SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
SCHEDULE 13D
(Rule 13d - 101)
Under the Securities Exchange Act of 1934
(Amendment No. ______________ )*
Collective Bancorp, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
193901 10 5
(CUSIP Number)
Richard F. Ober, Jr., Esq., Summit Bancorp.
301 Carnegie Center, P.O. Box 2066,
Princeton, NJ 08543-2066 (609) 987-3430
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 28, 1997
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b) (3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on the following pages)
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CUSIP No.193901 10 5
1) Name of Reporting Person's S.S. or I.R.S. Identification Nos. of Above Person
Summit Bancorp.
IRS Identification No. 22-1903313
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
N/A
3) SEC Use Only
4) Source of Funds (See Instructions)
N/A
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [ ]
N/A
6) Citizenship or Place of Organization
New Jersey
Number of Shares Beneficially Owned by Each Reporting Person With
(7) Sole Voting Power
4,231,124 *
(8) Shared Voting Power
-0-
(9) Sole Dispositive Power
4,231,124 *
(10) Shared Dispositive Power
-0-
11) Aggregate Amount Beneficially Owned by Each Reporting Person
4,231,124*
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
N/A
13) Percent of Class Represented by Amount in Row (11)
17.3% *
14) Type of Reporting Person (See Instructions)
CO
* Includes 4,067,424 shares which may be acquired upon the exercise of an
option currently not exercisable within 60 days, as to which beneficial
ownership is disclaimed.
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<PAGE>
Item 1. Security and Issuer.
This Statement relates to the Common Stock, par value $.01 per share, of
Collective Bancorp, Inc. ("Collective" or "Issuer").
The principal executive offices of Issuer are located at 716 West White
Horse Pike, Cologne, New Jersey 08213.
Item 2. Identity and Background.
Summit Bancorp. ("Summit"), the reporting person, is a corporation
organized under the laws of the State of New Jersey in 1970 and is registered as
a bank holding company under the federal Bank Holding Company Act of 1956.
The principal business of the reporting person is the ownership of
commercial bank and non-bank, financial service subsidiaries.
The address of the principal office of Summit Bancorp. is 301 Carnegie
Center, P.O. Box 2066, Princeton, New Jersey 08543-2066.
The name, residence or business address, present principal occupation or
employment (and the name, principal business and address of any corporation or
other organization in which such employment is conducted), and citizenship of
each director and executive officer follow:
<TABLE>
<CAPTION>
Position with Summit and
Name and Residence (R) Principal Occupation if
Or Business Address (B) Different from Summit
<S> <C>
Mr. S. Rodgers Benjamin (B) Director of Summit. Chairman (since 1992) and Chief
Chairman Executive Officer (since 1962) of Flemington Fur Company
Flemington Fur Company (retailer).
8 Spring Street
Flemington, NJ 08822
Mr. Robert L. Boyle (R) Director of Summit. Representative (since 1987) with the
7 Orchard Lane William H. Hintelmann Firm (realty and insurance).
Rumson, NJ 07760
Mr. James C. Brady, Jr. (B) Director of Summit. Managing General Partner (since 1987)
Partner of Mill House Associates, C.P. (real estate and securities
Mill House Associates, L.P. investment).
Hamilton Farms - Pottersville Rd.
Gladstone, NJ 07934
Mr. Dermot T.J. Dunphy (B) Director of Summit. Director and Chief Executive Officer
President & CEO (since 1971) of Sealed Air Corporation (protective
Sealed Air Corporation packaging products and systems).
Park 80 Plaza East
Saddle Brook, NJ 07662
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Position with Summit and
Name and Residence (R) Principal Occupation if
Or Business Address (B) Different from Summit
<S> <C>
Ms. Anne Evans Estabrook (B) Director of Summit. Sole proprietor (since 1984) of Elberon
Elberon Development Co. Development Co. (real estate) and President (since 1983)
235 Birchwood Avenue of David O. Evans, Inc. (real estate).
Cranford, NJ 07016
Mrs. Elinor J. Ferdon (R) Director of Summit. Volunteer professional. Director (since
Litchfield Way 1974) and National President (since 1996) of the Girl Scouts
P.O. Box 255 of U.S.A.
Alpine, NJ 07620-0255
Mr. Fred G. Harvey (R) Director of Summit. Director and Vice President (since 1983)
1903 Saucon Lane of E & E Corporation (engineering consulting services).
Bethlehem, PA 18015
Mr. Francis J. Mertz (R) Director of Summit. Trustee (since 1991) and President (since
167 Stanie Brae Drive 1990) of Fairleigh Dickinson University.
Watchung, NJ 07060
Mr. George L. Miles, Jr. (B) Director of Summit. President and Chief Executive Officer
President and CEO (Since 1994) of WQED Pittsburgh, Inc.(television and radio
WQED Pittsburgh broadcasting and magazine publishing).
4802 Fifth Avenue
Pittsburgh, PA 15213
Mr. Henry S. Patterson, II (B) Director of Summit. Director and President (since 1985) of
President E'town Corporation (parent company of regulated water utility
E'town Corporation and real estate company).
PO Box 788
600 South Avenue W
Westfield, NJ 07091
Mr. Thomas D. Sayles, Jr. (B) Director of Summit. Formerly Chairman (1974-1996),
382 Springfield Ave. President (1974-1987) and Chief Executive Officer (1974-
Suite 303 1994) of The Summit Bancorporation.
Summit, NJ 07901
Mr. Raymond Silverstein (B) Director of Summit. Consultant (since 1989) and former
Alloy, Silverstein, Shapiro, Principal (1949-1989) of Alloy, Silverstein, Shapiro, Adams,
Adams, Mulford & Co. Mulford & Co., P.C. (certified public accountants).
900 Kings Highway
Cherry Hill, NJ 08034
</TABLE>
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<TABLE>
<CAPTION>
Position with Summit and
Name and Residence (R) Principal Occupation if
Or Business Address (B) Different from Summit
<S> <C>
Mr. Orin R. Smith (B) Director of Summit. Chairman (since 1995), Director
Chairman & CEO (since 1981) and Chief Executive Officer (since 1984) of
Engelhard Corporation Engelhard Corporation (specialty chemical products, engineered
101 Wood Avenue materials and industrial commodities management).
Iselin, NJ 08830
Mr. Joseph M. Tabak (R) Director of Summit. President and Chief Executive Officer
30 South Adelaide Avenue (Since 1991) of JPC Enterprises, Inc. (distributor of paper and
Penthouse F plastic disposable products).
Highland Park, NJ 08904
Mr. Douglas G. Watson (B) Director of Summit. President and Chief Executive Officer
President & CEO (since February 1, 1997) of Novartis Corporation (healthcare,
Novartis Corporation agribusiness and nutrition products).
556 Morris Ave.
Summit, NJ 07901
Mr. T. Joseph Semrod (B) Director, Chairman of the Board and Chief Executive Officer
Summit Bancorp. of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Robert G. Cox (B) Director and President of Summit.
Summit Bancorp
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. John G. Collins (B) Director and Vice Chairman of the Board of Summit.
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. John R. Howell (B) Director and Vice Chairman of the Board of Summit.
Chairman & CEO
First Valley Corporation
One Bethlehem Plaza
Bethlehem, PA 18018
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Position with Summit and
Name and Residence (R) Principal Occupation if
Or Business Address (B) Different from Summit
<S> <C>
Mr. John R. Haggerty (B) Senior EVP (Executive Vice President),
301 Carnegie Center Chief Financial Officer of Summit.
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Sabry J. Mackoul (B) Senior EVP, Corporate Retail of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Stephen H. Paneyko (B) Senior EVP, Commercial Lending of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Larry L. Betsinger (B) EVP, Operations and Technology of Summit.
55 Challenger Road
6th Floor
Ridgefield Park, NJ 07660-2104
Mr. Alfred M. D'Augusta (B) EVP, Human Resources of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. John R. Feeney (B) EVP, Corporate Planning of Summit
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. William J. Healy (B) EVP, Comptroller of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Richard F. Ober, Jr. (B) EVP, General Counsel and Secretary of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Dennis Porterfield (B) EVP, Bank Investments of Summit.
214 Main Street
Hackensack, NJ 07602
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Position with Summit and
Name and Residence (R) Principal Occupation if
Or Business Address (B) Different from Summit
<S> <C>
Mr. Alan N. Posencheg (B) EVP, Corporate Operations of Summit.
55 Challenger Road
6th Floor
Ridgefield Park, NJ 07660-2104
Mr. Gary F. Simmerman (B) EVP, Director of Retail Lending of Summit.
1800 Commerce Center
2nd Floor
Cherry Hill, NJ 08002
Mr. George J. Soltys, Jr. (B) EVP, Corporate Planning of Summit
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Mr. Edmund C. Weiss, Jr. (B) EVP, General Auditor of Summit.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
</TABLE>
Neither Summit nor, to the best of its knowledge, any of its directors and
executive officers has during the past five years (a) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(b) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction or was or is subject to a judgment, decree, or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
All of the above natural persons are citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
On February 28, 1997, Summit and Issuer, a corporation organized under the
laws of the State of Delaware and savings and loan holding company registered
under the federal Home Owners Loan Act, entered into a Stock Option Agreement
(the "Collective Option Agreement") pursuant to which, in consideration of the
covenants and agreements of Summit contained therein and in the Merger Agreement
(defined below), and as an inducement to Summit to enter into the Merger
Agreement, Issuer granted to Summit an option to purchase up to an aggregate of
4,067,424 shares of the Common Stock of Issuer at the per share price of $38.125
(the "Collective Option").
Summit is not now able to identify the source of funds which would be used
if it were to exercise the Collective Option in whole or in part. In the event
the need to exercise the Collective Option arises, Summit will determine at that
time the appropriate source of the funds, up to approximately $155,070,540
needed to exercise the Collective Option.
Item 4. Purpose of the Transaction.
On February 27, 1997, Summit and Issuer entered into an Agreement
and Plan of Merger (the "Merger Agreement") providing for, among other things,
(i) the merger of Issuer into Summit (the "Merger") and (ii) the exchange of
each outstanding share of the Common Stock of Issuer ("Issuer Common") for .895
of a share of the Common Stock of Summit ("Summit Common"), with cash being paid
in lieu of issuing fractional shares of Summit Common; all upon the satisfaction
of the terms and conditions set forth in the Merger Agreement, including the
receipt of approval from the shareholders of Issuer, the Board of Governors of
the Federal Reserve System and the New Jersey Department of Banking. Collective
has the right to terminate the Merger Agreement if the "Average Closing Price"
of Summit Common (as defined in the Merger Agreement) and a quotient with
respect thereto are less than certain thresholds set forth in the Merger
Agreement.
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<PAGE>
On February 28, 1997, in connection with and in consideration of the
execution of the Merger Agreement, Issuer granted to Summit the Collective
Option, an option to purchase, under certain circumstances, up to 4,067,424
shares of Issuer Common at an exercise price equal to $38.125. The exercise
price of the Collective Option was arrived at by mutual agreement of the
parties.
Summit and Issuer, in accordance with the terms of the Merger Agreement,
plan to merge Issuer with and into Summit upon the satisfaction of all
conditions set forth in the Merger Agreement. The Collective Option was acquired
by Summit and granted by Issuer for the purpose of decreasing the likelihood
that third parties would initiate actions, including the acquisition of
significant amounts of the Common Stock of Issuer, having the effect of
interfering with the contractual relationship established by the Merger
Agreement or hindering the consummation of the Merger contemplated by the
parties and of assisting Issuer, if necessary, in obtaining the requisite
shareholder approval of the Merger.
Item 5. Interest in Securities of the Issuer.
(a) Prior to February 28, 1997, Summit was the beneficial owner of 163,700
shares of Issuer Common. On February 28, 1997, Summit acquired the right and
option to acquire up to 4,067,424 shares of Issuer Common pursuant to the
Collective Option. Summit disclaims beneficial ownership of the 4,067,424 shares
which could be acquired, under certain circumstances, pursuant to the Collective
Option, inasmuch as such option is currently not exerciseable within 60 days.
The 163,700 shares of Issuer Common held by Summit represent less than one
percent of the issued and outstanding common stock of the Issuer and together
with the 4,067,424 shares of Issuer Common Stock which could be acquired under
the circumstances set forth in the Collective Option, as to which beneficial
ownership is disclaimed, represent 17.3% of the issued and outstanding Common
Stock of Issuer, treating the 4,067,424 shares of Common Stock of Issuer covered
by the Collective Option as issued and outstanding for purposes of calculating
the foregoing percentage.
As of February 28, 1997 and during the period from February 28, 1997 to the
date hereof, to the knowledge of Summit, no directors or executive officers of
Summit beneficially owned any shares of Issuer Common.
(b) Summit possesses sole power to vote and dispose of the 163,700 shares
of Issuer Common acquired by Summit prior to February 28, 1997.
Summit possesses the sole power to exercise the Collective Option until
termination occurring in accordance with its terms. The Collective Option does
not carry any voting rights. Upon exercise of the Collective Option in whole or
in part, Summit would possess the sole power to vote and dispose of the shares
of Issuer Common acquired thereby, subject to certain conditions and
restrictions contained in the Stock Option Agreement.
(c) During the 60 days preceding the execution of the Collective Option
Agreement neither Summit nor, to the knowledge of Summit, any director or
executive officer of Summit effected any transaction in the Common Stock of
Collective
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect
to Securities of the Issuer.
See response to Items 3 and 4 and The Merger Agreement and Collective
Option Agreement constituting Exhibits 10(a) and 10(b), respectively,
to this Schedule 13D. No others exist.
Item 7. Material to be filed as Exhibits.
Exhibit No. Description.
10(a) Agreement and Plan of Merger, dated February 27, 1997 between Summit
Bancorp.
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<PAGE>
and Collective Bancorp, Inc., including Exhibits A through E.
(b) Collective Bancorp, Inc. Stock Option Agreement, dated as of February
28, 1997 between Summit Bancorp. and Collective Bancorp, Inc.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 10, 1997 Summit Bancorp.
By /s/ George J. Soltys, Jr.
George J. Soltys, Jr.
Executive Vice President
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EXHIBITS
Exhibit No. Description.
10(a) Agreement and Plan of Merger, dated February 27, 1997, between
Summit Bancorp. and Collective Bancorp, Inc., including Exhibits
A through E.
(b) Collective Bancorp, Inc. Stock Option Agreement, dated as of
February 28, 1997, between Summit Bancorp. and Collective
Bancorp, Inc.
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Exhibit 10 (A)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated February 27, 1997 between Summit
Bancorp., a New Jersey business corporation ("Summit"), and Collective Bancorp.,
Inc., a Delaware business corporation ("Collective").
W I T N E S S E T H :
WHEREAS, the respective boards of directors of Summit and Collective
deem it advisable and in the best interests of their respective shareholders to
merge Collective into Summit ("Merger") pursuant to the laws of the States of
New Jersey and Delaware and this Agreement and Plan of Merger ("Agreement");
WHEREAS, the Board of Directors of Summit and Collective have each
determined that the Merger and the other transactions contemplated hereby are
consistent with, and in furtherance of, their respective business strategies and
goals;
WHEREAS, to effectuate the Merger, the parties hereby adopt a plan of
reorganization in accordance with the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended ( "Code");
WHEREAS, Summit and Collective intend on the day after the date of this
Agreement and in consideration of this Agreement to enter into the Stock Option
Agreement ("Option Agreement") attached hereto as Exhibit A; and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Merger and also to prescribe certain other
terms and conditions of the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein and in
the Option Agreement, the parties hereto, intending to be legally bound, agree
as follows:
ARTICLE I.
GENERAL PROVISIONS
Section 1.01. The Merger.
(a) Upon the terms and subject to the conditions contained in this
Agreement, at the Effective Time (as defined at Section 1.06), Collective shall
be merged with and into Summit pursuant
<PAGE>
to and in accordance with the provisions of, and with the effect provided in,
the New Jersey Business Corporation Act, as amended ("New Jersey Act") and the
Delaware General Corporation Law, as amended ("Delaware Law") (Summit as the
surviving corporation being hereinafter sometimes referred to as the "Surviving
Corporation").
Section 1.02. Capital Stock of Summit. All shares of the capital stock
of Summit issued or issued and outstanding immediately prior to the Effective
Time shall be unaffected by the Merger and shall remain issued or issued and
outstanding, as the case may be, immediately thereafter.
Section 1.03. Terms of Conversion of Collective Capital Stock.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of any shareholder of Collective:
(1) All shares of the Common Stock, par value $.01 per share, of
Collective ("Collective Stock") which immediately prior to the
Effective Time are owned beneficially by Summit or a
subsidiary of Summit (other than Collective Stock held as a
result of debts previously contracted), if any, are held in
the treasury of Collective, if any, or owned beneficially by
Collective or a subsidiary of Collective (other than
Collective Stock held as a result of debts previously
contracted) shall be canceled and retired and no cash,
securities or other consideration shall be payable or paid or
delivered under this Agreement in exchange for such Collective
Stock; and
(2) Subject to Section 1.03(a)(1), outstanding shares of
Collective Stock held as of the Effective Time by each
Collective Shareholder (as defined at Section 1.07(c) below)
shall be converted in accordance with the New Jersey Act and
the Delaware Law into the right to receive whole shares of the
Common Stock, par value $1.20 per share, of Summit ("Summit
Stock") and cash in lieu of fractional shares of Summit Stock
as follows: the aggregate number of shares of Collective Stock
held by each Collective Shareholder shall be multiplied by the
Exchange Ratio and (i) the number of whole shares of Summit
Stock an Collective Shareholder shall become entitled to
receive pursuant to this Section 1.03(a)(2) shall equal the
whole number resulting from the foregoing multiplication, and
(ii) the cash in lieu of a fractional share of Summit Stock
("Cash In Lieu Amount") an Collective Shareholder shall become
entitled to receive pursuant to this Section 1.03(a)(2) shall
equal the product obtained by multiplying the fraction, if
any, which results from the foregoing multiplication by the
closing price of one share of Summit Stock on the New York
Stock Exchange- Composite Transactions List on the last
trading day ending prior to the Effective Time. (The shares of
Summit Stock issuable in accordance with this Section
1.03(a)(2) are sometimes referred to herein as the "Shares").
(The Shares and any Cash In Lieu Amounts payable in the Merger
are sometimes collectively referred to herein as the "Merger
Consideration").
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(b) In the event that, from the date hereof to the Effective Time, the
outstanding Summit 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 there occur other like changes in the outstanding shares
of Summit Stock, the Exchange Ratio and, if necessary, the form and amount of
Summit capital stock issuable in the Merger in exchange for Collective Stock
shall be appropriately adjusted so that Collective Shareholders who become
entitled to receive Summit Stock pursuant to the provisions hereof shall be
entitled to receive such number of whole shares of Summit Stock or other stock
(and Cash In Lieu Amount, if any) as they would have received if the Effective
Time had occurred prior to the happening of such event.
(c) The "Exchange Ratio" is hereby defined to be .895.
Section 1.04. Reservation of Summit Stock; Issuance of Shares Pursuant
to the Merger. Summit shall reserve and make available for issuance to holders
of Collective Stock in connection with the Merger, on the terms and subject to
the conditions of this Agreement, sufficient shares of Summit Stock (which
shares, when issued and delivered, will be duly authorized, legally and validly
issued, fully paid and non-assessable and subject to no preemptive rights). Upon
the terms and subject to the conditions of this Agreement, particularly Sections
1.03 and 1.07, Summit shall issue the Shares upon the effectiveness of the
Merger to Collective Shareholders.
Section 1.05. Exchange Agent Arrangements. Prior to the Effective Time,
Summit shall appoint First Chicago Trust Company of New York, or another entity
reasonably satisfactory to Collective, as the exchange agent ("Exchange Agent")
responsible for exchanging, in connection with and upon consummation of the
Merger and subject to Sections 1.03 and 1.07, certificates representing whole
shares of Summit Stock ("Summit Certificates") and Cash In Lieu Amounts for
certificates representing shares of Collective Stock ("Collective Certificates")
and Summit shall deliver to the Exchange Agent sufficient Summit Certificates
and cash as shall be required to satisfy Summit's obligations to Collective
Shareholders under Section 1.07(c), prior to the time such obligations arise.
Section 1.06. Effective Time. The Merger shall be effective at the hour
and on the date ("Effective Time") specified in the Certificate of Merger of
Summit and Collective required by this Agreement to be filed with the Secretary
of State of the State of New Jersey in accordance with Section 14A:10-4.1 of the
New Jersey Act ("NJ Certificate"), or, if filed later than the effective hour
and date set forth in the NJ Certificate, the date the Certificate of Merger
required by this Agreement to be filed with the Secretary of State of the State
of Delaware ("Delaware Certificate") is filed in accordance with Section 252 of
the Delaware Law. (The NJ Certificate and the Delaware Certificate are
collectively referred to herein as the "Certificates of Merger"). Summit shall
file the Certificates of Merger as promptly as practicable following the Closing
(as defined at Section 9.01) but in no event later than one business day
following the date the Closing shall occur.
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Section 1.07. Exchange of Collective Certificates.
(a) After the Effective Time and subject to Section 1.07(c) below, each
Collective Shareholder (except as provided otherwise in Section 1.03(a)(1)
above), upon surrender to the Exchange Agent of all Collective Certificates
registered to the Collective Shareholder, shall be entitled to receive in
exchange therefor a Summit Certificate representing the number of whole shares
of Summit Stock such Collective Shareholder becomes entitled to receive pursuant
to Section 1.03(a)(2) and the Cash In Lieu Amount, payable by check, such
Collective Shareholder may become entitled to receive pursuant to Section
1.03(a)(2). Until so surrendered, outstanding Collective Certificates held by
each Collective Shareholder, other than certificates for Collective Stock
governed by Section 1.03(a)(1), shall be deemed for all purposes (other than as
provided below with respect to unsurrendered Collective Certificates and
Summit's right to refuse payment of dividends or other distributions, if any, in
respect of Summit Stock) to represent only the right to receive the number of
whole shares of Summit Stock and the Cash In Lieu Amount, if any, determined in
accordance with Section 1.03(a)(2). Until so surrendered, Summit may, at its
option, refuse to pay to the holders of the unsurrendered Collective
Certificates dividends or other distributions, if any, payable to holders of
Summit Stock; provided, however, that upon the surrender and exchange of
Collective Certificates following a dividend or other distribution by Summit
there shall be paid to such Collective Shareholders the amount, without
interest, of dividends and other distributions, if any, which became payable
prior thereto but which were not paid.
(b) Holders of Collective Certificates as of the Effective Time shall
cease to be, and shall have no further rights as, shareholders of Collective.
(c) As promptly as practicable, but in no event more than 7 days, after
the Exchange Agent receives an accurate and complete list of all holders of
record of outstanding Collective Stock as of the Effective Time ("Collective
Shareholders") (including the address and social security number of and the
number of shares of Collective Stock held by each Collective Shareholder) from
Collective ("Final Shareholder List"), Summit shall cause the Exchange Agent to
send to each Collective Shareholder instructions and transmittal materials for
use in surrendering and exchanging Collective Certificates for the Merger
Consideration. If Collective Certificates are properly presented to the Exchange
Agent (with proper presentation including satisfaction of all requirements of
the letter of transmittal), Summit shall as soon as practicable, but in no event
more than 7 days, after the later to occur of such presentment or the receipt by
the Exchange Agent of an accurate and complete Final Shareholder List from
Collective cause the Exchange Agent to cancel and exchange Collective
Certificates for Summit Certificates and Cash In Lieu Amounts, if any; provided,
however, that if the Exchange Agent, in order to satisfy its obligations under
the Code with respect to the reporting of dividend income to former shareholders
of Collective, must suspend the exchange process provided for in the second
sentence of this Section 1.07(c) in order to preserve and report the required
reporting information, the 7-day exchange requirement shall be extended 5
business days for exchanges being processed by the Exchange Agent at the
commencement of, or which are received during, the period of the suspension.
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(d) At and after the Effective Time there shall be no transfers on the
stock transfer books of Collective of the shares of Collective Stock which were
outstanding immediately prior to the Effective Time.
Section 1.08. Restated Certificate of Incorporation and By-Laws. The
Restated Certificate of Incorporation of Summit in effect immediately prior to
the Effective Time shall be the Restated Certificate of Incorporation of the
Surviving Corporation, except as duly amended thereafter and except to the
extent such is deemed by law to be affected by the Certificate of Merger. The
By-Laws of Summit in effect immediately prior to the Effective Time shall be the
By-Laws of the Surviving Corporation, except as duly amended thereafter.
Section 1.09. Board of Directors and Officers. The Board of Directors
of the Surviving Corporation shall consist of (i) the members of the Board of
Directors of Summit at the Effective Time, (ii) Thomas H. Hamilton, Chairman and
Chief Executive Officer of Collective, provided he is still serving as such at
the Effective Time and is available for service, who, subject to the foregoing
proviso, shall be designated to serve as a member of that class of Summit
directors with a term of office expiring at the 2000 Annual Meeting of the
Shareholders of Summit, and (iii) one other person chosen by the Board of
Directors of Summit from among those persons serving as Collective directors on
the date hereof and who continue to serve as Collective directors through the
Effective Time, who shall be designated to serve as a member of that class of
Summit directors with a term of office expiring at the 1999 Annual Meeting of
the Shareholders of Summit,. The officers of the Surviving Corporation shall
consist of the officers of Summit at the Effective Time. Such directors and
officers shall serve as such for the terms prescribed in the Restated
Certificate of Incorporation and By-Laws of Summit, or otherwise as provided by
law or until their earlier deaths, resignation or removal.
Section 1.10. Collective Stock Options.
(a) At the Effective Time, each Collective Option (as defined in
Section 1.10(b) below) shall be deemed to constitute, and shall automatically be
converted in accordance with the Exchange Ratio into, options to purchase Summit
Stock ("Summit Options") and each Summit Option shall be administered in
accordance with the terms and conditions provided for in the Collective Option
Plan under which the corresponding Collective Option was granted and the stock
option agreement by which it was evidenced, including terms and provisions
regarding exercisability. The number of shares of Summit Stock which may be
purchased upon exercise of a particular Summit Option shall be the number of
shares of Summit Stock which would have been issued in the Merger if the shares
of Collective Stock purchasable upon exercise of the corresponding Collective
Option were issued and outstanding immediately prior to the Effective Time;
provided, however, that the number of shares of Summit Stock that may be
purchased upon exercise of a Summit Option shall not include any fractional
share interest but shall be rounded down to the next lower full share. The
exercise price per share of Summit Stock purchasable upon exercise of a Summit
Option shall equal the exercise price per share of Collective Stock as set forth
in the corresponding Collective Option so converted divided by the Exchange
Ratio (subject to any adjustments provided for in this Agreement),
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rounded to the fourth decimal place. Within 30 days after the receipt by Summit
of an accurate and complete list of all holders of Collective Options (including
the address and social security number of each such holder and a description of
the Collective Options held by such holder specifying, at a minimum, the plan
under which issued, type (incentive or nonqualified), grant date, expiration
date, exercise price and the number of shares of Collective Stock subject
thereto) ("Final Option List"), Summit shall issue to the holders of such
Collective Options appropriate instruments confirming the rights of such holders
with respect to Summit Stock, on the terms and conditions provided by this
Section 1.10, upon surrender of the outstanding instruments representing such
Collective Options; provided, however, that Summit shall not be obligated to
issue any such confirming instruments which relate to the issuance of Summit
Stock, or issue any shares of Summit Stock, until such time as the shares of
Summit Stock issuable upon exercise of Summit Options shall have been registered
with the Securities and Exchange Commission (the "SEC") pursuant to an effective
registration statement and authorized for listing on the New York Stock Exchange
and for sale by any appropriate state securities regulators, which Summit shall
use its best efforts to effect within 30 days after Collective shall have
delivered to Summit the Final Option List. Summit shall use its best efforts to
maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as the Summit Options remain outstanding. At or prior to the Effective Time,
Summit shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Summit Stock for delivery upon exercise of Summit
Options.
(b) For purposes of this Section 1.10, "Collective Option" is hereby
defined to mean a stock option for Collective Stock outstanding on the date
hereof and all rights appertinent thereto granted under the Collective Federal
Savings and Loan Association Stock Option Plan or the Collective Incentive Stock
Option Plan ("Collective Option Plans") and not subsequently exercised,
terminated, forfeited or expired prior to the Effective Time.
Section 1.11. Additional Actions. If, at any time after the Effective
Time, the Surviving Corporation 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
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of Collective acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger or
otherwise to carry out this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of Collective or otherwise, all such deeds, bills of sale,
assignments and assurances and to take, in the name and on behalf of Collective,
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 Surviving Corporation or otherwise to carry
out this Agreement.
Section 1.12. Unclaimed Merger Consideration. If, upon the expiration
of one year following the Effective Time, Merger Consideration remains with the
Exchange Agent due to the failure of Collective Shareholders to surrender and
exchange Collective Certificates for Merger Consideration, Summit may, at its
election, continue to retain the Exchange Agent for purposes of the surrender
and exchange of Collective Certificates or take possession of such unclaimed
Merger
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Consideration, in which such latter case, Collective Shareholders who have
theretofore failed to surrender and exchange Collective Certificates shall
thereafter look only to Summit for payment of the Merger Consideration and the
unpaid dividends and distributions on the Summit Stock constituting some or all
of the Merger Consideration, without any interest thereon. Notwithstanding the
foregoing, none of Summit, Collective, the Exchange Agent or any other person
shall be liable to any former holder of shares of Collective Stock for any
property properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
Section 1.13. Lost Collective Certificates. In the event any Collective
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Collective Certificate to be
lost, stolen or destroyed and the posting by such person of a bond in such
amount as Summit may determine is reasonably necessary as indemnity against any
claim that may be made against it with respect to such Collective Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Collective Certificate the Merger Consideration deliverable in respect thereof
pursuant to this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF COLLECTIVE
Collective represents and warrants to Summit as follows:
Section 2.01. Organization, Capital Stock.
(a) Each of Collective and its nonbank subsidiaries, including the
nonbank subsidiaries of bank subsidiaries (the term "subsidiary", as used in
this Agreement, shall mean any corporation or other organization of which 10% or
more of the shares or other interests having by their terms ordinary voting
power to elect a majority of the Board of Directors or other group performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned), all of which are listed, together with their
respective states of incorporation and direct and indirect beneficial owners, on
Collective Schedule 2.01(a), is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation, qualified
to transact business under the laws of all jurisdictions where the failure to be
so qualified would be likely to have a material adverse effect on (i) the
business, results of operations, assets or financial condition of Collective and
its subsidiaries on a consolidated basis, or (ii) the ability of Collective to
perform its obligations under, and to consummate the transactions contemplated
by, this Agreement ("Collective Material Adverse Effect" or "Collective Material
Adverse Change"). However, an Collective Material Adverse Effect or Collective
Material Adverse Change will not include a change resulting from a change in
law, rule, regulation, generally accepted or regulatory accounting principle or
other matter affecting banking institutions or their holding companies generally
or from charges or expenses incident to the Merger. Each of Collective and its
nonbank subsidiaries has all corporate power and authority and all material
licenses, franchises, certificates, permits and other governmental
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authorizations which are legally required to own and lease its properties and
assets, 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) Collective is registered as a savings and loan holding company
under the Home Owners' Loan Act of 1933, as amended ("HOLA").
(c) Collective or one of its subsidiaries is the holder and beneficial
owner of all of the outstanding capital stock of all of Collective's direct and
indirect nonbank subsidiaries.
(d) (1) The authorized capital stock of Collective consists of
37,000,000 shares of Common Stock, par value $.01 per share, and 2,500,000
shares of Preferred Stock, par value $.01 per share, and as of the date hereof
20,439,318 shares of Collective Stock were issued and outstanding, 49,500 shares
of Collective Stock were held in the Treasury of Collective and no shares of
Preferred Stock were issued or outstanding. All issued and outstanding shares of
the capital stock of Collective and of each of its nonbank subsidiaries have
been fully paid, were duly authorized and validly issued, are non-assessable and
have been issued pursuant to an effective registration statement under the
Securities Act of 1933, as amended (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. Except as set forth in
this Section 2.01(d), except for director and employee stock options outstanding
under the Collective Option Plans, except for Collective Stock issuable under
the Collective Employee Restricted Stock Plan (as defined at Section 2.01(a)(3)
below) as described in Collective Schedule 4.05(h), and except for Collective
Stock issuable in connection with the exercise of options outstanding on the
date hereof under the Collective Option Plans, there are no Equity Securities of
Collective or any nonbank subsidiary of Collective outstanding, in existence,
the subject of an agreement or reserved for issuance.
(2) "Equity Securities" of an issuer means (i) the capital
stock or other equity securities of such issuer, options, warrants, scrip,
interests in, rights (including preemptive rights) to subscribe to, purchase or
acquire, calls on or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any capital
stock, shares of any other equity security or shares of any security or right
convertible into or exchangeable for the capital stock or other equity security
of such issuer, and (ii) contracts, commitments, obligations, agreements,
understandings or arrangements entitling anyone to acquire from the issuer, or
by which such issuer is or may become bound to issue, shares of capital stock,
shares of any other equity security or shares of any security or right
convertible into or exchangeable for the capital stock or other equity security
of such issuer.
(3) No Collective plan or contract, whether oral or written or
formal or informal, exists which provides for the granting or awarding of
Collective Stock, stock options, stock appreciation rights or other securities,
derivative securities or stock-based cash rights to any person other than the
Collective Option Plans, the Collective Bancorp, Inc. Restricted Stock Plan
("Collective Employee Restricted Stock Plan") and the Collective Bancorp, Inc.
1993 Non-Employee
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Directors' and Qualified Consultant's Restricted Stock Award Plan ("Collective
Director Restricted Stock Plan") and the contracts issued pursuant thereto. (The
Collective Employee Restricted Stock Plan and the Collective Director Restricted
Stock Plan are sometimes collectively referred to herein as the "Collective
Restricted Stock Plans", and the Collective Restricted Stock Plans and
Collective Option Plans are sometimes referred to collectively herein as the
"Collective Stock Plans"). The Collective Stock Plans, including all amendments
thereto, have been duly approved by the shareholders of Collective in compliance
with any applicable laws or applicable regulations of governmental or
self-regulatory authorities. Copies of the Collective Stock Plans, including all
amendments thereto, have been previously provided to Summit. All information
relating to outstanding grants and awards under the Collective Stock Plans,
including without limitation director and employee stock options, stock
appreciation or other rights, and restricted stock awards (including without
limitation date of grant or award, expiration date, lapse date, plan under which
granted or awarded, type (if option, whether nonqualified or incentive; if a
right, type and whether or not granted in tandem with an option), exercise
price, number of shares, performance goals), is set forth in Collective Schedule
2.01(d).
(e) Collective owns no bank subsidiary other than the Collective Bank
("Bank") ("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). Bank
is a bank duly organized, validly existing, and in good standing under the
jurisdiction of its organization and is qualified to transact business under the
laws of all jurisdictions where the failure to be so qualified would be likely
to have an Collective Material Adverse Effect. Bank is duly authorized to
conduct all activities and exercise all powers of a Federal savings bank as
contemplated by the applicable Federal laws of the United States. Bank is an
insured bank as defined in the Federal Deposit Insurance Act, and 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 and assets, to occupy its premises, and
to engage in its business and activities as presently engaged in, and has
complied in all material respects with all applicable laws, regulations and
orders.
(f) The authorized and outstanding capital stock of Bank is as set
forth on Collective Schedule 2.01(f). Collective is the holder and beneficial
owner of all of the issued and outstanding Equity Securities of Bank. All issued
and outstanding shares of the capital stock of Bank have been fully paid, were
duly authorized and validly issued, are non-assessable, and were not issued in
violation of the preemptive rights of any shareholder. All Equity Securities of
Bank outstanding, in existence, the subject of an agreement or reserved for
issuance are described in all material respects on Collective Schedule 2.01(f).
(g) All Equity Securities of its direct and indirect subsidiaries
beneficially owned by Collective or a subsidiary of Collective are held free and
clear of any claims, liens, encumbrances or security interests.
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Section 2.02. Financial Statements. The financial statements and
schedules contained or incorporated in (a) Collective's annual report to
shareholders for the fiscal year ended June 30, 1996, (b) Collective's annual
report on Form 10-K filed pursuant to the Securities Exchange Act of 1934, as
amended ("Exchange Act") for the fiscal year ended June 30, 1996 and (c)
Collective's quarterly reports on Form 10-Q filed pursuant to the Exchange Act
for the fiscal quarters ended September 30, 1996 and December 31, 1996 (the
"Collective Financial Statements") are true and correct in all material respects
as of their respective dates and each fairly presents (subject, in the case of
unaudited statements, to recurring audit adjustments normal in nature and
amount), in accordance with generally accepted accounting principles, the
consolidated statements of condition, income, changes in stockholders' equity
and cash flows of Collective and its subsidiaries at its respective date and for
the period to which it relates, except as may otherwise be described therein.
The Collective 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 Collective Financial
Statements, in light of the circumstances under which they were made, misleading
in any respect.
Section 2.03. No Conflicts. Collective 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
Collective, or the consummation of the transactions contemplated hereby
including the Merger by Collective 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 Collective or any of its subsidiaries or upon any of the Equity
Securities of Collective or any of its subsidiaries, or constitute an event
which could, with the lapse of time, action or inaction by Collective 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 Restated Certificate of Incorporation or the By-Laws of
Collective or any of its subsidiaries;
(b) any applicable 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) any material note, bond, mortgage, indenture, lease, policy of
insurance or indemnity, license, contract, agreement or other instrument;
to which Collective or any of its subsidiaries is a party or by which Collective
or any of its subsidiaries or any of their assets or properties are bound or
committed, the consequences of which individually
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or in the aggregate would be likely to result in a Collective Material Adverse
Change, or enable any person to enjoin the transactions contemplated hereby.
Section 2.04. Absence of Undisclosed Liabilities. Except as disclosed
in Collective Schedule 2.04, Collective 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 Collective 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 Collective
Financial Statements or disclosed in the notes thereto, (b) commitments made by
Collective or any of its subsidiaries in the ordinary course of its business
which are not in the aggregate material to Collective and its subsidiaries,
taken as a whole, and (c) liabilities arising in the ordinary course of its
business since June 30, 1996, which are not in the aggregate material to
Collective and its subsidiaries, taken as a whole. Other than as may be reported
in the Forms 10-Q of Collective referred to in Section 2.02, neither Collective
nor any of its subsidiaries has, since June 30, 1996, become obligated on any
debt due in more than one year from the date of this Agreement in excess of
$1,000,000, other than intra-corporate debt and deposits received, repurchase
agreements and borrowings from the Federal Reserve Bank of New York or the
Federal Home Loan Bank of New York 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 Collective or any of its
subsidiaries which materially and adversely affects Collective and its
subsidiaries, taken as a whole, and there are no actions, arbitrations, claims,
charges, suits, investigations or proceedings (formal or informal) material to
Collective and its subsidiaries, taken as a whole, pending or, to Collective's
knowledge, threatened, against or involving Collective 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, except as may be
disclosed in the Forms 10-K and 10-Q of Collective referred to in Section 2.02.
Neither Bank nor Collective 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 material statutory or
regulatory noncompliance discovered in any regulatory examinations, its capital
adequacy, its credit or reserve policies or its management. Neither Bank nor
Collective 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. Neither Bank nor Collective has
failed to resolve to the satisfaction of the applicable regulatory agency any
significant deficiencies cited by any such agency in its most recently completed
examination of each aspect of Bank's and Collective's business nor has Bank or
Collective been advised of any significant deficiencies by any such agency in
connection with any current examination of Bank or Collective by any such
agency.
Section 2.06. Brokers' Fees. Collective has entered into this Agreement
with Summit as a result of direct negotiations without the assistance or efforts
of any finder, broker, financial advisor
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or investment banker, other than Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"). Collective Schedule 2.06 consists of true and
complete copies of all agreements between Collective and Merrill Lynch with
respect to the transactions contemplated by this Agreement or similar
transactions.
Section 2.07. Material Filings. At the time of filing, all filings made
by Collective and its subsidiaries after June 30, 1990 with the SEC and the
appropriate bank regulatory authorities 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 therein, in light of the circumstances under which they were made, not
misleading. To the extent such filings were 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. Collective and its subsidiaries have since June 30, 1993
timely made all filings required by the Securities Act and the Exchange Act,
Federal and state banking laws and regulations and the rules and regulations of
the NASD and any other self-regulatory organization, and have paid all fees and
assessments due and payable in connection therewith.
Section 2.08. Corporate Action. Assuming due execution and delivery by
Summit, and subject to the requisite approval by the shareholders of Collective
of this Agreement, the Merger and the other transactions contemplated hereby in
accordance with Collective's Restated Certificate of Incorporation and the
Delaware Law at a meeting of such holders to be duly called and held, Collective
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
Collective has taken all action required by law, its Restated Certificate of
Incorporation, its By-Laws or otherwise (i) to authorize the execution and
delivery of this Agreement and (ii) for shareholders of Collective to approve
this Agreement and the transactions contemplated hereby including the Merger by
a simple majority of the votes cast at the meeting held in accordance with
Section 4.03. This Agreement is a valid and binding agreement of Collective
enforceable in accordance with its terms except as such enforcement may be
limited by applicable principles of equity, and by bankruptcy, insolvency,
fraudulent transfer, moratorium or other similar laws of general applicability
presently or hereafter in effect affecting the enforcement of creditors' rights
generally and banks the deposits of which are insured by the Federal Deposit
Insurance Corporation. The Board of Directors of Collective in authorizing the
execution of this Agreement has determined to recommend to the shareholders of
Collective the approval of this Agreement, the Merger and the other transactions
contemplated hereby.
Section 2.09. Absence of Changes. There has not been, since June 30,
1996, any Collective Material Adverse Change except as may have been reported in
the Forms 10-Q of Collective referred to in Section 2.02. Except as may have
been reported in said Forms 10-Q of Collective, neither Collective nor any of
its subsidiaries has since June 30, 1996: (a) (i) declared, set aside or paid
any dividend or other distribution in respect of its capital stock, other than
dividends from subsidiaries to Collective or other subsidiaries of Collective,
and an ordinary cash dividend to Collective shareholders of $0.25 per share per
fiscal quarter, or, (ii) except as disclosed in Collective Schedule
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2.09, directly or indirectly purchased, redeemed or otherwise acquired any
shares of such stock held by persons other than Collective 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) except with respect to the
employment agreement and termination agreements disclosed in Collective Schedule
2.09 ("Officer Agreements"), made any officers' salary increase or wage increase
not consistent with past practices, 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
$250,000, whether or not covered by insurance, adversely affecting its business,
property or assets, or waived any rights of value in excess of $250,000; (f)
entered into transactions other than in the ordinary course of business which in
the aggregate exceeded $1,000,000; or (g) acquired assets or capital stock of
another company of whatsoever amount, 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 June 30, 1996 and
thereafter the allowances for loan and lease losses of Collective and its
subsidiaries were and are adequate in all material respects to provide for all
losses on loans and leases outstanding and, to the best of Collective's
knowledge, the loan and lease portfolios of Collective in excess of such
allowances are collectible in the ordinary course of business. Collective
Schedule 2.10 constitutes a list of all loans and leases made by Collective 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 Collective 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 Collective or any of its subsidiaries. None of
the property being acquired by Summit or its subsidiaries in the Merger is
property which Summit 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. All amounts required to be
withheld have been withheld from employees by Collective and each of its
subsidiaries for all periods in compliance with the tax, social security,
unemployment and other applicable withholding provisions of applicable federal,
state and local law. Proper and accurate federal, state and local returns (as
defined below) have been timely filed by Collective and each of its subsidiaries
for all periods for which returns were due, including with respect to employee
income tax withholding, social security, unemployment and other applicable taxes
(as defined below), and the amounts shown thereon to be due and payable, as well
as any interest, additions, and penalties due with respect to completed and
settled examinations or concluded litigation relating to Collective or any of
its subsidiaries, have been paid in full or adequate
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provision therefor has been included on the books of Collective or its
appropriate subsidiary. Other than franchise tax returns filed by Collective
with the State of Delaware, neither Collective 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 Collective or its appropriate subsidiary
for all unpaid taxes, whether or not disputed, that may become due and payable
by Collective or any of its subsidiaries in future periods in respect of
transactions, sales or services previously occurring or performed. The Internal
Revenue Service ("IRS") has audited the consolidated federal income tax returns
of Collective for all taxable years ended on or prior to and the State of New
Jersey has audited the New Jersey income tax returns of Collective and its
subsidiaries for all taxable years ended on or prior to . Neither Collective 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. Collective 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 Collective 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, claims, assessments, examinations, notices of
deficiency, demands for taxes, refund litigation, proceedings, audits or
proposed deficiencies pending or, to Collective's knowledge, threatened against
Collective or any of its subsidiaries, including a claim or assessment by any
authority in a jurisdiction where Collective or any of its subsidiaries do not
file tax returns and Collective or any such subsidiary is subject to taxation,
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 Collective 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 Collective or any of its subsidiaries, and
neither Collective nor any of its subsidiaries has any knowledge that the IRS
has proposed any such adjustment or change in accounting method. Collective and
its subsidiaries have complied in all material respects with all requirements
relating to information reporting, including tax identification number
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.
"Taxes" shall mean all taxes, charges, fees, levies, penalties or other
assessments imposed by any United States Federal, state, local, or foreign
taxing authority, including, but not limited to, income, excise, property,
sales, transfer, franchise, payroll, withholding, social security or other
taxes, including any interest, penalties or additions attributable thereto.
"Return" shall mean any return, report, information return or other documents
(including any related or supporting information) with respect to Taxes.
Section 2.12. Properties. Collective has, directly or through its
subsidiaries, 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 Collective Financial Statements
(except individual properties and assets disposed of since that date in the
ordinary course of business), which properties and assets are not subject to any
mortgage, pledge, lien, charge or encumbrance other than
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as reflected in the Collective Financial Statements or which in the aggregate do
not materially adversely affect or impair the operation of Collective and its
subsidiaries taken as a whole. Collective 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 be likely to have a Collective Material Adverse
Effect, and none of such leases contains any unusual or burdensome provision
which would be likely to materially and adversely affect or impair the
operations of Collective and its subsidiaries taken as a whole.
Section 2.13. Condition of Properties; Insurance. All real and tangible
personal properties owned by Collective or any of its subsidiaries or used by
Collective 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
Collective or such subsidiary subject to exceptions which are not, in the
aggregate, material to Collective and its subsidiaries, taken as a whole.
Collective and each of its subsidiaries maintains insurance (with companies
which, to the best of Collective's knowledge, are authorized to do business in
New Jersey) against loss relating to such properties and such other risks as
companies engaged in similar business located in the State of New Jersey, would,
in accordance with good business practice, be customarily insured 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 and are
carried in an amount and form and are otherwise adequate to protect Collective
and each of its subsidiaries from any adverse loss resulting from risks and
liabilities reasonably foreseeable at the date hereof, and are disclosed on
Collective Schedule 2.13. All material claims thereunder have been filed in a
due and timely fashion. Except as disclosed on Collective Schedule 2.13, since
January 1, 1991, neither Collective nor any of its subsidiaries has been refused
insurance for which it has applied or had any policy of insurance terminated
(other than at its request) nor have they received notice from any insurance
carrier that (i) such insurance will be canceled or that coverage thereunder
will be reduced or eliminated or (ii) premium costs with respect to such
insurance will be increased.
Section 2.14. Contracts.
(a) Except as set forth in Collective Schedule 2.14(a), neither
Collective 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 $250,000.
(b) Except as set forth in Collective Schedule 2.09(a) or 2.14(b),
neither Collective nor any of its subsidiaries is a party to and neither they
nor any of their assets are bound by any written or oral: (i) employment or
severance contract (including, without limitation, any Collective bargaining
contract or union agreement) or other agreement with any director, executive
officer or other key employee of Collective or any subsidiary, the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Collective or any of its subsidiaries of
the nature contemplated by this Agreement which is not terminable without
penalty
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by Collective or a subsidiary, as appropriate, on 60 days or less notice; (ii)
contract or commitment for capital expenditures in excess of $250,000 in the
aggregate for any one project or in excess of $1,000,000 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 $250,000 (including
advertising and consulting agreements, data processing agreements, and retainer
agreements with attorneys, accountants, actuaries, or other professionals); (iv)
contract or option to purchase or sell any real or personal property other than
OREO property involving consideration in excess of $250,000; (v) agreement or
plan, including any stock option plan, stock appreciation rights plan,
restricted stock plan, stock purchase plan, or any other non-qualified
compensation plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (vi) agreement containing covenants that limit
the ability of Collective or any of its subsidiaries to compete in any line of
business or with any person, or that involve any restriction on the geographic
area in which or method by which, Collective (including any successor thereof)
or any of its subsidiaries may carry on its business (other than as may be
required by law or any Regulatory Agency), (vii) agreement which by its terms
limits the payment of dividends by Collective or any of its subsidiaries, (viii)
contract (other than this Agreement) limiting the freedom of Collective or its
subsidiaries to engage in any type of banking or bank-related business
permissible under law; (ix) contract, plan or arrangement which provides for
payments of benefits payable to any participant therein or party thereto, and
which might render any portion of any such payments or benefits subject to
disallowance of deduction therefor as a result of the application of Section
280G of the Code or (x) other contracts material to the business of Collective
and its subsidiaries taken as a whole and not made in the ordinary course of
business.
(c) Neither Collective 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 Collective, is
materially adverse, onerous, or harmful to any aspect of the business of
Collective and its subsidiaries taken as a whole.
Section 2.15. Pension and Benefit Plans.
(a) Neither Collective 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 Collective Schedule 2.15(a)
(individually a "Collective Pension Plan" and collectively the "Collective
Pension Plans"). In its present form each Collective Pension Plan complies in
all material respects with all applicable requirements under ERISA and the Code.
Each Collective Pension Plan and the trust created thereunder is qualified and
exempt under Sections 401(a) and 501(a) of the Code, and Collective or the
subsidiary whose employees are covered by such Collective Pension Plan has
received from the IRS a determination letter to that effect and such
determination letter may still be relied on. No event has occurred and there has
been
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no omission or failure to act which would adversely affect such qualification or
exemption. Each Collective Pension Plan has been administered and communicated
to the participants and beneficiaries in all material respects in accordance
with its terms and ERISA. No employee or agent of Collective or any subsidiary
whose employees are covered by a Collective Pension Plan 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 (as the case may be), a
favorable determination as to such Collective Pension 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 Collective Pension
Plan or has been misled as to his or her rights under such Collective Pension
Plan. No Collective Pension Plan is subject to Section 412 of the Code or Title
IV of ERISA. No person has engaged in any prohibited transaction involving any
Collective Pension Plan or associated trust within the meaning of Section 406 of
ERISA or Section 4975 of the Code. There are no pending or threatened claims
(other than routine claims for benefits) against the Collective Pension Plans or
any fiduciary thereof which would subject Collective or any of its subsidiaries
to a material liability. All reports, filings, returns and disclosures and other
communications which have been required to be made to the participants and
beneficiaries, other employees, the Pension Benefit Guaranty Corporation
("PBGC"), 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,
communications, filings, returns and disclosures were true and correct in all
material respects. 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
Collective is a member and which is under common control within the meaning of
Section 414 of the Code. Neither Collective nor any of its subsidiaries has any
material liability under ERISA or the Code as a result of its being a member of
a group described in Sections 414(b), (c), (m) or (o) of the Code. There are no
unfunded benefit or pension plans or arrangements, or any individual agreements
whether qualified or not, to which Collective or any of its subsidiaries or
ERISA Affiliates has any obligation to contribute and the present value of all
benefits vested and all benefits accrued under each Collective Pension Plan
which is subject to Title IV of ERISA did not, in each case, as of the last
applicable annual valuation date, exceed the value of the assets of the
Collective Pension Plan allocable to such vested or accrued benefits. No
Collective Pension Plan or any trust created thereunder has been terminated, nor
has there been any "reportable events" with respect to any Collective Pension
Plan, as that term is defined in Section 4043 of ERISA since January 1, 1990. No
Collective Pension Plan or any trust created thereunder has incurred any
"accumulated funding deficiency" as such term is defined in Section 302 of
ERISA(whether or not waived). No Collective Pension Plan is a "multiemployer
plan" as that term is defined in Section 3(37) of ERISA. There has been no
change in control of any Collective Pension Plan since the last effective date
of any such change of control disclosed to Summit in Collective Schedule
2.15(a).
(b) All bonus, deferred compensation, profit-sharing, retirement,
pension, stock option, stock award and stock purchase plans and all other
employee benefit, health and welfare plans, arrangements or agreements,
including without limitation the Collective Stock Plans and medical,
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major medical, disability, life insurance or dental plans covering employees
generally, other than the Collective Pension Plans, maintained by Collective or
any of its subsidiaries with an annual cost in excess of $250,000 (collectively
"Collective Benefit Plans") are listed in Collective Schedule 2.15(b) (unless
already listed in Collective Schedule 2.15(a)) and 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. The Collective 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 Collective 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 an Collective 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 Collective Benefit Plans or has been misled as to their rights under
the Collective Benefit Plans. There are no pending or threatened claims (other
than routine claims for benefits) against the Collective Benefit Plans which
would subject Collective or any of its subsidiaries to liability. Any trust
which is intended to be tax-exempt has received a determination letter from the
IRS to that effect and no event has occurred which would adversely affect such
exemption. All reports, filings, returns and disclosures required to be made to
the participants and beneficiaries, other employees of Collective or any of its
subsidiaries, the PBGC, the SEC, the IRS, the U.S. Department of Labor and any
other governmental agency pursuant to the Code, ERISA, or other applicable
statute or regulation, if any, have been made in a timely manner and all such
reports, filings, returns and disclosures 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.
(c) There is no pending or, to Collective's knowledge, threatened
litigation, administrative action or proceeding relating to any Collective
Benefit Plan or Collective Pension Plan. There has been no announcement or
commitment by Collective or any subsidiary of Collective to create an additional
Collective Benefit Plan or Collective Pension Plan, or to amend a Collective
Benefit Plan or Collective Pension Plan, except for amendments required by
applicable law, which may materially increase the cost of such Collective
Benefit Plan or Collective Pension Plan and, except for any plans or amendments
expressly described on Collective Schedule 2.15(a) or Collective Schedule
2.15(b), Collective and its subsidiaries do not have any obligations for
post-retirement or post-employment benefits under any Collective Benefit Plan
(exclusive of any coverage mandated by the Consolidated Omnibus Reconciliation
Act of 1986 ("COBRA") that cannot be amended or terminated upon more than sixty
(60) days' notice without incurring any liability thereunder. With respect to
each Collective Benefit Plan and Collective Pension Plan to the extent
applicable, Collective has supplied or will promptly supply to Summit a true and
complete copy of (A) the most recent annual report on the applicable form of the
Form 5500 series filed with the IRS with all the attachments filed, (B) such
Collective Benefit Plan or Collective Pension Plan, including amendments
thereto, (C) each trust agreement and insurance contract relating to such plan,
including amendments thereto, (D) the most recent summary plan description for
such plan, including amendments thereto, if the plan is subject to Title I of
ERISA, (E) the most recent actuarial report or valuation if such plan is a
pension plan
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and (F) the most recent determination letter issued by the IRS if such plan is
qualified under Section 401(a) of the Code. To the extent that any individual
plan or arrangement described under this Section 2.15 does not completely meet
representations made herein, such plan and its variance from the representation
is set forth in Collective Schedule 2.15(a) or Collective Schedule 2.15(b).
Section 2.16. Fidelity Bonds. Since at least January 1, 1991,
Collective and each of its subsidiaries has continuously maintained fidelity
bonds insuring them against acts of dishonesty in such amounts as are customary,
usual and prudent for organizations of its size and business. All material
claims thereunder have been filed in a due and timely fashion. Since January 1,
1991, 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 $50,000) and neither Collective 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 Collective 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 Collective's and its subsidiaries' past
claim experience.
Section 2.17. Labor Matters. Hours worked by and payment made to
employees of Collective 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 Collective 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 Collective or its appropriate subsidiary. Collective is in
compliance in all material respects 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. No labor dispute, strike or other work stoppage has
occurred and is continuing or is to its knowledge threatened with respect to
Collective or any of its subsidiaries. Since January 1, 1991, no employee of
Collective or any of its subsidiaries has been terminated, suspended,
disciplined or dismissed under circumstances which could constitute a material
claim, suit, action, complaint or proceeding likely to result in a material
liability. No employees of Collective 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 Collective pending with, or, to the knowledge of Collective,
threatened by, any labor organization or group of employees of Collective.
Section 2.18. Books and Records. The minute books of Collective 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 Collective and each of its
subsidiaries fairly and accurately reflect the transactions to which Collective
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.
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Section 2.19. Concentrations of Credit. No customer or affiliated group
of customers (a) is owed by Collective or any subsidiary of Collective an
aggregate amount equal to more than 5% of the shareholders' equity of Collective
or such subsidiary (including deposits, other debts and contingent liabilities)
or (b) owes to Collective or any of its subsidiaries an aggregate amount equal
to more than 5% of the shareholders' equity of Collective or such subsidiary
(including loans and other debts, guarantees of debts of third parties, and
other contingent liabilities).
Section 2.20. Trademarks and Copyrights. Neither Collective nor any of
its subsidiaries has received notice or otherwise knows that the manner in which
Collective 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 2.21. Equity Interests. Neither Collective nor any of its
subsidiaries owns, directly or indirectly, except for the equity interest of
Collective in Bank and of Collective and Bank in the nonbank subsidiaries of
Collective listed on Collective Schedule 2.01(a), 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. None of the investments reflected
in the consolidated balance sheet of Collective as of June 30, 1996, and none of
such investments with face value of in excess of $100,000 made by it or any of
its subsidiaries since June 30, 1996, is subject to any restriction (contractual
or statutory), other than applicable securities laws, that would materially
impair the ability of the entity holding such investment freely to dispose of
such investment at any time, except to the extent any such investments are
pledged in the ordinary course of business ( including in connection with
hedging arrangements or programs or reverse repurchase arrangements) consistent
with prudent banking practice to secure obligations of Collective or any of its
subsidiaries.
Section 2.22. Environmental Matters.
(a) Except as disclosed on Collective Schedule 2.22 or as may be
disclosed in the Forms 10-K and 10-Q of Collective referred to in Section 2.02
hereof, to the knowledge of Collective:
(1) 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, leased or held or managed in a representative
or fiduciary capacity ("Present Property") by Collective or
any of its subsidiaries, (2) any property previously owned,
occupied, leased or held or managed in a representative or
fiduciary capacity ("Former Property") by Collective or any of
its subsidiaries during the time of such previous ownership,
occupancy, lease; holding or management or (3) any
Participation Facility (as hereinafter defined) during the
time that Collective 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;
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(2) Neither Collective 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
Collective 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;
(3) 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 Collective or any of its
subsidiaries from recovering the full value of its loan in
the event of a foreclosure on such Loan Property.
(b) Neither Collective nor any subsidiary (i) is aware of any
investigations contemplated, pending or completed by any environmental
regulatory authority with respect to any Present Property, Former Property, Loan
Property or Participation Facility, (ii) has received any information requests
from any environmental regulatory authority, or (iii) been named as a
potentially responsible or liable party in any Superfund, Resource Conservation
and Recovery Act, Toxic Substances Control Act or Clean Water Act proceeding or
other equivalent state or federal proceeding.
(c) 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 $50,000 and (c) "Hazardous Substances" shall mean (i) any flammable
substances, explosives, radioactive materials, hazardous materials, hazardous
substances, hazardous wastes, toxic substances, pollutants, contaminants and 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-containing products and wastes.
(d) Collective shall disclose to Summit all matters of the types
described above which Collective would have been required to disclose to Summit
on the date hereof if known to Collective on the date hereof, as such become
known to Collective between the date hereof and the Effective Time ("Discovered
Matters"). 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 the Discovered Matters, if any, is in the
aggregate in excess of $5,000,000, as reasonably estimated by an environmental
expert retained for
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such purpose by Summit at its sole expense, 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.
Section 2.23. Accounting, Tax and Regulatory Matters. Neither
Collective nor any of its subsidiaries has taken or agreed to take any action or
has any knowledge of any fact or circumstance that would (i) prevent the
transactions contemplated hereby from qualifying (A) for pooling-of- interest
accounting treatment, or (B) as a reorganization within the meaning of Section
368 of the Code, or (ii) materially impede or delay receipt of any approval
referred to in Section 4.01 or the consummation of the transactions contemplated
by this Agreement.
Section 2.24. Interest of Management and Affiliates. All loans
presently on the books of Collective or any of its subsidiaries to its present
or former directors or executive officers, or their 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. No present or former officer or
director of Collective 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
Collective 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 Collective 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
Collective nor any of its subsidiaries has any commitment, whether written or
oral, to lend any funds to any such person; and neither Collective 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 Collective or such
subsidiary, as appropriate, as in effect immediately prior to the date hereof.
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) or
provision of a benefit becoming due from Collective or any of its subsidiaries
or any successor or assign thereof to any director, officer or employee of
Collective or any of its subsidiaries or any successor or assign of such
subsidiary, other than payments and benefits provided for in the Officer
Agreements.
Section 2.25 Registration Obligations. Neither the Collective nor any
of its subsidiaries is under any obligation, contingent or otherwise, to
register any of its securities under the Securities Act.
Section 2.26 Corporate Documents. Collective has delivered to the
Summit true and complete copies of its Restated Certificate of Incorporation and
by-laws, as amended to date, which
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are currently in full force and effect, and the certificate of incorporation and
by-laws of each of its subsidiaries.
Section 2.27 Community Reinvestment Act Compliance. Collective and Bank
are in substantial compliance with the applicable provisions of the Community
Reinvestment Act of 1977 and the regulations promulgated thereunder, and
received a CRA rating of at least satisfactory as of its last completed
examination. As of the date of this Agreement, Collective has not been advised
of the existence of any fact or circumstance or set of facts or circumstances
which, if true, would cause Collective to fail to be in substantial compliance
with such provisions.
Section 2.28 Business of Collective. Since June 30, 1996, Collective
has conducted its business only in the ordinary course. For purposes of the
foregoing, Collective has not, since June 30, 1996, controlled expenses through
(i) elimination of employee benefits, (ii) deferral of routine maintenance of
real property or leased premises, (iii) elimination of reserves where the
liability related to such reserve has remained, (iv) reduction of capital
improvements from previous levels, (v) failure to depreciate capital assets in
accordance with past practice or to eliminate capital assets which are no longer
used in the business of seller, (vi) capitalized loan production expenses other
than in accordance with Statement of Financial Accounting Standard No. 91, or
(vii) extraordinary reduction or deferral of ordinary or necessary expenses.
Section 2.29 Interest Rate Risk Management Instruments.
(a) Set forth on Collective Schedule 2.29(a) is a list as of
the date hereof of all interest rate swaps, caps, floors and option agreements,
and other interest rate risk management arrangements to which Collective or any
of its subsidiaries is a party or by which any of their properties or assets may
be bound.
(b) All such interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements to which
Collective or any of its subsidiaries is a party or by which any of their
properties or assets may be bound were entered into the ordinary course of
business and, in accordance with prudent banking practice and applicable rules,
regulations and policies of regulatory authorities and with counterparties
believed, at the time entered into and at the date of this Agreement, to be
financially responsible and are legal, valid and binding obligations of
Collective or a subsidiary and are in full force and effect. Collective and each
of its subsidiaries has duly performed in all material respects all of its
obligations thereunder to the extent that such obligations to perform have
accrued, and there are no material breaches, violations or defaults or
allegations or assertions of such by any party thereunder.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SUMMIT
Summit represents and warrants to Collective as follows:
Section 3.01. Organization, Capital Stock.
(a) Summit 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
with attached rights issued pursuant to the Summit Shareholder Rights Plan, of
which 94,152,078 shares were issued and outstanding as of January 31, 1997 and
4,000,000 shares of Preferred Stock, each without par value, of which no shares
were issued and outstanding and 1,500,000 shares of Series R Preferred Stock
were reserved for issuance as of January 31, 1997.
(b) Summit 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 (i) the business, results of operations,
assets or financial condition of Summit and its subsidiaries on a consolidated
basis, or (ii) the ability of Summit to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement (a "Summit Material
Adverse Effect" or "Summit Material Adverse Change"). However, a Summit Material
Adverse Effect or Summit Material Adverse Change will not include a change
resulting from a change in law, rule, regulation, generally accepted or
regulatory accounting principle or other matter affecting financial institutions
or their holding companies generally or from charges or expenses incident to the
Merger. The bank subsidiaries of Summit are duly organized, validly existing and
in good standing under the laws of their jurisdiction of organization. Summit
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. Summit is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as amended
("BHCA").
(c) All issued shares of the capital stock of Summit 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 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. Summit or one of its subsidiaries is the holder and
beneficial owner of all of the issued and outstanding Equity Securities of its
bank subsidiaries. There are no Equity Securities of Summit outstanding, in
existence, the subject of an agreement, or reserved for issuance, except as set
forth at Section 3.01(a) or described at Summit Schedule 3.01 and except for
Summit Stock issuable upon the exercise of employee stock options granted under
stock option plans of Summit, Summit Stock issuable pursuant to Summit's
Dividend Reinvestment and Stock Purchase Plan, Savings
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Incentive Plan and 1993 Incentive Stock and Option Plan and the Agreement and
Plan of Merger, dated August 28, 1996, between Summit and B.M.J. Financial Corp.
("BMJ Merger Agreement") and Series R Preferred Stock issuable pursuant to the
Summit Shareholder Rights Plan.
(d) Except as disclosed on Summit Schedule 3.01, all Equity Securities
of its direct and indirect subsidiaries beneficially owned by Summit or a
subsidiary of Summit are held free and clear of any claims, liens, encumbrances
or security interests.
Section 3.02. Financial Statements. The financial statements and
schedules contained or incorporated in Summit's (a) annual report to
shareholders for the fiscal year ended December 31, 1995, (b) annual report on
Form 10-K pursuant to the Exchange Act for the fiscal year ended December 31,
1995 and (c) quarterly reports on Form 10-Q pursuant to the Exchange Act for the
fiscal quarters ended March 31, 1996, June 30, 1996 and September 30, 1996 (the
"Summit 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 Summit 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 Summit Financial
Statements were prepared in accordance with generally accepted accounting
principles consistently applied. The Summit 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 Summit Financial Statements, in light of the circumstances under
which they were made, misleading in any respect.
Section 3.03. No Conflicts. Summit 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 Summit, or the consummation of the
Merger by Summit 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 Summit and its subsidiaries, taken as
a whole, or upon any of the capital stock of Summit, or constitute an event
which could, with the lapse of time, action or inaction by Summit, 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 Restated Certificate of Incorporation or the By-Laws of
Summit;
(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
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(d) any material note, bond, mortgage, indenture, lease, policy of
insurance or indemnity, license, contract, agreement, or other instrument;
to which Summit is a party or by which Summit or any of its assets or properties
are bound or committed, the consequences of which would be a Summit 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 Summit or its
subsidiaries which materially and adversely affects Summit and its subsidiaries,
taken as a whole, and there are no actions, arbitrations, claims, charges,
suits, investigations or proceedings (formal or informal) material to Summit and
its subsidiaries, taken as a whole, pending or, to Summit's knowledge,
threatened, against or involving Summit or their officers or directors (in their
capacity as such) in law or equity or before any court, panel or governmental
agency, except as may be disclosed in the Forms 10-K and 10-Q of Summit referred
to in Section 3.02 or in the Form 8-K of Summit dated December 10, 1996. Neither
Summit nor any bank subsidiary of Summit 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
Summit nor any bank subsidiary of Summit, 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.
Summit and the bank subsidiaries of Summit 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 Summit or such bank
subsidiary's business except for examinations, if any, received within the 30
days prior to the date hereof.
Section 3.05. Material Information. At the time of filing, all filings
made by Summit and its subsidiaries after December 31, 1990 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 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. Summit has since December 31, 1993 timely made all
filings required by the Securities Act and the Exchange Act.
Section 3.06. Corporate Action. Assuming due execution and delivery by
Collective, Summit 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 Summit has taken all action required by law or by the
Restated Certificate of Incorporation or By-Laws of Summit or otherwise to
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authorize the execution and delivery of this Agreement. Approval by the
shareholders of Summit of this Agreement, the Merger or the transactions
contemplated by this Agreement are not required by applicable law. This
Agreement is a valid and binding agreement of Summit 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 and banks the deposits of which are insured by the Federal
Deposit Insurance Corporation.
Section 3.07. Absence of Changes. Except as disclosed in the Summit
Financial Statements or in the Summit news release disclosing 1996 earnings, a
copy of which was previously delivered to Collective ("Summit News Release"),
there has not been, since December 31, 1995, any Summit Material Adverse Change
and there is no matter or fact which may result in any such Summit Material
Adverse Change in the future.
Section 3.08. Non-bank Subsidiaries. The non-bank subsidiaries of
Summit did not, taken in the aggregate, constitute a "significant subsidiary" of
Summit, 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, 1995.
Section 3.09 Absence of Undisclosed Liabilities. The Summit Financial
Statements are prepared on an accrual basis and reflect all known assets,
liabilities and loss contingencies (as defined in Statement of Financial
Accounting Standards No.5). There are no material liabilities, whether
contingent or absolute, direct or indirect, or loss contingencies not disclosed
in the Summit Financial Statements, the Form 8-K of Summit dated December 10,
1996 or in the Summit News Release .
Section 3.10. Environmental Matters.
(a) Except as may be disclosed in the Forms 10-K and 10-Q of Summit
referred to in Section 3.02 hereof, to the knowledge of Summit:
(1) no Hazardous Substances have been stored, treated, dumped,
spilled, disposed, discharged, released or deposited at, under
or on any (i) Present Property of Summit or a subsidiary, (ii)
Former Property of Summit or a subsidiary during the time of
previous ownership, occupancy or lease, or (iii) Participation
Facility during the time that Summit or a subsidiary
participated in the management of, or may be deemed to be or
to have been an owner or operator of, such facility, where
such storage, treatment, dumping, spilling, disposing,
discharging, releasing, or depositing would have a material
adverse effect on Summit and its subsidiaries, taken as a
whole;
(2) neither Summit nor any subsidiary 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 Summit or any
subsidiary participated in the management of, or may be deemed
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to be or to have been an owner or operator of such
Participation Facility, where such disposal or arranging for
disposal would have a material adverse effect on Summit and
its subsidiaries, taken as a whole;
(3) no Hazardous Substances have been stored, treated, dumped,
spilled, disposed, discharged, released or deposited at, under
or on any Loan Property, nor is there with respect to any Loan
Property any violation of an environmental law, where such
storage, treatment, dumping, spilling, disposing, discharging,
releasing, depositing or violation would have a material
adverse effect on Summit and its subsidiaries, taken as a
whole.
(b) Neither Summit nor any subsidiary (i) is aware of any
investigations contemplated, pending or completed by any environmental
regulatory authority with respect to any Present Property, Former Property, Loan
Property or Participation Facility which would result in a Summit Material
Adverse Change, (ii) has received any information requests from any
environmental regulatory authority with respect to a matter which would result
in a Summit Material Adverse Change, or (iii) been named as a potentially
responsible or liable party in any Superfund, Resource Conservation and Recovery
Act, Toxic Substances Control Act or Clean Water Act proceeding or other
equivalent state or Federal proceeding which would result in a Summit Material
Adverse Change.
Section 3.11. Allowance for Loan and Lease Losses. At December 31, 1995
and thereafter, the allowances for loan and lease losses of Summit and its
subsidiaries are adequate in all material respects to provide for all losses on
loans and leases outstanding, and to the best of Summit's knowledge, the loan
and lease portfolios of Summit and its subsidiaries in excess of such allowances
are collectible in the ordinary course of business.
Section 3.12. Taxes and Tax Returns. Except to the extent not material
to Summit and its subsidiaries, taken as a whole, proper and accurate Federal,
state and local returns have been timely filed by Summit and each of its bank
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 Summit or its
appropriate subsidiary. Except to the extent not material to Summit and its
subsidiaries, taken as a whole, provision has been made on the books of Summit
or its appropriate bank subsidiary for all unpaid taxes, whether or not
disputed, that may become due and payable by Summit or any of its subsidiaries
in future periods in respect of transactions, sales or services previously
occurring or performed. Summit 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
Summit nor any of its bank 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 Summit's knowledge, threatened against
Summit or any of its bank
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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 Summit 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 Summit or any of its subsidiaries
which would result in any additional tax liability, and neither Summit nor any
of its bank subsidiaries has any knowledge that the IRS has proposed any such
adjustment or change in accounting method which would result in any additional
tax liability. Summit 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 3.13. Properties. Summit, 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 Summit Financial Statements (except properties and assets
disposed of since that date in the ordinary course of business and OREO property
disposed of since that date), which properties and assets are not subject to any
mortgage, pledge, lien, charge or encumbrance other than as reflected in the
Summit Financial Statements or which in the aggregate do not materially
adversely affect or impair the operation of Summit and its subsidiaries taken as
a whole. Summit 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 be likely to have a material adverse effect on Summit and its
subsidiaries taken as a whole.
Section 3.14. Labor Matters. To the knowledge of Summit, hours worked
by and payment made to employees of Summit and each of its bank 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 Summit and each of its bank
subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of Summit or its appropriate bank
subsidiary, except for any immaterial noncompliance. Summit is in compliance in
all material respects 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 Summit or any of its bank subsidiaries. No employee
of Summit or any of its bank subsidiaries has been terminated, suspended,
disciplined or dismissed under circumstances that are likely to result in a
material liability. To the knowledge of Summit, no employees of Summit or any of
its bank 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 Summit pending with, or, to
the knowledge of Summit, threatened by, any labor organization.
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Section 3.15. Books and Records. The minute books of Summit and each of
its bank 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 Summit and each of its bank
subsidiaries fairly and accurately reflect the transactions to which Summit and
each of its bank 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.
ARTICLE IV.
COVENANTS OF COLLECTIVE
Collective hereby covenants and agrees with Summit that:
Section 4.01. Preparation of Registration Statement and Applications
for Required Consents. Collective will cooperate with Summit in the preparation
of a Registration Statement on Form S-4 (the "Registration Statement") to be
filed with the SEC under the Securities Act for the registration of the offering
of Summit Stock to be issued in connection with the Merger and the proxy
statement-prospectus constituting part of the Registration Statement
("Proxy-Prospectus") that will be used by Collective to solicit shareholders of
Collective for approval of the Merger. In connection therewith, Collective will
furnish all financial or other information, including using best efforts to
obtain customary consents, certificates, opinions of counsel and other items
concerning Collective, deemed necessary by counsel to Summit for the filing or
preparation for filing under the Securities Act and the Exchange Act of the
Registration Statement (including the proxy statement portion thereof).
Collective will cooperate with Summit 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 under the BHCA of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and any other governmental or
regulatory consents or approvals or the taking of any other governmental or
regulatory action necessary to consummate the Merger without a material adverse
effect on the business, results of operations, assets or financial condition of
the Surviving Corporation and its subsidiaries, taken as a whole (the "Required
Consents"). Summit, reasonably in advance of making such filings, will provide
Collective and its counsel a reasonable opportunity to comment on such filings
and regulatory applications and will give due consideration to any comments of
Collective and its counsel before making any such filing or application, and
Summit will provide Collective and its counsel with copies of all such filings
and applications at the time filed if such filings and applications are made at
any time before the Effective Time. Collective covenants and agrees that all
information furnished by Collective for inclusion in the Registration Statement,
the Proxy-Prospectus, all applications to appropriate regulatory agencies for
approval of the Merger, and all information furnished by Collective to Summit
pursuant to this Agreement or in connection with obtaining Required Consents,
will comply in all material respects with the provisions of applicable law,
including the Securities Act
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and the Exchange Act and the rules and regulations of the SEC thereunder, 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. Collective will furnish to Merrill Lynch such
information as Merrill Lynch may reasonably request for purposes of the opinion
referred to in Section 8.07.
Section 4.02. Notice of Adverse Changes. Collective will promptly
advise Summit in writing of (a) any event occurring subsequent to the date of
this Agreement which would render any representation or warranty of Collective
contained in this Agreement or the Collective Schedules or the materials
furnished pursuant to the Post-Signing Document List (as defined in Section
4.09), if made on or as of the date of such event or the Closing Date, untrue or
inaccurate in any material respect, (b) any Collective Material Adverse Change,
(c) any inability or perceived inability of Collective 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 Collective or
any of its subsidiaries or assets, which, if determined adversely to Collective
or any of its subsidiaries, would have a material adverse effect upon Collective
and its subsidiaries taken as a whole or the ability of the parties to timely
consummate the Merger and the related transactions, (e) any governmental
complaint, investigation, hearing, or communication indicating that such
litigation or administrative proceeding is 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 Collective or a
subsidiary subsequent to the date hereof and prior to the Effective Time, under
any agreement, indenture or instrument to which Collective or a subsidiary is a
party or is subject and which is material to the business, operation or
condition (financial or otherwise) of Collective 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. Collective agrees that the delivery of such notice shall not constitute
a waiver by Summit of any of the provisions of Articles VI or VII.
Section 4.03. Meeting of Shareholders. Collective 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 Delaware Law and the Exchange
Act and all regulations promulgated thereunder governing shareholder meetings
and proxy solicitations. In connection with such meeting, Collective shall mail
the Proxy-Prospectus to its shareholders and use, unless in the written opinion
of counsel such action would be a breach of the fiduciary duties by the
directors under applicable law, its best efforts 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, Collective will deliver to Summit, at least twenty-four hours
prior to an anticipated date of filing or distribution, all documents to be
filed with the SEC or any bank regulatory authority or to be distributed in any
manner to the shareholders of Collective.
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Section 4.05. No Material Transactions. Until the Effective Time,
Collective will not and will not allow any of its subsidiaries to, without the
prior written consent of Summit:
(a) pay (or make a declaration which creates an obligation to pay) any
cash dividends, other than dividends from subsidiaries of Collective to
Collective or other subsidiaries of Collective except that Collective may
declare, set aside and pay a dividend of $0.25 per quarter;
(b) declare or distribute any stock dividend or authorize or effect a
stock split;
(c) merge with, consolidate with, or sell any material asset to any
other corporation, bank, or person (except for mergers of subsidiaries of
Collective into other subsidiaries of Collective) or enter into any other
transaction not in the ordinary course of the banking business;
(d) 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 or other transactions involving not more than $250,000;
(e) subject any of its properties or assets to any lien, claim, charge,
option or encumbrance, except in the ordinary course of business and for amounts
not material in the aggregate to Collective and its subsidiaries taken as a
whole;
(f) (i) pay any employee bonuses, other than bonuses, up to a maximum
of $200,000 in the aggregate for all employees, for performance during calendar
quarters in 1997 completed prior to the Effective Time, calculated in accordance
with the formulas and subject to satisfaction of the performance criteria set
forth in the Collective Executive Incentive Compensation Program, a copy of
which was previously delivered to Summit, payable within 30 days of the
Effective Time solely to employees of Collective or its subsidiaries who remain
so employed through the Effective Time, or (ii) increase or enter into any
agreement to increase the rate of compensation of any employee on the date
hereof which is not consistent with past practices and policies and which when
considered with all such increases or agreements to increase constitutes an
average annualized rate not exceeding five percent (5%);
(g) create, adopt or modify any employment, termination, severance
pension, supplemental pension, profit sharing, bonus, deferred compensation,
death benefit, retirement, stock option, stock award, stock purchase or other
employee or director benefit or welfare plan, arrangement or agreement of
whatsoever nature, including without limitation the Collective Pension Plans and
the Collective Benefit Plans (collectively, "Collective Plans"), or change the
level of benefits, reduce eligibility, performance or participation standards,
increase any payment or benefit under any Collective Plan;
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(h) except as described on Collective Schedule 4.05(h) with respect to
restricted stock to be issued under the Collective Employee Restricted Stock
Plan, distribute, issue, sell, award or grant any of its Equity Securities, any
stock appreciation rights, derivative securities or stock-based cash rights
except pursuant to the exercise of director and employee stock options granted
prior to the date hereof under the Collective Option Plans and exercisable and
outstanding under the terms of the Collective Option Plans at the date of such
exercise;
(i) 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;
(j) amend its certificate or articles of incorporation, charter or
by-laws;
(k) 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 Reserve Bank of New York or the Federal Home Loan Bank of
New York or enter into any contract, agreement, lease or understanding, 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 Collective or any of its
subsidiaries, taken as a whole;
(l) create, amend, increase, or accelerate the exercisability of, or
release any restrictions on any rights, awards, benefits, entitlements, or
options under the Collective Plans;
(m) make any employer contribution to an Collective Plan which under
the terms of the particular plan is voluntary and within the sole discretion of
Collective to make;
(n) make any determination or take any action, discretionary or
otherwise, under or with respect to any Collective Plan other than routine
administration in accordance with past precedent;
(o) amend or exercise any discretion to change the current terms of the
Collective Dividend Reinvestment Plan or issue any Collective Stock under the
Collective Dividend Reinvestment Plan at a discount; or
(p) enter into, increase or renew any loan or credit commitment
(including standby letters of credit) to any executive officer or director of
Collective or any of its subsidiaries, any holder of 10% of more of the
outstanding shares of Collective Stock, or any entity controlled, directly or
indirectly, by any of the foregoing or engage in any transaction with any of the
foregoing which is of the type or nature sought to be regulated in 12 U.S.C.
ss.371c and 12 U.S.C. ss.371c-1. For purposes of this Section 4.05(p), "control
shall have the meaning associated with that term under 12 U.S.C.
ss.371c..
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Section 4.06. Operation of Business in Ordinary Course. Collective, 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 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 Collective or any of its subsidiaries may terminate any employee
for unsatisfactory performance or other reasonable business purpose, and
provided further, however, that Collective will notify and consult with Summit
prior to terminating any of the five highest paid employees of Collective; (d)
will use their best efforts to continue to maintain fidelity bonds insuring
Collective 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 Collective 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, would be
likely to have a material adverse effect on Collective and its subsidiaries
taken as a whole; and (f) will not change their methods of accounting in effect
at June 30, 1996, 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 June
30, 1996, 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 Collective's independent certified public
accountants.
Section 4.07. Further Actions. Collective will: (a) execute and deliver
such instruments and take such other actions as Summit 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 Summit set forth in
Articles VI and VII hereof are satisfied.
Section 4.08. Cooperation. Until the Effective Time, Collective will
give to Summit 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 relevant to this Agreement
and the Merger, will provide such information with respect to its business
affairs and properties as Summit from time to time may reasonably request, and
will cause its managerial employees, and will use its best efforts to cause its
counsel and independent certified public accountants, to be available on
reasonable request to answer questions of Summit's representatives covering the
business and affairs of Collective or any of its subsidiaries.
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Section 4.09. Copies of Documents. As promptly as practicable, but not
later than 45 days after the date hereof, Collective will furnish to or make
available to Summit all the documents, contracts, agreements, papers, and
writings referred to in the Collective Schedules or called for by the list
attached hereto as Exhibit B (the "Post-Signing Document List").
Section 4.10. Applicable Laws. Collective and its subsidiaries will use
their best efforts to comply promptly with all requirements which federal or
state law may impose on Collective or any of its subsidiaries with respect to
the Merger and will promptly cooperate with and furnish information to Summit in
connection with any such requirements imposed upon Summit or on any of its
subsidiaries in connection with the Merger.
Section 4.11. Agreements of Affiliated Shareholders. Collective agrees
to furnish to Summit, not later than 10 business days prior to the date of
mailing of the Proxy-Prospectus, a writing setting forth the names of those
persons who in the written opinion of Muldoon, Murphy & Faucette, special
counsel to Collective (which such opinion need be delivered only to Collective
and cited by Collective in its letter), constitute all the affiliates of
Collective for the purposes of Rule 145 under the Securities Act (an "Collective
Affiliate") and Collective shall use its best efforts to cause each Collective
Affiliate to enter into, prior to the date of mailing of the Proxy-Prospectus,
an agreement, satisfactory in form and substance to Summit, substantially in the
form of Exhibit C hereto, and effective prior to such date (an "Affiliate
Agreement").
Section 4.12. Loans and Leases to Affiliates. All loans and leases
hereafter made by Collective or any of its subsidiaries to any of its present or
former directors or executive officers or their respective related interests
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. Confidentiality. All information furnished by Summit to
Collective or its representatives pursuant hereto shall be treated as the sole
property of Summit and, if the Merger shall not occur, Collective and its
representatives shall return to Summit 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 Collective or any committee thereof for the purpose of
considering this Agreement, the Merger and the related transactions may be kept
and maintained by Collective with other records of Board, and Board committee,
meetings subject to a continuing obligation of confidentiality. Collective
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 purposes other than the performance of this Agreement. 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 Collective's possession prior to the
disclosure thereof by Summit, (y) was then generally known to the public, or (z)
was disclosed to Collective 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
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or the receipt of a waiver hereunder, Collective is nonetheless, in the written
opinion of its outside counsel, compelled to disclose information concerning
Summit to any tribunal or governmental body or agency or else stand liable for
contempt or suffer other censure or penalty, Collective may disclose such
information to such tribunal or governmental body or agency without liability
hereunder and shall so notify Summit. This Section 4.13 shall survive any
termination of this Agreement.
Section 4.14. Dividends. Collective will coordinate with Summit the
declaration of any dividends and the record and payment dates thereof so that
the holders of Collective Stock will not be paid two dividends for a single
calendar quarter with respect to their shares of Collective Stock and any shares
of Summit Stock they become entitled to receive in the Merger or fail to be paid
one dividend in each calendar quarter between the date hereof and the Effective
Time. Collective will notify Summit at least five business days prior to any
proposed dividend declaration date.
Section 4.15. Acquisition Proposals. Collective agrees that neither
Collective nor any of its subsidiaries nor any of the respective officers and
directors of Collective or its subsidiaries shall, and Collective shall direct
and use its best effort to cause its employees, affiliates, agents and
representatives (including, without limitation, any investment banker, broker,
financial or investment advisor, attorney or accountant retained by Collective
or any of its subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries, proposals or offers with respect to, or engage in any
negotiations or discussions with any person, provide any nonpublic information,
or authorize or enter into any agreement or agreement in principle concerning,
or recommend, endorse or otherwise facilitate any effort or attempt to induce or
implement any Acquisition Proposal (as defined below); provided however, that
the Board of Directors of Collective may furnish or cause to be furnished
nonpublic information and may participate in such discussions directly or
through its representatives concerning an Acquisition Proposal, if such Board of
Directors has determined, after having consulted with outside counsel and been
advised of its legal rights to the effect, that the failure to provide such
nonpublic information or participate in such discussions would cause the members
of such Board of Directors to breach their fiduciary duties under applicable
laws, and, provided, further, that Collective shall first obtain a
confidentiality agreement in customary form and containing at least the
confidentiality provisions set forth at Sections 4.13 and 5.08. "Acquisition
Proposal" is hereby defined to be any offer, including an exchange offer or
tender offer, or proposal concerning a merger, consolidation, or other business
combination or takeover transaction involving Collective or any of its
subsidiaries or the acquisition of any assets (otherwise than as permitted by
Section 4.05) or securities of Collective or any of its subsidiaries. Collective
will immediately cease and cause to be terminated any existing activities,
discussion or negotiations with any parties conducted heretofore with respect to
any of the foregoing. Collective will take the necessary steps to inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section. In addition, Collective will notify
Summit by telephone to its chief executive officer or general counsel promptly
upon receipt of any communication with respect to a proposed Acquisition
Proposal with another person or receipt of a request for information from any
governmental or regulatory authority with respect to a proposed acquisition of
Collective or any of its subsidiaries or assets by another party, and will
immediately deliver as soon as possible by facsimile transmission, receipt
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acknowledged, to the Summit officer notified as required above a copy of any
document relating thereto promptly after any such document is received by
Collective.
Section 4.16 Tax Opinion Certificates. Collective shall execute and
deliver to Thompson Coburn any tax opinion certificate reasonably required by
Thompson Coburn in connection with the issuance of the Tax Opinions (as defined
at Section 6.03), dated as of the date of effectiveness of the Registration
Statement and as of the Closing Date, and Collective shall use its best efforts
to cause each of its executive officers, directors and holders of five percent
(5%) or more of outstanding Collective Stock (including shares beneficially
held) to execute and deliver to Thompson Coburn any tax opinion certificate
reasonably required by Thompson Coburn in connection with the issuance of one or
more of the Tax Opinions, dated as of the date of effectiveness of the
Registration Statement and as of the Closing Date.
Section 4.17 Best Efforts to Ensure Pooling. Collective 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.
Section 4.18 Directors' and Officers' Insurance. Collective and each of
its subsidiaries has taken or will take all requisite action (including, without
limitation, the making of claims and the giving of notices) pursuant to its
directors' and officers' liability insurance policy or policies ("D&O
Insurance") in order to preserve all rights thereunder with respect to all
matters (other than matters arising in connection with this Agreement and the
transactions contemplated hereby) occurring prior to the Effective Time that are
known to Collective. Collective shall renew any existing D&O Insurance or
purchase any "discovery period" D&O Insurance provided for thereunder at
Summit's request.
ARTICLE V.
COVENANTS OF SUMMIT
Summit hereby covenants and agrees with Collective that:
Section 5.01. Approvals and Registrations. Based on such assistance of
and cooperation Collective as Summit shall reasonably request, Summit 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, and (c) with the New York Stock Exchange ("NYSE"), an application
for the listing of the shares of Summit Stock issuable upon the Merger, subject
to official notice of issuance, except that Summit shall have no obligation to
file a new registration statement or a post-effective amendment to the
Registration Statement covering any reoffering of Summit Stock by Collective
Affiliates. Summit covenants and agrees that all information furnished by Summit
for inclusion in the Registration Statement, the Proxy-Prospectus, and all
applications and submissions
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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 and the Federal Reserve Board 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. Summit will furnish to Merrill Lynch, investment
bankers advising Collective, such information as they may reasonably request for
purposes of the opinion referred to in Section 8.07.
Section 5.02. Notice of Adverse Changes. Summit will promptly advise
Collective in writing of (a) any event occurring subsequent to the date of this
Agreement which would render any representation or warranty of Summit contained
in this Agreement or the Summit 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
Summit Material Adverse Change, (c) any inability or perceived inability of
Summit to perform or comply with the terms or conditions of this Agreement, (d)
the institution or threat of institution of material litigation or
administrative proceeding involving Summit or its assets which, if determined
adversely to Summit, would have a material adverse effect on Summit 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 proceeding is 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 Summit subsequent to the date
hereof and prior to the Effective Time, under any agreement, indenture or
instrument to which Summit is a party or is subject and which is material to the
business, operation or condition (financial or otherwise) of Summit 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. Summit agrees that the delivery of such notice shall not
constitute a waiver by Collective of any of the provisions of Articles VI or
VIII.
Section 5.03. Copies of Filings. Summit shall promptly provide to
Collective and its counsel copies of the application filed with the Federal
Reserve Board, all reports filed by it with the SEC on Forms 10-Q, 8-K and 10-K
and all documents to be distributed in any manner to the shareholders of Summit.
Section 5.04. Further Actions. Summit will: (a) execute and deliver
such instruments and take such other actions as Collective 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
Collective set forth in Articles VI and VIII hereof are satisfied.
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Section 5.05. Applicable Laws. Summit will use its best efforts to
comply promptly with all requirements which federal or state law may impose on
Summit with respect to the Merger and will promptly cooperate with and furnish
information to Collective in connection with any such requirements imposed upon
Collective or on any of its subsidiaries in connection with the Merger.
Section 5.06. Unpaid Collective Dividends. By virtue of the Merger and
without further action on anyone's part, Summit shall assume the obligation of
Collective to pay dividends, if any, on Collective Stock which have a record
date prior to the Effective Time but which are not payable until after the
Effective Time.
Section 5.07. Cooperation. Until the Effective Time, Summit will
provide such information with respect to its business affairs and properties as
Collective 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 Collective's
representatives covering the business and affairs of Summit or any of its
subsidiaries.
Section 5.08. Confidentiality. All information furnished by Collective
to Summit or its representatives pursuant hereto shall be treated as the sole
property of Collective and, if the Merger shall not occur, Summit and its
representatives shall return to Collective 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 Summit or any committee thereof for the purpose of considering
this Agreement, the Merger and the related transactions may be kept and
maintained by Summit with other records of Board, and Board committee, meetings
subject to a continuing obligation of confidentiality. Summit 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 Summit's possession prior to the disclosure thereof by
Collective, (y) was then generally known to the public, or (z) was disclosed to
Summit 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, Summit is
nonetheless, in the written opinion of its counsel, compelled to disclose
information concerning Collective to any tribunal or governmental body or agency
or else stand liable for contempt or suffer other censure or penalty, Summit may
disclose such information to such tribunal or governmental body or agency
without liability hereunder and shall so notify Collective in advance to the
extent practicable. This Section 5.08 shall survive any termination of this
Agreement.
Section 5.09. Further Transactions. Summit 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 Summit
Stock. In addition, prior to the Effective Time, Summit may, depending on market
conditions
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and other factors, otherwise determine to issue equity-linked or other
securities for financing purposes. Notwithstanding the foregoing, Summit will
not take any such action that would (i) prevent the transactions 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 for more
than 60 days.
Section 5.10. Indemnification.
(a) Summit shall indemnify, and advance expenses in matters that may be
subject to indemnification to, persons who served as directors and officers of
Collective or any subsidiary of Collective on or before the Effective Time with
respect to liabilities and claims (and related expenses, including fees and
disbursements of counsel) 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 the Restated Certificate of Incorporation and By-Laws of
Summit in effect on the date of this Agreement and applicable provisions of law
to the same extent as Summit 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 Summit.
(b) Subject to Collective's obligation set forth at Section 4.18: For a
period of six (6) years after the Effective Time, Summit will use its best
efforts to provide to the persons who served as directors or officers of
Collective or any subsidiary of Collective 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 Summit 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
Summit be required to expend more than 200% of the current amount expended by
Collective on an annual basis (the "Insurance Amount") to maintain or procure
insurance coverage pursuant hereto, and, further provided, that if Summit is
unable to maintain or obtain the insurance called for by this Section 5.10,
Summit shall use its best efforts to obtain as much comparable insurance as is
available for the Insurance Amount.
(c) This Section 5.10 shall be construed as an agreement as to which
the directors and officers of Collective referred to herein are intended to be
third party beneficiaries and shall be enforceable by the such persons and their
heirs and representatives.
Section 5.11. Employee Matters.
(a) After the Effective Time, Summit may in its discretion maintain,
terminate, merge or dispose of the Collective Plans; provided, however, that any
action taken by Summit shall comply with ERISA and any other applicable laws,
including laws regarding the preservation of employee pension benefit plan
benefits and, provided further, that if Summit maintains a plan available to all
its employees generally which is similar in benefits, character or nature to, or
which covers risks similar to those covered by, an Collective Plan which is
available to all Collective employees generally, then,
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if such Collective Plan is terminated by Summit or is otherwise rendered
inactive by Summit, Summit shall offer to the former employees of Collective
affected by such plan termination or cessation of activity the opportunity to
participate in the similar plan of Summit without being subject to any
exclusions due to pre-existing conditions and such employees shall be given
credit for years of service with Collective for purposes of eligibility, vesting
and benefit accrual purposes, except benefit accruals under the Summit
Retirement Plan and any supplemental retirement plans of Summit and, during the
applicability of the Severance Arrangement (as defined at Section 5.11(c) below)
but only during the applicability of the Severance Arrangement, any severance
plans, policies or practices of Summit.
(b) After the Effective Time, Collective employees shall not be
entitled to participate automatically in benefits plans, programs or
arrangements of Summit not maintained by Summit 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) Any employee of Collective or a subsidiary of Collective at the
Effective Time whose employment is terminated by Summit, other than for cause,
within twelve (12) months of the Effective Time shall receive, upon executing a
document (in form satisfactory to Summit in its sole discretion) which releases
Summit from all claims relating to such employee's employment by Collective and
Summit, a lump sum payment equal to the sum of (i) and (ii), where:
(i) is the greater of (A) such employee's gross weekly salary
multiplied by four, or (B) the product obtained by multiplying such
employee's gross weekly salary multiplied by two times the number of
full years of service completed by such employee prior to the
termination of employment, and
(ii) (only in the event less than 60 days advance notice is provided to
a particular terminated employee) is the product of (A) the difference
obtained by subtracting from 60 the number of days of advance notice of
termination received by a particular employee (a negative difference
shall for purposes of this Section 5.11 be treated as a zero), and (B)
the employee's annual salary rate at the time of the termination of
employment divided by 365;
provided, however, that no employee of Collective or a subsidiary of Collective
shall be eligible to receive the payment provided for above if such employee is
offered a position by Summit which is similar in job content to the position
held by such employee with Collective or its subsidiary and is located at a
reasonably accessible location. (The terms and conditions governing severance in
this Section 5.11(c) are sometimes referred to herein as the "Severance
Arrangement").
(d) Summit shall assume the obligations of Collective under the Officer
Agreements.
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ARTICLE VI.
CONDITIONS PRECEDENT TO THE RESPECTIVE OBLIGATIONS OF
SUMMIT AND COLLECTIVE
The respective obligations of Summit and Collective 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 Summit and Collective in accordance
with Section 10.09:
Section 6.01. Receipt of Required Consents. Summit and Collective shall
have received the Required Consents; the Required Consents shall not, in the
reasonable opinion of Summit or Collective, contain restrictions or limitations
which would materially adversely affect the financial condition of Summit 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 Summit or Collective,
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, Summit and Collective shall have
received from Thompson Coburn an opinion (the "Tax Opinion"), reasonably
satisfactory in form and substance to them, to the effect that (a) the Merger
will constitute a tax-free reorganization within the meaning of Section 368 of
the Code, (b) except with respect to fractional share interests, holders of
Collective Stock who receive solely Summit Stock in the Merger will not
recognize gain or loss for federal income tax purposes, (c) the basis of such
Summit Stock (including any fractional share for which cash is received) will
equal the basis of the Collective Stock for which it is exchanged and (d) the
holding period of such Summit Stock (including any fractional share for which
cash is received) will include the holding period of the Collective Stock for
which it is exchanged, assuming that such Collective Stock is a capital asset in
the hands of the holder thereof at the Effective Time.
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
Opinion, as the case may be, or (y) result in any of the factual assumptions
contained in the Tax Opinion being untrue.
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,
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panel or governmental or regulatory body or authority, shall have been
instituted or threatened against Summit or any of its subsidiaries, or
Collective or any of its subsidiaries, that is material to the Merger or to the
financial condition of Summit and its subsidiaries taken as a whole or
Collective 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 Summit and its subsidiaries taken as a whole or Collective and its
subsidiaries taken as a whole, as the case may be.
Section 6.05. NYSE Listing. At the Closing Date, the NYSE shall have
indicated that the shares of Summit Stock to be issued in the Merger are to be
listed on the NYSE, subject to official notice of issuance.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUMMIT
The obligation of Summit 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 Summit in writing in
accordance with Section 10.09:
Section 7.01. No Adverse Changes. During the period from June 30, 1996
to the Closing Date there shall not have been any Collective Material Adverse
Change, and Collective 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 Collective 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 Collective in this Agreement and the
Collective Schedules and the material furnished pursuant to the Post-Signing
Document List shall be true and correct in all material respects 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. Collective shall have complied in all material respects with all
covenants and agreements contained herein to be performed by Collective on or
before the Closing Date.
Section 7.03. Secretary's Certificate. Collective shall have furnished
to Summit a certificate dated the Closing Date to which shall be attached copies
of all resolutions adopted or minutes of actions taken by the Board of Directors
(including committees thereof) and shareholders of Collective relating to this
Agreement, the Option Agreement and the Merger and related transactions, which
such certificate shall be signed by the Secretary of Collective and certify to
the satisfaction of the
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condition set forth in Section 7.09 and the trueness, correctness, completeness
and continuing effectiveness of all resolutions and actions contained or
referenced in the aforementioned attachments.
Section 7.04. Officer's Certificate. Collective shall have furnished to
Summit a certificate signed by the Chief Executive Officer of Collective, dated
the Closing Date, certifying to the satisfaction of the conditions set forth at
Sections 6.01, 6.02 (last clause), 6.03 (last paragraph) and Section 6.04, as
they relate to Collective, and at Sections 7.01, 7.02, 7.07 and 7.10.
Section 7.05. Opinion of Collective's Counsel. Summit shall have
received an opinion of counsel to Collective, dated the Closing Date and
reasonably satisfactory in form and substance to counsel for Summit,
substantially to the effect provided in Exhibit D.
Section 7.06. 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 Summit, 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 7.07. Consents to Collective Contracts. All consents, approvals
or waivers, in form and substance reasonably satisfactory to Summit, required to
be obtained in connection with the Merger from other parties to each mortgage,
note, lease, permit, franchise, loan or other agreement or contract to which
Collective 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 or condition (financial or
otherwise) of Collective and its subsidiaries on a consolidated basis, shall
have been obtained.
Section 7.08. FIRPTA Affidavit. Collective shall have delivered to
Summit an affidavit of an executive officer of Collective stating, under
penalties of perjury, that Collective 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 7.09. Shareholder Approval. The shareholders of Collective, 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 Collective's Restated Certificate of Incorporation and
By-Laws.
Section 7.10. Absence of Regulatory Agreements. Neither Collective nor
any Collective 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 of
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Collective and its subsidiaries taken as a whole, and neither Collective 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.
Section 7.11. Affiliate Agreements. A sufficient number of Collective
Affiliates shall have delivered executed Affiliate Agreements to Summit such
that, in the reasonable opinion of Summit based on consultation with its
independent accounting firm, the Merger may be accounted for on a
pooling-of-interests basis. In the event Summit elects to close the Merger
notwithstanding the failure of one or more Collective Affiliates to deliver an
executed Affiliate Agreement to Summit, Summit may, notwithstanding Article I
hereof, refuse to exchange the Collective Certificates of such Collective
Affiliate and treat such Collective Affiliate as an unexchanged Collective
Shareholder.
Section 7.12. Pooling-of-Interests Letter. Summit shall have received a
letter from KPMG Peat Marwick LLP to the effect that, based on the facts known
to such accountants, the Merger will qualify for pooling-of-interests accounting
treatment if consummated in accordance with this Agreement.
The receipt of the documents required by this Article VII by Summit shall in no
way constitute a waiver by Summit of any of the provisions of or its rights
under this Agreement.
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ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF COLLECTIVE
The obligation of Collective 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 Collective in writing
in accordance with Section 10.09:
Section 8.01. No Adverse Changes. During the period from December 31,
1995 to the Closing Date there shall not have been any Summit Material Adverse
Change, and Summit 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 Summit and its subsidiaries, taken as a whole, to conduct
their business.
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 Summit in this Agreement and in the
Summit Schedules shall be true and correct in all material respects 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. Summit shall have complied in all material respects with all
covenants and agreements contained herein or therein to be performed by Summit
on or before the Closing Date. By way of illustration and not limitation, the
entry by Summit after the date hereof into any agreement to acquire any company
or other entity, the issuance of up to $1 billion of debt or equity or a
combination of debt and equity in public or private offerings, the issuance of
Series R Preferred Stock pursuant to Summit's Shareholder Rights Plan, the
redemption or repurchase by Summit of its Common Stock, the Rights attached to
Summit Common Stock or the Series R Preferred Stock issuable pursuant to
Summit'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. Summit shall have furnished to
Collective a certificate dated the Closing Date to which shall be attached
copies of all resolutions adopted or minutes of actions taken by the Board of
Directors (including committees thereof) of Summit relating to this Agreement,
the Merger Agreement and the Merger and related transactions, which such
certificate shall be signed by the Secretary of Summit and certify to the
trueness, correctness, completeness and continuing effectiveness of all
resolutions and actions contained or referenced in the aforementioned
attachments.
Section 8.04. Officer's Certificate. Summit shall have furnished to
Collective a certificate signed by the Chairman, Vice Chairman, President or an
Executive Vice President of Summit, dated the Closing Date, certifying to the
satisfaction of the conditions set forth at Sections 6.01 and 6.02, the last
paragraph of Section 6.03, and Sections 6.04 and 6.05, as they relate to Summit,
and Sections 8.01, 8.02 and 8.08.
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Section 8.05. Opinion of Summit Counsel. Collective shall have received
an opinion of the General Counsel of Summit, dated the Closing Date and
reasonably satisfactory in form and substance to counsel for Collective,
substantially to the effect provided in Exhibit E.
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 Collective, 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-Prospectus shall have
contained the favorable signed opinion of Merrill Lynch, dated the date of the
Proxy-Prospectus or a date not more than five business days prior thereto,
regarding the fairness from a financial point of view of the Exchange Ratio to
the shareholders of Collective in the Merger.
Section 8.08. Absence of Regulatory Agreements. Neither Summit 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 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 Summit's business or has a material adverse effect upon the Merger or upon
the financial condition of Summit and its subsidiaries taken as a whole, and
neither Summit 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. Collective Shareholder Approval. The shareholders of
Collective, 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 Collective's Certificate of Incorporation and
By-Laws.
The receipt of the documents required by this Article VIII by Collective shall
in no way constitute a waiver by Collective 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 Summit on at least five business days notice (the
"Closing Notice") given to Collective, at the office of Summit, 301
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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
Collective in accordance with Section 7.09;
(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 Summit and Collective, to
the consummation of the transactions contemplated herein or such prior date as
Summit and Collective shall elect, whether or not such proceeding has been
brought to a conclusion; or
(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". 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, Summit shall cause the NJ Certificate
to be filed with the State of New Jersey and the Delaware Certificate to be
filed with the State of Delaware, all in accordance with Section 1.06. 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 Collective and Summit 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 Collective 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 the Merger, this
Agreement and the transactions contemplated hereby 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
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party (provided that the terminating party is not then in material
breach of any representation, warranty, covenant or other agreement
contained herein);
(iii) Collective's investment banker is unable to deliver to Collective
by July 31, 1997 the opinion required by Section 8.07; or
(iv) the Closing is not consummated on or before January 1, 1998,
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.
(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
7.09 or 8.09 due to the circumstances set forth in Section 9.02(a)(i) hereof, a
failure of the condition set forth at Section 8.07 due to the circumstances set
forth at Section 9.02(a)(iii) hereof or a refusal of Summit to close due to a
failure of the condition set forth at Section 7.12 hereof), the Board of
Directors of such party may terminate this Agreement by giving written notice of
such termination to the other party.
(c) The Board of Directors of Summit may terminate this Agreement if
Collective does not execute and deliver the Option Agreement by the day
immediately following the date hereof.
(d) (1) The Board of Directors of Collective may terminate this
Agreement at any time during the ten-day period commencing the second day after
the Determination Date if
(i) the Average Closing Price of a share of Summit Stock is
less than $39.00, and
(ii) the quotient obtained by dividing the Average Closing
Price (as defined below) by $47.50 is more than .18 less than the
quotient obtained by dividing the Index Price (as defined below) on the
Determination Date (as defined below) by the Index Price on the
Starting Date (as defined below).
(2) For purposes of this Section 9.02(d)(2):
(i) "Average Closing Price" means the average of the closing
prices of a share of Summit Stock on the NYSE-Composite Transactions
List (as reported in the Wall Street Journal or, in the absence
thereof, as reported by another authoritative source mutually agreed
upon by Collective and Summit) for the 30 consecutive full trading
days, ending on the Determination Date, on which one share of Summit
Stock is traded.
(ii) "Determination Date" means the date on which the Required
Consent of the Federal Reserve Board shall have been received.
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(iii) "Index Group" means the 20 bank holding companies listed
below, the common stocks of all of which shall be publicly traded and
as to which there shall not have been, since the Starting Date and
before the Determination Date, any public announcement of a proposal
for such company to be acquired or for such company to acquire another
company or companies in transactions with a value exceeding 25% of the
acquiror's market capitalization. In the event that any such company or
companies are removed from the Index Group, the weights (which shall be
determined based upon the number of outstanding shares of common stock)
shall be redistributed proportionately for purposes of determining the
Index Price. If any company belonging to the Index Group or Summit
declares or effects a stock dividend, reclassificatin,
recapitalization, split-up, combination, exchange of shares, or similar
transaction between the Starting Date and the Determination Date, the
prices for the common stock of such company or Summit shall be
appropriately adjusted for the purposes of applying this Section
9.02(d). The 20 bank holding companies and the weights attributed to
them are as follows:
Bank Holding Companies Weighting
---------------------- ---------
Signet Banking Corporation 2.88%
Crestar Financial Corporation 5.22%
Central Fidelity Banks, Inc. 2.85%
Southern National Corporation 5.24%
Marshall & Ilsley Corporation 4.24%
Firstar Corporation 7.18%
Comerica Incorporated 5.14%
Huntington Bancshares, Inc. 6.83%
First Of America Bank Corporation 2.86%
Corestates Financial Corp. 10.17%
First Bank System, Inc. 6.46%
National City Corporation 10.69%
SouthTrust Corporation 4.60%
Mellon Bank Corporation 6.28%
Old Kent Financial Corporation 2.15%
BankBoston Corporation 7.34%
Keystone Financial, Inc. 1.82%
Wilmington Trust Corporation 1.62%
Star Banc Corporation 4.16%
Mercantile Bankshares Corporation 2.27%
-----
TOTAL 100.00%
(iv) "Index Price" means, on a given date, the weighted
average (weighted in accordance with the factors listed above) of the
closing prices of the companies composing the Index Group.
(v) "Starting Date" means February 28, 1997.
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(e) Upon a termination of this Agreement pursuant to this Section 9.02
hereof:
(1) the obligations of the parties under this Agreement (except for
those under this Section 9.02 and Sections 4.13 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,
and
(2) 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-Prospectus and the
Registration Statement, and the filing fees of regulatory authorities or
self-regulatory organizations, shall be borne equally by Summit and Collective;
provided, however, that: (A) if Collective terminates this Agreement pursuant to
Section 9.02(a)(ii) or Section 9.02(b), Summit shall reimburse Collective 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 Summit terminates this Agreement pursuant to Section 9.02(a)(ii), Section
9.02(b) or Section 9.02(d), Collective shall reimburse Summit 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.
(f) Notwithstanding any termination of this Agreement, (i) Collective
shall indemnify and hold Summit 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 Collective and (ii) Summit shall indemnify and hold Collective 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 Summit.
(g) Except as provided otherwise herein in the event of a termination
of this Agreement, Collective 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 Summit shall pay all printing
expenses and filing fees associated with the Registration Statement, the Proxy-
Prospectus and regulatory applications.
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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
Collective Schedules, the Summit Schedules and the Exhibits hereto and the
Option Agreement to be entered into 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
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 7.09 hereof, no such amendment or modification shall reduce the amount
of, or change the forms of consideration to be received by the shareholders of
Collective contemplated by this Agreement, unless such modification is submitted
to a vote of the shareholders of Collective.
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.
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,
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or if delivered personally or by courier, receipt requested, or by facsimile
transmission, receipt acknowledged addressed as follows:
Summit: Summit Bancorp.
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.
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
Telephone No.: 609-987-3430
Facsimile No.: 609-987-3435
Collective: Collective Bancorp, Inc.
716 West White Horse Pike
Cologne, New Jersey 08213
Attention: Thomas H. Hamilton
Telephone No.: 609-625-1110 (x5002)
Facsimile No.: 609-965-4381
With a copy to: Scott T. Page, Esq.
Collective Bancorp, Inc.
716 West White Horse Pike
Cologne, New Jersey 08213
Telephone No.: 609-965-5151
Facsimile No.: 609-965-4381
With a copy to: George W. Murphy, Jr., Esq.
Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, DC 20016
Telephone No.: 202-362-0840
Facsimile No.: 202-966-9409
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.
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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.
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.
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 Collective, 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
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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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in counterparts by their duly authorized officers as of the date first
above written.
SUMMIT BANCORP.
By: /s/ John G. Collins
John G. Collins
Vice Chairman
COLLECTIVE BANCORP, INC.
By: /s/ Thomas H. Hamilton
Thomas H. Hamilton
Chairman and Chief Executive Officer
<PAGE>
Exhibit A
An executed copy of Exhibit A is filed herewith as Exhibit 10 (b) to
this Schedule 13D.
<PAGE>
Exhibit B
POST-SIGNING DOCUMENT LIST
INSTRUCTIONS
1. Copies of documents rather than originals should be delivered.
2. The requested information and documents should be provided by Collective
(Collective) and by all subsidiaries of Collective unless an item refers by
name to a specific entity, in which case the information and documents may
be furnished solely by the named entity. References to "the Corporation"
means Collective and each of its subsidiaries.
3. The information and documents should be provided separately by each entity.
Please do not mix information or documents from one entity with that of
another. Please clearly segregate materials when delivering them to Summit.
4. Please mark each item of information and each document furnished pursuant
to this List in the upper right corner with the letter and number of the
item in this List to which it corresponds.
5. Send all information and documentation requested herein to the attention of
Dennis A. Williams, Senior Vice President and Group Counsel, Summit
Bancorp., 301 Carnegie Center, Princeton, New Jersey 08543.
6. To the extent you believe an item of information or document was furnished
pursuant to a Collective Schedule under the Agreement and Plan of Merger
between Collective and Summit, please indicate all such items of
information and documents on a list, cross- referencing the item from this
List to the appropriate Collective Schedule.
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POST-SIGNING DOCUMENT LIST
A. LEGAL
1. Original Certificate or Articles of Incorporation or
Articles of Association, as appropriate, certified by
Secretary.
2. All Amendments to Certificate or Articles of Incorporation
or Articles of Association, as appropriate, certified by
Secretary.
3. Current By-Laws and any Amendments certified by Secretary.
4. Copies of Annual Reports to Shareholders (6 years).
* 5. Original Minute Books containing all minutes of Shareholder,
Director and Committee meetings.
* 6. Original Stock Certificate Records.
7. (Reserved)
8. List of any outstanding options, warrants, presently
exercisable rights, buyout arrangements, voting trusts, or
liens affecting the Corporation's stock, with copies of
pertinent documentation and details of any such
arrangements.
9. Documentation of all long-term (over one year) indebtedness
or credit lines of the Corporation including guarantees and
other contingent liabilities in excess of $50,000.
10. List of all officers, directors, and holder of 1% or more of
stock of the Corporation showing:
a) Full name.
b) Titles.
c) Number of Shares of Stock held.
* 11. List of all shareholders with addresses and holdings.
12. Address and description of each office and whether building
is owned or leased.
13. As to any land and buildings owned, provide most recent
available accounting or tax schedules reflecting any of the
following: the original cost, date of acquisition, age of
building, depreciation rates used and allowed by the
Internal Revenue Service, depreciation reserve, net book
value, and property and other taxes currently being paid for
each building. To the extent available, provide copies of:
title papers, title insurance policies, abstracts, title
opinions, appraisals, surveys and all agreements relating to
or affecting the real property. List mortgages, and, to the
extent available, encumbrances and liens of all kinds.
14. List of real estate acquired as salvage on uncollected loans
and "other real estate owned" - address and date acquired,
loan value, most recent appraised value.
15. List all facilities financed with tax-exempt financing.
Specify whether the facility is owned or leased and, if
leased, the percentage of space in the facility under lease.
Please provide all documentation relating to the tax-exempt
financing and all documents relating to the facility
currently in force or in effect.
16. Leases for current premises, whether as tenant or landlord,
and any prior premises for which the Corporation retains
liabilities. List of any directors or officers with whom the
Corporation has a lease.
* Not to be delivered; to be made available for examination on site.
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17. Leases for all leased equipment with annual rentals over
$50,000, including, but not limited to:
a) Alarm system
b) Telephone system
c) Computers
d) Office equipment
18. All maintenance contracts with annual costs exceeding
$50,000, including but not limited to:
a) Equipment
b) Cleaning
19. All contracts with advertising agencies and contracts or
commitments for media involving payments in excess of
$50,000 per year or for more than 1 year.
20. All agreements, registrations or other filings relating to
trademarks, trade names, copyrights, licenses, patents or
other proprietary rights, including books or articles
authorized by officers and other employees.
21. Agreements for the purchase of materials or supplies
involving payments in excess of $50,000 per year or for more
than one year.
22. Agreements for the performance of services involving
payments in excess of $50,000 per year or for more than one
year related to the business, including but not limited to:
a) Messenger Service
b) Mortgage Servicing
c) Data Processing
d) BankCard Servicing
e) Automated Teller Machines Networks
f) Insurance, annuities, mutual fund or securities sales
or brokerage
g) Credit Life & A & H
23. All contracts or commitments for capital expenditures
involving payments in excess of $50,000.
24. All contracts or options to purchase or sell any real or
personal property.
25. All contracts, agreements, consultant arrangements,
retainers, or written or oral commitments (other than those
relating to normal customer transactions) currently in
effect not listed above in Insurance or Personnel Lists,
including but not limited to lawyers, accountants,
actuaries, insurance agents or brokers involving payments in
excess of $50,000 per year or for more than one year.
26. List of all lawsuits, claims, proceedings or arbitrations
involving customers, federal or state government agencies,
departments or bureaus, insurance carries or others
affecting the Corporation or its officers and employees,
whether current or past but not yet conclusively terminated
or barred by the statue of limitations, whether as
plaintiff, defendant or third party, providing:
a) a full statement of the issues involved,
b) nature of the litigation,
c) amount involved or maximum total liability or recovery
involved,
d) court or other body where matter is to be heard, docket
number and date of last filing,
e) last available reply to accountants or opinion of
counsel as to the probable outcome of such litigation,
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f) availability of insurance coverage, if any.
NOTE: The following may be excluded:
(i) Actions by the Corporation to collect loans made in the ordinary
course of business where the principal amount is less than $50,000
and there are no counterclaims.
(ii) Actions against the Corporation
(A) for personal injuries where there is adequate insurance coverage
and the claim is less than $50,000. Provide a list reflecting the
aggregate exposure for deductibles under insurance policies for
claims of $50,000 or less. (B) for losses due to alleged check
processing errors (forged signatures, stop payment missed, etc.)
where the alleged loss is less than $2,500 per claimant.
27. All filings with Comptroller of the Currency, Federal
Reserve Board, Federal Financial Institutions Examination
Counsel, FDIC, Office of Thrift Supervision, and all other
regulatory agencies (including but not limited to Forms
FFIEC-003 and FFIEC-004, F-2, F-3, F-4 and F-20, FDIC
insurance premium reports, and Call Reports with all
supplements, for all interim and full-year periods from
1/l/93 to date).
28. All written policies and procedures governing operation of
business including loan policies.
29. All pricing schedules made available to customers for
service charges, etc. in effect for last two years.
30. All advertising materials used in the last two years.
31. All forms and written materials used in customer
transactions in effect now and during last two years.
32. All standard purchasing forms.
33. All agreements with competitors.
34. List of all relationships between (i) Collective and (ii)
Summit and its officers, directors and affiliates, including
without limitation:
a) Loans; and
b) Purchases or sales of products or services (except
from public utility companies).
35. Director and officer Questionnaires for directors and
executive officers for last 2 years.
36. Customer complaint files.
37. Any covenants not to compete affecting officers or employees
of Collective.
38. Copy of CRA statements and all comments and responses
thereto for 2 years.
39. Copy of Home Mortgage Disclosure Statements (Regulation C)
for 2 years.
40. All filings by the Corporation with the SEC for the period
specified below, including but not limited to:
Registration Statements - 6 years
Proxy Statements - 6 years
Statements under Section 16(a) of the Securities
Exchange Act of 1934 - 1 year Reports on Forms
10-K, 10-Q and 8-K - 3 years
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SEC Forms 13G, 13D and MSD - 3 years Other - 3
years
including all Exhibits and Amendments to the foregoing.
41. List of any unregistered sales of securities (including
private placements) in the last 6 years and applicable
exemptions and opinions of counsel.
42. All applications to and filings with the NASD in the last 3
years, other than those supplied in response to item A.40.
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B. PERSONNEL
1. Corporation's Table of organization.
*2. List of all officers and directors of the Corporation, showing:
a) Full name.
b) Titles.
c) Date of birth.
d) Current salary, bonus and other compensation, and method of
calculation and payment.
e) Salary, bonus and other compensation for 1995, 1996 and to date.
f) Date of first employment and any gaps in service.
3. All employment contracts.
4. All pension and retirement plans and IRS rulings and opinions of
counsel thereon.
5. All bonus plans.
6. All deferred compensation plans.
7. All profit-sharing plans and IRS rulings and opinions of counsel thereon.
8. All stock option plans.
9. All dividend reinvestment plans and stock purchase plans.
10. All annuity plans.
11. All stock award plans.
12. All actuarial and trustees reports for pension, profit-sharing and other
benefit plans for 3 years.
13. List of all employee benefits in force, with copies of all relevant
documentation, including trust agreements, summary plan descriptions
benefits or policy manuals, insurance policies, etc., and
a schedule or agents or brokers, expiration date, premiums paid and claims
made during the last three years, including but not limited to:
a) Pension, bonus, profit-sharing, stock option, stock purchase
and annuity plans.
b) Medical plans i.e., Blue Cross-Blue Shield, Major Medical,
Health Maintenance organizations, commercial health insurance
policies.
c) Dental plans.
d) Vacation policy.
e) Education reimbursement policy.
f) Short-term disability.
g) Long-term disability.
h) Sick day policy.
i) Emergency leave policy.
j) Grievance policy.
k) Employee discount policy.
1) Life insurance.
m) Business travel accident insurance.
n) Personal accidental death and disability insurance.
o) Salary continuation program.
p) Retirement policy.
*14. List of unemployment compensation claims and results for 3 prior years
and current year.
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15. All hiring procedures and policies, including methods of solicitation of
applicants, media or agencies used, nepotism policy, etc.
16. Information regarding who prepares payroll and all contracts regarding
payroll preparation.
17. Informal pension, consulting, or benefits continuance arrangements with
retired employees.
* Not to be delivered; to be made available for examination on site.
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C. INSURANCE
1. Liability insurance policies for current and 3 prior years, including but
not limited to:
a) Comprehensive General Liability.
b) Tenants Liability.
c) Auto Liability.
d) Umbrella Liability.
e) Worker's Compensation.
2. List of paid and open claims in excess of $2,500 for current and 6 prior
years, indicating:
a) Type of claim and whether open or closed.
b) Amount of loss or claim.
c) Date of occurrence.
d) Description of occurrence.
3. List of self-insured or non-insured risks.
4. Any written safety programs.
*5. Copies of latest loss prevention inspection reports on all liability and
worker's compensation exposures.
6. Copies of O.S.H.A. Summary Accident reports for 3 prior years, along with
citations, fines assessed and cost of compliance.
7. Complete copies of all property insurance policies for current and 3 prior
years including:
a)Fire and Extended Coverage.
b) Boiler and Machinery.
c) All Risk coverage including flood/earthquake.
d) Mortgage.
e) Trust.
f) Aircraft.
8. List of all paid and outstanding claims for current and 5 prior years
per policy.
a) Type
b) Amount of Loss.
c) Date of Occurrence.
d) Description.
9. Copies of latest fire/loss prevention inspection reports.
10. Other insurance policies for current and 3 prior years.
a) Bond (with loss history for 6 prior years included).
b) Directors and Officers.
c) Professional liability with applications and claims.
d) Mail policies.
e) Lost Instrument Bonds.
f) ERISA Liability.
g) Workers Compensation.
* Not to be delivered; to be made available for examination on site.
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D. ACCOUNTING AND TAX
1. Access to 1995, 1996 and 1997 general ledger.
2. Federal tax returns of Corporation for 4 years.
3. State sales, use, income and personal property tax returns for 4 years.
4. Certified balance sheets and income statements of Collective for 4 prior
years, and most recent period available, including accountant's reports and
management letters.
*5. All audit reports of IRS in last 4 years.
6. All audit reports of state taxing authorities in last 4 years.
7. List setting forth status of all open tax returns, noting status of each
years return, i.e., whether liability settled, not yet determined or in
controversy. Status of all claims for refund.
8. List of all bank accounts in other banks with:
a) copy of most recent statement and reconciliation to general ledger.
b) copy of bank account resolution.
c) copy of current signature cards.
9. List of all loans to Corporation officers, directors, employees, and members
of their families currently outstanding or made during the Past three
years, including cash advances or payments or personal expenses not
reimbursed within 30 days in excess of $1,000, including the following
information:
a) Loan date.
b) Amount.
c) Term.
d) Interest rate.
e) Highest outstanding balance.
f) Current balance.
g) Has the loan been in default and is it currently in default? If yes,
details.
*10. Verification of current payment of all estimated tax for Collective,
withholding and FICA for employees.
11. List all commissions or other payments made to obtain business.
12. List of all contingent liabilities and assets, whether recorded or
unrecorded in excess of $50,000.
13. Internal and external audit reports for 3 years, including management
letters.
14. Schedule showing date and amount of each dividend paid since 1/l/93.
15. List of loan commitments greater than $50,000.
16. List of bank obligations other than deposits and deposit liabilities
greater than $50,000.
17. List of transactions over past 2 years greater than $5,000 with officers,
directors and employees.
18. List of depositors with accounts over $100,000.
* Not to be delivered; to be made available for examination on site.
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EXHIBIT C
Name of Affiliate:____________________
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, New Jersey 08543
Gentlemen:
This letter agreement is being entered into pursuant to the terms of
the Agreement and Plan of Merger, dated February , 1997 (the "Merger
Agreement"), between Summit Bancorp. ("Summit") and Collective Bancorp, Inc.
("Collective"), which provides, among other things, for the merger of Collective
with and into Summit (the "Merger") and the conversion at the Exchange Ratio
provided for in the Merger Agreement of shares of the common stock, par value
$.01 per share, of Collective ("Collective Common Stock") outstanding at the
Effective Time (as defined in the Merger Agreement) held in the aggregate by
each Collective Shareholder into whole shares of the Common Stock, par value
$1.20 per share, of Summit (the "Summit Common Stock") and cash in lieu of a
fractional share of Summit Common Stock.
Shares of Collective Common Stock owned solely, jointly or in a
custodial capacity by me, by a relative sharing the same household as me, or by
an entity I control, whether such shares are owned directly (of record) or
indirectly (through a bank, broker or other nominee), and any other shares of
Collective Common Stock over which I or such other persons or entities hold
investment or voting powers, either alone or with others, are referred to
collectively herein as the "Collective Shares". Shares of Summit Common Stock to
be received in exchange for the Collective Shares or in a custodial capacity are
referred to collectively herein as the "Summit Shares".
I have been advised that, in the opinion of counsel, I may be deemed to
be, at the time the Merger is submitted for a vote of the shareholders of
Collective, an "affiliate" of Collective as that term is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act") and that the Merger Agreement
requires that persons so characterized make the representations, warranties and
covenants set forth below.
Capitalized terms used herein but not specifically defined herein shall
have the meaning ascribed to them in the Merger Agreement.
I represent, warrant and covenant that:
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A. I will not make or permit any sale, transfer or other disposition of
the Summit Shares, or make or permit any offer to sell, transfer or otherwise
dispose of the Summit Shares, in violation of the Act or the Rules and
Regulations.
B. I have been advised that the issuance of the Summit Shares pursuant
to the Merger has been registered with the SEC under the Act under a
registration statement. However, I have also been advised that a distribution of
the Summit Shares has not been registered under the Act and that, because I may
be deemed to be, at the time the Merger is submitted for a vote of the
shareholders of Collective, an "affiliate" of Collective, I may not make or
permit any sale, transfer or other disposition of any of the Summit Shares
issued pursuant to the Merger, or make or permit any offer to sell, transfer or
otherwise dispose of any of such Summit Shares unless and until (i) an offer and
sale of such Summit Shares has been registered under the Act, (ii) such
disposition of such Summit Shares is made in conformity with Rule 145 under the
Act, or (iii) an exemption from registration, in the opinion of counsel
acceptable to Summit, is available with respect to such disposition of such
Summit Shares.
C. I understand that Summit is under no obligation to register the
sale, transfer or other disposition of the Summit Shares or to take any other
action necessary in order to make compliance with an exemption from registration
available.
D. I understand that stop transfer instructions may be given to
Summit's transfer agent with respect to the Summit Shares and that there may be
placed on the certificates for such Summit Shares, or any substitutions
therefor, a legend stating in substance:
The shares represented by this certificate were issued in a transaction to
which Rule 145 promulgated under the Securities Act of 1933 applies. The
shares represented by this certificate may not be sold, transferred, or
otherwise disposed of unless pursuant to (i) an effective registration
statement under the Securities Act of 1933, (ii) Rule 145 or (iii) an
exemption from registration under the said Act which is available in the
opinion of counsel acceptable to Summit Bancorp.
The legend set forth above and any similar legend placed on any share
certificate issued upon the transfer of any of the Summit Shares will be removed
by delivery of substitute certificates without such legend if the undersigned,
or any person who acquired, directly or indirectly, such Summit Shares, shall
have delivered to Summit a copy of a letter from the staff of the SEC, or an
opinion of counsel acceptable to Summit, to the effect that the restrictions on
sale, transfer or other disposition referred to in this letter are no longer
necessary under the Act or otherwise in order to effect such sale, transfer or
other disposition pursuant to law.
E. Summit agrees, by accepting this letter, (a) that for a period of
three years after the Effective Time (or such shorter period as may be permitted
by amendments to Rule 145) and thereafter until three months after I have ceased
to be an affiliate of Summit and so long as Summit
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has equity securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, Summit will make available with respect to
itself "adequate current public information" as defined in paragraph (c) of Rule
144 of the Rules and Regulations under the Act.
I have carefully read this letter and, to the extent I felt necessary,
discussed with my counsel the requirements of this letter and its impact upon
the ability to dispose of the Summit Shares.
Accepted this ____ day of _________, 199__ Very truly yours,
by Summit Bancorp.
By: Signature
Name:
Title: Printed Name
Dated as of _____, 199__
Address for any Objection sent
pursuant to Paragraph E:
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EXHIBIT D
FORM OF OPINION OF COLLECTIVE COUNSEL
PURSUANT TO SECTION 7.05
Summit Bancorp.
301 Carnegie Center
Princeton, New Jersey 08543-2066
Gentlemen:
This opinion is rendered to you pursuant to Section 7.05 of the Agreement and
Plan of Merger, dated ______, 1997 (the "Merger Agreement"), between Collective
("Collective" or the "Company") and Summit Bancorp. ("Summit"), which Merger
Agreement provides, among other things, for the merger (the "Merger") of
Collective with and into Summit and the issuance, in accordance with the
Exchange Ratio provided for in the Merger Agreement, of whole shares of the
Common Stock, par value $1.20 per share, of Summit (the "Summit Common Stock")
and cash in lieu of fractional shares of Summit Common Stock in exchange for
outstanding shares of the Common Stock, $.01 par value, of Collective (the
"Collective Common Stock"). In consideration of the Merger Agreement, Collective
and Summit entered into a Stock Option Agreement dated _____, 1997 pursuant to
which, among other things, Collective granted Summit a stock option with respect
to shares of Collective Common Stock (the "Option Agreement").
Capitalized terms used but not defined herein shall have the same meanings
herein as ascribed to them in the Merger Agreement.
We have acted as counsel to the Company in connection with the preparation,
authorization, execution and delivery of the Merger Agreement and the Option
Agreement and the consummation of the transactions contemplated by the Merger
Agreement, including the preparation of the registration statement, as amended
(the "Registration Statement"), under the Securities Act of 1933, as amended
(the "Securities Act"), on Form S-4 of Summit (No. 333-_______), and the proxy
statement of Collective included in the Registration Statement (the "Collective
Proxy Statement").
In so acting, we have made inquiries of certain of the officers and
representatives of the Company and its subsidiaries with respect to various
matters contained in the Merger Agreement, the Option Agreement and the
Registration Statement, and have examined and relied upon originals or copies
certified or otherwise identified to our satisfaction of the Merger Agreement,
the Option Agreement and such corporate records, agreements, documents and other
instruments, and such certificates or the comparable documents of public
officials and of such directors, officers and representatives of the Company and
its subsidiaries as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
In such examination, we have assumed, without independent verification, the
genuineness and
<PAGE>
authenticity of all signatures, the authenticity of all documents submitted to
us as originals, the legal capacity of all natural persons and the conformity to
original documents of documents submitted to us as certified or facsimile or
photostatic copies and the authenticity of the originals of facsimile or
photostatic copies. As to all questions of fact material to this opinion that
have not been independently established, we have relied upon certificates or
comparable documents of officers and representatives of the Company and upon the
representations and warranties of the Company contained in the Merger Agreement.
We have also assumed, without independent verification, the due authorization,
execution, and delivery (other than the due authorization, execution and
delivery by the Company) of all documents, the due authorization, execution and
delivery of which are prerequisites to the effectiveness of such documents, and
that such documents constitute legal, valid and binding obligations of the
parties thereto (other than the Company).
Based on the foregoing, and subject to the qualifications stated herein, we are
of the opinion that:
1. The Company has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, as described in the Registration
Statement.
2. The Company is duly qualified to transact business as a foreign corporation
and is in good standing in each jurisdiction where the failure to be so
qualified cannot be cured and such failure would have a material adverse effect
on the business, operations or financial condition of the Company and its
subsidiaries taken as a whole.
3. The Company is registered as a savings and loan holding company under the
Home Owners' Loan Act of 1933, as amended.
4. The authorized capital stock of Collective consists of 37,000,000 shares of
Common Stock, each of $.01 par value, and 2,500,000 shares of Preferred Stock,
$.01 par value, and as of the date of the Merger Agreement _______ shares of
Collective Common Stock and no shares of Collective Preferred Stock were issued
and outstanding, shares of Collective Common Stock were held in the treasury of
Collective ________ and shares of Collective Common Stock were reserved for
issuance in connection with the Collective Stock Plans. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, and
non-assessable, with no personal liability attaching to the ownership thereof,
and have not been issued in violation of any preemptive rights. Since the date
of the Merger Agreement, no Equity Securities of Collective have been issued
except for the stock option granted to Summit in the Option Agreement and the
Collective Common Stock reserved for issuance as of such date which may have
been issued in connection with the Collective Stock Plans. Except as set forth
above in this paragraph 4 and except for the Option Agreement, director and
employee stock options outstanding under the Collective Stock Plans and
Collective Common Stock issuable in connection with the Collective Stock Plans,
there are no other Equity Securities of Collective outstanding, in existence,
the subject of an agreement or reserved for issuance.
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5. Collective Bank ("Bank") has been duly incorporated and is validly existing
as a Federal savings and loan association in good standing under the Federal
laws of the United States and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, as described in the Registration Statement. Each other
subsidiary of the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
organization and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted,
as described in the Registration Statement.
6. Bank is an insured bank under the Federal Deposit Insurance Act, as amended.
7. All the outstanding capital stock of Bank and each subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
non-assessable, with no personal liability attached to the ownership thereof,
has not been issued in violation of any preemptive rights, is owned by the
Company. As of the date hereof, no options covering capital stock of any
subsidiary of the Company, warrants to purchase or contracts to issue capital
stock of any subsidiary of the Company, or any other contracts, rights
(including preemptive rights), commitments or convertible securities entitling
anyone to acquire from the Company or any subsidiary of the Company or
obligating any of them to issue any capital stock, or securities convertible
into or exchangeable for any shares of capital stock thereof, are outstanding,
in existence, or the subject of an agreement. The Company owns the capital stock
of Bank and each subsidiary of the Company free and clear of any perfected
security interest and, to the extent of our knowledge and information, any other
security interest, lien, claim, limitation on voting rights, option, or other
encumbrance.
8. To the extent of our knowledge and information, there are no outstanding
contractual obligations of the Company or any subsidiary to repurchase, redeem,
or otherwise acquire any outstanding shares of capital stock or other ownership
interests of any subsidiary of the Company or to provide funds or to make any
investment (in the form of a loan, capital contribution or otherwise), in any
subsidiary or any other entity.
9. The Company has the corporate power and authority to enter into the Merger
Agreement and the Option Agreement and to carry out the transactions
contemplated thereby; the Merger Agreement and the Option Agreement have been
validly authorized, executed and delivered by the Company; the consummation of
the transactions contemplated by the Merger Agreement, including the Merger, and
the Option Agreement have each been duly authorized by all necessary corporate
action on the part of the Company and its shareholders and (assuming the due
authorization, execution and delivery thereof by Summit) the Merger Agreement
and the Option Agreement each constitute a valid and binding agreement of the
Company.
10. The execution and delivery of the Merger Agreement and the Option Agreements
and the performance thereof by the Company and the consummation of the Merger
did not and will not violate, fail to comply with, conflict with, give rise to
rights under, result in the breach of, or constitute a default under, give rise
to a claim or right of termination, cancellation, revocation of or
3
<PAGE>
acceleration under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the rights, permits licenses, assets or properties
material to the Company and its subsidiaries taken as a whole, or any of its
subsidiaries, or upon any of the capital stock of the Company or any of its
subsidiaries, or constitute an event that could, with the lapse of time, action
or inaction by the Company 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
Certificate of Incorporation or By-laws of the Company, (b) any federal law of
the United States of America or any law of the State of New Jersey or Delaware,
(c) any rule, ruling, determination, ordinance or regulation of or agreement
with any governmental or regulatory authority, (d) to the extent of our
knowledge and information, any judgment, order, writ, award, injunction or
decree of any court or governmental authority issued in any proceeding to which
the Company or any of its subsidiaries is or was a party or by which the Company
or any of its subsidiaries or any of their assets or properties are bound or
committed, or (e) to the extent of our knowledge and information, any material
note, bond, mortgage, indenture, lease, policy of insurance or indemnity,
license, contract, agreement or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of its subsidiaries or any of
their assets or properties are bound or committed, other than any such
violations, conflicts, breaches, defaults or accelerations the consequences of
which do not or will not, in the aggregate, have a material adverse effect on
the business, operations or financial condition of the Company and its
subsidiaries, taken as a whole, or enable any person to enjoin the transactions
contemplated by the Merger Agreement. No consent, approval, waiver, license or
authorization or other action by or filing with any federal or New Jersey or
Delaware governmental authority is required in connection with the execution and
delivery by the Company of the Merger Agreement or Option Agreement or the
consummation by the Company of the transactions contemplated thereby, including
the Merger, except for (i) the filing of an appropriate Certificate of Merger as
provided in the Merger Agreement, (ii) such filings and other actions as may be
required by federal or state securities laws and the rules and regulations
thereunder, and (iii) those already obtained.
11. To the extent of our knowledge and information, there is no litigation,
proceeding or governmental investigation pending or overtly threatened against
the Company that relates to any of the transactions contemplated by the Merger
Agreement or is material to the financial condition of Collective and its
subsidiaries, taken as a whole.
12. To the extent of our knowledge and information, there are no persons who may
be deemed to be affiliates of the Company for purposes of Rule 145 under the
Securities Act who may receive shares of Summit Common Stock in the Merger and
who are not named in the opinion from us delivered by the Company to Summit
pursuant to Section 4.11 of the Merger Agreement.
13. The Collective Proxy Statement (except for the financial statements and the
notes thereto, the financial statement schedules and the other financial,
statistical and accounting data included, incorporated by reference or deemed
incorporated by reference in the Collective Proxy Statement, as to which we
express no opinion), but only insofar as the Company and its business, the
Merger Agreement and the transactions contemplated thereby, including the
Merger, and the Option
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Agreements are described in the Collective Proxy Statement, complies as to form
in all material respects with the requirements of the Securities Act and the
rules and regulations thereunder and the documents incorporated by reference in
the Registration Statement pursuant to Part I.C. of Form S-4 under the
Securities Act (except for the financial statements and the notes thereto and
the financial statement schedules and other financial, statistical and
accounting data included, incorporated by reference or deemed incorporated by
reference, as to which we express no opinion) when filed with the Securities and
Exchange Commission complied as to form in all material respects with the
Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder.
We have participated in conferences with officers and other representatives of
the Company and Summit, representatives of the independent public accountants
for the Company and Summit and counsel for Summit, at which conferences the
contents of the Registration Statement and the Collective Proxy Statement and
related matters were discussed, and, although we have not independently verified
and are not passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Collective Proxy Statement, no facts have come to our
attention that lead us to believe that the Registration Statement, on the
effective date thereof, insofar as the Company and its business, the Merger
Agreement and the transactions contemplated thereby, including the Merger, and
the Option Agreement are described therein, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading or that the Collective
Proxy Statement, on the date thereof or on the date hereof, insofar as the
Company and its business, the Merger Agreement and the transactions contemplated
thereby, including the Merger, and the Option Agreement are described therein,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary in order to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that we express no view with
respect to the financial statements and related notes, the financial statement
schedules and the other financial, statistical and accounting data included,
incorporated by reference or deemed incorporated by reference in the
Registration Statement or the Collective Proxy Statement).
Please be advised that, where any statement is stated herein as being "to the
extent of our knowledge and information," we have not independently verified the
accuracy of such statement but intend to advise you that in the course of our
representation as counsel to the Company and, in particular, our participation
in the preparation, authorization, execution and delivery of the Merger
Agreement and the Option Agreement and in the preparation of the Registration
Statement and the Collective Proxy Statement, nothing has come to our attention
that leads us to believe, and we do not believe, that the matter is other than
as stated therein. In addition, please be advised that our opinion with respect
to the valid and binding nature of the Merger Agreement and the Option Agreement
is subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer and similar laws presently or
hereafter in effect affecting the enforcement of creditors' rights and remedies
generally, the discretion of a court in ordering specific
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<PAGE>
performance or other equitable remedies, and to general principles of equity
(regardless of whether questioned in a proceeding at law or in equity).
The opinions herein are limited to the Federal laws of the United States and the
laws of the State of New Jersey and Delaware and we express no opinion as to the
effect on any matter covered by this opinion of the laws of any other
jurisdiction.
This opinion is being furnished to, and is solely for the benefit of, Summit and
is not to be quoted, used, circulated, published or disseminated, otherwise
referred to in any documents, filed with any governmental agency, entity or
person, or relied upon by any agency, entity or person other than Summit,
without my prior written consent.
Very truly yours,
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EXHIBIT E
OPINION OF SUMMIT COUNSEL
PURSUANT TO SECTION 8.05
Collective Bancorp, Inc.
716 West White Horse Pike
Cologne, New Jersey 08213
Gentlemen:
This opinion is rendered to you pursuant to Section 8.05 of the Agreement
and Plan of Merger, dated ________, 1997 (the "Merger Agreement"), between
Collective Bancorp, Inc. ("Collective") and Summit Bancorp. ("Summit" or the
"Company"), which Merger Agreement provides, among other things, for the merger
(the "Merger") of Collective with and into Summit and the issuance, in
accordance with the Exchange Ratio provided for in the Merger Agreement, of
whole shares of the Common Stock, par value $1.20 per share, of Summit (the
"Summit Common Stock") and cash lieu of fractional shares of Summit Common Stock
in exchange for outstanding shares of the Common Stock, $.01 par value, of
Collective (the "Collective Common Stock"). In consideration of the Merger
Agreement, Collective and Summit entered into a Stock Option Agreement dated
___________, 1997 pursuant to which, among other things, Collective granted
Summit a stock option with respect to shares of Collective Common Stock (the
"Option Agreement").
Capitalized terms used but not defined herein shall have the same meanings
herein as ascribed to them in the Merger Agreement. As used herein, it is
intended that "material" be determined with reference to Summit and its
subsidiaries considered as one enterprise.
I am Executive Vice President, General Counsel and Secretary of the Company
and have served as counsel to the Company and connection with the preparation,
authorization, execution and delivery of the Merger Agreement, the Option
Agreement and the consummation of the transactions contemplated thereby,
including the preparation of the registration statement, as amended, under the
Securities Act of 1933, as amended (the "Securities Act"), on Form S-4 of Summit
(No. 333-_____), and the prospectus of Summit included therein (the registration
statement, together with the prospectus of Summit included therein, is referred
to as the "Registration Statement").
In so acting, I have made inquiries of certain of the officers and
representatives of the Company and its subsidiaries with respect to various
matters contained in the Merger Agreement, the Option Agreement and the
Registration Statement, and have examined and relied upon originals or copies
certified or otherwise identified to my satisfaction of the Merger Agreement,
the Option Agreement and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of the public
officials and of such directors, officers and representatives of the Company and
its subsidiaries as I have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
<PAGE>
In such examination I have assumed, without independent verification, the
genuineness and authenticity of all signatures, the authenticity of all
documents submitted to me as originals, the legal capacity of all natural
persons and the conformity to original documents of documents submitted to me as
certified or facsimile or photostatic copies and the authenticity of the
originals of facsimile or photostatic copies. As to all questions of fact
material to this opinion that have not been independently established, I have
relied upon certificates or comparable documents of officers and representatives
of the Company and upon the representations and warranties of the Company
contained in the Merger Agreement. I have also assumed, without independent
verification, the due authorization, execution and delivery (other than due
authorization, execution and delivery by the Company) of all documents, the due
authorization, execution and delivery of which are prerequisites to the
effectiveness of such documents, and that such documents constitute legal, valid
and binding obligations of the parties thereto (other than the Company).
Based on the foregoing and subject to the qualifications stated herein, I am of
the opinion that:
1. Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, as described in
the Registration Statement.
2. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction where the failure to be
so qualified cannot be cured and such failure would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
3. The Company is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended.
4. The authorized capital stock of the Company consists of 4,000,000
shares of Preferred Stock, without par value, and 130,000,000 shares of Common
Stock, par value $1.20 per share, and, as of January 31, 1997 XX,XXX,XXX shares
of Summit Common Stock were issued and outstanding and 1,000,000 shares of
Series R Preferred Stock were reserved for issuance pursuant to Summit's
Shareholder Rights Plan. All of the outstanding shares of capital stock of the
Company are duly authorized, validly issued, and non-assessable, with no
personal liability attaching to the ownership thereof, and have not been issued
in violation of any preemptive rights.
5. Each of the bank subsidiaries of Summit has been duly incorporated
and is validly existing as a bank in good standing under the laws of the state
of its incorporation and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, as described in the Registration Statement.
6. Each of the bank subsidiaries of Summit is an insured bank under the
Federal Deposit Insurance Act, as amended.
7. All the issued and outstanding capital stock of each of the bank
subsidiaries of Summit has been duly and validly issued and is fully paid and
nonassessable and, to the extent of my knowledge and information, the Company
owns, directly or indirectly, all such capital stock, and other Equity
Securities
2
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of each of Summit's bank subsidiaries. Such stock is owned free and clear of any
perfected security interest and, to the extent of my knowledge and information,
any other security interest.
8. The Company has the corporate power and authority to enter into the
Merger Agreement and the Option Agreement and to carry out the transactions
contemplated thereby; the Merger Agreement and the Option Agreement have been
validly authorized, executed and delivered by the Company; the consummation of
the transactions contemplated by the Merger Agreement, including the Merger, and
the Option Agreement have each been duly authorized by all necessary corporate
action on the part of the Company and (assuming the due authorization, execution
and delivery thereof by Collective) the Merger Agreement and the Option
Agreement each constitute the valid and binding agreement of the Company.
9. The execution and delivery of the Merger Agreement and the Option
Agreement and the performance thereof by the Company and the consummation of the
Merger did not and will not violate, fail to comply with, conflict with, give
rise to rights under, result in the breach of, or 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 the Company and its subsidiaries, taken as a whole, or upon any of the
capital stock of the Company or constitute an event that could, with the lapse
of time, action or inaction by the Company 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 Restated
Certificate of Incorporation, By-Laws or Shareholder Rights Plan of the Company
(b) any federal law of the United States of America or any law of the State of
New Jersey or the Commonwealth of Pennsylvania, (c) any rule, ruling,
determination, ordinance or regulation of or agreement with any governmental or
regulatory authority, (d) to the extent of my knowledge and information, any
judgment, order, writ, award, injunction or decree of any court or governmental
authority issued in any proceeding to which the Company is a party or by which
the Company or any of their assets or properties are bound or committed, or (e)
to the extent of my knowledge and information, any material note, bond,
mortgage, indenture, lease, policy of insurance or indemnity, license, contract,
agreement or other instrument to which the Company is a party or by which either
of them or any of their assets or properties are bound or committed, other than
any such violations, conflicts, breaches, defaults or accelerations the
consequences of which do not or will not, in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or enable
any person to enjoin the transactions contemplated by the Merger Agreement or
the Option Agreement. No consent, approval, waiver, license or authorization or
other action by or filing with any federal or New Jersey or Pennsylvania
governmental authority is required in connection with the execution and delivery
by the Company of the Merger Agreement or Option Agreement or the consummation
by the Company of the transactions contemplated thereby, including the Merger,
except for (i) the filing of an appropriated Certificate of Merger as provided
by the Merger Agreement with the New Jersey Secretary of State, and the
Secretary of State of the State of Delaware, (ii) such filings and other actions
as may be required by federal or state securities laws and the rules and
regulations thereunder, and (iii) those already obtained.
10. The Summit Common Stock to be issued pursuant to the Merger
Agreement has been duly authorized for issuance pursuant to the Merger Agreement
and, when issued and delivered by the Company pursuant to the Merger Agreement,
will be validly issued, fully paid and nonassessable. The issuance of the Summit
Common Stock under the Merger Agreement is not subject to any preemptive
3
<PAGE>
rights under the Company's Restated Certificate of Incorporation or By-Laws or,
to the extent of my knowledge and information, any agreement by which the
Company is bound.
11. The Registration Statement is effective under the Securities Act
and, to the extent of my knowledge and information, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act or proceedings therefor initiated or threatened by the Securities and
Exchange Commission.
12. The Registration Statement (except for the financial statements and
the notes thereto, the financial statement schedules and the other financial,
statistical and accounting data included, incorporated by reference or deemed
incorporated by reference in the Registration Statement, as to which I express
no opinion) but only insofar as the Company and its business and the Merger
Agreement, the Option Agreement and the transactions contemplated thereby,
including the Merger, are described therein, comply as to form in all material
respects with the requirements of the Securities Act and the rules and
regulations thereunder. The documents filed by Summit with the Securities and
Exchange Commission (the "Commission") and incorporated by reference in the
Registration Statement pursuant to Part I.B. of Form S-4 under the Securities
Act (except for the financial statements and the notes thereto and the financial
statement schedules and other financial, statistical and accounting data
included, incorporated by reference or deemed incorporated by reference, as to
which I express no opinion) when filed with the Commission complied as to form
in all material respects with the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
I or members of my staff have participated in conferences with officers
and other representatives of the Company and Collective, representatives of the
independent public accountants for the Company and Collective and counsel for
Collective, at which conferences the contents of the Registration Statement and
related matters were discussed, and, although I have not independently verified
and am not passing upon and assume no responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, no facts have come to my attention (either directly or indirectly
after inquiries directed to members of my staff) that lead me to believe that
the Registration Statement, on the effective date thereof contained, or on the
date hereof contains, insofar as the Company and its business and the Merger
Agreement, the Option Agreement and the transactions contemplated thereby,
including the Merger, are described therein, an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that I express no view with respect to the financial statements and related
notes, the financial statement schedules and the other financial, statistical
and accounting data included, incorporated by reference or deemed incorporated
by reference in the Registration Statement).
Please be advised that, where any statement is stated herein as being "to
the extent of my knowledge and information," I have not independently verified
the accuracy of such statement but intend to advise you that in the course of my
duties as Executive Vice President, General Counsel and Secretary of the Company
and, in particular, my participation in the preparation, authorization,
execution and delivery of the Merger Agreement and the Option Agreement and in
the preparation (together with members of my staff) of the Registration
Statement,nothing has come to my attention (with respect to the Registration
Statement, either directly or indirectly after inquiries directed to my staff)
that leads me to believe, and I
4
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do not believe, that the matter is other than as stated herein. In addition,
please be advised that my opinion with respect to the valid and binding nature
of the Merger Agreement and the Option Agreement is subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and similar laws presently or hereafter in effect affecting
the enforcement of creditors' rights and remedies generally, the discretion of a
court in ordering specific performance or other equitable remedies, and to
general principles of equity (regardless of whether questioned in a proceeding
at law or in equity).
The opinions herein are limited to the federal laws of the United States
and the laws of the State of New Jersey and the Commonwealth of Pennsylvania,
and I express no opinion as to the effect on any matter covered by this opinion
of the laws of any other jurisdiction.
This opinion is not to be quoted or otherwise referred to in any
documents or filed with any governmental agency, entity or person or relied upon
by any agency, entity or person other than the addressee, without my prior
written consent.
Very truly yours,
5
Exhibit 10 (B)
COLLECTIVE BANCORP, INC. STOCK OPTION AGREEMENT
THE TRANSFER OF THE OPTION GRANTED BY THIS AGREEMENT IS SUBJECT TO RESALE
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
STOCK OPTION AGREEMENT, dated as of the 28th day of February, 1997
(this "Agreement"), between Summit Bancorp., a New Jersey corporation
("Grantee"), and Collective Bancorp, Inc., a Delaware corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer have on a date prior to the date hereof,
entered into an Agreement and Plan of Merger, dated as of the 27th day of
February, 1997 (the "Merger Agreement"). (Capitalized terms used in this
Agreement and not defined herein but defined in the Merger Agreement shall have
the meanings assigned thereto in the Merger Agreement); and
WHEREAS, as a condition and inducement to Grantee's entering into the
Merger Agreement and in consideration therefor, Grantee has required that Issuer
agree, and Issuer has agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
SECTION 1. Grant of Option. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase, subject to the
terms hereof, up to 4,067,424 fully paid and nonassessable shares of the common
stock, par value $.01 per share, of Issuer ("Common Stock") at a price equal to
$38.125 (such price, as adjusted as hereinafter provided, the "Option Price").
The number of shares of Common Stock that may be received upon the exercise of
the Option and the Option Price are subject to adjustment as herein set forth.
In no event shall the number of shares of Common Stock for which this Option is
exercisable exceed 19.9% of the number of shares of Common Stock then issued and
outstanding (without consideration of any shares of Common Stock subject to or
issued pursuant to the Option).
SECTION 2. Exercise of Option. (a) Grantee may exercise the Option, in
whole or part, at any time and from time to time following the occurrence of a
Purchase Event (as defined below); provided that the Option shall terminate and
be of no further force and effect upon the earliest to occur of (i) the time
immediately prior to the Effective Time, (ii) the termination of the Merger
Agreement in accordance with the terms thereof prior to the occurrence of an
Extension Event, other than a termination of the Merger Agreement by the Grantee
pursuant to Section 9.02(a)(ii) thereof, or (iii) 15 months after the
termination of the Merger Agreement following the occurrence of an Extension
Event (as defined below), or the termination of the Merger Agreement by Grantee
pursuant to Section 9.02(a)(ii) thereof, and provided further, that any purchase
of Common Stock upon
<PAGE>
exercise of the Option shall be subject to applicable law, and provided further,
that the Option may not be exercised, nor may Grantee require Issuer to
repurchase the Option (as set forth in Section 7 hereof), if, at the time of
exercise or repurchase, Grantee is in material breach of any material covenant
or obligation contained in the Merger Agreement and, if the Merger Agreement has
not terminated prior thereto, such breach would entitle Issuer to terminate the
Merger Agreement. The events described in clauses (i) - (iii) in the preceding
sentence are hereinafter collectively referred to as Exercise Termination
Events. As provided in Section 8, the rights set forth therein shall terminate
upon an Exercise Termination Event and, as provided in Sections 6 and 7 hereof,
the rights to deliver requests pursuant to Sections 6 or 7 shall terminate 12
months after an Exercise Termination Event, subject, in such case, to the
provisions of Section 9.
(b) The term "Extension Event" shall mean any of the following events
or transactions occurring without the Grantee's prior written consent after the
date hereof:
(i) Issuer or any of its subsidiaries (each an "Issuer
Subsidiary"), 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 Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act"), and the rules and regulations thereunder) other than Grantee or
any of its subsidiaries (each a "Grantee Subsidiary") or the Board of Directors
of Issuer shall have recommended that the shareholders of Issuer approve or
accept any Acquisition Transaction with any person other than Grantee or any
Grantee Subsidiary. For purposes of this Agreement, "Acquisition Transaction"
shall mean (w) a merger or consolidation, or any similar transaction, involving
Issuer or any of Issuer's banking subsidiaries ("Bank Subsidiaries"), (x) a
purchase, lease or other acquisition of 10% or more of the aggregate value of
the assets or deposits of Issuer or any Bank Subsidiary, (y) 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 Issuer
or a Bank Subsidiary, or (z) any substantially similar transaction, provided,
however, that in no event shall (i) any merger, consolidation or similar
transaction involving Issuer or any Bank Subsidiary in which the voting
securities of Issuer outstanding immediately prior thereto continue to represent
(either by remaining outstanding or being converted into voting securities of
the surviving entity of any such transaction) at least 75% of the combined
voting power of the voting securities of the Issuer or the surviving entity
outstanding after the consummation of such merger, consolidation, or similar
transaction, or (ii) any internal merger or consolidation involving only Issuer
and/or Issuer Subsidiaries, be deemed to be an Acquisition Transaction, provided
that any such transaction is not entered into in violation of the terms of the
Merger Agreement;
(ii) Any person (other than Grantee or any Grantee Subsidiary)
shall have acquired beneficial ownership or the right to acquire beneficial
ownership of securities representing 10% or more of the aggregate voting power
of Issuer or any Bank Subsidiary (the term "beneficial ownership" for purposes
of this Agreement having the meaning assigned thereto in Section 13(d) of the
Securities Exchange Act, and the rules and regulations thereunder);
(iii) Any person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its shareholders, by public
announcement or written communication
<PAGE>
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 Grantee or any Grantee 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 of 1933, as amended (the
"Securities Act"), with respect to, a tender offer or exchange offer to purchase
any shares of Common Stock such that, upon consummation of such offer, such
person would own or control securities representing 10% or more of the aggregate
voting power of Issuer or any Bank Subsidiary);
(iv) After any person other than Grantee or any Grantee
Subsidiary has made or disclosed an intention to make a proposal to Issuer or
its shareholders to engage in an Acquisition Transaction, Issuer shall have
breached any covenant or obligation contained in the Merger Agreement and such
breach (x) would entitle Grantee to terminate the Merger Agreement and (y) shall
not have been cured prior to the Notice Date (as defined below);
(v) Any person other than Grantee or any Grantee Subsidiary
shall have filed an application with, or given a notice to, whether in draft or
final form, the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") or other governmental authority or regulatory or administrative
agency or commission, domestic or foreign (each, a "Governmental Authority"),
for approval to engage in an Acquisition Transaction; or
(vi) the holders of Common Stock shall not have approved the
Merger Agreement at the meeting of such shareholders held for the purpose of
voting on the Merger Agreement, such meeting shall not have been called by the
Board of Directors of Issuer in accordance with Section 4.03 of the Merger
Agreement or held or shall have been canceled prior to termination of the Merger
Agreement or Issuer's Board of Directors shall have withdrawn or modified in a
manner adverse to the consummation of the Merger the recommendation of Issuer's
Board of Directors with respect to the Merger Agreement, in each case after an
Extension Event;
(vii) any Purchase Event (as defined below).
(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 Grantee or any
Grantee Subsidiary of beneficial ownership of securities representing 25% or
more of the aggregate voting power of Issuer or any Bank Subsidiary; or
(ii) The occurrence of an Extension Event described in Section
2(b)(i) except that the percentage referred to in clauses (x) and (y) shall be
25%.
(d) Issuer shall notify Grantee promptly in writing of the occurrence
of any Extension Event or Purchase Event; provided however, that the giving of
such notice by Issuer shall not be a condition to the right of Grantee to
exercise the Option.
(e) In the event that Grantee is entitled to and wishes to exercise the
Option, it shall send
<PAGE>
to Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of shares of Common Stock it will
purchase pursuant to such exercise, (ii) a place and date not earlier than three
business days nor later than 90 business days from the Notice Date for the
closing of such purchase (the "Closing Date") and (iii) that the proposed
exercise of the Option shall be revocable by Grantee in the event that the
transaction constituting a Purchase Event that gives rise to such written notice
shall not have been consummated prior to exercise of the Option; provided that
if prior notification to or approval of the Federal Reserve Board or any other
Governmental Authority is required in connection with such purchase, Grantee
shall promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run from the later of (x) the date on which any
required notification periods have expired or been terminated and (y) the date
on which such approvals have been obtained and any requisite waiting period or
periods shall have expired. For purposes of Section 2(a), any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto. Grantee
shall have the right to revoke its proposed exercise of the Option in the event
that the transaction constituting a Purchase Event that gives rise to such right
to exercise shall not have been consummated prior to exercise of the Option,
pursuant to the statement of such right in the written notice exercising the
Option as provided in clause 2(e)(iii) above.
(f) At the closing referred to in Section 2(e), Grantee shall surrender
this Agreement (and the Option granted hereby) to Issuer and pay to Issuer the
Option Price for the shares of Common Stock purchased pursuant to the exercise
of the Option in immediately available funds by wire transfer to a bank account
designated by Issuer; provided, however, that failure or refusal of Issuer to
designate such a bank account shall not preclude Grantee from exercising the
Option.
(g) At such closing, simultaneously with the delivery of the Option
Price in immediately available funds as provided in Section 2(f), Issuer shall
deliver to Grantee a certificate or certificates representing the number of
shares of Common Stock purchased by Grantee and, if the Option should be
exercised in part only, a new Option Agreement granting a new Option evidencing
the rights of Grantee thereof to purchase the balance of the shares of Common
Stock purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder
shall be endorsed with a restrictive legend substantially as follows:
"The transfer of the shares represented by this certificate is subject
to resale restrictions arising under the Securities Act of 1933, as
amended, and to certain provisions of an agreement between Summit
Bancorp. and Collective Bancorp, Inc. ("Issuer") dated as of the 27thJ
day of February, 1997. A copy of such agreement is on file at the
principal office of Issuer and will be provided to the holder hereof
without charge upon receipt by Issuer of a written request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the Securities and Exchange
Commission (the "SEC"), or an opinion of counsel, in form and substance
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the Securities Act; (ii) the reference to the
<PAGE>
provisions of this Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.
(i) Upon the giving by Grantee to Issuer of the written notice of
exercise of the Option provided for in Section 2(e) and the tender of the Option
Price on the Closing Date in immediately available funds, Grantee shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of Issuer shall
then be closed or that certificates representing such shares of Common Stock
shall not then actually be delivered to Grantee. Issuer shall pay all expenses
and any and all United States federal, state and local taxes and other charges
that may be payable in connection with the preparation, issue and delivery of
stock certificates under this Section 2 in the name of Grantee or its nominee.
SECTION 3. Reservation of Shares. Issuer agrees: (i) that it shall at
all times until the termination of this Agreement have reserved for issuance
upon the exercise of the Option that number of authorized shares of Common Stock
equal to the maximum number of shares of Common Stock at any time and from time
to time issuable hereunder, all of which shares will, upon issuance pursuant
hereto, be duly authorized, validly issued, fully paid, nonassessable, and
delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights; (ii) that it will not, by
amendment of its certificate of incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer; (iii) promptly to take all action as may from time to time be required
(including (x) complying with all premerger notification, reporting and waiting
period requirements specified in 15 U.S.C. ss. 18a and regulations promulgated
thereunder and (y) in the event, under the Bank Holding Company Act of 1956, as
amended (the "BHC Act"), or the Change in Bank Control Act of 1978, as amended,
or any state banking law, prior approval of or notice to the Federal Reserve
Board or to any other Governmental Authority is necessary before the Option may
be exercised, cooperating with Grantee in preparing such applications or notices
and providing such information to the Federal Reserve Board and each other
Governmental Authority as they may require) in order to permit Grantee to
exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) to take all action provided herein to protect
the rights of Grantee against dilution.
SECTION 4. Division of Option. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal office of Issuer,
for other agreements providing for Options of different denominations entitling
the holder thereof to purchase, on the same terms and subject to the same
conditions as are set forth herein, in the aggregate the same number of shares
of Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any agreements and related options for which this Agreement
(and the Option granted hereby) may be exchanged. Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction or
<PAGE>
mutilation of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Agreement, if mutilated, Issuer will execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
SECTION 5. Adjustment upon Change of Capitalization. The number of
shares of Common Stock purchasable upon the exercise of the Option shall be
subject to adjustment from time to time as follows:
(a) Subject to the last sentence of Section 1, in the event of any
change in the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are to be
issued or otherwise to become outstanding as a result of any such change (other
than pursuant to an exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding (without consideration of any shares of Common
Stock subject to or issued pursuant to the Option).
(b) Whenever the number of shares of Common Stock purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option Price
shall be adjusted by multiplying the Option Price by a fraction, the numerator
of which shall be equal to the number of shares of Common Stock purchasable
prior to the adjustment and the denominator of which shall be equal to the
number of shares of Common Stock purchasable after the adjustment. In no event
shall the Option Price be adjusted to less than the par value of the Common
Stock to be issued at such Option Price.
(c) It is intended by the parties hereto that the adjustments provided
by this Section 5 shall fully preserve the economic benefits of this Agreement
for Grantee.
SECTION 6. Registration Rights.
(a) Demand Registration Rights. After the occurrence of a Purchase
Event that occurs prior to an Exercise Termination Event, Issuer shall, at the
request of Grantee (whether on its own behalf or on behalf of any subsequent
holder of the Option (or part thereof) delivered prior to an Exercise
Termination Event or at the request of a holder of any of the shares of Common
Stock issued pursuant hereto) delivered no later than 12 months after an
Exercise Termination Event, promptly prepare, file and keep current a shelf
registration statement under the Securities Act covering this Option and any
shares issued and issuable pursuant to the Option (the "Option Shares") and
shall use its best efforts to cause such registration statement to become
effective and remain current and to qualify this Option or any such Option
Shares or other securities for sale under any applicable state securities laws
in order to permit the sale or other disposition of this Option or any Option
Shares in accordance with any plan of disposition requested by Grantee;
provided, however,
<PAGE>
that Issuer may postpone filing a registration statement relating to a
registration request by Grantee under this Section 6 for a period of time (not
in excess of 90 days) if in its judgment such filing would require the
disclosure of material information that Issuer has a bona fide business purpose
for preserving as confidential. Issuer will use its best efforts to cause such
registration statement first to become effective as soon as practicable after
the filing thereof and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective, or
such shorter time as may be necessary to effect such sales or other
dispositions. Grantee shall have the right to demand two such registrations.
Grantee shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. In connection
with any such registration, Issuer and Grantee shall provide each other with
representations, warranties, and other agreements customarily given in
connection with such registrations. If requested by any Grantee in connection
with such registration, Issuer and Grantee shall become a party to any
underwriting agreement relating to the sale of Option Shares, but only to the
extent of obligating themselves in respect of representations, warranties,
indemnities and other agreements customarily included in such underwriting
agreements. Notwithstanding the foregoing, if Grantee revokes any exercise
notice or fails to exercise any Option with respect to any exercise notice
pursuant to Section 2(e), Issuer shall not be obligated to continue any
registration process with respect to the sale of Option Shares.
(b) Additional Persons With Registration Rights. Upon receiving any
request under this Section 6 from any Grantee, Issuer agrees to send a copy
thereof to any other person known to Issuer to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies. Notwithstanding anything to the contrary contained herein, in no event
shall Issuer be obligated to effect more than two registrations pursuant to this
Section 6 by reason of the fact that there shall be more than one Grantee as a
result of any assignment or division of this Agreement.
(c) Expenses. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to this Section 6 (including the related
offerings and sales by holders of Option Shares) and all other qualifications,
notification or exemptions pursuant to Section 6.
(d) Indemnification. In connection with any registration under this
Section 6, Issuer hereby indemnifies the Grantee, and each officer, director and
controlling person of Grantee, and each underwriter thereof, including each
person, if any who controls such holder or underwriter within the meaning of
Section 15 of the Securities Act, against all expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement contained in
any registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading,
<PAGE>
except insofar as such expenses, losses, claims, damages or liabilities of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall be
indemnified by such Grantee, or by such underwriter, as the case may be, for all
such expenses, losses, claims, damages and liabilities caused by any untrue, or
alleged untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such holder or such underwriter,
as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section 6(d) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 6(d), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 6(d). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party either agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel satisfactory to the
indemnified party, or (iii) the indemnified party has been advised by counsel
that one or more legal defenses may be available to the indemnifying party that
may be contrary to the interests of the indemnified party. No indemnifying party
shall be liable for the fees and expenses of more than one separate counsel for
all indemnified parties or for any settlement entered into without its consent,
which consent may not be unreasonably withheld.
If the indemnification provided for in this Section 6(d) is unavailable
to a party otherwise entitled to be indemnified in respect of any expenses,
losses, claims, damages or liabilities referred to herein, then the indemnifying
party, in lieu of indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of Issuer, the
Grantee and the underwriters in connection with the statements or omissions
which resulted in such expenses, losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall any Grantee be
responsible, in the aggregate, for any amount in excess of the net offering
proceeds attributable to its Option Shares included in the offering. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
<PAGE>
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any obligation by any Grantee
to indemnify shall be several and not joint with other Grantees.
(e) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Grantee thereof in
accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144A. Issuer shall at its expense provide the Grantee with any information
necessary in connection with the completion and filing of any reports or forms
required to be filed by Grantee under the Securities Act or the Exchange Act, or
required pursuant to any state securities laws or the rules of any stock
exchange.
SECTION 7. Repurchase at the Option of Grantee or Owner. (a) Upon the
occurrence of a Repurchase Event (as defined below), (i) at the request (the
date of such request being the "Request Date") of Grantee, delivered prior to an
Exercise Termination Event, Issuer (or any successor thereto) shall repurchase
the Option from Grantee at a price (the "Option Repurchase Price") equal to the
amount by which (A) the market/offer price (as defined below) exceeds (B) the
Option Price, multiplied by the number of shares for which this Option may then
be exercised and (ii) at the request (the date of such request being the
"Request Date") of the owner of Option Shares from time to time (the "Owner"),
delivered within 12 months of the occurrence of a Repurchase Event (or such
later period as provided in Section 9), Issuer shall repurchase such number of
the Option Shares from the Owner as the Owner shall designate at a price (the
"Option Share Repurchase Price") equal to the market/offer price multiplied by
the number of Option Shares so designated. The term "market/offer price" shall
mean the highest of (i) the price per share of Common Stock at which a tender
offer or exchange offer therefor has been made after the date hereof and on or
prior to the Request Date, (ii) the price per share of Common Stock paid or to
be paid by any third party pursuant to an agreement with Issuer (whether by way
of a merger, consolidation or otherwise), (iii) the highest last sale price for
shares of Common Stock within the 90-day period ending on the Request Date
quoted on the Nasdaq National Market (as reported by The Wall Street Journal,
or, if not reported thereby, another authoritative source), (iv) in the event of
a sale of all or substantially all of Issuer's assets, the sum of the price paid
in such sale for such assets and the current market value of the remaining
assets of Issuer as determined by a nationally-recognized independent investment
banking firm selected by Grantee or the Owner, as the case may be, divided by
the number of shares of Common Stock outstanding at the time of such sale. In
determining the market/offer price, the value of consideration other than cash
shall be determined by a nationally-recognized independent investment banking
firm selected by Grantee or the Owner, as the case may be, whose determination
shall be conclusive and binding on all parties.
(b) Grantee or the Owner, as the case may be, may exercise its right to
require Issuer to repurchase the Option and/or any Option Shares pursuant to
this Section 7 by surrendering for such purpose to Issuer, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that Grantee or
the Owner, as the case may be, elects to require Issuer to repurchase the Option
and/or the Option Shares in accordance with the provisions of this Section 7. As
promptly as practicable, and in any event within the later to
<PAGE>
occur of (x) five business days after the surrender of the Option and/or
certificates representing Option Shares and the receipt of such notice or
notices relating thereto and (y) the time that is immediately prior to the
occurrence of a Repurchase Event, Issuer shall deliver or cause to be delivered
to Grantee the Option Repurchase Price or to the Owner the Option Share
Repurchase Price therefor or the portion thereof that Issuer is not then
prohibited from so delivering under applicable law and regulation or as a
consequence of administrative policy.
(c) Issuer hereby undertakes to use its reasonable efforts to obtain
all required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish any repurchase contemplated by
this Section 7. Nonetheless, to the extent that Issuer is prohibited under
applicable law or regulation, from repurchasing the Option and/or the Option
Shares in full, Issuer shall promptly so notify Grantee and/or the Owner and
thereafter deliver or cause to be delivered, from time to time, to Grantee
and/or the Owner, as appropriate, the portion of the Option Repurchase Price and
the Option Share Repurchase Price, respectively, that it is no longer prohibited
from delivering, within five business days after the date on which Issuer is no
longer so prohibited; provided, however, that if Issuer at any time after
delivery of a notice of repurchase pursuant to Section 7(b) is prohibited under
applicable law or regulation, from delivering to Grantee and/or the Owner, as
appropriate, the Option Repurchase Price or the Option Share Repurchase Price,
respectively, in full or in any substantial part, Grantee or the Owner, as
appropriate, may revoke its notice of repurchase of the Option or the Option
Shares either in whole or in part whereupon, in the case of a revocation in
part, Issuer shall promptly (i) deliver to Grantee and/or the Owner, as
appropriate, that portion of the Option Purchase Price or the Option Share
Repurchase Price that Issuer is not prohibited from delivering after taking into
account any such revocation and (ii) deliver, as appropriate, either (A) to
Grantee, a new Agreement evidencing the right of Grantee to purchase that number
of shares of Common Stock equal to the number of shares of Common Stock
purchasable immediately prior to the delivery of the notice of repurchase less
the number of shares of Common Stock covered by the portion of the Option
repurchased or (B) to the Owner, a certificate for the number of Option Shares
covered by the revocation.
(d) For purposes of this Section 7, a Repurchase Event shall be deemed
to have occurred (i) upon the consummation of any merger, consolidation or
similar transaction involving Issuer or any Bank Subsidiary any purchase, lease
or other acquisition of all or a substantial portion of the assets of Issuer or
any Bank Subsidiary, other than any such transaction which would not constitute
an Acquisition Transaction pursuant to the proviso to Section 2(b)(i) hereof or
(ii) upon the acquisition by any person of beneficial ownership of securities
representing 25% or more of the aggregate voting power of Issuer or any Bank
Subsidiary, provided that no such event shall constitute a Repurchase Event
unless an Extension Event shall have occurred prior to an Exercise Termination
Event. The parties hereto agree that Issuer's obligations to repurchase the
Option or Option Shares under this Section 7 shall not terminate upon the
occurrence of an Exercise Termination Event if an Extension Event shall have
occurred prior to the occurrence of an Exercise Termination Event.
(e) Issuer shall not enter into any agreement with any party (other
than Grantee or a Grantee Subsidiary) for an Acquisition Transaction unless the
other party thereto assumes all the obligations of Issuer pursuant to this
Section 7 in the event that Grantee or the Owner elects, in its sole discretion,
to require such other party to perform such obligations.
<PAGE>
SECTION 8. Substitute Option in the Event of Corporate Change. (a) In
the event that prior to an Exercise Termination Event, Issuer shall enter into
an agreement (i) to consolidate or merge with any person, other than Grantee or
a Grantee Subsidiary, and shall not be the continuing or surviving corporation
of such consolidation or merger, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other person or cash or any other property or the
then outstanding shares of Common Stock shall after such merger represent less
than 50% of the aggregate voting power of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets to any person,
other than Grantee or a Grantee Subsidiary, then, and in each such case, the
agreement governing such transaction shall make proper provision so that the
Option shall, upon the consummation of such transaction and upon the terms and
conditions set forth herein, be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of Grantee, of either (x) the Acquiring
Corporation (as defined below) or (y) any person that controls the Acquiring
Corporation (the Acquiring Corporation and any such controlling person being
hereinafter referred to as the Substitute Option Issuer)
(b) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as is hereinafter defined) as is equal to
the market/offer price (as defined in Section 7) multiplied by the number of
shares of the Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as is hereinafter defined) The exercise price of
the Substitute Option per share of the Substitute Common Stock (the "Substitute
Purchase Price") shall then be equal to the Option Price multiplied by a
fraction in which the numerator is the number of shares of the Common Stock for
which the Option was theretofore exercisable and the denominator is the number
of shares of Substitute Common Stock for which the Substitute Option is
exercisable.
(c) The Substitute Option shall otherwise have the same terms as the
Option, provided that if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Grantee, provided further that the terms of
the Substitute Option shall include (by way of example and not limitation)
provisions for the repurchase of the Substitute Option and Substitute Common
Stock by the Substitute Option Issuer on the same terms and conditions as
provided in Section 7.
(d) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving person, and (iii) the transferee of all or any
substantial part of the Issuer's assets (or the assets of Issuer
Subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the Substitute
Option.
(iii) "Average Price" shall mean the average last sale price
of a share of the Substitute Common Stock (as reported by The Wall
Street Journal or, if not reported therein,
<PAGE>
by another authoritative source) for the one year immediately preceding
the consolidation, merger or sale in question, but in no event higher
than the last sale price of the shares of the Substitute Common Stock
on the day preceding such consolidation, merger or sale; provided that
if Issuer is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls
or is controlled by such person, as Grantee may elect.
(e) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to the exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of Substitute Common Stock
but for this clause (e), the Substitute Option Issuer shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute Option without
giving effect to the limitation in this clause (e) over (ii) the value of the
Substitute Option after giving effect to the limitation in the clause (e). This
difference in value shall be determined by a nationally recognized investment
banking firm selected by Grantee and the Substitute Option Issuer.
SECTION 9. Extension of Time for Regulatory Approvals. Notwithstanding
Sections 2(e), 6, 7 and 11, if Grantee has given the notice referred to in one
or more of such Sections, the exercise of the rights specified in any such
Section shall be extended (a) if the exercise of such rights requires obtaining
regulatory approvals, to the extent necessary to obtain all regulatory approvals
for the exercise of such rights, and (b) to the extent necessary to avoid
liability under Section 16(b) of the Securities Exchange Act by reason of such
exercise; provided that in no event shall any closing date occur more than 18
months after the related Notice Date, and, if the closing date shall not have
occurred within such period due to the failure to obtain any required approval
by the Federal Reserve Board or any other Governmental Authority despite the
reasonable efforts of Issuer or the Substitute Option Issuer, as the case may
be, to obtain such approvals, the exercise of the Option shall be deemed to have
been rescinded as of the related Notice Date. In the event (a) Grantee receives
official notice that an approval of the Federal Reserve Board or any other
Governmental Authority required for the purchase and sale of the Option Shares
will not be issued or granted or (b) a closing date has not occurred within 18
months after the related Notice Date due to the failure to obtain any such
required approval, Grantee shall be entitled to exercise the Option in
connection with the resale of the Option Shares pursuant to a registration
statement as provided in Section 6. Nothing contained in this Agreement shall
restrict Grantee from specifying alternative exercising of rights pursuant to
Sections 2(e), 6, 7 and 11, hereof in the event that the exercising of any such
rights shall not have occurred due to the failure to obtain any required
approval referred to in this Section 9.
SECTION 10. Issuer Warranties. Issuer hereby represents and warrants to
Grantee as follows:
(a) Issuer has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on the part of Issuer are
necessary to authorize this Agreement or to consummate the transactions so
contemplated.
<PAGE>
This Agreement has been duly executed and delivered by, and constitutes a valid
and binding obligation of, Issuer, enforceable against Issuer in accordance with
its terms, except as enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant hereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any preemptive rights.
(c) Upon receipt of the necessary regulatory approvals as contemplated
by this Agreement, the execution, delivery and performance of this Agreement
does not or will not, and the consummation by Issuer of any of the transactions
contemplated hereby will not, constitute or result in (i) a breach or violation
of, or a default under, its certificate of incorporation or by-laws, or the
comparable governing instruments of any of its subsidiaries, or (ii) a breach or
violation of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance or regulation or judgment, decree, order,
award or governmental or non-governmental permit or license to which it or any
of its subsidiaries is subject, that would in any case give any other person the
ability to prevent or enjoin Issuer's performance under this Agreement in any
material respect.
SECTION 11. Assignment of Option by Grantee. (a) Neither of the parties
hereto may assign any of its rights or delegate any of its obligations under
this Agreement or the Option created hereunder to any other person without the
express written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event;
provided, however, that until the date 15 days following the date at which the
Federal Reserve Board approves an application by Grantee under the BHC Act to
acquire the shares of Common Stock subject to the Option, Grantee may not assign
its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase securities representing in excess of 2% of the aggregate voting
power of Issuer, (iii) an assignment to a single party (e.g., a broker or
investment banker) for the purpose of conducting a widely dispersed public
distribution on Grantee's behalf, or (iv) any other manner approved by the
Federal Reserve Board. Grantee will pay any reasonable out-of-pocket costs and
expenses of Issuer in connection with any such assignment. The term "Grantee" as
used in this Agreement shall also be deemed to refer to Grantee's permitted
assigns.
(b) Any assignment of rights of Grantee to any permitted assignee of
Grantee hereunder shall bear the restrictive legend at the beginning thereof
substantially as follows:
<PAGE>
"The transfer of the option represented by this assignment and the
related option agreement is subject to resale restrictions arising
under the Securities Act of 1933, as amended and to certain provisions
of an agreement between Summit Bancorp. and Collective Bancorp, Inc.
("Issuer") dated as of the 27th day of February, 1997. A copy of such
agreement is on file at the principal office of Issuer and will be
provided to any permitted assignee of the Option without change upon
receipt by Issuer of a written request therefor."
It is understood and agreed that (i) the reference to the resale restrictions of
the Securities Act in the above legend shall be removed by delivery of
substitute assignments without such reference if Grantee shall have delivered to
Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel,
in form and substance satisfactory to Issuer, to the effect that such legend is
not required for purposes of the Securities Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be removed by delivery of
substitute assignments without such reference if the Option has been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such assignments shall
bear any other legend as may be required by law.
SECTION 12. Application for Regulatory Approval. If Grantee is entitled
to exercise the Option and has sent a notice to Issuer pursuant to Section 2(e),
each of Grantee and Issuer will use its reasonable efforts to make all filings
with, and to obtain consents of, all third parties and the Federal Reserve Board
and other Governmental Authorities necessary to the consummation of the
transactions contemplated by this Agreement, including, without limitation,
making application for listing or quotation, as the case may be, of the shares
of Common Stock issuable hereunder on the NASDAQ National Market System and
applying to the Federal Reserve Board under the BHC Act and to state banking
authorities for approval to acquire the shares issuable hereunder.
SECTION 13. Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement by either
party hereto and that the obligations of the parties shall hereto be enforceable
by either party hereto through injunctive or other equitable relief. Both
parties further agree to waive any requirement for the securing or posting of
any bond in connection with the obtaining of any such equitable relief and that
this provision is without prejudice to any other rights that the parties hereto
may have for any failure to perform this Agreement.
SECTION 14. Separability of Provisions. If any term, provision,
covenant or restriction contained in this Agreement is held by a court or a
federal or state regulatory agency of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated. If for any reason such
court or regulatory agency determines that Grantee is not permitted to acquire,
or Issuer is not permitted to repurchase, pursuant to Section 7, the full number
of shares of Common Stock provided in Section 1 (as adjusted pursuant hereto),
it is the express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible, without
any amendment or
<PAGE>
modification hereof.
SECTION 15. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram, telecopy or telex, or by registered or certified
mail (postage prepaid, return receipt requested) at the respective addresses of
the parties set forth in the Merger Agreement.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
SECTION 17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 18. Expenses. Except as otherwise expressly provided herein,
each of the parties hereto shall bear and pay all costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
SECTION 19. Entire Agreement; No Third-Party Beneficiaries. Except as
otherwise expressly provided herein or in the Merger Agreement, this Agreement
contains the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
SECTION 20. Merger Agreement. Nothing contained in this Agreement shall
be deemed to authorize Issuer or Grantee to breach any provision of the Merger
Agreement.
SECTION 21. Majority in Interest. In the event that any selection or
determination is to be made by Grantee or the Owner hereunder and at the time of
such selection or determination there is more than one Grantee or Owner, such
selection shall be made by a majority in interest of such Grantees or Owners.
SECTION 22. Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and such Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
SECTION 23. No Rights as Shareholder. Except to the extent Grantee
exercises the Option, Grantee shall have no rights to vote or receive dividends
or have any other rights as a shareholder with respect to shares of Common Stock
covered hereby.
<PAGE>
SECTION 24. Grantee Representation. The Option and any Option Shares or
other securities acquired by Grantee upon exercise of the Option are not being,
and will not be, as the case may be, acquired with a view to the public
distribution thereof in the United States except as provided for in Sections 6
and 11 hereof and neither the Option nor any Option Shares or other securities
acquired by Grantee upon exercise of the Option will be transferred or otherwise
disposed of by Grantee except in a transaction registered or exempt from
registration under the Securities Act.
IN WITNESS WHEREOF, each of the parties has caused this Stock Option
Agreement to be executed on its behalf by their officers thereunto duly
authorized, all as of the date first above written.
Summit Bancorp.
By /S/ John G. Collins
John G. Collins
Vice Chairman
Collective Bancorp, Inc.
By /S/ Thomas H. Hamilton
Thomas H. Hamilton
Chairman & Chief Executive Officer
