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 1, 1995
UJB Financial Corp.
(Exact name of registrant as specified in its charter)
NEW JERSEY 1-6451 22-1903313
(State or other juris- (Commission (IRS Employer
diction of incorporation File No.) Identification No.)
or organization)
301 Carnegie Center, P.O. Box 2066,
Princeton, New Jersey 08543-2066
(Address of principal executive offices)
Registrant's telephone number, including area code (609) 987-3200
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Item 5. Other Information.
Agreement and Plan of Merger
On August 1, 1995, Registrant and The Flemington National Bank and Trust
Company, a national banking association ("FNBT"), entered into an Agreement and
Plan of Merger (the "Agreement") providing for the merger of FNBT into United
Jersey Bank, a New Jersey banking corporation wholly owned by Registrant (the
"Merger") and providing further for each stockholder of FNBT to receive shares
of the Common Stock of the Registrant ("UJB Stock") in exchange for FNBT stock
held by such stockholder in an amount determined in accordance with the exchange
ratio provided for in the Agreement, all upon the satisfaction of the terms and
conditions set forth in the Agreement, including the receipt of approval from
the Board of Governors of the Federal Reserve System and the Department of
Banking, State of New Jersey. Under the terms of the agreement, each FNBT
shareholder will receive between 1.3514 and 1.7241 shares of UJB Stock for each
share of FNBT stock except in certain circumstances more fully set forth in the
Agreement. The exact exchange ratio will be determined based upon the average
price of UJB Stock over a pricing period prior to closing.
Additionally, the agreement allows for FNBT to declare quarterly common
stock dividends between August 1, 1995 and the closing equivalent to the common
stock dividend rate declared by the Registrant. These payments will be subject
to adjustment for the final exchange ratio.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
(2) Agreement and Plan of Merger, dated August 1, 1995, between
UJB Financial Corp. and The Flemington National Bank and
Trust Company, including Exhibits A through J thereto.
(99) Press Release dated August 2, 1995.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Date: August 15, 1995 UJB FINANCIAL CORP.
By: /s/ RICHARD F. OBER, JR.
------------------------------------
Richard F. Ober, Jr.
Executive Vice President
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EXHIBIT INDEX
Ex. No. Description
(2) Agreement and Plan of Merger, dated August 1, 1995, between
UJB Financial Corp. and The Flemington National Bank and
Trust Company, including Exhibits A through J thereto.
(99) Press Release dated August 2, 1995.
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EXHIBIT (2)
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") dated as of August 1,
1995 among UJB Financial Corp., a New Jersey corporation ("UJB"), United Jersey
Bank, a New Jersey banking corporation ("UJBank" and the "Receiving Bank") and
The Flemington National Bank and Trust Company, a national banking association
("Bank" and the "Merging Bank") recites and provides:
A. The respective boards of directors of UJB, UJBank and Bank deem it
advisable to merge Bank into UJBank (the "Merger") pursuant to this Agreement
and to issue to the holders of shares of Common Stock of Bank, par value $2.50
per share ("Bank Stock"), in exchange for their Bank Stock in the Merger, shares
of the Common Stock of UJB, par value $1.20 per share ("UJB Stock").
B. To effectuate the foregoing, the parties desire to adopt a plan of
reorganization in accordance with the provisions of Section 368(a) of the United
States Internal Revenue Code of 1986, as, amended (the "Code");
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I.
GENERAL PROVISIONS
Section 1.01. The Merger. Upon the terms and subject to the conditions
contained in this Agreement, at the Effective Time (as defined in Section 1.06),
Bank shall be merged with and into UJBank pursuant to and in accordance with the
provisions of the New Jersey Banking Act of 1948, as amended, Chapter 67 of the
Laws of 1948, New Jersey Revised Statutes 17:9:A-1 et seq. (the "New Jersey
Banking Act").
Section 1.02. Capital Stock of UJB. All shares of the capital stock of UJB
outstanding immediately prior to the Effective Time shall be unaffected by the
Merger and shall remain outstanding immediately thereafter.
Section 1.03. Terms of Conversion of Bank Stock.
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of any Bank shareholder:
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(1) All shares of Bank Stock which immediately prior to the Effective Time are
either owned beneficially by UJB, if any, or held in the treasury of Bank,
if any, shall be cancelled and retired and no cash, securities or other
consideration shall be paid or delivered under this Agreement in exchange
for such Bank Stock; and
(2) Subject to Sections 1.07, 1.08 and 1.09, each share of Bank Stock
outstanding immediately prior to the Effective Time shall be converted into
the number of shares of UJB Stock equal to the exchange ratio determined in
accordance with the following (the "Exchange Ratio"):
(A) If the Average Price (as defined in Section 1.03(b) below) of a share
of UJB Stock is greater than $37.00, the Exchange Ratio shall be
1.3514;
(B) If the Average Price of a share of UJB Stock is equal to or greater
than $29.00 and equal to or less than $37.00, the Exchange Ratio shall
be equal to the quotient obtained by dividing $50.00 by the Average
Price; and
(C) If the Average Price of a share of UJB Stock is less than $29.00, the
Exchange Ratio shall be 1.7241; provided, however, that if the Average
Price of a share of UJB Stock is less than $26.10, the Board of
Directors of Bank shall have the right, exercisable only until 11:59
p.m. on the third business day following the Determination Date (as
defined in Section 9.01), to terminate this Agreement by giving UJB
notice of such termination, referring to this Section 1.03(a)(2)(C),
and this Agreement shall be terminated pursuant to such notice,
subject to Section 9.02, effective as of 11:59 p.m. on the third
business day following receipt of such notice by UJB, unless UJB
shall, prior to 11:59 p.m. on the third business day following receipt
of such termination notice, send notice to Bank agreeing that the
Exchange Ratio shall be equal to the quotient obtained by dividing
$45.00 by the Average Price.
(b) For purposes of this Agreement:
(1) "Average Price" means the average (rounded to the nearest penny) of the
closing prices of a share of UJB Stock on the New York Stock Exchange -
Composite Transactions Tape for the 10 consecutive trading days ending
on the Determination Date as reported in The Wall Street Journal, or if
not reported therein, as reported in an authoritative source mutually
agreeable to Bank and UJB.
(2) "business day" shall mean a calendar day other than a Saturday or a
Sunday, January 1, the third Monday in January, the third Monday in
February, the last Monday in May, July 4, the first Monday in September,
the second Monday in October, November 11, the fourth Thursday in
November, or December 25. If
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January 1, July 4, November 11 or December 25 fall on a Sunday, the
next Monday is not a business day.
(c) The provisions of Section 1.03(a)(2) and the Exchange Ratio shall be subject
to appropriate adjustments in the event that, from the date hereof to the
Effective Time, the outstanding UJB Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of
shares or securities through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
like changes in the outstanding shares of UJB Stock so that Bank
shareholders who are entitled to receive UJB Stock pursuant to the
provisions hereof shall be entitled to receive such number of shares of UJB
Stock or other stock as they would have received if the Effective Time had
occurred prior to the happening of such event.
Section 1.04. Reservation of UJB Stock; Issuance of Shares Pursuant to the
Merger. UJB shall reserve and make available for issuance to holders of Bank
Stock in connection with the Merger, on the terms and subject to the conditions
of this Agreement, sufficient shares of UJB Stock (which shares, when issued and
delivered, will be duly authorized, legally and validly issued, fully paid and
non-assessable). The shares of UJB Stock to be issued in accordance with the
Agreement are sometimes referred to herein as the "Shares". Upon the terms, and
subject to the conditions of this Agreement, including the conversion of Bank
Stock according to the Exchange Ratio, UJB shall issue the Shares upon
consummation of the Merger to holders of Bank Stock.
Section 1.05. Exchange Agent Arrangements. Prior to the Effective Time, UJB
shall appoint First Chicago Trust Company of New York or another entity
reasonably satisfactory to Bank as the exchange agent (the "Exchange Agent")
responsible for exchanging, in connection with and upon consummation of the
Merger, certificates representing shares of Bank Stock for certificates
representing the Shares (the "UJB Certificates") and Cash In Lieu Amounts (as
defined at Section 1.08) and as disbursing agent for amounts required to be paid
by Section 4.16, if any, and upon consummation of the Merger UJB shall deliver
to the Exchange Agent sufficient certificates representing shares of UJB Stock
and cash (representing the aggregate Cash In Lieu Amount) as shall be required
to effect the exchange required by this Agreement and sufficient cash to pay any
amounts required to be paid by Section 4.16.
Section 1.06. Effective Time. The Merger shall be effective at 12:01 a.m.
on the day after this Agreement and the necessary certifications pursuant to
Section 17:9A-137B of the New Jersey Banking Act have been filed with the
Department of Banking of New Jersey. UJB shall file this Agreement and the
aforedescribed certifications not later than one business day following the
Closing Date (as defined at Section 9.01).
Section 1.07. Exchange of Bank Certificates.
(a) After the Effective Time, the holders of certificates theretofore
representing shares of Bank Stock (the "Bank Certificates"), upon surrender of
such certificates to the Exchange Agent, and only upon such surrender, shall be
entitled to receive (i) in exchange therefor
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certificates representing the number of whole Shares to which the holders are
entitled pursuant to the conversion effected by Section 1.03 and any Cash In
Lieu Amount; provided, however, that each Dissenting Shareholder (as defined at
Section 1.09) who becomes entitled to receive cash pursuant 12 U.S.C. ss.214a
shall receive such payment in lieu of whole Shares and any Cash In Lieu Amount,
and (ii) any cash required to be paid by Section 4.16. Until so surrendered,
outstanding Bank Certificates, other than those not converted pursuant to
Section 1.03(a)(1), shall be deemed for all purposes, other than as provided
below with respect to unsurrendered Bank Certificates and UJB's right to refuse
the payment of dividends or other distributions, if any, in respect of UJB
Stock, to represent (i) the number of whole Shares into which the shares of Bank
Stock have been converted and the right to receive a Cash In Lieu Amount, if
any, as provided in Section 1.08, and (ii) the right to receive amounts, if any,
required to be disbursed under Section 4.16. Until Bank Certificates are so
surrendered, UJB may, at its option, refuse to pay to the holders of such Bank
Certificates dividends or other distributions, if any, payable to holders of UJB
Stock; provided, however, that upon surrender and exchange of such Bank
Certificates there shall be paid to such holders the Amount, without interest,
of dividends and other distributions, if any, which became payable prior thereto
but which were not paid.
(b) Holders of Bank Certificates as of the Effective Time shall cease to
be, and shall have no further rights as, shareholders of Bank.
(c) As promptly as practicable after the Effective Time, if not previously
sent, UJB shall cause the Exchange Agent to send to each holder of Bank
Certificates instructions and transmittal materials for use in surrendering and
exchanging Bank Certificates. If Bank Certificates are properly presented to the
Exchange Agent, UJB shall cause the Exchange Agent to cancel and exchange them
for UJB Certificates and Cash In Lieu Amounts, and, to the extent particular
holders are entitled thereto, to disburse any cash amount required to be paid by
Section 4.16.
(d) At and after the Effective Time there shall be no transfers on the
stock transfer books of Bank of the shares of Bank Stock which were outstanding
immediately prior to the Effective Time.
Section 1.08. Fractional Shares. Each holder of a Bank Certificate who by
virtue of this Article I would have been entitled to receive a fraction of a
share of UJB Stock (after taking into account all shares of Bank Stock
represented by the Bank Certificates then delivered by such holder) shall
receive at the time such holder is to receive UJB Certificates, in lieu of such
fraction of a share, cash in an amount equal to such fraction multiplied by the
Average Price (the "Cash In Lieu Amount").
Section 1.09. Dissenting Bank Shareholders. Bank shall give UJB (i) prompt
notice of any Bank shareholder who gives notice in writing to the Bank at or
prior to the meeting of Bank shareholders contemplated by Section 4.03 that such
Bank shareholder dissents from this Agreement (ii) a list of those Bank
shareholders who vote against the Merger, and (iii) the opportunity to
participate in all negotiations and proceedings with a Bank shareholder
described in clause (i) or (ii) (collectively, "Dissenting Shareholders") with
respect to such Dissenting
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Shareholder's Bank Stock. Any Dissenting Shareholder shall be entitled to
payment for such shares of Bank Stock only to the extent required by and in
accordance with the provisions of 12 U.S.C. ss.214a and UJB shall cause the
Receiving Bank to pay such consideration with funds provided by UJB. Bank shall
not, except with the prior written consent of UJB, voluntarily make any payment
with respect to, or settle, any such demands for payments.
Section 1.10. Additional Actions. If, at any time after the Effective Time,
the Receiving Bank shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Receiving
Bank its right, title or interest in, to or under any of the rights, properties
or assets of Merging Bank acquired or to be acquired by the Receiving Bank as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Receiving Bank shall be authorized
to execute and deliver, in the name and on behalf of Merging Bank or otherwise,
all such deeds, bills of sale, assignments and assurances and to take, in the
name and on behalf of Merging Bank, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Receiving
Bank or otherwise to carry out this Agreement.
Section 1.11. Offices of the Receiving Bank. The Receiving Bank on the date
hereof has offices located as set forth in Exhibit B hereto.
Section 1.12. Offices of the Merging Bank. The Merging Bank on the date
hereof has offices located as set forth in Exhibit C hereto.
Section 1.13. Name of Receiving Bank. The name by which the Receiving Bank
will be known will be UNITED JERSEY BANK.
Section 1.14. Directors of the Receiving Bank. The names of the persons who
will be Directors of the Receiving Bank from and after the Effective Time are as
set forth in Exhibit D.
Section 1.15. Principal Officers of Receiving Bank. The names of the
persons who will be the Principal Officers of the Receiving Bank are as set
forth in Exhibit E. All other officers of the Receiving Bank at the Effective
Time shall retain their then current titles.
Section 1.16. Principal Office of Receiving Bank. The location of the
principal office of the Receiving Bank to be maintained after the Effective Time
shall be the location now occupied by the principal office of the Receiving
Bank, being 210 Main Street, Hackensack, Bergen County, New Jersey.
Section 1.17. Branch Offices of Receiving Bank. The location now occupied
by the main office of Merging Bank at 56 Main Street, Flemington, New Jersey,
will continue as a branch office of the Receiving Bank. All branch office
locations of Merging Bank listed on Exhibit C not closed prior to the Effective
Time, in addition to its main office referred to above, will continue as branch
offices of the Receiving Bank. All branch office locations of the Receiving Bank
listed on
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Exhibit B not closed prior to the Effective Time, in addition to its
principal office referred to in Section 1.16, will continue as branch offices of
the Receiving Bank. UJBank and Bank shall revise Exhibits B and C, as
appropriate, to reflect branch openings and closings between the date hereof and
the Effective Time.
Section 1.18. Capital Stock of Receiving Bank.
(a) The shares of the common stock of the Receiving Bank outstanding
immediately prior to the Effective Time shall remain outstanding. At the
Effective Time, the Receiving Bank shall issue to UJB an amount of its common
stock equal to the number of shares of Bank Stock outstanding immediately prior
to the Effective Time divided by two.
(b) The amount of issued and outstanding capital stock of the Receiving
Bank upon the Effective Time shall be $113,548,265 consisting of 21,509,653
shares of common stock with a par value of $5.00 per share, and 120,000 shares
of preferred stock with a par value of $50.00 per share. The Receiving Bank will
have $355,063,000 of surplus at the Effective Time.
Section 1.19. Preferred Stock of UJBank. The Series A Preferred Stock of
the Receiving Bank (par value $50.00) outstanding immediately prior to the
Merger shall remain outstanding.
Section 1.20. Certificate of Incorporation. The Certificate of
Incorporation of the Receiving Bank upon the Effective Time shall be the
Restated Certificate of Incorporation as in effect on the date hereof until duly
amended as provided by law.
Section 1.21. By-Laws of Receiving Bank. The By-Laws of the Receiving Bank
upon the Effective Time shall be the By-Laws of the Receiving Bank which are in
effect immediately prior to the Effective Time, until duly amended in accordance
with the By-Laws.
Section 1.22. Effect of Merger.
(a) At the Effective Time the corporate existence of Merging Bank shall be
merged into that of the Receiving Bank, and the property and rights of Merging
Bank shall thereupon vest in the Receiving Bank without further act or deed, and
the rights and obligations of Merging Bank shall become the rights and
obligations of the Receiving Bank, and all fiduciary and agency duties and
relationships of Merging Bank shall vest in the Receiving Bank and be performed
by it in the same manner as though the Receiving Bank itself originally assumed
such fiduciary and agency duties and relationships, and any pending action by or
against Merging Bank or the Receiving Bank shall survive the Merger, and the
Receiving Bank shall be substituted for Merging Bank.
(b) At the Effective Time, and to the fullest extent not prohibited by law,
all and singular the rights, powers, privileges, franchises, licenses, effects
and property of Merging Bank, of whatever kind, nature or description, and all
debts, obligations and liabilities, due or owing or
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to grow due or owing to Merging Bank, choses in action as well as all other
things in action or belonging to Merging Bank, and all and every right, title
and interest of Merging Bank in and to any cash, assets or property, shall,
together with the banking business of Merging Bank, be vested in the Receiving
Bank, and be as effectually the property of the Receiving Bank as the same was
of Merging Bank before the Merger.
Section 1.23. Manner of Disposing of UJB Stock Not Taken By Dissenting
Shareholders. Shares of UJB Stock otherwise issuable in the Merger pursuant to
this Agreement in exchange for shares of Bank Stock shall not be issued to a
Dissenting Shareholder who requests in writing to receive in cash the value of
the Bank Stock held by such Dissenting Shareholder before thirty days after the
date of consummation of the Merger. Such UJB Stock shall remain authorized and
unissued common stock of UJB.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF BANK
Bank represents and warrants to UJB and UJBank as follows:
Section 2.01. Organization, Capital Stock.
(a) Each of Bank and its nonbank subsidiaries (the term "subsidiary", as
used herein, shall mean any corporation or other organization or entity of which
25% or more of the outstanding shares of any class of capital stock or other
equity security is directly or indirectly owned), all of which are listed,
together with their respective states of incorporation, on Bank Schedule 2.01,
is, as the case may be, a national banking association or a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, qualified to transact business in and in good
standing under the laws of all jurisdictions where the failure to be so
qualified would have a material adverse effect on the business, results of
operations, assets or financial condition of Bank and its subsidiaries on a
consolidated basis (a "Bank Material Adverse Change"). However, a Bank Material
Adverse Change will not include a change resulting from a change in law, rule,
regulation or generally accepted or regulatory accounting principles, or from
any other matter affecting financial institutions generally. Each of Bank and
its subsidiaries has all corporate power and authority and all material
licenses, franchises, certificates, permits and other governmental
authorizations which are legally required to own and lease its properties, to
occupy its premises and to engage in its business and activities as presently
engaged in, and each has complied in all material respects with all applicable
laws, regulations and orders.
(b) Bank or one of its subsidiaries is the holder and beneficial owner of
all of the issued and outstanding capital stock of all of Bank's direct and
indirect nonbank subsidiaries.
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(c) The authorized capital stock of Bank consists of 1,500,000 shares of
Bank Stock, of which at the date of hereof 958,476 shares were issued and
outstanding. Except as set forth above, or in Section 2.01 (a) hereof, there are
no other Equity Securities of Bank or any subsidiary of Bank outstanding.
"Equity Securities" of an issuer means capital stock or other equity securities
of such issuer, options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, shares of any capital stock or other Equity Securities of such
issuer, or contracts, commitments, understandings or arrangements by which such
issuer is or may become bound to issue additional shares of its capital stock or
other Equity Securities of such issuer, or options, warrants, scrip or rights to
purchase, acquire, subscribe to, calls on or commitments for any shares of its
capital stock or other Equity Securities. Since April 28, 1995, no Equity
Securities of Bank have been issued. All of the issued and outstanding shares of
Bank Stock and shares of capital stock of each subsidiary of Bank have been
fully paid, were duly authorized and validly issued, and except as otherwise
provided by Federal law relating to national banking associations are
non-assessable, have been issued pursuant to an effective registration statement
and current prospectus under the Securities Act of 1933 (the "Securities Act")
or an appropriate exemption from registration under the Securities Act, and were
not issued in violation of the preemptive rights of any shareholder of Bank or
any subsidiary of Bank. Bank has previously delivered a valid list of
shareholders dated not earlier than the fifth business day prior to the date of
this Agreement.
(d) Bank owns no bank subsidiary ("bank" is hereby defined to include
commercial banks, savings banks, private banks, trust companies, savings and
loan associations, building and loan associations and similar institutions
receiving deposits and making loans).
(e) All Equity Securities of its direct and indirect subsidiaries
beneficially owned by Bank or a subsidiary are held free and clear of any
claims, liens, encumbrances or security interests.
Section 2.02. Financial Statements. The financial statements and schedules
contained or incorporated in Bank's (a) annual report to shareholders for the
fiscal year ended December 31, 1994, (b) annual report on Form 10-KSB pursuant
to the Exchange Act for the fiscal year ended December 31, 1994, and (c)
quarterly report on Form 10-QSB pursuant to the Exchange Act for the fiscal
quarter ended March 31, 1995 (the "Bank Financial Statements") are true and
correct in all material respects as of their respective dates and each fairly
presents, in accordance with generally accepted accounting principless
consistently applied, the consolidated statements of condition, income, changes
in shareholders' equity and cash flows of Bank and its subsidiaries at its
respective date and for the period to which it relates. Except as may otherwise
be described therein or in related notes or in accountants' reports thereon, the
Bank Financial Statements were prepared in accordance with generally accepted
accounting principles consistently applied. The Bank Financial Statements do
not, as of the dates thereof, include any material asset or omit any material
liability, absolute or contingent, or other fact, the inclusion or omission of
which renders the Bank Financial Statements, in light of the circumstances under
which they were made, misleading in any respect.
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Section 2.03. No Conflicts. Bank and each of its subsidiaries is not in,
and has received no notice of, violation or breach of, or default under, nor
will the execution, delivery and performance of this Agreement by Bank, or the
consummation of the transactions contemplated hereby, including the Merger, by
Bank upon the terms provided herein (assuming receipt of the Required Consents,
as that term is defined in Section 4.01), violate, conflict with, result in the
breach of, constitute a default under, give rise to a claim or right of
termination, cancellation, revocation of, or acceleration under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of the
material rights, permits, licenses, assets or properties of Bank or any of its
subsidiaries or upon any of the Equity Securities of Bank or any of its
subsidiaries, or constitute an event which could, with the lapse of time, action
or inaction by Bank or any of its subsidiaries or a third party, or the giving
of notice and failure to cure, result in any of the foregoing, under any of the
terms, conditions or provisions, as the case may be, of:
(a) the Articles of Association or By-Laws of Bank or the Certificate or
Articles of Incorporation or By-Laws of any of Bank's subsidiaries;
(b) any law, statute, rule, ruling, determination, ordinance or regulation
of or agreement with any governmental or regulatory authority;
(c) any judgment, order, writ, award, injunction or decree of any court or
other governmental authority; or
(d) except as set forth in Bank Schedule 2.03, any material note, bond,
mortgage, indenture, lease, policy of insurance or indemnity, license, contract,
agreement or other instrument;
to which Bank or any of its subsidiaries is a party or by which Bank or any of
its subsidiaries or any of their assets or properties are bound or committed,
the consequences of which individually or in the aggregate, would be a Bank
Material Adverse Change, or enable any person to enjoin the transactions
contemplated hereby.
Section 2.04. Absence of Undisclosed Liabilities. To the best knowledge of
Bank management, except as set forth in Bank Schedule 2.04, Bank and its
subsidiaries have no liabilities, whether contingent or absolute, direct or
indirect, matured or unmatured (including but not limited to liabilities for
federal, state and local taxes, penalties, assessments, lawsuits or claims
against Bank or any of its subsidiaries), and no loss contingency (as defined in
Statement of Financial Accounting Standards No. 5) other than (a) those
reflected in the Bank Financial Statements or disclosed in the notes thereto,
(b) commitments made by Bank or any of its subsidiaries in the ordinary course
of its business which are not in the aggregate material in frequency or amount
to Bank and its subsidiaries, taken as a whole, and (c) liabilities arising in
the ordinary course of its business since December 31, 1994 which are not in the
aggregate material in frequency or amount to Bank and its subsidiaries, taken as
a whole. Neither Bank nor any of its subsidiaries has, since December 31, 1994,
become obligated on any debt due in more than one year from the date of this
Agreement in excess of $150,000, other than intra-corporate debt and deposits
received, repurchase agreements and borrowings of federal funds from
correspondent
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banks and the Federal Home Loan Bank of New York all entered into in the
ordinary course of business.
Section 2.05. Absence of Litigation, Agreements with Bank Regulators. There
is no outstanding order, injunction or decree of any court or governmental or
self-regulatory body against or affecting Bank or any of its subsidiaries which
materially and adversely affects Bank and its subsidiaries, taken as a whole,
and there are no actions, arbitrations, claims, charges, suits, investigations
or proceedings (formal or informal) material to Bank and its subsidiaries, taken
as a whole, pending or, to Bank's knowledge, threatened, against or involving
Bank or any of its subsidiaries or their officers or directors (in their
capacity as such) in law or equity or before any court, panel or governmental
agency. Neither Bank nor any subsidiary is a party to any agreement or
memorandum of understanding with, or is a party to any commitment letter to, or
has submitted a board of directors resolution or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any governmental or regulatory authority which
restricts materially the conduct of its business, or in any manner relates to
regulatory examinations, its capital adequacy, its credit or reserve policies or
its management. Bank has not been advised by any governmental or regulatory
authority that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any of the foregoing. Bank has
resolved to the satisfaction of the applicable regulatory agency any significant
deficiencies cited by any such agency in its most recent examinations of each
aspect of Bank's business.
Section 2.06. Brokers' Fees. Bank has entered into this Agreement with UJB
as a result of direct negotiations without the assistance or efforts of any
finder, broker, financial advisor or investment banker, other than Advest, Inc.
("Advest"). Bank Schedule 2.06 contains a true and complete copy of all
agreements between Bank and Advest with respect to fees payable on account of
the transactions contemplated by this Agreement.
Section 2.07. Material Information. The representations and warranties made
by Bank in this Agreement and the Bank Schedules hereto, and, at the time of
filing, all filings made by Bank and its subsidiaries after December 31, 1988
with the Office of the Comptroller of the Currency (the "OCC") do not or did not
contain any untrue statement of a material fact and do not or did not omit to
state any material fact required to be stated herein or therein or necessary to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading. Such filings complied in all
material respects with all applicable rules and regulations of the OCC and with
the Securities Act and Exchange Act. Bank has timely made all filings required
by the Securities Act, and the Exchange Act and other federal laws of like
import relating to national banking associations.
Section 2.08. Corporate Action. Assuming due execution and delivery by each
of the other parties hereto, and subject to the approval by the shareholders of
Bank of this Agreement, the Merger and the other transactions contemplated
hereby in accordance with Bank's Articles of Association at a meeting of such
holders to be duly called and held, Bank has the corporate power and is duly
authorized by all necessary corporate action to execute, deliver and perform
this Agreement. The Board of Directors of Bank has taken all action required by
law, its Articles of
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Association, its By-Laws or otherwise to authorize the execution and delivery
of this Agreement. This Agreement is a valid and binding agreement of Bank
enforceable in accordance with its terms except as such enforcement may be
limited by applicable principles of equity, and by bankruptcy, insolvency,
moratorium or other similar laws presently or hereafter in effect affecting the
enforcement of creditors' rights generally. The Board of Directors of Bank in
authorizing the execution of this Agreement has determined to recommend to the
shareholders of Bank the approval of this Agreement, the Merger and the other
transactions contemplated hereby.
Section 2.09. Absence of Changes. There has not been, since December 31,
1994, any Bank Material Adverse Change. Except as disclosed in Bank Schedule
2.09, neither Bank nor any of its subsidiaries has, since December 31, 1994: (a)
declared, set aside or paid any dividend or other distribution in respect of its
capital stock, other than dividends from subsidiaries to Bank or other
subsidiaries of Bank, or, directly or indirectly, purchased, redeemed or
otherwise acquired any shares of such stock held by persons other than Bank and
its subsidiaries; (b) incurred current liabilities since that date other than in
the ordinary course of business; (c) sold, exchanged or otherwise disposed of
any of their assets except in the ordinary course of business; (d) made any
extraordinary officers' salary increase or wage increase, entered into any
employment, consulting, severance or change of control contract with any present
or former director, officer or salaried employee, or instituted any employee or
director welfare, bonus, stock option, profit-sharing, retirement, severance or
other benefit plan or arrangement or modified any of the foregoing so as to
increase its obligations thereunder in any material respect; (e) suffered any
taking by condemnation or eminent domain or other damage, destruction or loss in
excess of $30,000, whether or not covered by insurance, adversely affecting its
business, property or assets, or waived any rights of value in excess of
$30,000; (f) entered into any transactions which in the aggregate exceeded
$150,000 other than in the ordinary course of business; or (g) acquired the
assets or capital stock of another company, except in a fiduciary capacity or in
the course of securing or collecting loans or leases.
Section 2.10. Allowance for Loan and Lease Losses. At December 31, 1994 and
thereafter Bank's allowance for loan and lease losses is adequate in all
material respects to provide for all losses on loans and leases outstanding and,
to the best of Bank's knowledge, the loan and lease portfolios of Bank in excess
of such allowances are collectible in the ordinary course of business. Bank
Schedule 2.10 constitutes a list of all loans and leases made by Bank or any of
its subsidiaries that have been "classified" as to quality by any internal or
external auditor, accountant or examiner, and such list is accurate and complete
in all material respects.
Section 2.11. Taxes and Tax Returns. Neither Bank nor any of its
subsidiaries has at any time filed a consent pursuant to Section 341(f) of the
Code or consented to have the provisions of Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by Bank or any of its subsidiaries. None of the
property being acquired by UJB or its subsidiaries in the Merger is property
which UJB or its subsidiaries will be required to treat as being owned by any
other person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986 or is "tax-exempt use property" within
the meaning of Section 168(h)(1) of the Code. Proper and accurate amounts
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have been withheld from employees by Bank and each of its subsidiaries for
all periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state and local law.
Proper and accurate federal, state and local returns have been timely filed by
Bank and each of its subsidiaries for all periods for which returns were due,
including with respect to employee income tax withholding, social security and
unemployment taxes, and the amounts shown thereon to be due and payable have
been paid in full or adequate provision therefor has been included on the books
of Bank or its appropriate subsidiary. Neither Bank nor any of its subsidiaries
is required to file tax returns with any state other than the State of New
Jersey. Provision has been made on the books of Bank or its appropriate
subsidiary for all unpaid taxes, whether or not disputed, that may become due
and payable by Bank or any of its subsidiaries in future periods in respect of
transactions, sales or services previously occurring or performed. The status of
federal and New Jersey tax audits are as disclosed in Bank Schedule 2.11.
Neither Bank nor any of its subsidiaries is subject to an audit or review of its
tax returns by any state other than the State of New Jersey. Bank is not and has
not been a United States real property holding corporation as defined in Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. Neither Bank nor any of its subsidiaries is
currently a party to any tax sharing or similar agreement with any third party.
There are no material matters, assessments, notices of deficiency, demands for
taxes, proceedings, audits or proposed deficiencies pending or, to Bank's
knowledge, threatened against Bank or any of its subsidiaries and there have
been no waivers of statutes of limitations or agreements related to assessments
or collection in respect of any federal, state or local taxes. Neither Bank nor
any of its subsidiaries has agreed to or is required to make any adjustment
pursuant to Section 481(a) of the Code by reason of a change in accounting
method initiated by Bank or any of its subsidiaries, and neither Bank nor any of
its subsidiaries has any knowledge that the IRS has proposed any such adjustment
or change in accounting method. Bank and its subsidiaries have complied in all
material respects with all requirements relating to information reporting and
withholding (including back-up withholding) and other requirements relating to
the reporting of interest, dividends and other reportable payments under the
Code and state and local tax laws and the regulations promulgated thereunder and
other requirements relating to reporting under federal law including record
keeping and reporting on monetary instruments transactions.
Section 2.12. Properties. Bank, directly or through its subsidiaries, has
good and marketable title to all of its properties and assets, tangible and
intangible, including those reflected in the most recent consolidated balance
sheet included in the Bank Financial Statements (except individual properties
and assets disposed of since that date in the ordinary course of business with
gross proceeds not in excess of $30,000 and individual OREO property disposed of
since that date with gross proceeds not in excess of $50,000), which properties
and assets are not subject to any mortgage, pledge, lien, charge or encumbrance
other than as reflected in the Bank Financial Statements or which in the
aggregate do not materially adversely affect or impair the operation of Bank and
its subsidiaries taken as a whole. Bank and each of its subsidiaries enjoys
peaceful and undisturbed possession under all material leases under which it or
any of its subsidiaries is the lessee, where the failure to enjoy such peaceful
and undisturbed possession would have a material adverse effect on Bank and its
subsidiaries taken as a whole, and none of such leases contains any unusual or
burdensome provision which would materially and adversely affect or impair the
operations of Bank and its subsidiaries taken as a whole.
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Section 2.13. Condition of Properties; Insurance. All real and tangible
personal properties owned by Bank or any of its subsidiaries or used by Bank or
any of its subsidiaries in its business are in a good state of maintenance and
repair, are in good operating condition, subject to normal wear and tear,
conform in all material respects to all applicable ordinances, regulations and
zoning laws, and are adequate for the business conducted by Bank or such
subsidiary subject to exceptions which are not, in the aggregate, material to
Bank and its subsidiaries, taken as a whole. Bank and each of its subsidiaries
maintains insurance (with companies which, to the best of Bank's knowledge, are
authorized to do business in New Jersey) against loss relating to such
properties in amounts which are customary, usual and prudent for corporations or
banks, as the case may be, of their size. Such policies are in full force and
effect, are carried in an amount and form and are otherwise adequate to protect
Bank and each of its subsidiaries from any adverse loss resulting from risks and
liabilities reasonably foreseeable at the date hereof, and are disclosed on Bank
Schedule 2.13. All material claims thereunder have been filed in a due and
timely fashion. Since December 31, 1988, neither Bank nor any of its
subsidiaries has ever been refused insurance for which it has applied or had any
policy of insurance terminated (other than at its request).
Section 2.14. Contracts.
(a) Except as set forth in Bank Schedule 2.14(a), neither Bank nor any of
its subsidiaries is a party to and neither they nor any of their assets are
bound by any written or oral lease or license with respect to any property, real
or personal, as tenant or licensee involving an annual consideration in excess
of $50,000.
(b) Except as set forth in Bank Schedule 2.14(b), neither Bank nor any of
its subsidiaries is a party to and neither they nor any of their assets is bound
by any written or oral: (i) employment or severance contract (including, without
limitation, any collective bargaining contract or union agreement) which is not
terminable without penalty by Bank or a subsidiary, as appropriate, on 60 days'
or less notice; (ii) contract or commitment for capital expenditures in excess
of $50,000 in the aggregate for any one project or in excess of $150,000 in the
aggregate for all projects; (iii) contract or commitment whether or not made in
the ordinary course of business for the purchase of materials or supplies or for
the performance of services involving consideration in excess of $50,000
(including advertising and consulting agreements and retainer agreements with
attorneys, accountants, actuaries, or other professionals); (iv) contract or
option to purchase or sell any real or personal property involving consideration
in excess of $50,000; or (v) other contracts material to the business of Bank
and its subsidiaries taken as a whole and not made in the ordinary course of
business.
(c) Except as previously disclosed to UJB, neither Bank nor any of its
subsidiaries is a party to or otherwise bound by any contract, agreement, plan,
lease, license, commitment or undertaking which, in the reasonable opinion of
management of Bank, is materially adverse, onerous, or harmful to any aspect of
the business of Bank and its subsidiaries taken as a whole.
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Section 2.15. Interest of Management and Affiliates. All loans presently on
the books of Bank or any of its subsidiaries to its present or former directors
or executive officers, or their related interests, affiliates, associates, or
any members of their immediate families, have been made in the ordinary course
of business and on the same terms and interest rates as those prevailing for
comparable transactions with others and do not involve more than the normal risk
of repayment or present other unfavorable features. Except as set forth in Bank
Schedule 2.15, no present or former officer or director of Bank or any of its
subsidiaries or any of their associates or any members of their immediate
families has any interest in any property, real or personal, tangible or
intangible, used in or pertaining to the business of Bank or any of its
subsidiaries except for the normal rights of a shareholder; no such person is
indebted to or has a contract or commitment for the purchase or sale of real or
personal property, materials, supplies or services in excess of $10,000 per
annum or for longer than one year whether or not in the ordinary course of
business with Bank or any of its subsidiaries, except for normal business
expense advances and loans or other extensions of credit of not more than
$25,000 in the aggregate; neither Bank nor any of its subsidiaries has any
commitment, whether written or oral, to lend any funds to any such person; and
neither Bank nor any of its subsidiaries is indebted to any such person except
for deposits taken in the ordinary course of business and amounts due for normal
compensation or reimbursement of expenses incurred in furtherance of the
business of such person's employer and reimbursable according to a policy of
Bank or such subsidiary, as appropriate, as in effect immediately prior to the
date hereof. Except as set forth in Bank Schedule 2.15, the consummation of the
transactions contemplated hereby will not (either alone, or upon the occurrence
of any act or event, the lapse of time, or the giving of notice and failure to
cure) result in any payment (severance or other) becoming due from Bank or any
of its subsidiaries or any successor or assign thereof to any director, officer
or employee of Bank or any of its subsidiaries or any successor or assign of
such subsidiary.
Section 2.16. Pension and Benefit Plans.
(a) Neither Bank nor any of its subsidiaries maintains an employee pension
benefit plan, within the meaning of Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or has made any contributions
to any such employee pension benefit plan except employee pension benefit plans
listed in Bank Schedule 2.16(a) (individually a "Bank Plan" and collectively the
"Bank Plans"). In its present form each Bank Plan complies in all material
respects with all applicable requirements under ERISA and the Code. Except as
disclosed in Bank Schedule 2.16(a), each Bank Plan and the trust created
thereunder is qualified and exempt under Sections 401(a) and 501(a) of the Code,
and Bank or the subsidiary whose employees are covered by such Bank Plan has
received from the IRS a determination letter to that effect. Each Bank Plan has
been administered and communicated to the participants and beneficiaries in all
material respects in accordance with its terms and ERISA. Except as disclosed in
Bank Schedule 2.16(a), no employee or agent of Bank or any subsidiary whose
employees are covered by a Bank Plan has engaged in any action or has failed to
act in such manner that, as a result of such action or failure: (i) the IRS
could revoke, or refuse to issue (as the case may be), a favorable determination
as to such Bank Plan's qualification and the associated trust's exemption or
impose any liability or penalty under the Code, or (ii) a participant or
beneficiary or a nonparticipating employee has been denied benefits properly due
or to become due under such
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Bank Plan or has been misled as to his or her rights under such Bank Plan.
No Bank Plan is subject to Section 412 of the Code or Title IV of ERISA. Except
as disclosed in Bank Schedule 2.16(a), no person has engaged in any prohibited
transaction involving any Bank Plan or associated trust within the meaning of
Section 406 of ERISA or Section 4975 of the Code. All reports, filings,
disclosures, and other communications which have been required to be made to the
participants and beneficiaries, other employees, the SEC, the IRS, the U.S.
Department of Labor, or any other governmental agency pursuant to the Code,
ERISA, or other applicable statute or regulation have been made in a timely
manner and all such reports and communications were true and correct in all
material respects. Except as disclosed in Bank Schedule 2.16(a), no liability
has been, or is likely to be, incurred on account of delinquent or incomplete
compliance or failure to comply with such requirements. "ERISA Affiliate" where
used in this Agreement means any trade or business (whether or not incorporated)
which is a member of a group of which Bank is a member and which is under common
control within the meaning of Section 414 of the Code. Except as disclosed in
Bank Schedule 2.16(a), there are no unfunded benefit or pension plans or
arrangements or any individual agreements, whether qualified or not, to which
Bank or any of its subsidiaries or ERISA Affiliates has any obligation to
contribute. There has been no change in control of any Bank Plan since the last
effective date of any such change of control disclosed to UJB in Bank Schedule
2.16(a).
(b) All bonus, deferred compensation, profit-sharing, retirement, pension,
stock option, stock award and stock purchase plans and all other employee
benefit plans with an annual cost in excess of $25,000 other than medical, major
medical, disability, life insurance or dental plans covering employees
generally, maintained by Bank or any of its subsidiaries (collectively "Benefit
Plans") are listed in Bank Schedule 2.16(b) and, except as disclosed thereon,
comply in all material respects with all applicable requirements imposed by the
Securities Act, the Exchange Act, ERISA, the Code, and all applicable rules and
regulations thereunder. Except as disclosed on Bank Schedule 2.16(b), the
Benefit Plans have been administered and communicated to the participants and
beneficiaries in all material respects in accordance with their terms and ERISA,
and no employee or agent of Bank or any of its subsidiaries has engaged in any
action or failed to act in such manner that, as a result of such action or
failure: (i) the IRS could revoke, or refuse to issue, a favorable determination
as to a Benefit Plan's qualification and any associated trust's exemption or
impose any liability or penalty under the Code; or (ii) a participant or
beneficiary or a nonparticipating employee has been denied benefits properly due
or to become due under the Benefit Plans or has been misled as to their rights
under the Benefit Plans. All reports, filings, disclosures, and other
communications which have been required to be made to the participants and
beneficiaries, other employees of Bank or any of its subsidiaries, the SEC, the
IRS, the U.S. Department of Labor, the PBGC, and any other governmental agency
pursuant to the Code, ERISA, or other applicable statute or regulation have been
made in a timely manner and all such reports and communications were true and
correct in all material respects. No material liability has been, or is likely
to be, incurred on account of delinquent or incomplete compliance or failure to
comply with such requirements.
Section 2.17. Fidelity Bonds. Since at least January 1, 1989, Bank and each
of its subsidiaries has continuously maintained fidelity bonds insuring them
against acts of dishonesty by each of the respective insured's employees in such
amounts as are customary, usual and prudent
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for organizations of its size and business. All material claims thereunder
have been filed in a due and timely fashion. Since January 1, 1989, the
aggregate amount of all claims under such bonds has not exceeded the policy
limits of such bonds (excluding, except in the case of excess coverage, a
deductible amount of not more than $30,000) and neither Bank nor any of its
subsidiaries is aware of any facts which would form the basis of a claim or
claims under such bonds aggregating in excess of the applicable deductible
amounts under such bonds. Neither Bank nor any of its subsidiaries has reason to
believe that its respective fidelity coverage will not be renewed by its carrier
on substantially the same terms as the existing coverage, except for possible
premium increases unrelated to Bank's and its subsidiaries' past claim
experience.
Section 2.18. Labor Matters. Hours worked by and payment made to employees
of Bank and each of its subsidiaries have not been in violation of the Fair
Labor Standards Act or any applicable law dealing with such matters; and all
payments due from Bank and each of its subsidiaries on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of Bank or its appropriate subsidiary. Bank is in compliance with all
other laws and regulations relating to the employment of labor, including all
such laws and regulations relating to collective bargaining, discrimination,
civil rights, safety and health, plant closing (including the Worker Adjustment
Retraining and Notification Act), workers' compensation and the collection and
payment of withholding and Social Security and similar taxes, except for any
immaterial non-compliance. No labor dispute, strike or other work stoppage has
occurred and is continuing or is threatened with respect to Bank or any of its
subsidiaries. No employee of Bank or any of its subsidiaries has been
terminated, suspended, disciplined or dismissed under circumstances that are
likely to result in a material claim, suit, action, complaint or proceeding
against Bank or any of its subsidiaries. No employees of Bank or any of its
subsidiaries are unionized nor has such union representation been requested by
any group of employees or any other person within the last two years. There are
no organizing activities involving Bank pending with, or, to the knowledge of
Bank, threatened by, any labor organization or group of employees of Bank.
Section 2.19. Books and Records. The minute books of Bank and each of its
subsidiaries contain complete and accurate records of and fairly reflect all
actions taken at all meetings and accurately reflect all other corporate action
of the shareholders and the boards of directors and each committee thereof. The
books and records of Bank and each of its subsidiaries fairly and accurately
reflect the transactions to which Bank and each of its subsidiaries is or has
been a party or by which their properties are subject or bound, and such books
and records have been properly kept and maintained.
Section 2.20. Concentrations of Credit. Except as disclosed on Bank
Schedule 2.20, no customer or affiliated group of customers (a) is owed by Bank
or any subsidiary of Bank an aggregate amount equal to more than 5% of the
shareholders' equity of Bank or such subsidiary (including deposits, other debts
and contingent liabilities) or (b) owes to Bank or any of its subsidiaries an
aggregate amount equal to more than 5% of the shareholders' equity of Bank or
such subsidiary (including loans and other debts, guarantees of debts of third
parties, and other contingent liabilities).
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Section 2.21. Trademarks and Copyrights. Neither Bank nor any of its
subsidiaries has received notice or otherwise knows that the manner in which
Bank or any of its subsidiaries conducts its business including its current use
of any material trademark, trade name, service mark or copyright violates
asserted rights of others in any trademark, trade name, service mark, copyright
or other proprietary right.
Section 2.22. Equity Interests. Except as disclosed in Bank Schedule 2.22,
neither Bank nor any of its subsidiaries owns, directly or indirectly, any
equity interest, other than by virtue of a security interest securing an
obligation not presently in default, in any bank, corporation, partnership or
other entity, except: (a) in a fiduciary capacity; or (b) an interest valued at
less than $25,000 acquired in connection with a debt previously contracted.
Section 2.23. Environmental Matters. Except as set forth in Bank Schedule
2.23, no Hazardous Substances (as hereinafter defined) have been stored,
treated, dumped, spilled, disposed, discharged, released or deposited at, under
or on (1) any property now owned, occupied or leased ("Present Property") by
Bank or any of its subsidiaries, (2) any property previously owned, occupied or
leased ("Former Property") by Bank or any of its subsidiaries during the time of
such previous ownership, occupancy or lease; or (3) any Participation Facility
(as hereinafter defined) during the time that Bank or any of its subsidiaries
participated in the management of, or may be deemed to be or to have been an
owner or operator of, such Participation Facility. Neither Bank nor any of its
subsidiaries has disposed of, or arranged for the disposal of, Hazardous
Substances from any Present Property, Former Property or Participation Facility,
and no owner or operator of a Participation Facility disposed of, or arranged
for the disposal of, Hazardous Substances from a Participation Facility during
the time that Bank or any of its subsidiaries participated in the management of,
or may be deemed to be or to have been an owner or operator of, such
Participation Facility. No Hazardous Substances have been stored, treated,
dumped, spilled, disposed, discharged, released or deposited at, under or on any
Loan Property (as hereinafter defined), nor is there, with respect to any such
Loan Property, any violation of environmental law which could materially
adversely affect the value of such Loan Property to an extent which could
prevent or delay Bank or any of its subsidiaries from recovering the full value
of its loan in the event of a foreclosure on such Loan Property.
As used in this Agreement, (a) "Participation Facility" shall mean any
property or facility of which the relevant person or entity (i) has at any time
participated in the management or (ii) may be deemed to be or to have been an
owner or operator, (b) "Loan Property" shall mean any real property in which the
relevant person or entity holds a security interest in an amount greater than
$30,000 and (c) "Hazardous Substances" shall mean (i) any flammable substances,
explosives, radioactive materials, hazardous materials, hazardous substances,
hazardous wastes, toxic substances, pollutants, contaminants or any related
materials or substances specified in any applicable Federal or state law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient or indoor air, surface
water, groundwater, land surface or subsurface strata) and (ii) friable
asbestos, polychlorinated biphenyls, urea formaldehyde, and petroleum and
petroleum-based products.
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It shall be considered material for all purposes of this Agreement if the
cost of taking all remedial or other corrective actions and measures (as
required by applicable law, as recommended or suggested by phase two
investigation reports or as may be prudent in light of serious life, health or
safety concerns) with respect to matters required to be disclosed pursuant to
this Section 2.23 but not so disclosed, is in the aggregate in excess of
$1,000,000, as reasonably estimated by an environmental expert retained for such
purpose by UJB, or if the cost of such actions and measures cannot be so
reasonably estimated by such expert to be such amount or less with any
reasonable degree of certainty.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF UJB AND UJBANK
UJB represents and warrants to Bank as follows:
Section 3.01. Organization, Capital Stock.
(a) UJB is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey with authorized capital stock
consisting of 130,000,000 shares of Common Stock, each of par value $1.20, of
which 55,468,117 shares were issued and outstanding as of June 30, 1995 and
4,000,000 shares of Preferred Stock, each without par value, of which 600,166
shares of Series B Adjustable Rate Cumulative Preferred Stock ($50 stated value)
were issued and outstanding and 600,000 shares of Series R Preferred Stock were
reserved for issuance as of June 30, 1995. UJBank is a banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey with authorized capital stock consisting of 25,000,000 shares of
common stock par value $5.00 per share, of which 19,957,687 shares are currently
issued and outstanding and 250,000 shares of preferred stock of which 120,000
shares are currently issued and outstanding.
(b) UJB is qualified to transact business in and is in good standing under
the laws of all jurisdictions where the failure to be so qualified would have a
material adverse effect on the business, results of operations, assets or
financial condition of UJB and its subsidiaries on a consolidated basis (a "UJB
Material Adverse Change"). However, a UJB Material Adverse Change will not
include a change resulting from a change in law, rule, regulation or generally
accepted or regulatory accounting principles, or from any other matter affecting
financial institutions or their holding companies generally. The bank
subsidiaries of UJB are duly organized, validly existing and in good standing
under the laws of their jurisdiction of organization. UJB and its bank
subsidiaries have all corporate power and authority and all material licenses,
franchises, certificates, permits and other governmental authorizations which
are legally required to own and lease their respective properties, occupy their
respective premises, and to engage in their respective businesses and activities
as presently engaged in. UJB is duly registered as a bank holding company under
the Bank Holding Company Act.
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(c) All issued shares of the capital stock of UJB and of each of its bank
subsidiaries have been fully paid, were duly authorized and validly issued, are
non-assessable, have been issued pursuant to an effective registration statement
and current prospectus under the Securities Act or an appropriate exemption from
registration under the Securities Act and were not issued in violation of the
preemptive rights of any shareholder. UJB or one of its subsidiaries is the
holder and beneficial owner of all of the issued and outstanding capital stock
of its bank subsidiaries. No options covering capital stock of UJB or any of its
bank subsidiaries, warrants to purchase or contracts to issue capital stock of
UJB or any of its bank subsidiaries, or any other contracts, rights (including
preemptive rights), commitments or convertible securities entitling anyone to
acquire from UJB or any of its subsidiaries or obligating them to issue any
capital stock, or securities convertible into or exchangeable for shares of
capital stock, of UJB or any of its bank subsidiaries are outstanding, in
existence, or the subject of an agreement, except for UJB Stock issuable
pursuant to employee stock options granted under stock option plans of UJB, UJB
Stock issuable pursuant to UJB's Dividend Reinvestment and Stock Purchase Plan,
UJB Savings Incentive Plan and 1993 Incentive Stock and Option Plan and Series R
Preferred Stock issuable pursuant to the UJB Shareholder Rights Plan.
Section 3.02. Financial Statements. The financial statements and schedules
contained or incorporated in UJB's (a) annual report to shareholders for the
fiscal year ended December 31, 1994, (b) annual report on Form 10-K pursuant to
the Exchange Act for the fiscal year ended December 31, 1994, (c) quarterly
report on Form 10-Q pursuant to the Exchange Act for the fiscal quarter ended
March 31, 1995, and (d) news release, the Second Quarter Report dated August 1,
1995 and bank regulatory call report relating to financial results for the
fiscal quarter ended June 30, 1995 (the "UJB Financial Statements") are true and
correct in all material respects as of their respective dates and each fairly
presents, in accordance with generally accepted accounting principles
consistently applied, the consolidated balance sheets, statements of income,
statements of shareholders' equity and statements of cash flows of UJB and its
subsidiaries at its respective date and for the period to which it relates.
Except as may otherwise be described therein or in the related notes or in
accountants' reports thereon, the UJB Financial Statements were prepared in
accordance with generally accepted accounting principles consistently applied.
The UJB Financial Statements do not, as of the dates thereof, include any
material asset or omit any material liability, absolute or contingent, or other
fact, the inclusion or omission of which renders the UJB Financial Statements,
in light of the circumstances under which they were made, misleading in any
respect.
Section 3.03. No Conflicts. Each of UJB and UJBank is not in, and has
received no notice of, violation or breach of, or default under, nor will the
execution, delivery and performance of this Agreement by UJB or UJBank, or the
consummation of the Merger by UJB and UJBank upon the terms and conditions
provided herein (assuming receipt of the Required Consents), violate, conflict
with, result in the breach of, constitute a default under, give rise to a claim
or right of termination, cancellation, revocation of, or acceleration under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
rights, permits, licenses, assets or properties material to UJB and its
subsidiaries, taken as a whole, or upon any of the capital stock of UJB or
UJBank, or constitute an event which could, with the lapse of time, action or
inaction by UJB or UJBank, or a third party, or the giving of notice and failure
to cure,
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result in any of the foregoing, under any of the terms, conditions or
provisions, as the case may be, of:
(a) the Restated Certificate of Incorporation or the By-Laws of UJB or
UJBank;
(b) any law, statute, rule, ruling, determination, ordinance, or regulation
of any governmental or regulatory authority;
(c) any judgment, order, writ, award, injunction, or decree of any court or
other governmental authority; or
(d) any material note, bond, mortgage, indenture, lease, policy of
insurance or indemnity, license, contract, agreement, or other instrument;
to which UJB or UJBank is a party or by which UJB or UJBank, or any of its
assets or properties are bound or committed, the consequences of which would be
a UJB Material Adverse Change, or enable any person to enjoin the transactions
contemplated hereby.
Section 3.04. Absence of Litigation, Agreements with Bank Regulators. There
is no outstanding order, injunction, or decree of any court or governmental or
self-regulatory body against or affecting UJB or its subsidiaries which
materially and adversely affects UJB and its subsidiaries, taken as a whole, and
there are no actions, arbitrations, claims, charges, suits, investigations or
proceedings (formal or informal) material to UJB and its subsidiaries, taken as
a whole, pending or, to UJB's knowledge, threatened, against or involving UJB or
their officers or directors (in their capacity as such) in law or equity or
before any court, panel or governmental agency, except as disclosed in the Forms
10-K and 10-Q of UJB referred to in Section 3.02 or as previously provided to
Bank. Neither UJB nor any bank subsidiary of UJB is a party to any agreement or
memorandum of understanding with, or is a party to any commitment letter to, or
has submitted a board of directors resolution or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any governmental or regulatory authority which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies or its management. Neither
UJB nor any bank subsidiary of UJB, has been advised by any governmental or
regulatory authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any of the foregoing.
UJB and the bank subsidiaries of UJB have resolved to the satisfaction of the
applicable regulatory agency any significant deficiencies cited by any such
agency in its most recent examinations of each aspect of UJB or such bank
subsidiary's business except for examinations received within the 30 days prior
to the date hereof.
Section 3.05. Material Information. The representations and warranties made
by UJB in this Agreement and, at the time of filing, all filings made by UJB and
its subsidiaries after December 31, 1989 with the SEC and appropriate bank
regulatory authorities do not contain any untrue statement of a material fact
and do not omit to state any material fact required to be stated herein or
therein or necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading. To the
extent such filings were
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subject to the Securities Act or Exchange Act, such filings complied in all
material respects with the Securities Act or Exchange Act, as appropriate, and
all applicable rules and regulations thereunder of the SEC. UJB has timely made
all filings required by the Securities Act and the Exchange Act.
Section 3.06. Corporate Action. Assuming due execution and delivery by each
of the other parties thereto, and subject to the approval by UJB of this
Agreement as the sole shareholder of UJBank pursuant to Section 5.14, each of
UJB and UJBank has the corporate power and is duly authorized by all necessary
corporate action to execute, deliver, and perform this Agreement. The Board of
Directors of UJB has taken all action required by law or by the Restated
Certificate of Incorporation or By-Laws of UJB or otherwise to authorize the
execution and delivery of this Agreement. Approval by the shareholders of UJB of
this Agreement, the Merger or the transactions contemplated by this Agreement
are not required by applicable law. The sole shareholder and the Board of
Directors of UJBank have taken all action required by law or by the Restated
Certificate of Incorporation or By-Laws of UJBank or otherwise to authorize the
execution and delivery of this Agreement. This Agreement is a valid and binding
agreement of UJB enforceable in accordance with its terms except as such
enforcement may be limited by applicable principles of equity, and by
bankruptcy, insolvency, moratorium or other similar laws presently or hereafter
in effect affecting the enforcement of creditors' rights generally.
Section 3.07. Absence of Changes. Except as disclosed in the UJB Financial
Statements, there has not been, since December 31, 1994, any UJB Material
Adverse Change and there is no matter or fact which may result in any such UJB
Material Adverse Change in the future.
Section 3.08. Non-bank Subsidiaries. The non-bank subsidiaries of UJB did
not, taken in the aggregate, constitute a "significant subsidiary" of UJB, as
that term is defined in Rule 1-02(v) of Regulation S-X of the SEC (17 CFR
ss.210.1-02(v)), at December 31, 1994.
Section 3.09. Absence of Undisclosed Liabilities. The UJB Financial
Statements are prepared on an accrual basis and reflect all known assets and
liabilities. There are no material undisclosed liabilities to the best knowledge
of management.
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ARTICLE IV.
COVENANTS OF BANK
Bank hereby covenants and agrees with UJB and UJBank that:
Section 4.01. Preparation of Registration Statement and Applications for
Required Consents. Bank will cooperate with UJB in the preparation and filing
with the SEC of a Registration Statement on Form S-4 (the "Registration
Statement"), including the Bank proxy statement to be included as a part thereof
(the "Proxy Statement"), for the registration of the UJB Stock to be issued in
connection with the Merger. In connection therewith, Bank will furnish all
information concerning Bank reasonably deemed necessary by counsel to UJB for
the filing or preparation for filing under the Securities Act of the
Registration Statement. Bank will cooperate with UJB and provide such
information as may be advisable in obtaining an order of effectiveness for the
Registration Statement, appropriate permits or approvals under state securities
and "blue sky" laws, the required approval by the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), the required approval from
the Department of Banking of the State of New Jersey, the listing of the Shares
on the New York Stock Exchange (subject to official notice of issuance) and any
other governmental or regulatory consents or approvals or the taking of any
other governmental or regulatory action necessary or, in the reasonable judgment
of UJB, advisable to consummate the Merger (the "Required Consents"). Bank
covenants and agrees that all information furnished by Bank for inclusion in the
Registration Statement, the Proxy Statement and applications or submissions for
the Required Consents will comply in all material respects with the provisions
of applicable law, including the Securities Act and the Exchange Act and the
rules and regulations of the SEC, Federal Reserve Board and OCC, and will not
contain any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. Bank will furnish to Advest, investment bankers advising Bank, such
information as they may reasonably request for purposes of the opinion referred
to in Section 8.07.
Section 4.02. Notice of Adverse Changes. Bank will promptly advise UJB in
writing of (a) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of Bank contained in this
Agreement or the Bank Schedules or the materials furnished pursuant to the
Post-Signing Disclosure List (as defined in Section 4.09), if made on or as of
the date of such event or the Closing Date (as defined at Section 9.01), untrue
or inaccurate in any material respect, (b) any Bank Material Adverse Change, (c)
any inability or perceived inability of Bank to perform or comply with the terms
or conditions of this Agreement, (d) the institution or threat of institution of
litigation or administrative proceedings involving Bank or any of its
subsidiaries or assets, which, if determined adversely to Bank or any of its
subsidiaries, would have a material adverse effect upon Bank and its
subsidiaries taken as a whole or the Merger and the related transactions, and
(e) any governmental complaint, investigation, hearing, or communication
indicating that such litigation or administrative proceedings are contemplated,
(f) any written notice of, or other communication relating to, a default or
event
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which, with notice or lapse of time or both, would become a default,
received by Bank or a subsidiary subsequent to the date hereof and prior to the
Effective Time, under any agreement, indenture or instrument to which Bank or a
subsidiary is a party or is subject and which is material to the business,
operation or condition (financial or otherwise) of Bank and its subsidiaries
taken as a whole, and (g) any written notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement including the
Merger. Bank agrees that the delivery of such notice shall not constitute a
waiver by UJB of any of the provisions of Articles VI or VII.
Section 4.03. Meeting of Shareholders. Bank will call a meeting of its
shareholders for the purpose of voting upon this Agreement, the Merger and the
transactions contemplated hereby to be held as promptly as practicable and, in
connection therewith, will comply with the National Bank Act, the Exchange Act,
the New Jersey Banking Act and all regulations promulgated thereunder governing,
to the extent appropriate, shareholder meetings and proxy solicitations. In
connection with such meeting, Bank shall mail the Proxy Statement to its
shareholders and use its best efforts, subject to the fiduciary duties of the
Board of Directors of Bank, to obtain shareholder approval of this Agreement,
the Merger and the transactions contemplated hereby.
Section 4.04. Copies of Filings. Without limiting the provisions of Section
4.01, Bank will deliver to UJB, at least twenty-four hours prior to an
anticipated date of filing or distribution, all documents to be filed with any
bank regulatory authority or to be distributed in any manner to the shareholders
of Bank or the public, together with, in the case of all quarterly financial
statements provided pursuant to this section, a written opinion of the chief
financial officer of Bank to the effect that such financial statements are true,
correct and complete in all material respects and have been prepared in
accordance with generally accepted accounting principles consistently applied,
except as disclosed therein, and with the books and records of Bank, and present
fairly the consolidated financial position of Bank and its subsidiaries at the
date thereof and the results of operations and cash flows for the period covered
thereby.
Section 4.05. No Material Transactions. Until the Effective Time, Bank will
not and will not allow any of its subsidiaries to, without the prior written
consent of UJB: (a) pay (or make a declaration which creates an obligation to
pay) any cash dividends, other than dividends from subsidiaries of Bank to Bank
or other subsidiaries of Bank, except that Bank may declare a dividend for each
quarter in which UJB, after the date hereof, declares a dividend equal to the
dividend so declared by UJB multiplied by 1.3514; (b) fail to coordinate with
UJB the declaration of any dividends or the setting of any record or payment
dates; (c) declare or distribute any stock dividend or authorize or effect a
stock split; (d) merge with, consolidate with, or sell any material asset to any
other corporation, bank, or person (except for mergers of subsidiaries of Bank
into other subsidiaries of Bank) or enter into any other transaction not in the
ordinary course of business; (e) incur any liability or obligation other than
intracompany obligations, make or agree to make any commitment or disbursement,
acquire or dispose or agree to acquire or dispose of any property or asset
(tangible or intangible), make or agree to make any contract or agreement or
engage or agree to engage in any other transaction, except transactions in the
ordinary course of business and other transactions aggregating not more than
$150,000; (f) subject any of its properties or assets to any lien, claim,
charge, option or encumbrance, except in the ordinary
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course of business and for amounts not material in the aggregate to the
Bank and its subsidiaries taken as a whole; (g) increase or enter into any
agreement to increase the rate of compensation of the employees on the date
hereof at an annualized rate exceeding five percent (5%), or pay any employee
bonus other than bonuses listed on Bank Schedule 4.05(g) which may be paid to
employees pursuant to the bonus plan of Bank and the "staying bonuses" listed on
Schedule 4.05(g) which may be paid to the employees specified on such Schedule
if such employee remains in the employ of the Bank through the Closing Date; (h)
except as set forth in Bank Schedule 4.05(h), create, adopt or modify any
employment or severance arrangement or any pension or profit sharing plan,
bonus, deferred compensation, death benefit, retirement or other employee or
director benefit plan of whatsoever nature, or change the level of benefits
under any such arrangement or plan, or increase any severance or termination pay
benefit or any other fringe benefit; (i) distribute, issue, sell or grant any of
its Equity Securities or any stock appreciation rights; (j) except in a
fiduciary capacity, purchase, redeem, retire, repurchase, or exchange, or
otherwise acquire or dispose of, directly or indirectly, any of its Equity
Securities, whether pursuant to the terms of such Equity Securities or
otherwise, or enter into any agreement providing for any of the foregoing
transactions; (k) amend, its Articles of Association or its Certificate or
Articles of Incorporation or By-laws; (l) modify, amend or cancel any of its
existing borrowings other than intra-corporate borrowings and borrowings of
federal funds from correspondent banks and the Federal Home Loan Bank of New
York or enter into any contract, agreement, lease or understanding, respecting
the sale of OREO property with an individual sale price in excess of $50,000 or
any contracts, agreements, leases or understandings other than those in the
ordinary course of business or which do not involve the creation of any material
obligation or release of any material right of Bank or any of its subsidiaries;
(m) create, or accelerate the exercisability of, any stock appreciation rights
or options or the release of any restrictions on stock issued under the Benefit
Plans; (n) except as otherwise permitted by Section 4.05(e), directly or
indirectly through any investment banker, broker, financial or investment
advisor or other agent, solicit or initiate, or encourage any unsolicited
inquiry respecting, any proposal or offer for, or enter into discussions or
negotiate for, or authorize or enter into any agreement or agreement in
principle providing for, any merger, consolidation, sale or other disposition of
assets or securities, tender offer, exchange offer or other acquisition of
outstanding securities issued by it or other business combination or takeover
transaction (other than the Merger); (o) except as may be required by court
order or decree or required by statute or regulation, furnish or cause to be
furnished any information relating to any inquiry or proposal described in the
foregoing subsection (n), except information previously made public and any
information customarily furnished to the public in the ordinary course of
business concerning its business or properties, to any person or entity making
any inquiry or proposing any transaction described in subsection (n), other than
UJB; or (p) make any employer contribution to a Bank Plan or a Benefit Plan
which under the terms of the particular Plan is voluntary and within the sole
discretion of the Bank to make. In addition, Bank will notify UJB by telephone
to its chief executive officer or general counsel promptly upon receipt of any
inquiry with respect to a proposed merger, consolidation, business combination,
assets acquisition or disposition, tender offer or other takeover transaction
with another person or receipt of a request for information from any
governmental or regulatory authority with respect to a proposed acquisition of
Bank or any of its subsidiaries or assets by another party, and will immediately
deliver as soon as possible by facsimile transmission, receipt acknowledged, to
the UJB officer notified as required above a copy of any document relating
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thereto promptly after any such document is received by Bank. Anything in
clauses (n) or (o) of the foregoing sentence to the contrary notwithstanding,
Bank may, after written notice to UJB, respond to unsolicited inquiries from
third parties and/or engage in discussions with third parties and/or furnish
information to third parties, if, in each case, it receives a written opinion of
its counsel that to fail to do so would constitute a breach or failure on the
part of members of the Bank's Board of Directors to perform the fiduciary duties
of their office.
Section 4.06. Operation of Business in Ordinary Course. Bank, on behalf of
itself and its subsidiaries, covenants and agrees that from and after the date
hereof and until the Effective Time, it and its subsidiaries: (a) will carry on
their business diligently and substantially in the same manner as heretofore and
will not institute any unusual or novel methods of management or operation of
their properties or business and will maintain such in their customary manner;
(b) will use their best efforts to continue in effect their present insurance
coverage on all properties, assets, business and personnel; (c) will use their
best efforts to preserve their business organization intact, preserve their
present relationships with customers, suppliers, and others having business
dealings with them, and keep available their present employees, provided,
however, that Bank or any of its subsidiaries may terminate any employee for
unsatisfactory performance or other reasonable business purpose, and provided
further, however, that Bank will notify and consult with UJB prior to
terminating any of the five highest paid employees of Bank; (d) will use their
best efforts to continue to maintain fidelity bonds insuring Bank and its
subsidiaries against acts of dishonesty by each of their employees in such
amounts (not less than present coverage) as are customary, usual and prudent for
corporations or banks, as the case may be, of their size; (e) will not do
anything or fail to do anything which will cause a breach of or default under
any representation, warranty or covenant of Bank or any contract, agreement,
commitment or obligation to which they or any one of them is a party or by which
they or any of their assets or properties may be bound or committed if the
consequence of such, individually or in the aggregate, may have a material
adverse effect on Bank and its subsidiaries taken as a whole; and (f) will not
change their methods of accounting in effect at December 31, 1994, or change any
of their methods of reporting income and deductions for Federal income tax
purposes from those employed in the preparation of their Federal income tax
returns for the taxable year ending December 31, 1994, except as required by
changes in laws, regulations or generally accepted accounting principles or
changes that are to a preferable accounting method, and approved in writing by
Bank's independent certified public accountants.
Section 4.07. Further Actions. Bank will: (a) execute and deliver such
instruments and take such other actions as UJB may reasonably require to carry
out the intent of this Agreement; (b) use all reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or reasonably
desirable for the consummation of the transactions contemplated by this
Agreement; (c) diligently support this Agreement in any proceeding before any
regulatory authority whose approval of any of the transactions contemplated
hereby is required or reasonably desirable or before any court in which
litigation in respect thereof is pending; and (d) use its best efforts, subject
to the qualification with respect to the fiduciary duties of the Board in
Section 4.03, so that the other conditions precedent to the obligations of UJB
set forth in Articles VI and VII hereof are satisfied.
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Section 4.08. Cooperation. Until the Effective Time, Bank will give to UJB
and to its representatives, including its accountants, KPMG Peat Marwick LLP,
and its legal counsel, full access during normal business hours to all of its
property, documents, contracts and records, will provide such information with
respect to its business affairs and properties as UJB from time to time may
reasonably request, and will cause its managerial employees, counsel and
independent certified public accountants to be available on reasonable request
to answer questions of UJB's representatives covering the business and affairs
of Bank or any of its subsidiaries.
Section 4.09. Copies of Documents. As promptly as practicable, but not
later than 30 days after the date hereof, Bank will furnish to or make available
to UJB all the documents, contracts, agreements, papers, and writings called for
by the list or lists provided by UJB to Bank on or prior to the date hereof (the
"Post-Signing Disclosure List").
Section 4.10. Applicable Laws. Bank and its subsidiaries will use their
best efforts to comply promptly with all requirements which federal or state law
may impose on Bank or any of its subsidiaries with respect to the Merger and
will promptly cooperate with and furnish information to UJB in connection with
any such requirements imposed upon UJB or on any of its subsidiaries in
connection with the Merger.
Section 4.11. Agreements of Affiliated Shareholders. Bank agrees to furnish
to UJB, not later than 10 business days prior to the date of mailing of the
Proxy Statement, a list of each person who, in the opinion of Drinker Biddle &
Reath, special counsel to Bank, is an affiliate of Bank for the purposes of Rule
145 under the Securities Act (a "Bank Affiliate"), shall cause each Bank
Affiliate to enter into, prior to the date of mailing of the Proxy Statement, an
agreement, satisfactory in form and substance to UJB, substantially in the form
of Exhibit F hereto, and effective prior to such date (an "Affiliate
Agreement"), which provides that, among other things, (a) the UJB Stock to be
acquired by a Bank Affiliate upon consummation of the Merger (such shares of UJB
Stock being sometimes referred to herein as "Acquired Shares") will not be
acquired with a view to the sale or distribution thereof except as permitted by
Rule 145, (b) the shares of Bank Stock beneficially owned by such person on the
effective date of the Affiliate Agreement and the Acquired Shares (collectively,
the "Affiliate Shares") will not be disposed of in such a manner as to violate
the Securities Act or the Affiliate Agreement and without UJB having first
received evidence of compliance with Rule 145 and the Affiliate Agreement (e.g.,
copies of brokers' representation letters or any other forms customarily
required to effectuate a brokers' transaction under Rule 145), in each case
satisfactory to UJB (the Office of the Corporate Secretary of UJB can be
consulted for guidance on what constitutes satisfactory evidence of compliance),
(c) the certificates representing the Acquired Shares may bear a legend
referring to the foregoing restrictions on disposition and UJB may issue to its
transfer agent appropriate stop transfer instructions with respect to the
Acquired Shares, and (d) in a transfer of Affiliate Shares not complying with
Rule 145, each Bank Affiliate will obtain an agreement, and deliver a copy of
such to UJB, from the transferee in such a transfer which is substantially
similar to an Affiliate Agreement, unless such transferee may under the
Securities Act dispose of the Affiliate Shares without registration under the
Securities Act and without violation of the Affiliate Agreement.
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Section 4.12. Loans and Leases to Affiliates. All loans and leases
hereafter made by Bank or any of its subsidiaries to any of its present or
former directors, executive officers, or their respective associates shall be
made only in the ordinary course of business and on the same terms and at the
same interest rates as those prevailing for comparable transactions with others
and shall not involve more than the normal risk of repayment or present other
unfavorable features.
Section 4.13. ERISA. Bank shall maintain and cause each of its ERISA
affiliates to maintain Bank Plan assets that are at least equal in value to Plan
benefits guaranteed under Title IV of ERISA, and not permit any Prohibited
Transaction within the meaning of Section 406 of ERISA to exist.
Section 4.14. Fee.
(a) Bank hereby agrees to pay UJB, and UJB shall be entitled to payment of,
a fee (the "Fee") of $3,000,000 following the occurrence of a Purchase Event (as
defined below); provided that UJB shall have sent written demand for such Fee
within 90 days following such Purchase Event; and provided further that the
right to receive the Fee shall terminate and be of no further force and effect
upon the earliest to occur of:
(i) the Effective Time;
(ii) 24 months after
(A) the termination of this Agreement following:
(x) the occurrence of a Preliminary Purchase Event (as
defined below),
(y) discussions occurring pursuant to the last sentence of
Section 4.05, or
(z) a determination by the Board of Directors of Bank not
to submit this Agreement and the transactions
contemplated hereby, including, without limitation, the
Merger, to Bank's shareholders; or
(B) the termination of this Agreement by UJB pursuant to:
(x) Section 9.02(a)(ii), other than a termination occurring
due to a breach of a Bank representation or warranty
existing on the date hereof,
(y) Section 9.02(a)(iii),
(z) Section 9.02(b), other than a termination by UJB
occurring due to a breach of a Bank representation or
warranty existing on the date hereof or a failure of
either of the conditions set forth in Section 7.07 or
Section 7.09;
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(C) the termination of this Agreement by Bank pursuant to
Section 9.02(a)(iv), other than a termination occurring
during such time as UJB shall have failed to perform or
observe an agreement set forth in this Agreement which was
required to be performed or observed on or prior to the
Closing Date and other than a termination due to a failure
of the condition set forth at Section 6.01; or
(iii) termination of this Agreement pursuant to any Section other than
those listed in clause (ii)(B) above, provided such termination
occurs prior to any Purchase Event or any other event or
circumstance described in clause (ii)(A).
Payment of the Fee shall be made in immediately available funds within five
business days after delivery of such written demand.
(b) The term "Preliminary Purchase Event" shall mean any of the following
event or transactions occurring after the date hereof:
(i) The Board of Directors of Bank shall withdraw or modify in a
manner adverse to UJB its approval of, or its recommendation to
the shareholders of Bank to approve, this Agreement or the
transactions contemplated hereby, including, without limitation,
the Merger.
(ii) Bank or any of its subsidiaries (each a "Bank Subsidiary"),
without having received UJB's prior written consent, shall have
entered into an agreement to engage in an Acquisition Transaction
(as defined below) with any person (the term "person" for
purposes of this Agreement having the meaning assigned thereto in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act and the rules
and regulations thereunder) other than UJB or any of its
subsidiaries (each a "UJB Subsidiary") or the Board of Directors
of Bank shall have recommended that the shareholders of Bank
approve or accept any Acquisition Transaction with any person
other than UJB or any UJB Subsidiary. For purposes of this
Agreement, "Acquisition Transaction" shall mean (A) a merger or
consolidation, or any similar transaction, involving Bank or any
Bank Subsidiary, (B) a purchase, lease or other acquisition of
all or substantially all of the assets or deposits of Bank or any
Bank Subsidiary, or (C) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting
power of Bank or any Bank Subsidiary; provided that the term
"Acquisition Transaction" does not include any internal merger or
consolidation involving only one or more of Bank and the Bank
Subsidiaries.
(iii) Any person (other than UJB or any UJB Subsidiary) shall have
acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of Bank Stock
(the term "beneficial ownership" for purposes of this Agreement
having the meaning assigned thereto in Section 13(d) of the
Exchange Act, and the rules and regulations thereunder), or (B)
any group (as such term "group" is defined in Section 13(d)(3) of
the Exchange Act), other than
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a group of which UJB or any UJB Subsidiary is a member, shall
have been formed that beneficially owns 10% or more of the Bank
Stock then outstanding.
(iv) Any person other than UJB or any UJB Subsidiary shall have made a
bona fide proposal to Bank or its shareholders, by public
announcement or written communication that is or becomes the
subject of public disclosure, to engage in an Acquisition
Transaction (including, without limitation, any situation in
which any person other than UJB or any UJB Subsidiary shall have
commenced (as such term is defined in Rule 14d-2 under the
Exchange Act) or shall have filed a registration statement under
the Securities Act with respect to, a tender offer or exchange
offer to purchase any shares of Bank Stock such that, upon
consummation of such offer, such person would own or control 10%
or more of the then outstanding shares of Bank Stock (such an
offer referred to herein as a "Tender Offer" or an "Exchange
Offer", respectively));
(v) After a proposal is made by a third party to Bank or its
shareholders to engage in an Acquisition Transaction, or such
third party states its intention to Bank to make such a proposal
if the Agreement terminates, Bank shall have breached any
representation, covenant or obligation contained in this
Agreement, other than a breach of a representation existing on
the date hereof, and such breach would entitle UJB to terminate
this Agreement under Section 9.02 of this Agreement (without
regard to the cure periods provided for in said Section 9.02 of
this Agreement unless such cure is promptly effected prior to a
termination of this Agreement by UJB without jeopardizing
consummation of the Merger pursuant to the terms of this
Agreement); or
(vi) The holders of Bank Stock shall not have approved this Agreement
at the meeting of such shareholders held for the purpose of
voting on this Agreement or such meeting shall not have been held
or shall have been canceled prior to termination of this
Agreement, in each case after any person (other than UJB or any
UJB Subsidiary) shall have (A) made, or disclosed an intention to
make, a bona fide proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a registration
statement under the Securities Act with respect to an Exchange
Offer or (C) filed an application (or given a notice), whether in
draft or final form, under the New Jersey Banking Act, the Bank
Holding Company Act, the Bank Merger Act or the Change in Bank
Control Act of 1978, as amended, for approval to engage in an
Acquisition Transaction.
(c) The term "Purchase Event" shall mean either of the following events or
transactions occurring after the date hereof:
(i) The acquisition by any person, other than UJB or any UJB
Subsidiary, alone or together with such person's affiliates and
associates, or any group (as defined in Section 13(d)(3) of the
Exchange Act), of beneficial ownership of 25% or more of the Bank
Stock; or
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(ii) The occurrence of a Preliminary Purchase Event described in
subsection (b)(ii) of this Section 4.14 except that the
percentage referred to in clause (C) shall be 25%.
(d) Bank shall notify UJB promptly in writing of its knowledge of the
occurrence of any Preliminary Purchase Event or Purchase Event or the occurrence
of either of the events or circumstances described at Section 4.14(a)(ii)(A)(y)
and Section 4.14(a)(ii)(A)(z); provided, however, that the giving of such notice
by Bank shall not be a condition to the right of UJB to the Fee.
(e) This Section 4.14 shall survive any termination of this Agreement.
Section 4.15. Confidentiality. All information furnished by UJB to Bank or
its representatives pursuant hereto shall be treated as the sole property of UJB
and, if the Merger shall not occur, Bank and its representatives shall return to
UJB all of such written information and all documents, notes, summaries or other
materials containing, reflecting or referring to, or derived from, such
information, except that any such confidential information or notes or abstracts
therefrom presented to the Board of Directors of Bank or any committee thereof
for the purpose of considering this Agreement, the Merger and the related
transactions may be kept and maintained by Bank with other records of Board, and
Board committee, meetings subject to a continuing obligation of confidentiality.
Bank shall, and shall use its best efforts to cause its representatives to, keep
confidential all such information, and shall not directly or indirectly use such
information for any competitive or other commercial purposes. The obligation to
keep such information confidential shall continue for five years from the date
the proposed Merger is abandoned and shall not apply to: (i) any information
which (x) was legally in Bank's possession prior to the disclosure thereof by
UJB, (y) was then generally known to the public, or (z) was disclosed to Bank by
a third party not bound by an obligation of confidentiality; or (ii) disclosures
made as required by law. It is further agreed that if, in the absence of a
protective order or the receipt of a waiver hereunder, Bank is nonetheless, in
the written opinion of its outside counsel, compelled to disclose information
concerning UJB to any tribunal or governmental body or agency or else stand
liable for contempt or suffer other censure or penalty, Bank may disclose such
information to such tribunal or governmental body or agency without liability
hereunder and shall so notify UJB in advance to the extent practicable. This
Section 4.15 shall survive any termination of this Agreement.
Section 4.16. Dividend Equivalency. In the event the Exchange Ratio is
greater than 1.3514, shareholders of record of Bank at the Effective Time shall
become entitled to receive a cash payment per share of Bank Stock held by them
at the Effective Time equal in amount to the difference between the dividends
per share Bank would have been able to pay pursuant to Section 4.05(a) had the
multiplier stated therein been the Exchange Ratio and the dividends per share
actually paid by Bank. The payment to which Bank shareholders may become
entitled pursuant to this Section 4.16 shall be distributed by UJB
simultaneously with the distribution of Shares and Cash In Lieu Amounts provided
for in Article I.
Section 4.17. Dividends. Bank will coordinate with UJB the declaration of
any dividends and the record and payment dates thereof so that the holders of
Bank Stock will not be paid two
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dividends for a single calendar quarter with respect to their shares of
Bank Stock and any shares of UJB Stock they become entitled to receive in the
Merger or fail to be paid one dividend in each calendar quarter.
Section 4.18. Tax Opinion Certificates. Bank shall execute and deliver to
Thompson & Mitchell a tax opinion certificate dated as of the date of
effectiveness of the Registration Statement and as of the Closing Date
substantially in the form of Exhibit G, and Bank shall use its best efforts to
cause each of its executive officers, directors and holders of five percent (5%)
or more of outstanding Bank Stock (including shares beneficially held) to
execute and deliver to Thompson & Mitchell a tax opinion certificate dated as of
the date of effectiveness of the Registration Statement and as of the Closing
Date substantially in the form of Exhibit H hereto.
Section 4.19. Best Efforts to Ensure Pooling. Bank agrees to use, and
agrees to cause each of its subsidiaries to use, its and their best efforts to
cause the Merger to qualify for pooling-of-interests accounting treatment.
ARTICLE V.
COVENANTS OF UJB
UJB hereby covenants and agrees with Bank that:
Section 5.01. Approvals and Registrations. Based on such assistance and
cooperation of Bank as UJB may reasonably request, UJB will use its best efforts
to prepare and file (a) with the SEC, the Registration Statement, (b) with the
Federal Reserve Board, an application for approval of the Merger, (c) with the
New Jersey Department of Banking, an application for approval of the Merger, and
(d) with the New York Stock Exchange, an application for the listing of the
shares of UJB Stock issuable upon the Merger, subject to official notice of
issuance, except that UJB shall have no obligation to file a new registration
statement or a post-effective amendment to the Registration Statement covering
any reoffering of UJB Stock by Bank Affiliates. UJB shall cooperate with Bank in
the preparation and filing of the Proxy Statement by Bank with the OCC and, in
connection therewith, UJB will furnish all information concerning UJB reasonably
deemed necessary by counsel to Bank for such filing or preparation for filing.
UJB covenants and agrees that all information furnished by UJB for inclusion in
the Registration Statement, the Proxy Statement, and all applications and
submissions for the Required Consents will comply in all material respects with
the provisions of applicable law, including the Securities Act and the Exchange
Act and the rules and regulations of the SEC, Federal Reserve Board and OCC, and
will not contain any untrue statement of a material fact and will not omit to
state any material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. UJB will furnish to Advest, investment bankers
advising Bank, such information as they may reasonably request for purposes of
the opinion referred to in Section 8.07.
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Section 5.02. Notice of Adverse Changes. UJB will promptly advise Bank in
writing of (a) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of UJB or UJBank contained in
this Agreement or the UJB Schedules, if made on or as of the date of such event
or the Closing Date, untrue or inaccurate in any material respect, (b) any UJB
Material Adverse Change, (c) any inability or perceived inability of UJB or
UJBank to perform or comply with the terms or conditions of this Agreement, (d)
the institution or threat of institution of material litigation or
administrative proceedings involving UJB or its assets which, if determined
adversely to UJB, would have a material adverse effect on UJB and its
subsidiaries taken as a whole or the Merger, (e) any governmental complaint,
investigation, or hearing or communication indicating that such litigation or
administrative proceedings are contemplated, (f) any written notice of, or other
communication relating to, a default or event which, with notice or lapse of
time or both, would become a default, received by UJB subsequent to the date
hereof and prior to the Effective Time, under any agreement, indenture or
instrument to which UJB or UJBank is a party or is subject and which is material
to the business, operation or condition (financial or otherwise) of UJB and its
subsidiaries taken as a whole, and (g) any written notice or other communication
from any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement
including the Merger. UJB agrees that the delivery of such notice shall not
constitute a waiver by Bank of any of the provisions of Articles VI or VIII.
Section 5.03. Copies of Filings. UJB shall promptly provide to Bank copies
of the application for approval of the Merger filed with the Federal Reserve
Board and the New Jersey Department of Banking and all reports filed by it with
the SEC on Forms 10-Q, 8-K and 10-K.
Section 5.04. Further Actions. UJB will: (a) execute and deliver such
instruments and take such other actions as Bank may reasonably require to carry
out the intent of this Agreement; (b) use all reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or reasonably
desirable for the consummation of the transactions contemplated by this
Agreement; (c) diligently support this Agreement in any proceeding before any
regulatory authority whose approval of any of the transactions contemplated
hereby is required or reasonably desirable or before any court in which
litigation in respect thereof is pending; and (d) use its best efforts so that
the other conditions precedent to the obligations of Bank set forth in Articles
VI and VIII hereof are satisfied.
Section 5.05. Applicable Laws. UJB will use its best efforts to comply
promptly with all requirements which federal or state law may impose on UJB with
respect to the Merger and will promptly cooperate with and furnish information
to Bank in connection with any such requirements imposed upon Bank or on any of
its subsidiaries in connection with the Merger.
Section 5.06. Unpaid Bank Dividends. By virtue of the Merger and without
further action on anyone's part, UJB shall assume the obligation of Bank to pay
dividends, if any, on Bank Stock which has a record date prior to the Effective
Time but are not payable until after the Effective Time.
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Section 5.07. Cooperation. Until the Effective Time, UJB will provide such
information with respect to its business affairs and properties as Bank from
time to time may reasonably request, and will cause its managerial employees,
counsel and independent certified public accountants to be available on
reasonable request to answer questions of Bank's representatives covering the
business and affairs of UJB or any of its subsidiaries.
Section 5.08. Confidentiality. All information furnished by Bank to UJB or
its representatives pursuant hereto shall be treated as the sole property of
Bank and, if the Merger shall not occur, UJB and its representatives shall
return to Bank all of such written information and all documents, notes,
summaries or other materials containing, reflecting or referring to, or derived
from, such information, except that any such confidential information or notes
or abstracts therefrom presented to the Board of Directors of UJB or any
committee thereof for the purpose of considering this Agreement, the Merger and
the related transactions may be kept and maintained by UJB with other records of
Board, and Board committee, meetings subject to a continuing obligation of
confidentiality. UJB shall, and shall use its best efforts, to cause its
representatives to, keep confidential all such information, and shall not
directly or indirectly use such information for any competitive or other
commercial purposes. The obligation to keep such information confidential shall
continue for five years from the date the proposed Merger is abandoned and shall
not apply to: (i) any information which (x) was legally in UJB's possession
prior to the disclosure thereof by Bank, (y) was then generally known to the
public, or (z) was disclosed to Bank by a third party not bound by an obligation
of confidentiality; or (ii) disclosures made as required by law. It is further
agreed that if, in the absence of a protective order or the receipt of a waiver
hereunder, UJB is nonetheless, in the written opinion of its counsel, compelled
to disclose information concerning Bank to any tribunal or governmental body or
agency or else stand liable for contempt or suffer other censure or penalty, UJB
may disclose such information to such tribunal or governmental body or agency
without liability hereunder and shall so notify Bank in advance to the extent
practicable. This Section 5.08 shall survive any termination of this Agreement.
Section 5.09. Further Transactions. UJB continually evaluates possible
acquisitions and may prior to the Effective Time enter into one or more
agreements providing for, and may consummate the acquisition by it of another
bank, association, bank holding company, savings and loan holding company or
other company (or the assets thereof) for consideration that may include UJB
Stock. In addition, prior to the Effective Time, UJB may, depending on market
conditions and other factors, otherwise determine to issue equity-linked or
other securities for financing purposes. Notwithstanding the foregoing, UJB will
not take any action that would (i) prevent the transactions and contemplated
hereby from qualifying as a reorganization within the meaning of Section 368 of
the Code or (ii) materially impede or delay receipt of any Required Consent or
the consummation of the transactions contemplated by this Agreement.
Section 5.10. Indemnification.
(a) UJBank shall indemnify, and advance expenses in matters that may be
subject to indemnification to, persons who served as directors and officers of
Bank or any subsidiary of Bank on or before the Effective Time with respect to
liabilities and claims (and related expenses)
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made against them resulting from their service as such prior to the
Effective Time in accordance with and subject to the requirements and other
provisions of UJBank Restated Certificate of Incorporation and By-Laws in effect
on the date of this Agreement and applicable provisions of law to the same
extent as UJBank is obliged thereunder to indemnify and advance expenses to its
own directors and officers with respect to liabilities and claims made against
them resulting from their service for UJBank.
(b) For a period of six (6) years after the Effective Time, UJBank will use
its best efforts to provide to the persons who served as directors or officers
of Bank or any subsidiary of Bank on or before the Effective Time insurance
against liabilities and claims (and related expenses) made against them
resulting from their service as such prior to the Effective Time comparable in
coverage to that provided by UJBank to its own directors and officers, but, if
not available on commercially reasonable terms, then coverage substantially
similar in all material respects to the insurance coverage provided to them in
such capacities at the date hereof; provided, however, that in no event shall
UJBank be required to expend more than 200% of the current amount expended by
Bank (the "Insurance Amount") to maintain or procure insurance coverage pursuant
hereto, and, further provided, that if UJBank is unable to maintain or obtain
the insurance called for by this Section 5.10, UJBank shall use its best efforts
to obtain as much comparable insurance as available for the Insurance Amount.
Bank shall renew any existing insurance or purchase any "discovery period"
insurance provided for thereunder at UJBank's request.
(c) This Section 5.10 shall be construed as an agreement as to which the
directors and officers of Bank referred to herein are intended to be third party
beneficiaries and shall be enforceable by the such persons and their heirs and
representatives.
(d) If UJB or any of its successors or assigns (i) shall consolidate with
or merge into any other corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii) shall
transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then in each such case, UJB or such
successor or assign shall take such actions as shall be necessary for the
successors or assigns of UJBank to assume the obligations set forth in this
Section 5.10.
Section 5.11. Employee Matters.
(a) After the Effective Time, UJB may in its discretion maintain,
terminate, merge or dispose of (i) the Bank Plans, (ii) the Benefit Plans, and
(iii) all other medical, major medical, disability, life insurance, accidental
death and dismemberment insurance, dental, vision care, or other health or
welfare plan maintained by Bank (the "Health or Welfare Plans"); provided,
however, that any action taken by UJB shall comply with ERISA and other
applicable laws, including laws regarding the preservation of employee pension
benefit plan benefits and, provided further, that if UJB maintains a plan
available to all its employees generally which is similar in character or nature
to, or which covers risks similar to those covered by, a Bank Plan, a Benefit
Plan or a Health or Welfare Plan available to all Bank employees generally,
then, if such Bank plan is terminated by UJB or is otherwise rendered inactive
by UJB, UJB shall offer to the former employees of Bank affected by such plan
termination or cessation of activity the opportunity to
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participate in the similar plan of UJB without being subject to any
exclusions due to pre-existing conditions and such employees shall be given
credit for years of service with Bank for purposes of eligibility, vesting and
benefit accrual purposes, except benefit accruals under the UJB Retirement Plan,
supplemental employee retirement plans and severance plans.
(b) After the Effective Time, Bank employees shall not be entitled to
participate automatically in benefits plans, programs or arrangements of UJB not
maintained by UJB for its employees generally, including without limitation
bonus plans, stock option plans, stock award plans, severance plans and
reduction in force plans, but shall be allowed to participate if and only if
selected for participation by the persons authorized by the terms of such plans
to select participants.
(c) Following the Effective Time, UJBank shall assume the obligations of
Bank with respect to the following agreements, policies or plans existing prior
to the date hereof which have been disclosed in the Bank Schedules: (i)
employment agreements, (ii) stock appreciation rights agreements, (iii) change
of control plan (but only with respect to the three participants on the date
hereof), (iv) for the nine-month period following the Effective Time, severance
policies, but excluding from the coverage of this clause (iv) the President of
Bank and the participants in the change of control plan referred to in clause
(iii), and (v) bonus plan, but only with respect to the bonuses listed in Bank
Schedule 4.05(g) payable by Bank with respect to services rendered in 1995 but
not paid by Bank at or prior to the Effective Time.
(d) In the event Bank shall not have terminated the Bank Savings Plan prior
to the Effective Time, UJB or UJBank shall terminate the Bank Savings Plan
provided such termination would be consistent with accounting for the Merger as
a pooling of interests.
Section 5.12. Best Efforts to Ensure Pooling. UJB agrees to use, and agrees
to cause its subsidiaries to use, its and their best efforts to cause the Merger
to qualify for pooling-of-interests accounting treatment.
Section 5.13. Publication of Results of Combined Operations. If the Closing
Date is a date within the first or third month of any calendar quarter, UJB will
publish financial results including not less than 30 days of post-merger
combined operations which shall be published promptly following the first full
calendar month following the Closing Date and which shall be in accordance with
Section 201.01 of the SEC's Codification of Financial Reporting Policies, and
UJB shall file a Form 8-K for this purpose if necessary.
Section 5.14. Approval of Sole Shareholder of UJBank. UJBank will call a
meeting of its sole shareholder for the purpose of voting upon this Agreement,
the Merger and the transactions contemplated hereby to be held as promptly as
practicable and, in connection therewith, will comply with the New Jersey
Banking Act and all regulations promulgated thereunder governing shareholder
meetings. UJB shall at the shareholder meeting so called, or by means of a
written consent in lieu of meeting, approve this Agreement, the Merger and the
transactions contemplated hereby.
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ARTICLE VI.
CONDITIONS PRECEDENT TO THE RESPECTIVE OBLIGATIONS OF UJB,
UJBANK AND BANK
The respective obligations of UJB, UJBank and Bank under this Agreement to
consummate the Merger are subject to the satisfaction of all the following
conditions, compliance with which or the occurrence of which may only be waived
in whole or in part in writing by UJB, UJBank and Bank:
Section 6.01. Receipt of Required Consents. UJB, UJBank and Bank shall have
received the Required Consents; the Required Consents shall not, in the
reasonable opinion of UJB or Bank, contain restrictions or limitations which
would materially adversely affect the financial condition of UJB after
consummation of the Merger; the Required Consents and the transactions
contemplated hereby shall not on the Closing Date be contested by any federal or
state governmental authority; and on the Closing Date the Required Consents
needed for the Merger shall have been obtained and shall not have been withdrawn
or suspended.
Section 6.02. Effective Registration Statement. The Registration Statement
shall have been declared effective by the SEC; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and remain in
effect on the Closing Date; and no proceeding for that purpose shall have been
initiated or, to the knowledge of UJB or Bank, shall be contemplated or
threatened by the SEC on the Closing Date.
Section 6.03. Tax Matters. At the time of effectiveness of the Registration
Statement and at the Closing Date, each of UJB and Bank shall have received from
Thompson & Mitchell an opinion (the "Tax Opinion"), reasonably satisfactory in
form and substance to it, to the effect that (a) the Merger will constitute a
reorganization within the meaning of Section 368 of the Code, (b) except with
respect to fractional share interests, holders of Bank Stock who receive solely
UJB Stock in the Merger will not recognize gain or loss for federal income tax
purposes, (c) the basis of such UJB Stock (including any fractional share for
which cash is received) will equal the basis of the Bank Stock for which it is
exchanged, (d) the holding period of such UJB Stock (including any fractional
share for which cash is received) will include the holding period of the Bank
Stock for which it is exchanged, assuming that such Bank Stock is a capital
asset in the hands of the holder thereof at the Effective Time, and (e) holders
of Bank Stock who dissent and receive solely cash in exchange for their Bank
Stock will recognize gain or loss, provided that the cash payment does not have
the effect of the distribution of a dividend under Code Section 302.
In addition, no condition or set of facts or circumstances shall exist at the
Closing Date which will either (x) preclude any of the parties to this Agreement
from satisfying the terms or conditions of, or assumptions made in, the Tax
Opinions, as the case may be, or (y) result in any of the factual assumptions
contained in the Tax Opinions being untrue.
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Section 6.04. Absence of Litigation. At the Closing Date, no investigation
by any state or federal agency, and no action, suit, arbitration or proceeding
before any court, state or federal agency, panel or governmental or regulatory
body or authority, shall have been instituted or threatened against UJB or any
of its subsidiaries, or Bank or any of its subsidiaries, that is material to the
Merger or to the financial condition of UJB and its subsidiaries taken as a
whole or Bank and its subsidiaries taken as a whole, as the case may be. At the
Closing Date, no order, decree, judgment, or regulation shall have been entered
or law or regulation adopted by any such agency, panel, body or authority which
enjoined or has a material adverse effect upon the Merger or on the financial
condition of UJB and its subsidiaries taken as a whole or Bank and its
subsidiaries taken as a whole, as the case may be.
Section 6.05. NYSE Listing. At the Closing Date, the shares of UJB Common
Stock to be issued in the Merger shall have been listed on the New York Stock
Exchange subject to official notice of issuance.
Section 6.06. Shares of Dissenting Shareholders. The number of shares of
Bank Stock, if any, represented by Dissenting Shareholders shall not exceed five
percent (5%) of the shares of Bank Stock outstanding on the Closing Date.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF UJB AND UJBANK
The obligation of UJB and UJBank to consummate the Merger is subject to
the satisfaction of all of the following conditions, compliance with which or
the occurrence of which may be waived in whole or in part by UJB and UJBank in
writing:
Section 7.01. No Adverse Changes. During the period from December 31, 1994
to the Closing Date there shall not have been any Bank Material Adverse Change,
and Bank and its subsidiaries shall have not sustained any material loss or
damage to their properties, whether or not insured, which materially affects the
ability of Bank and its subsidiaries, taken as a whole, to conduct their
business.
Section 7.02. Representations and Covenants. Except with respect to matters
resulting from transactions specifically contemplated by this Agreement, all
representations and warranties made by Bank in this Agreement and the Bank
Schedules and the material furnished pursuant to the Post-Signing Disclosure
List shall be true and correct on the date of this Agreement, and in all
material respects on the Closing Date with the same force and effect as if such
representations and warranties were made on the Closing Date. Bank shall have
complied in all material respects with all covenants and agreements contained
herein to be performed by Bank on or before the Closing Date.
Section 7.03. Secretary's Certificate. Bank shall have furnished to UJB a
certificate signed by the Secretary of Bank and dated the Closing Date,
certifying to the satisfaction of the
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conditions set forth in Section 7.11 herein and the effectiveness of all
resolutions adopted by the Board of Directors (including committees thereof) and
shareholders of Bank relating to this Agreement, the Merger Agreement and the
Merger and related transactions, a copy of which resolutions shall be attached
to such certificate.
Section 7.04. Officer's Certificate. Bank shall have furnished to UJB a
certificate signed by the Chairman or President of Bank, dated the Closing Date,
certifying to the satisfaction of the conditions set forth in Sections 6.01, the
last paragraph of Section 6.03, and Section 6.04 as they relate to Bank and in
Sections 7.01, 7.02, 7.08, 7.09 and 7.12.
Section 7.05. Opinion of Bank's Counsel. UJB shall have received an opinion
of Drinker Biddle & Reath, dated the Closing Date and reasonably satisfactory in
form and substance to counsel for UJB, substantially to the effect provided in
Exhibit I.
Section 7.06. Affiliate Agreements and Tax Opinion Certificates. Each
person who is a Bank Affiliate shall have delivered to UJB an executed Affiliate
Agreement.
Section 7.07. Approvals of Legal Counsel. All actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all related legal matters shall be
reasonably satisfactory to counsel to UJB, and such counsel shall have been
furnished with certified copies of actions and proceedings and such other
documents and instruments as they shall have reasonably requested.
Section 7.08. Consents to Bank Contracts. All consents, approvals or
waivers, in form and substance reasonably satisfactory to UJB, required to be
obtained in connection with the Merger from other parties to each mortgage,
note, lease, permit, franchise, loan or other agreement, or other contract to
which Bank or any of its subsidiaries is a party or by which they or any of
their assets or properties may be bound or committed, which contract is material
to the business, franchises, operations, assets, financial condition or
prospects (financial or otherwise) of Bank and its subsidiaries on a
consolidated basis, shall have been obtained.
Section 7.09. Net Worth. The sum of (i), (ii), (iii), (iv) and (v) (where
(i) is the sum of consolidated shareholders' equity and consolidated allowance
for loan losses of Bank (as determined in accordance with generally accepted
accounting principles consistently applied with those used in preparing the Bank
Financial Statements as of December 31, 1994) at the last day of the month
preceding the Closing Date, (ii) is the sum of expenses incurred or accrued by
Bank in respect of the Merger and related transactions as of the Closing Date
and expenses attributable to stock appreciation rights agreements as of the
Closing Date, (iii) is the acceleration, if any, in amortization of leasehold
improvements arising from notice of termination by Bank of existing leases, (iv)
is the net negative effect after June 30, 1995, if any, of mark-to-market
accounting for securities available for sale, and (v) is the sum of the "staying
bonuses" payable on the Closing Date to the three individuals named on Bank
Schedule 4.05(g) to the extent acrued by the Bank prior to such date) shall be
not less than the sum of consolidated shareholders' equity and consolidated
allowance for loan losses of Bank (as determined in accordance with generally
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accepted accounting principles consistently applied with those used in preparing
the Bank Financial Statements as of December 31, 1994) at June 30, 1995.
Section 7.10. FIRPTA Affidavit. Bank shall have delivered to UJB an
affidavit of an executive officer of Bank stating, under penalties of perjury,
that Bank is not and has not been a United States real property holding company
(as defined in Section 897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
Section 7.11. Shareholder Approval. The shareholders of Bank, at the
meeting contemplated by this Agreement, shall have authorized and approved the
Merger and this Agreement and all transactions contemplated by this Agreement as
and to the extent required by all applicable laws and regulations and the
provisions of Bank's Articles of Association and By-Laws.
Section 7.12. Absence of Regulatory Agreements. Neither Bank nor any Bank
subsidiary shall be a party to any agreement or memorandum of understanding
with, or commitment letter to, or board of directors resolution submitted to or
similar undertaking made to, or be subject to any order or directive by, or be a
recipient of any extraordinary supervisory letter from, any governmental or
regulatory authority which restricts materially the conduct of its respective
business or has a material adverse effect upon the Merger or upon the financial
condition of Bank or Bank and its subsidiaries taken as a whole, and neither
Bank nor Bank shall have been advised by any governmental or regulatory
authority that such authority is contemplating issuing or requesting, or
considering the appropriateness of issuing or requesting, any of the foregoing.
The receipt of the documents required by this Article VII by UJB shall in no way
constitute a waiver by UJB of any of the provisions of or its rights under this
Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF BANK
The obligation of Bank to consummate the Merger is subject to the
satisfaction of all of the following conditions, compliance with which or the
occurrence of which may be waived in whole or in part by Bank in writing:
Section 8.01. No Adverse Changes. During the period from December 31, 1994
to the Closing Date there shall not have been any UJB Material Adverse Change,
and UJB and its subsidiaries shall not have sustained any material loss or
damage to their properties, whether or not insured, which materially affects the
ability of UJB and its subsidiaries, taken as a whole, to conduct their
business.
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Section 8.02. Representations and Covenants. Except with respect to matters
resulting from transactions specifically contemplated by this Agreement, all
representations and warranties made by UJB in this Agreement shall be true and
correct on the date of this Agreement and, in all material respects, on the
Closing Date with the same force and effect as if such representations and
warranties were made on the Closing Date. UJB shall have complied in all
material respects with all covenants and agreements contained herein or therein
to be performed by UJB on or before the Closing Date. The entry by UJB after the
date hereof into any agreement to acquire any company or other entity, the
issuance of up to $400 million of debt equity, and the issuance of Series R
Preferred Stock pursuant to UJB's Shareholder Rights Plan, the redemption or
repurchase by UJB of its Common Stock, Series B Adjustable Rate Cumulative
Preferred Stock, the Rights attached to UJB Common Stock or the Series R
Preferred Stock issuable pursuant to UJB's Shareholder Rights Plan, and any
transactions reasonably necessary or appropriate in connection therewith, are
specifically permitted by this Agreement.
Section 8.03. Secretary's Certificate. UJB shall have furnished to Bank a
certificate signed by the Secretary of UJB and dated the Closing Date,
certifying to the satisfaction of the condition set forth in Section 6.05 and
the effectiveness of all resolutions adopted by the Board of Directors
(including committees thereof) of UJB relating to this Agreement, the Merger
Agreement and the Merger and related transactions, a copy of which resolutions
shall be attached to such certificate.
Section 8.04. Officer's Certificate. UJB shall have furnished to Bank a
certificate signed by the Chairman, Vice Chairman, President or an Executive
Vice President of UJB, dated the Closing Date, certifying to the satisfaction of
the conditions set forth at Sections 6.01 and 6.02, the next to last paragraph
of Section 6.03, and Section 6.04 as they relate to UJB and Sections 8.01, 8.02
and 8.08.
Section 8.05. Opinions of UJB Counsel. Bank shall have received an opinion
of General Counsel for UJB, dated the Closing Date and reasonably satisfactory
in form and substance to counsel for Bank, substantially to the effect provided
in Exhibit J.
Section 8.06. Approvals of Legal Counsel. All actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all related legal matters shall be
reasonably satisfactory to counsel to Bank, and such counsel shall have been
furnished with certified copies of actions and proceedings and such other
documents and instruments as they shall have reasonably requested.
Section 8.07. Fairness Opinion. The Proxy Statement shall have contained
the favorable signed opinion of Advest, dated the date of the Proxy Statement or
not more than five business days prior thereto, regarding the fairness from a
financial point of view of the consideration to be received by the shareholders
of Bank in the Merger.
Section 8.08. Absence of Regulatory Agreements. Neither UJB nor any of its
bank subsidiaries shall be a party to any agreement or memorandum of
understanding with, or commitment letter to, or board of directors resolution
submitted to or similar undertaking made
40
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to, or be subject to any order or directive by, or be a recipient of any
extraordinary supervisory letter from, any governmental or regulatory authority
which restricts materially the conduct of UJB's business or has a material
adverse effect upon the Merger or upon the financial condition of UJB and its
subsidiaries taken as a whole, except for such of the foregoing as was
previously disclosed to Bank, and neither UJB nor any of its bank subsidiaries
shall have been advised by any governmental or regulatory authority that such
authority is contemplating issuing or requesting, or considering the
appropriateness of issuing or requesting, any of the foregoing.
Section 8.09. Bank Shareholder Approval. The shareholders of Bank, at the
meeting contemplated by this Agreement, shall have authorized and approved the
Merger and this Agreement and all transactions contemplated by this Agreement as
and to the extent required by all applicable laws and regulations and the
provisions of Bank's Articles of Association and By-Laws.
Section 8.10. UJBank Shareholder Approval. UJB as sole shareholder of
UJBank shall have authorized and approved the Merger, this Agreement and all
transactions contemplated by this Agreement, either pursuant to a meeting held
for that purpose or by means of a written consent of sole shareholder, as and to
the extent required by all applicable laws and regulations and the provisions of
UJBank's Restated Certificate of Incorporation and By-Laws.
The receipt of the documents required by this Article VIII by Bank shall in no
way constitute a waiver by Bank of any of the provisions of or its rights under
this Agreement.
ARTICLE IX
CLOSING; TERMINATION RIGHTS
Section 9.01. Closing. Unless a different place and time are agreed to by
the parties hereto, the closing of the Merger (the "Closing") shall take place
on a date determined by UJB on at least five business days notice (the "Closing
Notice") given to Bank, at the office of UJB, 301 Carnegie Center, Princeton,
New Jersey, commencing at 10:00 a.m., which date shall not be later than 45
business days after the last to occur of the following:
(a) the date of the approval of the Merger by the shareholders of Bank in
accordance with Section 7.11;
(b) if the transactions contemplated by this Agreement are being contested
in any legal proceeding, the date that such proceeding has been brought to a
conclusion favorable, in the judgment of UJB and Bank, to the consummation of
the transactions contemplated herein or such prior date as UJB and Bank shall
elect, whether or not such proceeding has been brought to a conclusion; or
41
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(c) the date of receipt of the last of the Required Consents (and the
expiration of any required waiting period required by statute or incorporated
into such Required Consents);
Such date is sometimes referred to herein as the "Closing Date". In the Closing
Notice, UJB shall specify the "Determination Date" for purposes of determining
the Average Price, which date shall be not more than ten business days prior to
the Closing Date. At the Closing, the parties will exchange certificates, legal
opinions and other documents for the purpose of determining whether the
conditions precedent to the obligations of the parties set forth herein have
been satisfied or waived. After all such conditions have been satisfied or
waived, UJB shall cause to be filed with the New Jersey Department of Banking in
accordance with Section 1.06, the Merger Agreement and certifications required
under the New Jersey Banking Act. All proceedings to be taken and all documents
to be executed and delivered by all parties at the Closing shall be deemed so
taken, executed and delivered simultaneously, and no proceedings shall be deemed
taken or any documents executed or delivered until all have been taken, executed
or delivered.
Section 9.02. Termination Rights.
(a) The Boards of Directors of Bank and UJB may terminate this Agreement by
mutual consent at any time prior to the Effective Time. In addition, if either
party shall refuse to close because, on the date on which the Closing must be
held as determined by Section 9.01, all the conditions precedent to its
obligation to close under Article VI shall not have been met, the Board of
Directors of such party may terminate this Agreement by giving written notice of
such termination to the other party. Furthermore, the Board of Directors of
either party may terminate this Agreement in the event that:
(i) the shareholders of Bank at the meeting of shareholders
contemplated by Section 4.03, called for the purpose of approving the
Merger, this Agreement and the transactions contemplated by this Agreement,
upon voting, shall have failed to approve by the requisite vote, or
(ii) a material breach of a warranty or representation or covenant
made by the other party shall have occurred and such breach has not been
cured, or is not capable of being cured, within 30 days after written
notice of the existence thereof shall have been given to the other party
(provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained herein);
(iii) Bank's investment banker is unable to deliver to Bank by
November 30, 1995 the opinion required by Section 8.07; or
(iv) the Closing is not consummated on or before June 30, 1996, unless
the failure of such occurrence shall be due solely to the failure of the
party seeking to terminate this Agreement to perform or observe its
agreements set forth in this Agreement required to be performed or observed
by such party on or before the Closing Date.
42
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(b) If either party shall refuse to close because, on the date on which the
Closing must be held as determined by Section 9.01, all the conditions to its
obligation to close (other than a condition set forth in Article VI) shall not
have been met (other than a failure of the condition set forth at Section 7.11
or 8.07 due to the circumstances set forth in Section 9.02(a)(i) hereof or a
failure of the condition set forth at Section 8.07 due to the circumstances set
forth at Section 9.02(a)(iii) hereof), the Board of Directors of such party may
terminate this Agreement by giving written notice of such termination to the
other party.
(c) Upon a termination of this Agreement pursuant to this Section 9.02 or
Section 1.03(a)(2)(C) hereof:
(i) the obligations of the parties under this Agreement (except for
those under this Section 9.02 and Sections 4.14, 4.15 and 5.08) shall
terminate and be of no further force or effect and each party shall be
mutually released and discharged from liability to the other party or to
any third parties hereunder except for any liability arising out of any
uncured wilful breach of any covenant or other agreement contained herein
or any fraudulent breach of a representation or warranty contained herein,
and
(ii) no party shall be liable to any other party for any costs or
expenses paid or incurred in connection herewith by such other party,
except that expenses incurred in connection with printing the Proxy
Statement and the Registration Statement, and the filing fees of regulatory
authorities or self-regulatory organizations, shall be borne equally by UJB
and Bank; provided, however, that: (A) if Bank terminates this Agreement
pursuant to Section 9.02(a)(ii) or Section 9.02(b), UJB shall reimburse
Bank for its out-of-pocket expenses reasonably incurred in connection with
this Agreement, including counsel fees and the printing and filing fees
referred to above, but excluding any brokers', finders' or investment
bankers' fees; and (B) if UJB terminates this Agreement pursuant to Section
9.02(a)(i) or (a)(ii) or Section 9.02(b), Bank shall reimburse UJB for its
out-of-pocket expenses reasonably incurred in connection with this
Agreement, including counsel fees and the printing and filing fees referred
to above, but excluding any brokers', finders' or investment bankers' fees.
(d) Notwithstanding any termination of this Agreement, (i) Bank shall
indemnify and hold UJB harmless from and against any claim by any broker or
finder asserting a right to brokerage commissions or finders' fees as a result
of any action allegedly taken by or understanding allegedly reached with Bank
and (ii) UJB shall indemnify and hold Bank harmless from and against any claim
by any broker or finder asserting a right to brokerage commissions or finders'
fees as a result of any action allegedly taken by or understanding allegedly
reached with UJB.
(e) Except as provided otherwise herein in the event of a termination of
this Agreement, Bank and its subsidiaries shall bear their own expenses incident
to preparing, entering into and carrying out this Agreement and to consummating
the Merger, provided, however, that UJB shall pay all printing and mailing
expenses and filing fees associated with the Registration Statement, the Proxy
Statement and regulatory applications.
43
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ARTICLE X
MISCELLANEOUS
Section 10.01. Press Releases. At all times until the Closing Date or the
termination of this Agreement, each party shall promptly advise and consult with
the other prior to issuing, or permitting any of its subsidiaries, directors,
officers, employees or agents to issue, any press release or other information
to the press or any third party with respect to this Agreement, or the
transactions contemplated hereby.
Section 10.02. Article and Section Headings. Article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 10.03. Entire Agreement; Amendments. This Agreement, the Bank
Schedules, the Post-Signing Disclosure List and the Exhibits hereto and thereto,
if any, entered into contemporaneously herewith by the parties hereto constitute
the entire agreement between the parties pertaining to the subject matter hereof
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth
herein or therein. No supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby (or in the case of a termination occurring pursuant to Section 9.02 or
Section 1.03(a)(2)(C) hereof by the party exercising a right to terminate this
Agreement). No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof or thereof (whether
or not similar), nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided in the instrument granting such waiver. The parties
hereto may amend or modify this Agreement in such manner as may be agreed upon
by a written instrument executed by the parties, except that, after the meeting
described in Section 7.11 hereof, no such amendment or modification shall reduce
the amount of, or change the forms of consideration to be received by the
shareholders of Bank contemplated by this Agreement, unless such modification is
submitted to a vote of the shareholders of Bank.
Section 10.04. Survival of Representations, Warranties and Covenants. No
investigation made by the parties hereto made heretofore or hereafter shall
affect the representations and warranties of the parties which are contained
herein and each such representation and warranty shall survive such
investigation. None of the representations, warranties, covenants and agreements
in this Agreement or in any instrument delivered pursuant to this Agreement
shall survive the Effective Time, except for those representations, covenants
and agreements contained herein and therein which by their terms apply in whole
or in part after the Effective Time.
44
<PAGE>
Section 10.05. Notices. Any notice or other communication required or
permitted hereunder shall be in writing, and shall be deemed to have been given,
unless otherwise specified in a particular provision of this Agreement, if
placed in the mail, registered or certified, postage prepaid, or if delivered
personally or by courier, receipt requested, or by facsimile transmission,
receipt acknowledged addressed as follows:
UJB or UJBank: UJB Financial Corp.
Attn: John G. Collins
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Telephone No.: 609-987-3422
Facsimile No.: 609-987-3435
With a copy to: Richard F. Ober, Jr., Esq.
UJB Financial Corp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Telephone No.: 609-987-3430
Facsimile No.: 609-987-3435
Bank: The Flemington National Bank and
Trust Company
Attn: Nathan C. Collins
56 Main Street
Flemington, NJ 08822
Telephone No.: 908-782-3151
Facsimile No.: 908-782-9787
With a copy to: Henry S. Bryans, Esq.
Drinker Biddle & Reath
Philadelphia National Bank Building
Broad & Chestnut Streets
Philadelphia, PA 19107
Telephone No.: 215-988-2823
Facsimile No.: 215-988-2757
or to such other address as such party may designate by notice to the others,
which change of address shall be deemed to have been given upon receipt.
A notice or other communication hereunder shall be deemed delivered (i) if
mailed by certified or registered mail to the proper address, with adequate
postage prepaid, on the fifth business day following posting or (ii) if
delivered by other means, when received by the party to whom it is directed.
45
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Section 10.06. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey,
without giving effect to the provisions, policies or principles thereof relating
to choice or conflict of laws except that matters affecting the validity of
corporate action taken by Bank shall be governed by the laws of the United
States.
Section 10.07. Counterparts. This Agreement is being executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 10.08. Binding Effect. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 10.09. Extensions; Waivers and Consents. Either party hereto, by
written instrument signed by its Chairman, Vice Chairman, President, or Chief
Financial Officer, may extend the time for the performance of any of the
obligations of the other party hereto, and may waive, at any time before or
after approval of this Agreement and the transactions contemplated hereby by the
shareholders of Bank, subject to the provisions of Section 10.03 hereof: (i) any
inaccuracies of the other party in the representations and warranties in this
Agreement or any other document delivered pursuant hereto or thereto; (ii)
compliance with any of the covenants or agreements of the other party contained
in this Agreement; (iii) the performance (including performance to the
satisfaction of a party or its counsel) by the other party of any of its
obligations hereunder or thereunder; and (iv) the satisfaction of any conditions
to the obligations of the waiving party hereunder or thereunder. Any consent or
approval of a party hereunder shall be effective only if signed by the Chairman,
Vice Chairman, President or Chief Financial Officer of such party. Subject to
Section 10.03, no such instrument, consent or approval may modify the form or
amount of consideration to be received by the shareholders of Bank.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in counterparts by their duly authorized officers and their corporate seals to
be hereunto affixed as of the date first above written.
CORPORATE SEAL UJB FINANCIAL CORP.
Attest /S/ RICHARD F. OBER, JR. By /S/ JOHN G. COLLINS
------------------------- -----------------------------------
Richard F. Ober, Jr., John G. Collins
Secretary Vice Chairman of the Board
CORPORATE SEAL UNITED JERSEY BANK
Attest /S/ RICHARD F. OBER, JR. By /S/ JOHN G. COLLINS
------------------------ -----------------------------------
Richard F. Ober, Jr. John G. Collins
Secretary Vice Chairman of the Board
CORPORATE SEAL THE FLEMINGTON NATIONAL BANK
AND TRUST COMPANY
Attest /S/ VICTORIA C. ARCELLA By /S/ NATHAN C. COLLINS
------------------------ ----------------------------------
Victoria A. Arcella Nathan C. Collins
Secretary President & Chief
Executive Officer
47
EXHIBIT (99)
Immediate
Media:
C. Scott Rombach, VP
Corporate Communications
609-987-3350
Analysts/Investors:
Kerry K. Calaiaro, VP
Investor Relations
609-987-3226
UJB FINANCIAL TO ACQUIRE FLEMINGTON NATIONAL BANK;
MOVES TO #1 IN HUNTERDON COUNTY
PRINCETON, NJ, August 2, l995 -- UJB Financial Corp. (NYSE:UJB) and The
Flemington National Bank and Trust Company (NASDAQ: FLNB) have signed a
definitive merger agreement in which UJB Financial will acquire Flemington
National Bank in an exchange of stock. Flemington National Bank headquartered in
Flemington, New Jersey has $288 million in assets and operates eight community
banking offices in Hunterdon County.
With this acquisition, UJB Financial will capture the number one market share
position in Hunterdon County. Hunterdon is the fourteenth ranked county in the
nation in per capita income, and ranks fourth in New Jersey. UJB Financial
recently acquired Bancorp New Jersey, Inc., and the combination of Flemington
National and Bancorp deposits will give UJB Financial a 24 percent share of bank
deposits in Hunterdon County.
"This acquisition demonstrates our on-going commitment to this region," T.
Joseph Semrod, Chairman, President and CEO of UJB Financial said. "It enhances
our strong presence in New Jersey and provides an excellent distribution network
to expand services to the appealing demographics of the Hunterdon County
market."
Flemington National Bank President and CEO Nathan C. Collins said, "UJB
Financial's broad product mix and dedication to service excellence will benefit
both our customers and shareholders."
The transaction is expected to be completed in the first quarter of 1996,
subject to the approval of Flemington National Bank shareholders, regulatory
approvals, and the market price of UJB Financial stock at the time the exchange
ratio is determined.
1
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Under the terms of the agreement, each Flemington National Bank shareholder will
receive between 1.3514 and 1.7241 shares of UJB Financial common stock for each
share of Flemington National Bank common stock. The exact ratio will be
determined based upon the average price of UJB Financial common stock over a
pricing period prior to closing.*
Additionally, the agreement allows for Flemington National Bank to declare
quarterly common stock dividends between August 1, 1995 and the closing
equivalent to the common stock dividend rate declared by UJB Financial.
These payments will be subject to adjustment for the final exchange ratio.
Based on the $34.88 closing price of UJB Financial common stock as of August 1,
1995 and the amount of Flemington National Bank common shares outstanding as of
June 30, 1995, the transaction has a total value of $47.9 million.
UJB Financial is a Princeton based financial services company with $15.9 billion
in assets. It operates 278 community banking offices through United Jersey Bank
and New Jersey Savings Bank in New Jersey and First Valley Savings Bank in
Pennsylvania. The company provides financial services through its major lines of
business including commercial banking, retail banking, mortgage banking and
investment management. These core businesses and nine non-bank subsidiaries,
including UJB Discount Brokerage, offer a full array of financial services to
individuals, businesses, non-profit organizations, government entities and other
financial institutions.
*ADDITIONAL PRICING INFORMATION
Under the terms of the agreement, approved by the directors of both companies,
each Flemington National Bank common share would be exchanged for UJB Financial
common stock under the following formula: Assuming that the average price of UJB
Financial common stock over a pricing period prior to closing is between $29.00
and $37.00, the exchange ratio would be $50.00 divided by the average price.
If the average price is greater than $37.00, the exchange ratio would be fixed
at 1.3514 of a common share of UJB Financial for each Flemington National Bank
common share. If the average price falls between $26.10 and $29.00, the exchange
ratio would be 1.7241. However, if the average price falls below $26.10,
Flemington National Bank may terminate the merger agreement unless UJB Financial
elects to increase the exchange ratio to $45.00 divided by the average price.
2
