known to and directly involving Fidelity or its
Subsidiaries, which would not include any changes in conditions that affect the
banking industry generally, that would have, either individually or in the
aggregate, a Material Adverse Effect on Fidelity or any of its Subsidiaries.
(e Fidelity and its Subsidiaries shall not, and shall not authorize or
knowingly permit any of their respective affiliates, officers, directors,
employees or agents to, on or before the earlier of the Closing Date or the date
of termination of this Agreement, directly or indirectly solicit, initiate or
encourage or hold discussions or negotiations with or provide any information to
any person in connection with any proposal from any person for the acquisition
of all or any substantial portion of the business, assets, Fidelity Common
Shares or other securities of Fidelity or its Subsidiaries. Fidelity shall
within twenty-four (24) hours advise PFGI of its receipt of any such proposal or
inquiry concerning any possible such proposal, the substance of such proposal or
inquiry, and the identity of the party making the proposal. Nothing contained
herein shall prohibit the Board of Directors of Fidelity from furnishing
information to or entering into discussions or negotiations with, any person or
entity, if, and only to the extent that (A) the Board of Directors of Fidelity,
based upon the advice of outside counsel, determines in good faith that such
action is required by the Board of Directors to comply with its fiduciary duties
to shareholders imposed by law, (B) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity relating
to a Competing Transaction, Fidelity provides written notice to PFGI to the
effect that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity relating to a Competing Transaction,
and (C) Fidelity keeps PFGI reasonably informed as to the status and all
material information with respect to any such discussions or negotiations.
Section 4.2 Breaches. Fidelity and its Subsidiaries shall, in the event
either has knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach (or would
have caused or constituted a breach had such event occurred or been known prior
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to the date hereof) of any of its representations or agreements contained or
referred to herein, give prompt written notice thereof to PFGI and use its best
efforts to prevent or promptly remedy the same.
Section 4.3 Submission to Management and Shareholders. Fidelity, acting
through its Board of Directors, shall, in accordance with the OGCL and its
Articles of Incorporation and Code of Regulations, promptly and duly call, give
notice of, convene and hold a special shareholders' meeting (the "Shareholders'
Meeting") as soon as practicable following the date upon which the Registration
Statement has been declared effective by the SEC and under all applicable state
securities laws, for the purpose of approving this Agreement and the
transactions contemplated hereby. Subject only to the provisions of Section 7.8,
at the Shareholders' Meeting and in any proxy materials used in connection with
the meeting:
(a the Board of Directors of Fidelity shall recommend that its
shareholders vote for approval of this Agreement, subject only to the fiduciary
obligations of the Board of Directors, the receipt of a fairness opinion from
its financial advisor, Sandler O'Neill & Partners, L.P., received immediately
prior to the effectiveness of the Registration Statement and review of the
Registration Statement;
(b Fidelity shall use its best efforts to solicit from its shareholders
proxies to vote on the proposal to approve this Agreement and the Mergers and to
secure a quorum at the Shareholders' Meeting;
(c Fidelity shall use its best efforts to secure the vote of
shareholders required by Fidelity's Articles of Incorporation and Code of
Regulations to approve this Agreement and the Mergers.
In addition, within fifteen (15) days of the execution of this
Agreement, Fidelity shall use its best efforts to obtain from all of the
Fidelity directors and executive officers holding Fidelity Common Shares written
undertakings in form and substance satisfactory to PFGI and Provident Bank that
each officer and director shall agree to cast his or her shares in favor of
approving this Agreement and the Mergers.
Section 4.4 Consents to Contracts and Leases. Fidelity, Fidelity
Acquisition and Centennial shall use their respective best efforts to obtain all
necessary consents with respect to all interests of Fidelity and its
Subsidiaries in any material leases, licenses, contracts, instruments and rights
which require the consent of another person for their transfer or assumption
pursuant to the Mergers, including, but not limited to any landlord approvals
required in Section 6.1(l).
Section 4.5 Consummation of Agreement. Fidelity, Fidelity Acquisition
and Centennial shall use their best efforts to perform and fulfill all
conditions and obligations on their part to be performed or fulfilled under this
Agreement as promptly as possible and to effect the Mergers and the other
transactions contemplated hereby expeditiously in accordance with the terms and
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provisions hereof and to effect the transition and integration of the business
and operations of Fidelity and its Subsidiaries with the business and operations
of PFGI and its Subsidiaries. Fidelity, Fidelity Acquisition and Centennial
shall furnish to PFGI and Provident Bank in a timely manner, all information,
data and documents in the possession of Fidelity and its Subsidiaries requested
by PFGI as may be required to obtain any necessary regulatory or other approvals
of the Mergers and to file the Registration Statement with the SEC relating to
the PFGI Common Shares to be issued to the shareholders of Fidelity pursuant to
this Agreement and shall otherwise cooperate fully with PFGI and Provident Bank
to carry out the purpose and intent of this Agreement. Fidelity shall diligently
review its activities and operations to ascertain and report to PFGI within
twenty (20) days after execution of this Agreement whether Fidelity or any of
its Subsidiaries is engaged in any activity or has any equity investment that is
prohibited by the Federal Reserve Board or the BHCA or which is not listed at 12
C.F.R. 225.25, or that would be impermissible for PFGI or Provident Bank by the
BHCA or by rule or regulation of a Regulatory Agency upon consummation of the
Mergers.
Section 4.6 Employee Benefit Plans.
(a Centennial ESOP. (i) Fidelity is authorized to take all steps
appropriate to terminate the Centennial Bank Employee Stock Ownership Plan
("Centennial ESOP") effective as of the Effective Time and to request that the
IRS issue a determination letter to the effect that termination of the
Centennial ESOP, the allocation and disposition of its assets as described in
Section 4.6(a)(ii) and the distribution of participants' account balances will
not affect the Centennial ESOP's status as a tax-qualified retirement plan. This
determination letter request will be filed with the IRS not later than six weeks
after the date action is taken to terminate the Centennial ESOP (or as soon a
possible after the action is taken). Fidelity will make no additional
contributions to the Centennial ESOP after the date of this Agreement, except
for contributions that are consistent with prior levels and rates of
contributions.
(ii All Fidelity Common Shares held by the Centennial ESOP
Trustee at the Effective Time, including those allocated to Centennial
ESOP participants' accounts ("Allocated Shares"), any forfeited shares
then pending reallocation to participants' accounts ("Forfeited
Shares") and those subject to a security interest granted in connection
with any outstanding loan ("Pledged Shares") will be exchanged by the
Centennial ESOP Trustee for PFGI Common Shares at the Per Share
Consideration in accordance with this Agreement. The PFGI Common Shares
received by the Centennial ESOP will be credited to Centennial ESOP
participants' accounts as provided by the Centennial ESOP's terms, to
the extent that they represent shares received in exchange for
Allocated or Forfeited Shares or will be substituted for the Pledged
Shares, to the extent that they represent shares received in exchange
for Pledged Shares ("Pledged PFGI Shares"). To the extent that cash
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held in the Centennial ESOP Trust is insufficient to retire the loan,
the Centennial ESOP Trustee will (A) sell Pledged PFGI Shares to the
extent needed to retire the loan and (B) repay the loan. Any Pledged
PFGI Shares remaining in the Centennial ESOP trust after the loan is
repaid will be allocated to participants' accounts as provided by the
Centennial ESOP. The allocation procedure will be fully described in
the determination letter request referred to above in Section
4.6(a)(i). If the IRS issues a determination letter with respect to
that application, the allocation will be made as described in the
application. If the IRS refuses to issue a determination letter with
respect to that application, the allocation will be made on another
basis on which the IRS approves and issues a determination letter.
Notwithstanding any other provision in this Agreement to the contrary,
the Centennial ESOP participants shall not be eligible to receive an
allocation of benefits under the employee stock ownership contribution
portion of The Provident Financial Group, Inc. Retirement Plan until
January 1, 2001.
(b Other Fidelity Employee Plans. (i) Except as provided in Section
4.6(a), through the Effective Time, Fidelity will continue to administer the
Fidelity Employee Plans consistent with their terms and the requirements imposed
by the Code and ERISA, including admitting new employees as they becomes
eligible, accepting and depositing all employee contributions and deferrals,
calculating and remitting all Fidelity contributions, reviewing claims for
benefits and distributing plan benefits. However, without the prior written
consent of PFGI, which shall not be unreasonably withheld or delayed, Fidelity
will not (A) amend the Fidelity Code ss.401(k) Plan in any respect, other than
amendments that may be required to ensure that the plan continues to meet
applicable legal standards or (B) make any benefit payments, other than payments
arising in the normal administration of the plans or (C) except as set forth in
Section 4.6(a)(ii), make any contributions to the Fidelity Employee Plans after
the date of this Agreement except for contributions that are consistent with
prior levels and rates of contribution. Also, and except as provided in Section
4.6(a) or as a consequence of the action taken under Section 4.6(b)(ii),
Fidelity will take no action that will accelerate any participant's vesting in
benefits earned under any Fidelity Employee Plan.
(ii If PFGI so requests (and except as otherwise provided in
any other section of this Agreement), Fidelity and its Subsidiaries
will amend any Fidelity Employee Plan to (A) cease further benefit
accruals and (B) to limit participation to the Fidelity employees then
participating in the Fidelity Employee Plan. The effective date of this
action will be as of the Effective Time. However, Fidelity's obligation
under this subsection will arise only if (C) PFGI's request is given in
writing, specifying the plan to be amended and the effective date of
this action and (D) that action can be taken without affecting any
benefits accrued by participants to the effective date the plan is to
be amended.
(iii After the Effective Time, PFGI will assume responsibility
for maintenance and administration of the Fidelity Employee Plans that
(A) have not been terminated before the Effective Time or (B) have been
terminated before the Effective Time but their assets not distributed
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before the Effective Time. Also, PFGI will be responsible for all
residual acts (such as filing annual reports) associated with Fidelity
Employee Plans that were terminated before the Effective Time, whether
or not their assets were distributed before the Effective Time, and for
completing the disposition of the Centennial ESOP as described in
Section 4.6(a).
(c Discretionary Acts. With respect to any Fidelity Employee Plans that
provide for the allocation or vesting of benefits, there shall be no
discretionary acceleration of any such allocation or vesting without PFGI's
consent whether or not such discretionary acceleration of such allocation or
vesting is permitted under the terms of the Fidelity Plan; provided that a
Fidelity Employee Plan which pursuant to its terms provides for an acceleration
of any allocation or vesting upon a change of control of Fidelity shall not be
deemed to involve a discretionary acceleration and such allocation or vesting
thereunder, as the case may be, shall accelerate as of the Effective Time.
(d Determination Letters. Within six weeks of the date of the Agreement
(or as soon as possible after that date), Fidelity and its Subsidiaries will
file an application with the IRS to the effect that the Fidelity ss.401(k) Plan
complies with all applicable requirements imposed by Code ss.401(a). Within the
period described in Section 4.6(a) a similar application will be made with
respect to the termination of the Centennial ESOP.
Section 4.7 Access to Information. Fidelity and its Subsidiaries shall
permit PFGI and Provident Bank reasonable access in a manner which shall avoid
undue disruption or interference with Fidelity's and its Subsidiaries' normal
operations to their operations and premises and shall disclose and make
available to PFGI and Provident Bank all books, documents, papers, records and
computer systems documentation and files relating to its assets, stock
ownership, properties, operations, obligations and liabilities, including, but
not limited to, all books of account (including the general ledger), tax
records, minute books of directors' and shareholders' meetings, organizational
documents, contracts and agreements, loan files, filings with any regulatory
authority, accountants' workpapers (if available and subject to the respective
independent accountants' consent), litigation files (except for matters covered
by the attorney-client privilege), Fidelity Employee Plans, and any other
business activities or prospects. Fidelity and its Subsidiaries shall provide
notice of and permit a representative of PFGI and/or Provident Bank to attend
all meetings of the Board of Directors and committees thereof; provided,
however, that the Boards of Directors may exclude such representative from
attending any deliberations during which the Boards may discuss a Competing
Transaction. PFGI shall hold any such information which is nonpublic in
confidence in accordance with the confidentiality provisions hereof.
Section 4.8 Plan of Merger. Upon request, Fidelity and its Subsidiaries
shall enter into a separate plans of merger or articles of merger or
certificates of merger reflecting the terms hereof for purposes of any filing
requirement of the OGCL or any other federal or state law.
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Section 4.9 Cooperation. PFGI will prepare and cause to be filed at its
expense such applications and other documents with the Board of Governors of the
Federal Reserve System, the FDIC, the OTS, the Ohio Division of Financial
Institutions, and any other governmental agencies as are required to secure the
requisite approval of such agencies to the consummation of the transactions
provided for in this Agreement, and the parties shall cooperate in the
preparation of an appropriate registration statement, including the prospectus,
proxy statement, and such other documents necessary to comply with all federal
and state securities laws related to the registration and issuance of the shares
of PFGI to be issued to the shareholders of Fidelity in this transaction (the
expenses thereof, other than accounting, legal, investment banking, financial
consulting and associated expenses of Fidelity and its Subsidiaries, to be paid
by PFGI and the fee for any filing under the HSR Act shall be divided equally
between Fidelity and PFGI), and any other laws applicable to the transactions
provided for in this Agreement. PFGI shall use all reasonable efforts to file
all such applications within ninety (90) days of the date of this Agreement and
to secure all such approvals. Fidelity and its Subsidiaries agree that they
will, as promptly as practicable after request and at their own expense, provide
PFGI with all information and documents concerning Fidelity and its Subsidiaries
as shall be required in connection with preparing any applications, registration
statements and other documents which are to be prepared and filed by PFGI and in
connection with regulatory approvals required to be obtained by PFGI hereunder.
PFGI agrees that it will, as promptly as practicable after request and at its
own expense, provide Fidelity and its Subsidiaries with all information and
documents concerning PFGI and its Subsidiaries as shall be required in
connection with preparing such applications, registration statements and other
documents which are to be prepared and filed by Fidelity or its Subsidiaries in
connection with approvals required to be obtained by Fidelity or its
Subsidiaries hereunder. Prior to filing such applications, statements, or other
documents with the applicable governmental agency, Fidelity and its Subsidiaries
shall provide at least five (5) days prior to the filing date, copies thereof to
PFGI. Fidelity and its Subsidiaries shall cooperate with PFGI and Provident Bank
in the preparation and filing of applications for the closure of certain branch
operations of Fidelity, so that any branch closures contemplated by PFGI can be
promptly approved by the applicable Regulatory Agencies and permitted to occur
immediately after the Effective Time.
ARTICLE 5
AGREEMENTS OF PFGI AND PROVIDENT BANK
Section 5.1 Regulatory Approvals; Other Agreements.
(a) PFGI and Provident Bank shall file all regulatory applications
required in order to consummate the Mergers, including but not limited to the
necessary applications for the prior approval of the Federal Reserve Board and
the Ohio Division of Financial Institutions and any premerger notification to
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the U.S. Department of Justice required under the HSR Act. PFGI shall keep
Fidelity reasonably informed as to the status of such applications and/or
waiting periods and make available to Fidelity for review prior to filing with
the applicable Regulatory Agencies from time to time copies of such applications
and any supplementally filed materials.
(b) Neither PFGI nor Provident Bank shall, between the date hereof and
the Effective Time, commit any act or fail to do any act which would cause a
breach of any agreement, contract or commitment and which would have a material
adverse effect on PFGI and its Subsidiaries, taken as whole.
(c) Neither PFGI nor Provident Bank shall, between the date hereof and
the Effective Time, affirmatively take, or cause to be taken, any action,
whether before or after the Effective Time, which would disqualify the Mergers
as a "reorganization" within the meaning of Section 368(a) of the Code.
(d) Neither PFGI nor Provident Bank shall, without the prior written
consent of Fidelity, engage in any transaction or take any action that would
render untrue any of the representations and warranties of PFGI and Provident
Bank contained in Article 3 hereof (except for any such representations and
warranties made only as of a specified date), if such representations and
warranties were given as of the date of such transaction or action.
(e) PFGI shall promptly notify Fidelity in writing of the occurrence of
any matter or event known to and directly involving PFGI or Provident Bank,
which would not include any changes in conditions that affect the banking
industry generally, that would have a material adverse effect on PFGI or any of
its Subsidiaries, taken as whole.
Section 5.2 Breaches. PFGI and Provident Bank shall, in the event
either has knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach (or would
have caused or constituted a breach had such event occurred or been known prior
to the date hereof) of any of its representations or agreements contained or
referred to herein, give prompt written notice thereof to Fidelity and use its
best efforts to prevent or promptly remedy the same.
Section 5.3 Consummation of Agreement. PFGI and Provident Bank shall
use their best efforts to perform and fulfill all conditions and obligations on
their part to be performed or fulfilled under this Agreement and to effect the
Mergers in accordance with the terms and conditions of this Agreement. PFGI
acknowledges that it is not required to submit this Agreement to a vote of its
shareholders and, while it may be permitted to do so, that it will not submit
this Agreement to its shareholders for approval.
Section 5.4 Employee Benefits. PFGI and/or Provident Bank shall, with
respect to each employee of Fidelity and its Subsidiaries at the Effective Time
who shall continue in employment with PFGI or Provident Bank or their respective
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Subsidiaries (each a "Continued Employee"), provide the benefits described in
this Section 5.4. Subject to the right of subsequent amendment, modification or
termination in PFGI's sole discretion, each Continued Employee shall be
entitled, as a new employee of a subsidiary of PFGI, to participate in such
employee benefit plans, as defined in Section 3(3) of ERISA, or any
non-qualified employee benefit plans or deferred compensation, stock option,
bonus or incentive plans, severance plans (provided, however, that (i) any
employee of Fidelity and its Subsidiaries who is a party to a written employment
or severance agreement providing for separate severance benefits shall be
entitled only to the benefits provided for in such agreement and (ii) an
employee shall be deemed "severed" if he or she voluntarily terminates his or
her employment as a result of either being required to relocate more than 15
miles (for non-exempt employees) or 30 miles (for exempt employees) from the
current location of his or her employment or as a result of receiving a
reduction in the level of his or her salary or hourly rate of compensation) or
other employee benefit or fringe benefit programs that may be in effect
generally for employees of PFGI's Subsidiaries (the "PFGI Employee Plans"), to
the extent (if any) that a Continued Employee otherwise may satisfy the
eligibility requirements and, if required, selected for participation therein
under the terms thereof. PFGI shall cause any and all pre-existing condition
limitations (to the extent such limitations did not apply to a pre-existing
condition under any Fidelity Employee Plan) and eligibility waiting periods
under group health plans to be waived with respect to such participants and
their eligible dependents. All such participation shall be subject to such terms
of such PFGI Employee Plans as may be in effect from time to time and this
Section 5.4 is not intended to give Continued Employees any rights or privileges
superior to those of other employees of PFGI's Subsidiaries (except as provided
in the following sentence with respect to credit for past service). PFGI and/or
Provident Bank may terminate or modify all Fidelity Employee Plans except
insofar as benefits thereunder shall have vested at the Effective Time and
cannot be modified and PFGI's obligation under this Section 5.4 shall not be
deemed or construed so as to provide duplication of similar benefits but,
subject to that qualification, PFGI shall, for purposes of vesting and any age
or period of service requirements for commencement of participation with respect
to any PFGI Employee Plans in which Continued Employees may participate (but not
for benefit accruals under any defined benefit plan), credit each Continued
Employee with his or her term of service with Fidelity and its Subsidiaries and
their predecessors. PFGI shall be entitled to provide benefits to the Continued
Employees under the terms of existing Fidelity Employee Plans (instead of PFGI
Employee Plans) for a period of time after the Effective Time which PFGI, in its
discretion, determines appropriate to the termination of the Fidelity Employee
Plans or the integration of the Fidelity Employee Plans into the PFGI Employee
Plans.
Section 5.5 Advisory Board. PFGI shall take such corporate action as is
necessary to establish an Advisory Board comprised of the nine (9) non-employee
members of the Centennial Board of Directors. The Advisory Board shall serve in
an adjunct capacity to the Board of Directors of PFGI to advise PFGI on issues
which may arise concerning the business of Centennial and the transition of the
Centennial organization and business to Provident Bank. Those individuals who
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agree to serve as members of the Advisory Board shall serve in such capacity for
a period of two (2) years following the Closing Date and each shall be
compensated on a monthly basis at the rate of Nine Hundred Dollars ($900.00) per
month. Each member of the Advisory Board shall agree to enter into a written
agreement providing in substance that, during his or her tenure as a member of
the Advisory Board, such individual shall not solicit the services of any of the
employees and shall not, for the sale of any products or services, solicit any
customers of Fidelity, either directly or indirectly, as an officer, director,
employee or more than Five Percent (5%) shareholder in the banking, investment
or financial products business.
Section 5.6 Director and Officer Matters. Effective as of the Effective
Time, PFGI shall cause to be issued one or more policies of insurance, or
provide for coverage under the existing policies of one or more of the parties
to this Agreement, for all of the current directors and officers of Fidelity and
its Subsidiaries, for the acts and omissions of such directors and officers
occurring in their respective capacities as such prior to the Effective Time,
and for a period of three (3) years from the Effective Time, providing liability
insurance coverage on substantially the same terms and conditions as presently
provided for the benefit of the directors and officers of Fidelity and its
Subsidiaries under their respective existing directors' and officers' liability
insurance policies, but only to the extent that such insurance may be purchased
or kept in force on commercially reasonable terms taking into account the cost
thereof and the benefits provided thereby. The cost of such insurance shall be
considered commercially reasonable so long as it does not exceed 200% of the
costs currently paid for such coverage by Fidelity. Proof of such insurance
shall be furnished to any of the former directors and officers of Fidelity and
its Subsidiaries upon request. PFGI and Provident Bank agree that all rights to
indemnification that the directors and officers of Fidelity and its Subsidiaries
and PFGI have pursuant to the Articles of Incorporation, Code of Regulations or
similar charter documents of Fidelity and its Subsidiaries and PFGI, or under
applicable law, shall survive the Mergers and shall continue in full force and
effect. In the case of any former officer or director of Fidelity or any of its
Subsidiaries or any of their constituent predecessor corporations who is not an
officer or director as of the date hereof, and who is entitled to and is
currently receiving the benefits of any existing contractual arrangement with
Fidelity or any of its Subsidiaries providing benefits similar to those set
forth in this Section, PFGI shall be obligated to honor the terms and conditions
of any such prior contractual arrangement.
Section 5.7 Access to Information. PFGI shall permit Fidelity
reasonable access in a manner which shall avoid undue disruption or interference
with PFGI' s normal operations to its properties and shall disclose and make
available to Fidelity all books, documents, papers and records relating to its
assets, stock ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the general
ledger), tax records, minute books of directors' and shareholders' meetings,
organizational documents, material contracts and agreements, loan files, filings
with any regulatory authority, accountants' workpapers (if available and subject
to the respective independent accountants' consent), litigation files, plans
affecting employees, and any other business activities or prospects in
furtherance of the transactions contemplated by this Agreement. Fidelity shall
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hold any such information which is nonpublic in confidence in accordance with
the confidentiality provisions hereof.
Section 5.8 Employment Agreements. The executive officers of Fidelity
and Centennial and certain other employees are parties to employment or
severance agreements, all of which are listed in Section 2.13 of the Disclosure
Schedule, pursuant to which each of them shall be entitled, under certain
circumstances, to payments in connection with a termination of employment
resulting from a "change in control" transaction. PFGI and Provident Bank
expressly acknowledge the validity and enforceability of these employment
agreements and agree to honor the terms thereof following the Effective Time.
PFGI expressly agrees to honor the terms of the Glenway Loan and Deposit Bank
Incentive Plan in which Robert Sudbrook is the sole participant (with the
references to Fidelity and to options in Fidelity Common Shares being
appropriately changed to PFGI and PFGI Common Shares in the manner described in
Section 1.6 hereof). PFGI also agrees to enter into a new consulting agreement
with Robert Sudbrook, on mutually acceptable terms, including the continuation
of his same level of salary for a period of eighteen (18) months. As a part of
such consulting agreement, PFGI also agrees to grant Robert Sudbrook options to
acquire 10,000 PFGI Common Shares at an exercise price equal to the closing
price of PFGI Common Shares on the Closing Date.
ARTICLE 6
CONDITIONS PRECEDENT TO MERGER
Section 6.1 Conditions to Obligations of PFGI and Provident Bank. The
obligations of PFGI and Provident Bank to effect the Mergers shall be subject to
the satisfaction (or waiver by PFGI and Provident Bank) prior to or on the
Closing Date of the following conditions:
(a) The representations and warranties made by Fidelity and its
Subsidiaries in this Agreement shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date (except for any such
representations and warranties made only as of a specified date which shall be
true and correct as of such date);
(b) Fidelity and its Subsidiaries shall have performed and complied in
all material respects with all of its obligations and agreements required to be
performed on or prior to the Closing Date under this Agreement, including, but
not limited to, obtaining the approvals of Fidelity's officers and directors as
provided in Section 4.3 hereof;
(c) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
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restraint or prohibition (an "Injunction") preventing the consummation of the
Mergers shall be in effect, nor shall any proceeding by any Regulatory Agency or
other person seeking any of the foregoing be pending. There shall not be any
action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Mergers which makes the consummation of the
Mergers illegal;
(d) All necessary regulatory approvals, consents, authorizations and
other approvals, including the requisite approval of this Agreement and the
Mergers by the shareholders of each party hereto, required by law or any
Regulatory Agency for consummation of the Mergers shall have been obtained and
all waiting periods required by law shall have expired, and no regulatory
approval shall have imposed any condition, requirement or restriction which the
Board of Directors of PFGI reasonably determines in good faith would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement to PFGI and its shareholders as to
render inadvisable the consummation of the Mergers (any such condition,
requirement or restriction, a "Burdensome Condition");
(e) PFGI and Provident Bank shall have received all documents required
by this Agreement to be received, on or prior to the Closing Date, all in form
and substance reasonably satisfactory to PFGI;
(f) The Mergers shall qualify as a "pooling of interests" for
accounting purposes if closed and consummated in accordance with this Agreement
and PFGI and Provident Bank shall have received an opinion letter, dated as of
the Closing Date, from Ernst & Young, LLP, its independent public accountants,
to such effect;
(g) As soon as practicable after the execution of this Agreement, PFGI
and Provident Bank shall have received an executed Pooling Affiliate Letter in
the form of Exhibit 6.1(g) from Fidelity's executive officers and directors (or
so many of them as PFGI may require to ensure that the Mergers shall qualify as
a "pooling of interests" for accounting purposes);
(h) PFGI and Provident Bank shall have received an opinion of its
counsel, Keating, Muething & Klekamp, P.L.L., to the effect that if the Mergers
are consummated in accordance with the terms set forth in this Agreement (i) the
Mergers shall constitute a reorganization within the meaning of Section 368(a)
of the Code, (ii) no gain or loss shall be recognized by the holders of
Outstanding Fidelity Shares upon receipt of PFGI Common Shares as a part of the
Merger Consideration, (iii) the basis of PFGI Common Shares received by the
shareholders of Fidelity shall be the same as the basis of Fidelity Common
Shares exchanged therefor, and (iv) the holding period of the PFGI Common Shares
received by such shareholders shall include the holding period of the Fidelity
Common Shares exchanged therefor, provided such shares were held as capital
assets as of the Effective Time;
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(i) PFGI shall have received the unaudited consolidated balance sheets
of Fidelity and Subsidiaries as of September 30, 1999, and related consolidated
income, changes in stockholders' equity and cash flows for the quarter ended
September 30, 1999, together with the consolidating statements and notes
thereto, and the unaudited consolidated balance sheets of Fidelity and
Subsidiaries and the related unaudited consolidated income statements and
statements of changes in shareholders' equity and cash flows for each month
prior to the Effective Time, and, to the extent that the Closing occurs after
the completion of Fidelity's financial statements for the year ended December
31, 1999, either (i) the audited (if available or practicable to complete) or
(ii) the unaudited consolidated balance sheets of Fidelity and its Subsidiaries
as of December 31, 1999, and related consolidated income, changes in
stockholders' equity and cash flows for the year ended December 31, 1999,
together with the consolidating statements and notes thereto (all such financial
statements being collectively referred to as the "Pre-Closing Financial
Statements"), in each instance prepared on a basis consistent with prior periods
and in accordance with generally accepted accounting principles;
(j) The Pre-Closing Financial Statements as at the end of the month
prior to the Closing Date shall reflect stockholders' equity, as of the Closing
Date, of not less than Ninety-Seven Million Six Hundred Five Thousand Dollars
($97,605,000) (disregarding, however, fees and expenses of legal counsel to
Fidelity and its Subsidiaries related to the Mergers, investment banking fees
paid to Sandler O'Neill & Partners, L.P., proxy preparation and printing
expenses, change in control payments to executive officers, expenses incurred in
fulfilling Fidelity's obligations under Section 8.19 hereof, and other expenses
incurred in connection with the transactions contemplated by this Agreement or
similar impact to equity as a result of the application of FASB 115);
(k) The Pre-Closing Financial Statements as at the end of the month
prior to the Closing Date shall reflect sufficient total capital of Centennial
in order to continue to meet the regulatory standards and requirements
established by the Ohio Division of Financial Institutions for minimum reserve
and net worth;
(l) PFGI shall have entered into and received originally-executed
agreements, in form and substance satisfactory to PFGI, with John R. Reusing,
Robert R. Sudbrook and Joseph D. Hughes, providing in substance that each such
individual shall not, either directly or indirectly, in any capacity, including
but not limited to, as an officer, director, employee, or more than Five Percent
(5%) shareholder of any business that provides banking, investment or financial
services:
(i) for a period of two (2) years from the later of (A) the
Closing Date or (B) if such individual becomes employed by
PFGI or Provident Bank following the Mergers, the date of
termination of such individual's employment, solicit any
customers of Fidelity or Centennial for the purpose of selling
any banking, investment or financial services or products; and
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(ii) for a period of six (6) months from the later of (A) the
Closing Date or (B) if such individual becomes employed by
PFGI or Provident Bank following the Mergers, the date of
termination of such individual's employment, hire or attempt
to hire any of the employees of Fidelity or Centennial.
(m) PFGI shall have received written confirmation in form and substance
satisfactory to it from all of the landlords of Fidelity and its Subsidiaries
that, after the Closing and the consummation of the Mergers, the terms of the
agreements between Fidelity and its Subsidiaries and their landlords, will
permit continuation of activities on such leased premises as presently conducted
and the operation of branches and ATMs of Provident Bank on all leased premises
at which a Centennial branch is currently operated, except where (A) the failure
to obtain such confirmation is not reasonably expected to have a material
adverse effect and (B) an opinion of counsel or other reasonable assurance is
furnished to PFGI to the effect that the activities on such leased premises may
continue after the Effective Time without PFGI or its Subsidiaries being in
breach of the subject lease; and
(n) PFGI shall have had an opportunity to have experts designated by
PFGI review the computer systems, software and other operations of Fidelity and
its Subsidiaries, and PFGI shall have received confirmation from such experts,
not later than October 1, 1999 and reasonably satisfactory to PFGI, that all of
the hardware, software and other systems owned or used by Fidelity and its
Subsidiaries and material to their business are Year 2000 Compliant.
(o) The Pre-Closing Financial Statements as at the end of the month
prior to the Closing Date shall report that the deposit accounts of Centennial
(which for purposes of this Section are adjusted to exclude non-retail deposits,
that is, brokered deposits, commercial accounts, custodial accounts, public
funds and internal operating accounts) as of such date are at least the lesser
of: (1) Ninety-Five Percent (95%) of the amount of such deposit accounts, as so
adjusted, on August 31, 1999, or (2) if the deposit accounts at Provident Bank
as of the end of the month prior to the Closing Date and computed in the same
manner as stated above are less than such deposit accounts at Provident Bank, as
so adjusted, on August 31, 1999, the percentage reduction of such deposit
accounts at Centennial does not exceed the percentage reduction of such deposit
accounts at Provident Bank; provided, however, that Centennial shall pay rates
on deposit accounts comparable to rates for similar types, amounts and
maturities of deposit accounts paid by its competitors in Centennial's deposit
market as reported in the Ratewatch Premium Report for the Cincinnati Region or
other similar publication.
Section 6.2 Conditions to Obligations of Fidelity and its Subsidiaries.
The obligations of Fidelity and its Subsidiaries to effect the Mergers shall be
subject to the satisfaction (or waiver by Fidelity and its Subsidiaries) prior
to or on the Closing Date of the following conditions:
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(a) The representations and warranties made by PFGI and Provident Bank
in this Agreement shall be true and correct on and as of the Closing Date with
the same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any such representations and
warranties made only as of a specified date which shall be true and correct as
of such date);
(b) PFGI and Provident Bank shall have performed and complied in all
material respects with all of its obligations and agreements hereunder required
to be performed on or prior to the Closing Date under this Agreement;
(c) No Injunction preventing the consummation of the Mergers shall be
in effect, nor shall any proceeding by any Regulatory Agency or any other person
seeking any of the foregoing be pending. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Mergers which makes the consummation of the Mergers illegal;
(d) All necessary regulatory approvals, consents, authorizations and
other approvals, including the requisite approval of this Agreement and the
Mergers by the shareholders of the parties hereto, required by law or any
Regulatory Agency for consummation of the Mergers shall have been obtained and
all waiting periods required by law shall have expired;
(e) PFGI shall have registered its shares of Common Stock to be issued
to the Fidelity shareholders with the SEC pursuant to the Securities Act and
with all applicable state securities authorities; the Registration Statement
shall have been declared effective by the SEC and all applicable state
securities authorities and no stop order shall have been issued; and the
Provident Common Shares shall have been authorized for trading on the National
Market System of NASDAQ upon official notice of issuance;
(f) Fidelity and its Subsidiaries shall have received all documents
required to be received from PFGI or Provident Bank on or prior to the Closing
Date, all in form and substance reasonably satisfactory to Fidelity and its
Subsidiaries;
(g) Since the date of this Agreement, there shall not have been any
change in the financial condition, results of operations or business of PFGI,
Provident Bank and their Subsidiaries that would have a material adverse effect
on PFGI, Provident Bank or their Subsidiaries, taken as a whole;
(h) Fidelity shall have received the opinion of PFGI's counsel,
addressed to Fidelity, contemplated by Section 6.1(h) hereof; and
(i) Fidelity shall have received an opinion of Sandler O'Neill &
Partners, L.P. to the effect that the consideration receivable upon consummation
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of the Mergers is fair from a financial point of view to the holders of Fidelity
Common Shares, which opinion is expected by Fidelity to be received reasonably
contemporaneously with the mailing of the proxy statement to the Fidelity
shareholders.
ARTICLE 7
TERMINATION OR ABANDONMENT
Section 7.1 Mutual Agreement. This Agreement may be terminated by the
mutual written agreement of PFGI and Fidelity at any time prior to the Closing
Date, regardless of whether approval of this Agreement and the Holding Company
Merger by the shareholders of Fidelity and PFGI shall have been previously
obtained.
Section 7.2 Breach of Agreements. In the event that there is any breach
in any of the representations and warranties or a breach of any of the
agreements of any party hereto, which breach is not cured within thirty (30)
days after written notice to cure such breach is given to the breaching party by
the non-breaching party, then the non-breaching party, regardless of whether
shareholder approval of this Agreement and the Holding Company Merger shall have
been previously obtained, may terminate and cancel this Agreement by providing
written notice of such action to the other party hereto.
Section 7.3 Failure of Conditions. In the event any of the conditions
to the obligations of either party are not satisfied or waived on or prior to
the Closing Date, and if any applicable cure period provided in Section 7.2
hereof has lapsed, then such party may, regardless of whether approval of this
Agreement and the Holding Company Merger by the shareholders of Fidelity has
been previously obtained, terminate and cancel this Agreement by delivery of
written notice of such action to the other party on such date.
Section 7.4 Regulatory Approval Denial; Burdensome Condition. If any
regulatory application filed pursuant to Section 5.1(a) hereof should be finally
denied or disapproved by the respective Regulatory Agency, then this Agreement
thereupon shall be deemed terminated and canceled; provided, however, that a
request for additional information or undertaking by PFGI, as a condition for
approval, shall not be deemed to be a denial or disapproval so long as PFGI
diligently provides the requested information or undertaking. In the event an
application is denied pending an appeal, petition for review, or similar such
act on the part of PFGI (hereinafter referred to as the "appeal") then the
application shall be deemed denied unless PFGI prepares and timely files such
appeal and continues the appellate process for purposes of obtaining the
necessary approval. PFGI may terminate this Agreement if its Board of Directors
shall have reasonably determined in good faith that any of the requisite
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regulatory approvals imposes a Burdensome Condition, and PFGI shall deliver
written notice of such determination to Fidelity not later than thirty (30) days
after receipt by PFGI of notice of the imposition of such Burdensome Condition
from the applicable Regulatory Agency (unless an appeal of such determination is
being pursued by PFGI, in which event the foregoing notice shall be given within
thirty (30) days of the termination of any such appeal by PFGI or the denial of
such appeal by the appropriate Regulatory Agency).
Section 7.5 Shareholder Approval Denial; Withdrawal/Modification of
Board Recommendation. If this Agreement and the relevant transactions
contemplated by this Agreement, including the Holding Company Merger, are not
approved by the requisite vote of the shareholders of Fidelity at the
Shareholders Meeting, then either party may terminate this Agreement. PFGI may
terminate this Agreement (without prejudice to any recourse it may have against
Fidelity) if Fidelity's Board of Directors shall have withdrawn or modified in
any manner adverse to PFGI its approval or recommendation of this Agreement or
the Holding Company Merger, or shall have resolved or publicly announced an
intention to do either of the foregoing.
Section 7.6 Regulatory Enforcement Matters. If, prior to the Effective
Time, Fidelity or any of its Subsidiaries becomes a party or subject to any new
or amended written agreement, memorandum of understanding, cease and desist
order, imposition of civil money penalties or other regulatory enforcement
action or proceeding with a Regulatory Agency, which might have a Material
Adverse Effect on Fidelity, then PFGI may terminate this Agreement. If, prior to
the Effective Time, PFGI or any of its Subsidiaries becomes a party or subject
to any new or amended written agreement, memorandum of understanding, cease and
desist order, imposition of civil money penalties or other regulatory
enforcement action or proceeding with a Regulatory Agency, which would have a
Material Adverse Effect on PFGI, then Fidelity may terminate this Agreement.
Section 7.7 Outside Closing Date. If the Closing Date does not occur on
or prior to June 30, 2000, then this Agreement may be terminated by either party
by giving written notice thereof to the other, unless the failure of the Closing
to occur by such date shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe the covenants and agreements of
such party set forth in this Agreement.
Section 7.8 Termination for Materially Improved Offer. Fidelity may
terminate this Agreement by written notice to PFGI and Provident Bank in
accordance with this Section if the following conditions are satisfied:
(a) An unsolicited offer to consummate a Competing Transaction is
received by the Board of Directors of Fidelity at a price per share (or
equivalent) higher than $21.00;
(b) the Board of Directors of Fidelity determines in good faith, after
taking into all other factors relevant to the Fidelity shareholders and based
upon the written advice of its legal counsel and financial advisors that (i) the
Competing Offer is materially better for the Fidelity shareholders than the
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benefits accorded the Fidelity shareholders under this Agreement, (ii) the
failure to withdraw, modify or change its recommendation to approve this
Agreement and the Mergers would cause the Board of Directors of Fidelity to
breach its fiduciary duties to Fidelity's shareholders under applicable law, and
(iii) the Board of Directors should accept and recommend the Competing
Transaction to the shareholders of Fidelity;
(c) Fidelity proceeds to close the Competing Transaction on the terms
of the unsolicited offer; and
(d) contemporaneously with the closing of the Competing Transaction,
Fidelity tenders with its written notice of termination to PFGI payment in full,
in immediately available funds, of the cash-out option as provided for in the
Stock Option Agreement between PFGI and Fidelity referred to in Section 8.20
hereof.
Section 7.9 Upset Provision. Within three (3) business days after the
Common Exchange Value is determined, Fidelity shall have the right, upon
delivery of written notice to PFGI, to terminate this Agreement effective on the
thirtieth (30th) day following such notice (the "Effective Termination Date") if
the Final PFGI Value is less than Eighty-Five Percent (85%) of the Initial
Exchange Value, unless the ratio of the Final PFGI Value to the Initial Exchange
Value (the "PFGI Ratio") is greater than or equal to the number obtained by
subtracting 0.15 from the ratio of the Final Index Price to the Initial Index
Price (the "Index Ratio"), subject, however, to the following provisions.
If Fidelity elects to exercise its termination right pursuant to this
Section, it shall give prompt written notice thereof to PFGI; provided, that
such notice of election to terminate may be withdrawn at any time prior to the
Effective Termination Date. During the five (5) day period commencing with its
receipt of such notice, PFGI shall have the option to increase the consideration
to be received by the holders of Fidelity Common Shares hereunder by adjusting
the Per Share Consideration to the lesser of (i) a number which is equal to the
Per Share Consideration times a fraction, the numerator of which is Eighty-Five
Percent (85%) times the Initial PFGI Value and the denominator of which is the
Final PFGI Value, and (ii) a number which is equal to the Per Share
Consideration times a fraction, the numerator of which is the Index Ratio minus
0.15 and the denominator of which is the PFGI Ratio (the intent of which is to
permit PFGI to increase the Per Share Consideration to such amount as would be
sufficient to prevent Fidelity from becoming entitled to exercise its rights
under the first sentence of this Section to terminate this Agreement). If PFGI
so elects, it shall give, within such five (5) day period, written notice to
Fidelity of such election and the revised Per Share Consideration, whereupon no
termination shall be deemed to have occurred pursuant to this Section 7.9 and
this Agreement shall remain in full force and effect in accordance with its
terms (except as the Per Share Consideration shall have been so modified).
If the number of shares of common stock of any Index Company is
materially changed as a result of a recapitalization, reclassification,
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subdivision, spinoff, splitup, exchange of shares or readjustment, or stock
dividend taking effect after the Initial Index Price is determined and prior to
the last trading day during which the Final Index Price is determined, then the
closing prices for such common stock for purposes of determining the Initial
Index Price and the Final Index Price shall be equitably adjusted (in the same
manner as would apply to a Share Adjustment) so as to be comparable as of the
dates on which such Initial Index Price and Final Index Price are determined.
Section 7.10 Effect of Termination. A termination of this Agreement
effected by written notice shall be without prejudice to the terminating party's
rights to damages or to seek other recourse against one or more of the other
parties hereto for any breach of this Agreement. If, however, this Agreement is
terminated mutually by the parties, or if the transactions are not approved by
all of the requisite Regulatory Agencies, or if a party is unable to satisfy a
condition precedent to the consummation of the transactions through no fault of
any party hereto, or if this Agreement is terminated as result of the
application of Sections 7.7, 7.8 or 7.9, then this Agreement shall be of no
further force or effect and the parties shall have no further obligations to
each other except for such executory obligations (such as the return of
information) as expressly survive the termination of this Agreement by the terms
hereof. The agreements set forth in Section 8.2, 8.3, 8.4, 8.6 and 8.17 hereof
shall survive the earlier termination of this Agreement.
ARTICLE 8
GENERAL
Section 8.1 Disclosure Schedule.
(a) Fidelity and its Subsidiaries have delivered to PFGI and Provident
Bank a disclosure schedule (the "Disclosure Schedule"), certified by Fidelity
and its Subsidiaries and delivered prior to the execution of this Agreement,
setting forth, among other things, items the disclosure of which shall be
necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in Article 2 hereof.
(b) Fidelity and its Subsidiaries shall update and supplement the
Disclosure Schedule so as to disclose exceptions to one or more representations
or warranties contained in Article 2 hereof which shall have arisen between the
date hereof and the Closing Date, but any exceptions or other information
subsequently disclosed shall not be taken into consideration in determining, for
purposes of this Agreement, whether the condition set forth in Section 6.1(a)
hereof shall have been satisfied.
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Section 8.2 Confidential Information. The parties acknowledge the
general confidential and proprietary nature of the information which has
heretofore been exchanged and which shall be received from each other hereunder
and agree to hold and keep the same confidential. Confidential information does
not include, however, information which is or becomes generally available to the
public other than as a result of a disclosure by a party or its representatives
in violation of this Agreement. The parties agree that the information shall be
used solely for the purposes contemplated by this Agreement and that such
information shall not be disclosed to any person other than employees and agents
of a party who are directly involved in evaluating the transaction. The
information shall not be used in any way detrimental to a party, including use
directly or indirectly in the conduct of the other party's business or any
business or enterprise in which such party may have an interest, now or in the
future, and whether or not now in competition with such other party.
Section 8.3 Publicity. PFGI and Fidelity shall cooperate with each
other in the development and distribution of all news releases and other public
disclosures concerning this Agreement and the Mergers and shall not issue any
news release or make any other public disclosure prior to the Effective Time
without the prior consent of the other party, unless it reasonably believes such
is required by law upon the advice of counsel or is in response to published
newspaper or other mass media reports regarding the transactions contemplated by
this Agreement, in which such latter event the parties shall give reasonable
notice, and to the extent practicable, consult with each other regarding such
responsive public disclosure. Subsequent to the Effective Time, PFGI shall have
the exclusive right to issue news releases and other public disclosures
concerning this Agreement and the Mergers.
Section 8.4 Return of Documents. Upon termination of this Agreement
without the Mergers becoming effective, each party shall deliver to the other
originals and all copies of all Information made available to such party and
shall not retain any copies, extracts or other reproductions in whole or in part
of such Information.
Section 8.5 Notices. Any notice or other communication shall be in
writing and shall be deemed to have been given or made on the date of delivery,
in the case of hand delivery, or three (3) business days after deposit in the
United States Registered Mail, postage prepaid, or upon receipt if transmitted
by facsimile telecopy or any other means, addressed (in any case) as follows:
(a) if to PFGI:
Provident Financial Group, Inc.
One East Fourth St.
Cincinnati, Ohio 45202
Attention: Mark E. Magee, Vice President, General Counsel
Facsimile: (513) 763-8069
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with a copy to:
Keating, Muething & Klekamp, P.L.L.
1400 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Timothy B. Matthews, Esq.
Facsimile: (513) 579-6457
and
(b) if to Fidelity:
Fidelity Financial of Ohio, Inc.
5535 Glenway Avenue
Cincinnati, Ohio 45238
Attention: Robert R. Sudbrook, President and Chief Executive
Officer
Facsimile: (513) 922-3024
with a copy to:
Vorys, Sater, Seymour and Pease LLP
Suite 2100, Atrium Two
221 East Fourth Street
Cincinnati, Ohio 45202
Attention: Terri R. Abare or Kate M. Molinsky
Facsimile: 513-723-4056
or to such other address as any party may from time to time designate by notice
to the others.
Section 8.6 Liabilities and Expenses.
(a) If this Agreement is terminated pursuant to the provisions of
Article 7 hereof (except by reason of a breach of this Agreement as permitted by
Section 7.2 or the failure of one party to satisfy a condition to Closing as a
result of such party's actions or failure to act, as permitted by Section 7.3),
no party hereto shall have any liability to any other party for costs, expenses,
damages or otherwise. If, however, this Agreement is terminated by a party
pursuant to Section 7.2 by reason of a breach in any of the representations,
warranties or covenants contained in this Agreement or pursuant to Section 7.3
by reason of the other party's failure to satisfy a condition to closing as a
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result of such party's actions or failure to act, then the non-breaching party
shall be entitled to recover damages from the breaching party, including,
without limitation, reimbursement to the non-breaching party of its costs, fees
and expenses (including attorneys', accountants' and advisors' fees and
expenses) incident to the negotiation, preparation, execution and performance of
this Agreement and related documentation.
(b) In the event that the Board of Directors of Fidelity fails to
recommend to the shareholders of Fidelity approval of this Agreement and this
Agreement is rejected by the shareholders of Fidelity at the Shareholders'
Meeting, or in the event that no meeting of the shareholders of Fidelity is held
on or before March 31, 2000, other than for reasons beyond the control of
Fidelity, then, in either of such events, Fidelity shall pay to PFGI Five
Million Dollars ($5,000,000) in immediately available federal funds (i) in the
case of the disapproval by the shareholders of Fidelity of this Agreement where
the Board of Directors of Fidelity has failed to recommend approval, such
payment to be made within five days after the date of the Shareholders' Meeting,
and (ii) if no Shareholders' Meeting is held by March 31, 2000, other than for
reasons beyond the control of Fidelity, such payment to be made within five days
after March 31, 2000.
(c) In the event of any breach of this Agreement by Fidelity, Fidelity
Acquisition or Centennial which (i) has given rise to a right of termination by
PFGI pursuant to Section 7.2 of this Agreement, after the expiration of the
applicable cure period provided in such Section, (ii) is volitional in nature
(and thus within the control of Fidelity, Fidelity Acquisition or Centennial)
and (iii) is materially adverse to the ability of the parties to consummate the
transactions contemplated by this Agreement or has a Material Adverse Effect on
any of the parties hereto, Fidelity shall pay to PFGI Five Million Dollars
($5,000,000) in immediately available federal funds, such payment to be made
within five days after the date of written demand by PFGI.
Section 8.7 Survival of Representations and Warranties. The
representations and warranties contained herein shall expire at the Effective
Time, provided, however, that no such representation or warranty shall be deemed
to be terminated or extinguished so as to deprive PFGI or Fidelity (or any
director, officer or controlling person thereof) of any defense in law or equity
which otherwise would be available against the claims of any person, including,
without limitation, any shareholder or former shareholder of either PFGI or
Fidelity, the aforesaid representations and warranties being material
inducements to the consummation by PFGI and Fidelity of the transactions
contemplated herein.
Section 8.8 Entire Agreement. This Agreement constitute the entire
agreement between the parties and supersedes and cancels any and all prior
discussions, negotiations, undertakings, agreements in principle or other
agreements between the parties relating to the subject matter hereof.
Section 8.9 Headings and Captions. The captions of Articles and
Sections hereof are for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
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Section 8.10 Waiver, Amendment or Modification. The conditions of this
Agreement which may be waived may only be waived by written notice to the other
party waiving such condition. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. This Agreement may be amended or modified
by the parties hereto, at any time before or after shareholder approval of the
Agreement; provided, however, that after any such approval no such amendment or
modification shall alter the amount or change the form of the Merger
Consideration contemplated by this Agreement to be received by shareholders of
Fidelity and, provided, further, that after shareholder approval of this
Agreement, if any such amendment or modification does not alter the amount or
change the form of the Merger Consideration, no further action or approval by
the shareholders of Fidelity shall be required. This Agreement may not be
amended or modified except by a written document duly executed by the parties
hereto.
Section 8.11 Rules of Construction. Unless the context otherwise
requires: (i) a term has the meaning assigned to it, (ii) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles, (iii) "or" is not exclusive, (iv) words in the
singular may include the plural and in the plural include the singular, and (v)
"knowledge" of a party means the actual or constructive knowledge of any
director or executive officer of such party or any of its Subsidiaries.
Section 8.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
shall be deemed one and the same instrument. For purposes of executing this
Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the
request of any party, any facsimile or telecopy document shall be re-executed in
original form by the parties who executed the facsimile or telecopy document. No
party may raise the use of a facsimile machine or telecopier or the fact that
any signature was transmitted through the use of a facsimile or telecopier
machine as a defense to the enforcement of this Agreement or any amendment or
other document executed in compliance with this Section 8.12.
Section 8.13 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No person or entity not a party to this Agreement (other
than the shareholders of Fidelity, to the extent they are entitled to payment of
the Merger Consideration) shall be deemed to be a third party beneficiary of
this Agreement.
Section 8.14 Severability. In the event that any provisions of this
Agreement or any portion thereof shall be finally determined to be unlawful or
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unenforceable, such provision or portion thereof shall be deemed to be severed
from this Agreement, and every other provision, and any portion of a provision,
that is not invalidated by such determination, shall remain in full force and
effect. To the extent that a provision is deemed unenforceable by virtue of its
scope but may be made enforceable by limitation thereof, such provision shall be
enforceable to the fullest extent permitted under the laws and public policies
of the State whose laws are deemed to govern enforceability. It is declared to
be the intention of the parties that they would have executed the remaining
provisions without including any that may be declared unenforceable.
Section 8.15 Governing Law; Assignment. This Agreement shall be
governed by the laws of the State of Ohio and applicable federal laws and
regulations. This Agreement may not be assigned by either of the parties hereto;
provided, however, that the merger or consolidation of PFGI shall not be deemed
an assignment hereunder if PFGI is the surviving corporation in such merger or
consolidation and the PFGI Common Shares shall thereafter continue to be
publicly traded and issuable to the Fidelity shareholders pursuant to the terms
of this Agreement.
Section 8.16 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, an aggrieved party to this Agreement shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction and such right shall be in
addition to any other remedy to which they shall be entitled at law or in
equity.
Section 8.17 Objections under Antitrust Laws. Each of the parties
hereto shall use its diligent efforts to resolve any objections to the Mergers
which may be asserted by the Department of Justice or any private party or other
governmental entity under any antitrust laws or regulations.
Section 8.18 Current Information. During the period from the date of
this Agreement to the Effective Time, each of the parties will promptly notify
the other of (i) any material change in the normal course of its business, (ii)
any governmental complaints, investigations or hearings (or communications that
the foregoing may be contemplated), (iii) the institution or the threat of
material litigation involving such party, and each agrees to keep the other
promptly informed of the status of such events.
Section 8.19 Integration of Operations. Subject to applicable laws,
regulations and the requirements of Regulatory Agencies, during the period from
the date of this Agreement to the Effective Time, the parties will consult and
cooperate fully with each other to do all things advisable to prepare for and
facilitate the integration of Fidelity and its Subsidiaries and their operations
into and with PFGI's Subsidiaries and operations as rapidly and effectively as
possible as of the Effective Time, including, without limitation, preparation
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for the integration of branch operations, management information systems,
financial and accounting operations, employee compensation and benefit matters,
employee training and similar matters. Nothing in this Section shall be
construed, however, to obligate the Board of Directors of Fidelity to take any
action which would constitute a breach of its fiduciary duties to its
shareholders.
Section 8.20 Option Agreement. Within one (1) day of the execution of
this Agreement, Fidelity and PFGI shall enter into a Stock Option Agreement in
the form attached as Exhibit 8.20 providing for the grant of an option to PFGI
to acquire 1,815,955 Fidelity Common Shares (which Fidelity represents shall
constitute approximately 19.9% of the number of Outstanding Fidelity Shares), at
a price equal to Fifteen and 75/100 Dollars ($15.75) per share.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FIDELITY FINANCIAL OF OHIO, INC.
By: /s/Robert R. Sudbrook
Robert R. Sudbrook
President and Chief Executive Officer
FIDELITY ACQUISITION CORPORATION
By: /s/Robert R. Sudbrook
Robert R. Sudbrook
CENTENNIAL BANK
By: /s/Robert R. Sudbrook
Robert R. Sudbrook
President and Chief Executive Officer
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PROVIDENT FINANCIAL GROUP, INC.
By: /s/Robert L. Hoverson
Robert L. Hoverson
President and Chief Executive Officer
THE PROVIDENT BANK
By /s/Robert L. Hoverson
Robert L. Hoverson
President and Chief Executive Officer
58
NEWS RELEASE
Provident Financial Group, Inc. & Fidelity Financial of Ohio, Inc.
Announce Definitive Agreement
to Merge Fidelity Financial into Provident
Cincinnati, August 16, 1999 -- Provident Financial Group, Inc. (Nasdaq: PFGI)
and Fidelity Financial of Ohio, Inc. (Nasdaq: FFOH) today announced that they
have signed a definitive agreement whereby Fidelity Financial and its subsidiary
will merge into Provident Financial Group, Inc. and its subsidiary, The
Provident Bank. Fidelity Financial, with $808.5 million in assets, operates 15
full-service banking offices in the Cincinnati, Ohio area through its
subsidiary, Centennial Bank.
Under terms of the agreement, Fidelity Financial shareholders will receive
shares of Provident common stock having an aggregate value of $191.6 million.
The final exchange ratio will be determined based on Provident's 10-day average
closing price ending on the date in which the last regulatory approval required
to consummate the merger is granted. Fidelity Financial shareholders will
receive $21.00 worth of Provident common stock if Provident's average per share
price during the pricing period is between $40.00 and $44.50. If Provident's
price is less than $40.00, Fidelity Financial shareholders will receive a fixed
exchange ratio of 0.525 shares of Provident. If Provident's price is more than
$44.50, Fidelity Financial shareholders will receive a fixed exchange ratio of
0.4719 shares of Provident. Based on Provident's closing stock price of $42.625
on August 13,1999, Fidelity Financial shareholders would receive 0.4927 shares
of Provident common stock for each Fidelity Financial share. Fidelity Financial
has agreed to grant Provident an option to acquire 19.9 percent of the
outstanding stock of Fidelity Financial, exercisable under certain conditions.
The transaction, which will be accounted for as a pooling-of-interests, is
expected to close late in the fourth quarter of 1999 or early in the first
quarter of 2000. Due diligence work, including an assessment of Year 2000
readiness has been completed by both companies and their advisors. The
transaction, approved by the boards of directors of both companies, is subject
to approval by Fidelity Financial shareholders and customary regulatory
approval. The transaction will be neutral to Provident's earnings per share and
the company expects to take an estimated one-time, acquisition-related,
after-tax charge of $12.0 million during the quarter in which the transaction
closes.
"Fidelity Financial of Ohio is a quality institution that will allow us
continued expansion of our local retail banking network and deposit base within
the greater Cincinnati area," said Provident president and chief executive
officer, Robert L. Hoverson. "The Fidelity Financial transaction is our second
announced acquisition this month. On August 2nd, we announced the acquisition of
OHSL Financial Corp. Both transactions, when finalized, will increase
Provident's deposit base by approximately $820 million."
"We are proud to affiliate with Provident, a well-respected Cincinnati
institution that shares our community-oriented values and banking philosophies,"
said Robert R. Sudbrook, president and chief executive officer of Fidelity
Financial. "This relationship will provide our employees with increased
opportunities and give our customers a wider range of products and services as
well as access to a greater number of convenient banking locations. It is
encouraging to know that we will be able to serve our existing customers as well
as new ones the way we always have. Our shareholders will also realize
significant benefits by being investors in a $2 billion market capitalized
financial institution."
<PAGE>
About Provident Financial Group, Inc.
Provident Financial Group, Inc., a Cincinnati-based commercial banking and
financial services company with $8.5 billion in on-balance sheet assets and
$13.0 billion in managed assets, provides full-service national and regional
commercial and retail banking operations through The Provident Bank and the
Provident Bank of Florida. Additional company information is available at
http://www.provident-financial.com.
About Fidelity Financial of Ohio, Inc.
Fidelity Financial of Ohio, Inc. operates 15 full-service banking offices in
Hamilton and Butler counties in southwestern Ohio through its subsidiary
Centennial Bank. Centennial offers a variety of commercial lending and business
checking products as well as mortgage and consumer loan products.
For further information, please contact:
Provident Financial Group, Inc.
Christopher J. Carey
Executive Vice President & Chief Financial Officer
513-639-4644 / 800-851-9521
e-mail: [email protected]
Fidelity Financial of Ohio, Inc.
Paul D. Staubach
Senior Vice President & Chief Financial Officer
or
Gregory P. Niesen
Senior Vice President & Treasurer
513-922-5959
