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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) May 18, 1999
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FULTON BANCORP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-21273 43-1754577
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(State or other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization File Number) Identification No.)
410 Market Street, Fulton, Missouri 65251
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(Address of Principal Executive Offices) (Zip Code)
(573) 642-6617
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(Registrant's Telephone Number, including Area Code)
Not Applicable
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(Former Name or Former Address, If Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
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On May 18, 1999, Fulton Bancorp, Inc. ("Fulton"), entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Central Bancompany,
Inc. ("Central"). The Merger Agreement is filed as Exhibit 2.1 hereto and is
incorporated herein by reference. The Merger Agreement provides that a
wholly-owned subsidiary of Central will be merged with and into Fulton, with
Fulton being the surviving entity (the "Merger") and becoming a wholly-owned
subsidiary of Central. Immediately following the consummation of the Merger,
Fulton Savings Bank, F.S.B., a federally chartered savings association and
wholly-owned subsidiary of Fulton, will merge with and into The Central Trust
Bank, a trust company organized under the laws of the State of Missouri and a
subsidiary of Central.
Pursuant to the terms of the Merger Agreement, each share of Fulton common
stock, par value $.01 per share, issued and outstanding at the Effective Time of
the Merger, shall become and be converted into the right to receive $19.15 in
cash.
Consummation of the Merger is subject to various conditions, including the
approval of the shareholders of Fulton and the receipt of all requisite
regulatory approvals.
The press release issued by Fulton with respect to the Merger is filed
herewith as Exhibit 99.1.
The summary of the Merger Agreement is not complete and is qualified in
its entirety by reference to the complete text of such documents filed as an
exhibit herewith and incorporated herein by reference.
ITEM 7(C). FINANCIAL STATEMENTS AND EXHIBITS.
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Exhibit 2.1 Agreement and Plan of Merger, dated as of May 18, 1999, by and
between Central Bancompany, Inc. and Fulton Bancorp, Inc.
Exhibit 99.1 Press Release issued by Fulton Bancorp, Inc. on May 18, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FULTON BANCORP, INC.
Dated: May 21, 1999 By: \s\ Kermit D. Gohring
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Kermit D. Gohring
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit 2.1 Agreement and Plan of Merger, dated as of May 18, 1999, by and
between Central Bancompany, Inc. and Fulton Bancorp, Inc.
Exhibit 99.1 Press Release issued by Fulton Bancorp, Inc. on May 18, 1999.
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AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 18, 1999
BY AND BETWEEN
CENTRAL BANCOMPANY, INC.
AND
FULTON BANCORP, INC.
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TABLE OF CONTENTS
PAGE NO.
Introductory Statement.........................................................4
ARTICLE I
THE MERGER..................................................................4
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Section 1.1. Structure of the Merger.......................................4
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Section 1.2. Effect on Outstanding Shares of Fulton Common Stock...........4
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Section 1.3. Exchange Procedures...........................................5
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Section 1.4. Effect on Outstanding Shares of Acquisition Sub Common
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Stock.........................................................7
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Section 1.5. Stock Options; Restricted Stock...............................7
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Section 1.6. Bank Merger...................................................7
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Section 1.7. Directors and Officers of Fulton at Effective Time............7
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Section 1.8. Alternative Structure.........................................8
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Section 1.9. Certificate of Incorporation and Bylaws of the Surviving
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Corporation...................................................8
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ARTICLE II
REPRESENTATIONS AND WARRANTIES..............................................8
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Section 2.1. Disclosure Letters............................................8
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Section 2.2. Representations and Warranties of Fulton......................8
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Section 2.3. Representations and Warranties of Central....................21
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ARTICLE III
CONDUCT PENDING THE MERGER.................................................24
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Section 3.1. Conduct of Fulton's Business Prior to the Effective Time.....24
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Section 3.2. Forbearance by Fulton........................................25
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Section 3.3. Conduct of Central's Business Prior to the Effective Time....28
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ARTICLE IV
COVENANTS..................................................................28
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Section 4.1. Acquisition Proposals........................................28
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Section 4.2. Certain Policies of Fulton...................................29
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Section 4.3. Access and Information.......................................29
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Section 4.4. Certain Filings, Consents and Arrangements...................30
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Section 4.5. Antitakeover Provisions......................................30
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Section 4.6. Additional Agreements........................................30
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Section 4.7. Publicity....................................................31
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Section 4.8. Stockholders Meeting.........................................31
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Section 4.9. Proxy Statement..............................................31
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Section 4.10. Notification of Certain Matters..............................31
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Section 4.11. Employees, Directors and Officers............................32
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Section 4.12. Indemnification..............................................33
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ARTICLE V
CONDITIONS TO CONSUMMATION.................................................34
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Section 5.1. Conditions to Each Party's Obligations.......................34
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Section 5.2. Conditions to the Obligations of Central.....................35
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Section 5.3. Conditions to the Obligations of Fulton......................35
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ARTICLE VI
TERMINATION................................................................36
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Section 6.1. Termination..................................................36
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Section 6.2. Termination Fees.............................................37
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Section 6.3. Effect of Termination........................................37
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ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME.................................38
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Section 7.1. Effective Date and Effective Time............................38
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Section 7.2. Deliveries at the Closing....................................38
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ARTICLE VIII
CERTAIN OTHER MATTERS......................................................38
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Section 8.1. Certain Definitions; Interpretation..........................38
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Section 8.2. Survival.....................................................39
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Section 8.3. Waiver; Amendment............................................39
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Section 8.4. Counterparts.................................................39
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Section 8.5. Governing Law................................................39
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Section 8.6. Expenses.....................................................39
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Section 8.7. Notices......................................................39
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Section 8.8. Entire Agreement; etc........................................40
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Section 8.9. Successors and Assigns; Assignment...........................41
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AGREEMENT AND PLAN OF MERGER
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This is an AGREEMENT AND PLAN OF MERGER, dated as of the 18th day of
May, 1999 ("AGREEMENT"), by and between Central Bancompany, Inc., a Missouri
corporation ("CENTRAL"), and Fulton Bancorp, Inc., a Delaware corporation
("FULTON").
INTRODUCTORY STATEMENT
The Board of Directors of each of Central and Fulton (i) has
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of Central and
Fulton, respectively, and in the best interests of their respective stockholders
and (ii) has approved, at meetings of each of such Boards of Directors, this
Agreement.
Central and Fulton desire to make certain representations,
warranties and agreements in connection with the business combination and
related transactions provided for herein and to prescribe various conditions to
such transactions.
In consideration of their mutual promises and obligations hereunder,
the parties hereto adopt and make this Agreement and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
ARTICLE I
THE MERGER
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Section 1.1. Structure of the Merger. Prior to the Effective Date
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(as defined in SECTION 7.1), Central will form a Delaware corporation that will
be a wholly owned subsidiary of Central ("ACQUISITION SUB"). On the Effective
Date, Acquisition Sub will merge with and into Fulton ("MERGER"), with Fulton
being the surviving entity, pursuant to the provisions of, and with the effect
provided in, the Delaware General Corporation Law ("DGCL"). Upon consummation
of the Merger, the separate corporate existence of Acquisition Sub shall cease.
Fulton shall be the surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Delaware and its name and separate
corporate existence, with all of its rights, privileges, immunities, powers and
franchises, shall continue unaffected by the Merger. From and after the
Effective Time (as defined in SECTION 7.1), Fulton shall possess all of the
properties and rights and be subject to all of the liabilities and obligations
of Acquisition Sub, all as more fully described in the DGCL.
Section 1.2. Effect on Outstanding Shares of Fulton Common Stock.
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(a) By virtue of the Merger, automatically and without any action
on the part of the holder thereof, each share of common stock, par value
$.01 per share, of Fulton ("FULTON COMMON STOCK") issued and outstanding at
the Effective Time, other than Excluded Shares (as
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defined below), shall become and be converted into the right to receive $19.15
in cash (the "MERGER CONSIDERATION").
"EXCLUDED SHARES" shall consist of (i) shares the holder of
which pursuant to any applicable law providing for dissenters' or appraisal
rights is entitled to receive payment in accordance with the provisions of any
such law, such holder to have only the rights provided in any such law (the
"DISSENTERS' SHARES"), (ii) shares held directly or indirectly by Central
(other than shares held in a fiduciary capacity or in satisfaction of a debt
previously contracted) and (iii) shares held by Fulton as treasury stock.
(b) If, between the date of this Agreement and the Effective Time,
the outstanding shares of Fulton Common Stock shall have been changed into a
different number of shares or into a different class by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Merger Consideration shall be adjusted correspondingly
to the extent appropriate to reflect such change in the number of outstanding
shares.
(c) As of the Effective Time, each Excluded Share, other
than Dissenters' Shares, shall be cancelled and retired and shall cease to
exist, and no exchange or payment shall be made with respect thereto.
Section 1.3. Exchange Procedures.
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(a) Appropriate transmittal materials ("LETTER OF TRANSMITTAL")
shall be mailed as soon as reasonably practicable after the Effective Time, and
in no event later than five business days thereafter, to each holder of record
of Fulton Common Stock as of the Effective Time. A Letter of Transmittal will be
deemed properly completed only if accompanied by certificates representing all
shares of Fulton Common Stock to be converted thereby.
(b) At and after the Effective Time, each certificate ("FULTON
CERTIFICATE") previously representing shares of Fulton Common Stock (except as
specifically set forth in SECTION 1.2) shall represent only the right to receive
the Merger Consideration multiplied by the number of shares of Fulton Common
Stock previously represented by the Fulton Certificate.
(c) Prior to the Effective Time, Central shall deposit, or shall
cause to be deposited, in a segregated account with The Central Trust Bank
("CENTRAL BANK"), which shall act as exchange agent ("EXCHANGE AGENT") for the
benefit of the holders of shares of Fulton Common Stock, for exchange in
accordance with this SECTION 1.3, an amount of cash sufficient to pay the
aggregate Merger Consideration to be paid with respect to the outstanding shares
of Fulton Common Stock pursuant to SECTION 1.2.
(d) The Letter of Transmittal shall (i) specify that delivery shall
be effected, and risk of loss and title to the Fulton Certificates shall pass,
only upon delivery of the Fulton Certificates to the Exchange Agent, (ii) be in
a form and contain any other provisions as Central may reasonably determine and
(iii) include instructions for use in effecting the surrender of the
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Fulton Certificates in exchange for the Merger Consideration. Upon the proper
surrender of the Fulton Certificates to the Exchange Agent, together with a
properly completed and duly executed Letter of Transmittal, the holder of such
Fulton Certificates shall be entitled to receive in exchange therefor a check
in the amount equal to the cash that such holder has the right to receive
pursuant to SECTION 1.2. Fulton Certificates so surrendered shall forthwith be
canceled. As soon as practicable, but no later than 10 business days following
receipt of the properly completed Letter of Transmittal and any necessary
accompanying documentation, the Exchange Agent shall issue a check as provided
herein. If there is a transfer of ownership of any shares of Fulton Common Stock
not registered in the transfer records of Fulton, the Merger Consideration shall
be issued to the transferee thereof if the Fulton Certificates representing such
Fulton Common Stock are presented to the Exchange Agent, accompanied by all
documents required, in the reasonable judgment of Central and the Exchange
Agent, (x) to evidence and effect such transfer and (y) to evidence that any
applicable stock transfer taxes have been paid.
(e) From and after the Effective Time there shall be no transfers on
the stock transfer records of Fulton of any shares of Fulton Common Stock. If,
after the Effective Time, Fulton Certificates are presented to Central, they
shall be canceled and exchanged for the Merger Consideration deliverable in
respect thereof pursuant to this Agreement in accordance with the procedures set
forth in this SECTION 1.3.
(f) Any portion of the aggregate amount of cash to be paid pursuant
to SECTION 1.2 that remains unclaimed by the stockholders of Fulton for 12
months after the Effective Time shall be repaid by the Exchange Agent to Central
upon the written request of Central. After such request is made, any
stockholders of Fulton who have not theretofore complied with this SECTION 1.3
shall look only to Central for the Merger Consideration deliverable in respect
of each share of Fulton Common Stock such stockholder holds, as determined
pursuant to SECTION 1.2 of this Agreement, without any interest thereon. If
outstanding Fulton Certificates are not surrendered prior to the date on which
such payments would otherwise escheat to or become the property of any
governmental unit or agency, the unclaimed items shall, to the extent permitted
by any abandoned property, escheat or other applicable laws, become the property
of Central (and, to the extent not in its possession, shall be paid over to it),
free and clear of all claims or interest of any person previously entitled to
such claims. Notwithstanding the foregoing, neither the Exchange Agent nor any
party to this Agreement (or any affiliate thereof) shall be liable to any former
holder of Fulton Common Stock for any amount delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(g) Central and the Exchange Agent shall be entitled to rely upon
Fulton's stock transfer books to establish the identity of those persons
entitled to receive the Merger Consideration, which books shall be conclusive
with respect thereto. In the event of a dispute with respect to ownership of
stock represented by any Fulton Certificate, Central and the Exchange Agent
shall be entitled to deposit any Merger Consideration represented thereby in
escrow with an independent third party and thereafter be relieved with respect
to any claims thereto.
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(h) If any Fulton Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Fulton Certificate to be lost, stolen or destroyed and, if required by the
Exchange Agent, the posting by such person of a bond in such amount as the
Exchange Agent may direct as indemnity against any claim that may be made
against it with respect to such Fulton Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Fulton Certificate the
Merger Consideration deliverable in respect thereof pursuant to SECTION 1.2.
Section 1.4. Effect on Outstanding Shares of Acquisition Sub Common
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Stock. By virtue of the Merger, automatically and without any action on the
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part of the holder thereof, each share of Common Stock of Acquisition Sub
issued and outstanding at the Effective Time shall be converted into one share
of the Common Stock of Fulton, as the surviving corporation.
Section 1.5. Stock Options; Restricted Stock.
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(a) At the Effective Time, each option to acquire shares of Fulton
Common Stock ("FULTON OPTION") granted pursuant to the Fulton Bancorp, Inc. 1997
Stock Option Plan (the "FULTON OPTION PLAN") that is then outstanding and
unexercised shall be canceled, and in lieu thereof the holders of such options
shall be paid in cash an amount equal to the product of (i) the number of shares
of Fulton Common Stock subject to such option at the Effective Time and (ii) an
amount equal to the excess of the Merger Consideration over the exercise price
per share of such option, net of any cash which must be withheld under federal
and state income and employment tax requirements. In the event that the exercise
price of a Fulton Option is greater than the Merger Consideration, then at the
Effective Time such Fulton Option shall be canceled without any payment made in
exchange therefor. At the Effective Time, the Fulton Option Plan shall be deemed
terminated.
(b) All unvested shares of restricted stock awarded under the Fulton
Bancorp, Inc. 1997 Management Recognition and Development Plan ("MRDP") shall,
as of the Effective Time, become vested pursuant to the terms of MRDP and
converted into the right to receive the Merger Consideration. At the Effective
Time, the MRDP shall be deemed terminated.
Section 1.6. Bank Merger. Concurrently with or as soon as practicable
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after the execution and delivery of this Agreement, Central Bank, a wholly
owned subsidiary of Central, and Fulton Savings Bank, FSB ("FULTON SAVINGS"),
a wholly owned subsidiary of Fulton, shall enter into the Plan of Bank
Merger, in the form attached hereto as EXHIBIT A, pursuant to which the
merger of Fulton Savings with and into Central Bank ("BANK MERGER") will be
effected. The parties hereto intend that the Bank Merger shall become
effective on the Effective Date and shall take all actions necessary or
appropriate to cause the Bank Merger to become effective immediately following
the Effective Time.
Section 1.7. Directors and Officers of Fulton at Effective Time.
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At the Effective Time, the directors and officers of Fulton shall consist of
the directors and officers of Acquisition Sub serving immediately prior to
the Effective Time, each to hold office in
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accordance with the Certificate of Incorporation and Bylaws of the
surviving corporation until their respective successors are duly elected or
appointed and qualified.
Section 1.8. Alternative Structure. Notwithstanding anything to
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the contrary contained in this Agreement, prior to the Effective Time, Central
may specify that the structure of the transactions contemplated hereby be
revised and the parties shall enter into such alternative transactions as
Central may determine to effect the purposes of this Agreement; PROVIDED,
HOWEVER, that such revised structure shall not (i) alter or change the amount or
kind of the Merger Consideration or the economic benefits of the transactions
contemplated hereby to the holders of Fulton Common Stock, (ii) diminish the
benefits to be received by the directors, officers or employees of Fulton or
Fulton Savings as set forth in or as contemplated by this Agreement, or (iii)
materially impede or delay the receipt of any approval referred to in this
Agreement. This Agreement and any related documents shall be appropriately
amended in order to reflect any such revised structure.
Section 1.9. Certificate of Incorporation and Bylaws of the
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Surviving Corporation. The Certificate of Incorporation and Bylaws of
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Fulton in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation and Bylaws of the surviving corporation
from and after the Effective Time until amended as provided by law.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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Section 2.1. Disclosure Letters. Prior to the execution and
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delivery of this Agreement, Fulton and Central have each delivered to the
other a letter (each, its "DISCLOSURE LETTER") setting forth, among
other things, facts, circumstances and events the disclosure of which is
required or appropriate in relation to any or all of their respective
representations and warranties (and making specific reference to the
Section of this Agreement to which they relate). The mere inclusion of a fact,
circumstance or event in a Disclosure Letter shall not be deemed an admission
by a party that such item represents a material exception or that such
item is reasonably likely to result in a Material Adverse Effect (as
defined in Article VIII hereof).
Section 2.2. Representations and Warranties of Fulton. Fulton
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represents and warrants to Central that, except as disclosed in Fulton's
Disclosure Letter:
(a) Organization.
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(i) Fulton is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is registered
as a savings and loan holding company under the Home Owners' Loan Act, as
amended ("HOLA"). Fulton Savings is a stock savings association duly organized,
validly existing and in good standing under the laws of the United States of
America and is a wholly-owned Subsidiary (as defined below) of Fulton. Each
Subsidiary of Fulton other than Fulton Savings is a corporation, limited
liability company or partnership duly organized, validly existing and in good
standing under the laws of its
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jurisdiction of incorporation or organization. Each of Fulton and its
Subsidiaries 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
used in this Agreement, unless the context requires otherwise, the term
"SUBSIDIARY" when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, which is consolidated with
such party for financial reporting purposes or which is controlled, directly or
indirectly, by such party.
(ii) Fulton and each of its Subsidiaries has the requisite
corporate power and authority and is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary.
(iii) Fulton's Disclosure Letter sets forth all of Fulton's
Subsidiaries and all entities (whether corporations, partnerships or similar
organizations), including the corresponding percentage ownership, in which
Fulton owns, directly or indirectly, 5% or more of the ownership interests as of
the date of this Agreement and indicates for each of Fulton's Subsidiaries, as
of such date, its jurisdiction of organization and the jurisdiction(s) wherein
it is qualified to do business. All such Subsidiaries and ownership interests
are in compliance with all applicable laws, rules and regulations relating to
direct investments in equity ownership interests. Fulton owns, either directly
or indirectly, all of the outstanding capital stock of each of its Subsidiaries.
No Subsidiary of Fulton other than Fulton Savings is an "insured depository
institution" as defined in the Federal Deposit Insurance Act, as amended
("FDIA"), and the applicable regulations thereunder. All of the shares of
capital stock of Fulton's Subsidiaries are fully paid, nonassessable and not
subject to any preemptive rights and are owned by Fulton or a Subsidiary of
Fulton free and clear of any claims, liens, encumbrances or restrictions (other
than those imposed by applicable federal and state securities laws), and there
are no agreements or understandings with respect to the voting or disposition of
any such shares.
(iv) The deposits of Fulton Savings are insured by the
Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") to the extent provided in the FDIA.
(b) Capital Structure.
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(i) The authorized capital stock of Fulton consists of
7,000,000 shares of Fulton Common Stock and 1,000,000 shares of preferred stock,
par value $.01 per share. As of the date of this Agreement (A) 1,653,949 shares
of Fulton Common Stock were issued and outstanding, not including shares held in
treasury, (B) no shares of Fulton preferred stock were issued and outstanding,
(C) no shares of Fulton Common Stock were reserved for issuance, except that
171,925 shares of Fulton Common Stock were reserved for issuance pursuant to the
Fulton Option Plan, (D) no shares of Fulton preferred stock were reserved for
issuance and (E) 111,462 shares of Fulton Common Stock were held by Fulton in
its treasury. The authorized capital stock of Fulton Savings consists of 1,000
shares of common stock, par value $1.00 per share, and 9,000 shares of preferred
stock having no par value. As of the date of this Agreement, 1,000 shares of
such common stock were outstanding, no shares of such preferred stock were
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outstanding and all outstanding shares of such common stock were, and as of the
Effective Time will be, owned by Fulton. All outstanding shares of capital stock
of Fulton and Fulton Savings are duly authorized and validly issued, fully paid
and nonassessable and not subject to any preemptive rights and, with respect to
shares of Fulton held by Fulton in its treasury or by its Subsidiaries and
shares of Fulton Savings, are free and clear of all liens, claims, encumbrances
or restrictions (other than those imposed by applicable federal and state
securities laws) and there are no agreements or understandings with respect to
the voting or disposition of any such shares. Fulton's Disclosure Letter sets
forth a complete and accurate list of all outstanding options to purchase
Fulton Common Stock that have been granted pursuant to the Fulton Option
Plan, including the names of the optionees, dates of grant, exercise
prices, dates of vesting, dates of termination and shares subject to
each grant.
(ii) No bonds, debentures, notes or other indebtedness of
Fulton having the right to vote on any matters on which stockholders may vote
are issued or outstanding.
(iii) As of the date of this Agreement, except for options
granted pursuant to the Fulton Option Plan, neither Fulton nor any of its
Subsidiaries has or is bound by any outstanding subscriptions, options,
warrants, calls, rights, convertible securities, commitments or agreements of
any character obligating Fulton or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any additional shares of capital
stock of Fulton or any of its Subsidiaries or obligating Fulton or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the date hereof,
there are no outstanding contractual obligations of Fulton or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Fulton or any of its Subsidiaries.
(c) Authority.
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(i) Fulton has all requisite corporate power and authority to
enter into this Agreement and, subject to approval of this Agreement by the
requisite vote of Fulton's stockholders and receipt of all required regulatory
or governmental approvals, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and, subject to the approval of
this Agreement by Fulton's stockholders, the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
actions on the part of Fulton. This Agreement has been duly and validly executed
and delivered by Fulton and constitutes a valid and binding obligation of
Fulton, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles
of equity, whether applied in a court of law or a court of equity.
(ii) Fulton Savings has all requisite corporate power and
authority to enter into the Plan of Bank Merger and, subject to approval of the
Plan of Bank Merger by Fulton as the sole stockholder of Fulton Savings and the
receipt of all required regulatory or governmental approvals, to consummate the
transactions contemplated thereby. The execution and delivery of the Plan of
Bank Merger and the consummation of the transactions contemplated
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thereby have been duly authorized by all necessary corporate actions on the part
of Fulton Savings. The Plan of Bank Merger, upon execution and delivery by
Fulton Savings, will be duly and validly executed and delivered by Fulton
Savings and will constitute a valid and binding obligation of Fulton Savings,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity, whether
applied in a court of law or a court of equity.
(d) Stockholder Approval; Fairness Opinion. The affirmative vote of
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a majority of the outstanding shares of Fulton Common Stock entitled to vote on
this Agreement is the only vote of the stockholders of Fulton required for
approval of this Agreement and the consummation of the Merger and the related
transactions contemplated hereby. Fulton has received the written opinion of
Manchester Partners, L.L.C., a division of D.R. Hancock & Co., to the effect
that, as of the date hereof, the Merger Consideration to be received by Fulton's
stockholders is fair, from a financial point of view, to such stockholders.
(e) No Violations; Consents. The execution, delivery and
-----------------------
performance of this Agreement by Fulton do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) assuming receipt of
all Requisite Regulatory Approvals (as defined in SECTION 2.3(C)) and requisite
stockholder approvals, a violation of any law, rule or regulation or any
judgment, decree, order, governmental permit or license to which Fulton or any
of its Subsidiaries (or any of their respective properties) is subject, (ii) a
violation of the certificate of incorporation or bylaws of Fulton or the
similar organizational documents of any of its Subsidiaries or (iii) a breach
or violation of, or a default under (or an event which, with due notice or
lapse of time or both, would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of Fulton or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, indenture, deed of
trust, loan agreement or other agreement, instrument or obligation to which
Fulton or any of its Subsidiaries is a party, or to which any of their
respective properties or assets may be subject. The consummation by Fulton and
Fulton Savings of the transactions (including the Bank Merger) contemplated
hereby (exclusive of the effect of any changes effected pursuant to SECTION 1.8)
will not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement, or
instrument, other than (x) the approval of the holders of a majority of the
outstanding shares of Fulton Common Stock entitled to vote thereon, (y) the
approval of Fulton as the sole stockholder of Fulton Savings and (z) the consent
of the Office of Thrift Supervision ("OTS"). As of the date hereof, the
executive officers of Fulton know of no reason pertaining to Fulton why any of
the approvals referred to in this SECTION 2.2(E) should not be obtained.
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<PAGE> 12
(f) Reports and Financial Statements.
--------------------------------
(i) Fulton and each of its Subsidiaries have each timely filed
all material reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
June 30, 1997 with (a) the FDIC, (b) the OTS, (c) the National Association of
Securities Dealers, Inc. ("NASD") and (d) the Securities and Exchange Commission
("SEC") (collectively, "FULTON'S REPORTS") and have paid all fees and
assessments due and payable in connection therewith. As of their respective
dates, none of Fulton's Reports contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. All of Fulton's Reports filed with
the SEC complied in all material respects with the applicable requirements of
the Securities Exchange Act of 1934, as amended ("EXCHANGE ACT") and the rules
and regulations of the SEC promulgated thereunder.
(ii) Each of the financial statements of Fulton included in
Fulton's Reports complied as to form, as of their respective dates of filing
with the SEC, in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto
and have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited financial statements, as permitted by the SEC). Each of the
consolidated statements of condition contained or incorporated by reference
in Fulton's Reports (including in each case any related notes and schedules)
and each of the consolidated statements of operations, consolidated statements
of cash flows and consolidated statements of changes in stockholders' equity,
contained or incorporated by reference in Fulton's Reports (including in each
case any related notes and schedules) fairly presented (x) the financial
position of the entity or entities to which it relates as of its date and (y)
the results of operations, stockholders' equity and cash flows, as the case
may be, of the entity or entities to which it relates for the periods set
forth therein (subject, in the case of unaudited interim statements, to
normal year-end audit adjustments that are not material in amount or
effect), in each case in accordance with GAAP, except as may be noted therein.
(g) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
Fulton's Reports filed on or prior to the date of this Agreement, since June 30,
1998, (i) Fulton and its Subsidiaries have not incurred any liability, except in
the ordinary course of their business consistent with past practice, (ii)
Fulton and its Subsidiaries have conducted their respective businesses only
in the ordinary and usual course of such businesses consistent with their past
practices, (iii) there has not been any Material Adverse Effect with respect to
Fulton and its Subsidiaries, taken as a whole, and (iv) there has been no
change in any accounting principles, practices or methods of Fulton or any
of its Subsidiaries other than as required by GAAP.
(h) Absence of Claims. No litigation, controversy, claim, action,
-----------------
suit or other legal administrative or arbitration proceeding before any court,
governmental agency or arbitrator is pending against Fulton or any of its
Subsidiaries and no such litigation, controversy, claim, action, suit or
proceeding has been threatened.
12
<PAGE> 13
(i) Absence of Regulatory Actions. Since June 30, 1997, neither
-------------------------------
Fulton nor any of its Subsidiaries has been a party to any cease and desist
order, written agreement or memorandum of understanding with, or any commitment
letter or similar undertaking to, or has been subject to any action, proceeding,
order or directive by, or has been a recipient of any extraordinary supervisory
letter from any federal or state governmental authority charged with the
supervision or regulation of depository institutions or depository institution
holding companies or engaged in the insurance of bank and/or savings and loan
deposits ("GOVERNMENT REGULATORS"), or has adopted any board resolutions at the
request of any Government Regulator, or has been advised by any Government
Regulator that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such action, proceeding, order,
directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar
undertaking.
(j) Taxes. All federal, state, local and foreign tax returns required
-----
to be filed by or on behalf of Fulton or any of its Subsidiaries have been
timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all material respects. All taxes shown on
such returns, all taxes required to be shown on returns for which extensions
have been granted and all other taxes required to be paid by Fulton or any of
its Subsidiaries have been paid in full or adequate provision has been made for
any such taxes on Fulton's balance sheet (in accordance with GAAP). For purposes
of this SECTION 2.2(J), the term "taxes" shall include all income, franchise,
gross receipts, real and personal property, real property transfer and gains,
wage and employment taxes. As of the date of this Agreement, there is no audit
examination, deficiency assessment, tax investigation or refund litigation with
respect to any taxes of Fulton or any of its Subsidiaries, and no claim has been
made by any authority in a jurisdiction where Fulton or any of its Subsidiaries
do not file tax returns that Fulton or any such Subsidiary is subject to
taxation in that jurisdiction. All taxes, interest, additions and penalties due
with respect to completed and settled examinations or concluded litigation
relating to Fulton or any of its Subsidiaries have been paid in full or adequate
provision has been made for any such taxes on Fulton's balance sheet (in
accordance with GAAP). Fulton and its Subsidiaries have not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect. Fulton and each
of its Subsidiaries has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party, and Fulton
and each of its Subsidiaries has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61 of the
Internal Revenue Code (the "IRC") and similar applicable state and local
information reporting requirements.
(k) Agreements.
----------
(i) Fulton and its Subsidiaries are not bound by any material
contract (as defined in Item 601(b)(10) of Regulation S-K promulgated by the
SEC), to be performed after the date hereof that has not been filed with or
incorporated by reference in Fulton's Reports. Neither Fulton nor any of its
Subsidiaries is a party to an oral or written (A) agreement (other than
agreements with any officer or director) requiring the payment by Fulton or a
subsidiary of
13
<PAGE> 14
Fulton of $25,000 or more per annum not terminable on 60 days' or less notice,
(B) agreement with any present or former director, officer or employee of Fulton
or any of its Subsidiaries the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Fulton or any of its Subsidiaries of the nature contemplated by this Agreement,
(C) agreement with respect to any employee or director of Fulton or any of its
Subsidiaries providing any term of employment or compensation guarantee
extending for a period longer than 60 days, (D) agreement or plan, including any
stock option plan, phantom stock or stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting or payment 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 or (E) agreement
containing covenants that limit the ability of Fulton 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, Fulton
(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). Fulton
has previously delivered to Central true and complete copies of each agreement
and other documents referenced in Fulton's Disclosure Letter with respect to
this SECTION 2.2(K)(I).
(ii) Neither Fulton nor any of its Subsidiaries is in default
under (and no event has occurred which, with due notice or lapse of time or
both, would constitute a default under) or is in violation of any provision of
any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or
other agreement to which it is a party or by which it is bound or to which any
of its respective properties or assets is subject.
(iii) Fulton and each of its Subsidiaries owns or possesses
valid and binding licenses and other rights to use without payment all patents,
copyrights, trade secrets, trade names, servicemarks and trademarks used in its
businesses, and neither Fulton nor any of its Subsidiaries has received any
notice of conflict with respect thereto that asserts the right of others. Each
of Fulton and its Subsidiaries has performed all the obligations required to be
performed by it and are not in default under any contract, agreement,
arrangement or commitment relating to any of the foregoing.
(l) Labor Matters. Fulton and its Subsidiaries are in material
-------------
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice. Neither Fulton nor any of its Subsidiaries
is or has ever been a party to, or is or has ever been bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization with respect to its employees, nor is Fulton or any
of its Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and conditions of
employment nor has any such proceeding been threatened, nor is there any strike,
other labor dispute or organizational effort involving Fulton or any of its
Subsidiaries pending or threatened.
14
<PAGE> 15
(m) Employee Benefit Plans.
----------------------
(i) Fulton's Disclosure Letter contains a complete and
accurate list of all pension, retirement, stock option, stock purchase, stock
ownership, savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other benefit
plans, contracts, agreements and arrangements, including, but not limited to,
"employee benefit plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), incentive and welfare
policies, contracts, plans and arrangements and all trust agreements related
thereto with respect to any present or former directors, officers or other
employees of Fulton or any of its Subsidiaries (hereinafter referred to
collectively as the "FULTON EMPLOYEE PLANS"). There has been no announcement or
commitment by Fulton or any of its Subsidiaries to create an additional Fulton
Employee Plan, or to amend any Fulton Employee Plan, except for amendments
required by applicable law which do not materially increase the cost of such
Fulton Employee Plan. With respect to each Fulton Employee Plan, Fulton has
supplied to Central a true and correct copy of (A) the annual report on the
applicable form of the Form 5500 series filed with the Internal Revenue Service
("IRS") for the most recent plan year, if required to be filed, (B) such Fulton
Employee Plan, including amendments thereto, (C) each trust agreement, insurance
contract or other funding arrangement relating to such Fulton Employee Plan,
including amendments thereto, and (D) the most recent determination letter
issued by the IRS if such Fulton Employee Plan is a Fulton Qualified Plan (as
defined below).
(ii) There is no pending or threatened litigation,
administrative action or proceeding relating to any Fulton Employee Plan. All of
the Fulton Employee Plans comply in all material respects with all applicable
requirements of ERISA, the IRC and other applicable laws. There has occurred no
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the IRC) with respect to the Fulton Employee Plans which is likely to result in
the imposition of any penalties or taxes under Section 502(i) of ERISA or
Section 4975 of the IRC upon Fulton or any of its Subsidiaries.
(iii) Neither Fulton nor any of its Subsidiaries maintains a
pension plan or any other employee benefit plan subject to Title IV of ERISA.
Neither Fulton nor any of its Subsidiaries has contributed to any "multiemployer
plan," as defined in Section 3(37) of ERISA, on or after September 26, 1980.
(iv) Each Fulton Employee Plan that is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) and which is intended to be
qualified under Section 401(a) of the IRC (a "FULTON QUALIFIED PLAN") has
received a favorable determination letter from the IRS, and Fulton and its
Subsidiaries are not aware of any circumstances likely to result in revocation
of any such favorable determination letter. Each Fulton Qualified Plan that is
an "employee stock ownership plan" (as defined in Section 4975(e)(7) of the IRC)
has satisfied all of the applicable requirements of Sections 409 and 4975(e)(7)
of the IRC and the regulations thereunder in all respects and any assets of any
such Fulton Qualified Plan that are not allocated to participants' individual
accounts are pledged as security for, and may be applied to satisfy, any
securities acquisition indebtedness.
15
<PAGE> 16
(v) Fulton and its Subsidiaries do not have any obligations
for post-retirement or post-employment benefits under any Fulton Employee Plan
that cannot be amended or terminated upon 60 days' notice or less without
incurring any liability thereunder, except for coverage required by Part 6 of
Title I of ERISA or Section 4980B of the IRC, or similar state laws, the cost of
which is borne by the insured individuals. With respect to Fulton or any of its
Subsidiaries, for the Fulton Employee Plans listed in Fulton's Disclosure
Letter, the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any payment or series of
payments by Fulton or any of its Subsidiaries to any person which is an "excess
parachute payment" (as defined in Section 280G of the IRC), increase or secure
(by way of a trust or other vehicle) any benefits payable under any Fulton
Employee Plan or accelerate the time of payment or vesting of any such benefit.
(n) Title to Assets. Fulton's Disclosure Letter contains a complete
---------------
and accurate list of all real property owned or leased by Fulton or any of its
Subsidiaries, including all properties of Fulton or any of its Subsidiaries
classified as "Real Estate Owned" or words of similar import (the "REAL
PROPERTY"). To the knowledge of Fulton, none of the buildings, structures or
other improvements located on the Real Property encroaches upon or over any
adjoining parcel or real estate or any easement or right-of-way. Fulton and each
of its Subsidiaries have good and marketable title to their respective
properties and assets (including any intellectual property asset such as any
trademark, service mark, tradename or copyright) and property acquired in a
judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or
similar transfer whether real or personal, tangible or intangible, reflected on
the consolidated financial statements of Fulton as of June 30, 1998, or acquired
after such date, other than such items of personal property as have been
disposed of in the ordinary course of business since June 30, 1998, in each case
free and clear of any liens, security interests, encumbrances, mortgages,
pledges, restrictions, charges or rights or interests of others, except pledges
to secure deposits and other liens incurred in the ordinary course of business.
Each lease pursuant to which Fulton or any of its Subsidiaries is lessee or
lessor is valid and in full force and effect and neither Fulton nor any of its
Subsidiaries, nor any other party to any such lease, is in default or in
violation of any provisions of any such lease. All material tangible properties
of Fulton and each of its Subsidiaries are in a good state of maintenance and
repair, conform with all applicable ordinances, regulations and zoning laws and
are considered by Fulton to be adequate for the current business of Fulton and
its Subsidiaries.
(o) Compliance with Laws. Fulton and each of its Subsidiaries has
--------------------
all permits, licenses, certificates of authority, orders and approvals of, and
has made all filings, applications and registrations with, all federal, state,
local and foreign governmental or regulatory bodies (each, a "GOVERNMENTAL
ENTITY") that are required in order to permit it to carry on its business as it
is presently conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect, and, to the best knowledge of
Fulton, no suspension or cancellation of any of them is threatened. Neither
Fulton nor any of its Subsidiaries are in material violation of, is, to the
knowledge of Fulton, under investigation with respect to any material violation
of, or has been given notice or been charged with any material violation of, any
law, ordinance, regulation, order, writ, rule, decree or condition to approval
of any Governmental Entity.
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<PAGE> 17
(p) Fees. Other than financial advisory services performed for
----
Fulton by Manchester Partners, L.L.C., neither Fulton nor any of its
Subsidiaries, nor any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder has acted directly or indirectly for Fulton or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby. Fulton has provided Central with a true and correct copy of the contract
between Fulton and Manchester Partners, L.L.C.
(q) Environmental Matters. There is no suit, claim, action, demand,
---------------------
executive or administrative order, directive, investigation or proceeding
pending or threatened before any court, governmental agency or board or other
forum against Fulton or any of its Subsidiaries for alleged noncompliance
(including by any predecessor) with, or liability under, any Environmental Law
(as defined below) or relating to the presence of or release into the
environment of any Hazardous Material (as defined below), whether or not
occurring at or on a site owned, leased or operated by it or any of its
Subsidiaries. To Fulton's knowledge, the properties currently owned or operated
by Fulton or any of its Subsidiaries (including, without limitation, soil,
groundwater or surface water on, under or adjacent to the properties, and
buildings thereon) are not contaminated with and do not otherwise contain any
Hazardous Material other than as permitted under applicable Environmental Law.
Neither Fulton nor any of its Subsidiaries has received any notice, demand
letter, executive or administrative order, directive, request or other
communication (written or oral) for information from any federal, state, local
or foreign governmental entity or any third party indicating that it may be in
violation of, or liable under, any Environmental Law. To Fulton's knowledge,
there are no underground storage tanks on, in or under any properties owned or
operated by Fulton or any of its Subsidiaries and no underground storage tanks
have been closed or removed from any properties owned or operated by Fulton or
any of its Subsidiaries. To Fulton's knowledge, during the period of Fulton's or
any of its Subsidiaries' ownership or operation of any of their respective
current properties, there has been no contamination by or release of Hazardous
Materials in, on, under or affecting such properties. To Fulton's knowledge,
prior to the period of Fulton's or any of its Subsidiaries' ownership or
operation of any of their respective current properties, there was no
contamination by or release of Hazardous Material in, on, under or affecting
such properties.
"ENVIRONMENTAL LAW" means (i) any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, directive, executive or administrative
order, judgment, decree, injunction, legal requirement or agreement with any
Governmental Entity relating to (A) the protection, preservation or restoration
of the environment (which includes, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, structures, soil, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety as it relates to Hazardous Materials, or (B) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of, Hazardous Materials, in each case as amended and as now in effect. The term
Environmental Law includes all federal, state and local laws, rules, regulations
or requirements relating to the protection of the environment or health and
safety, including, without limitation, (i) the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments
17
<PAGE> 18
and Reauthorization Act of 1986, the Federal Water Pollution Control Act of
1972, the Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976 (including, but not limited to,
the Hazardous and Solid Waste Amendments thereto and Subtitle I relating to
underground storage tanks), the Federal Solid Waste Disposal and the Federal
Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970 as it relates to
Hazardous Materials, the Federal Hazardous Substances Transportation Act, the
Emergency Planning and Community Right-To-Know Act, the Safe Drinking Water Act,
the Endangered Species Act, the National Environmental Policy Act, the Rivers
and Harbors Appropriation Act or any so-called "Superfund" or "Superlien" law,
each as amended and as now or hereafter in effect, and (ii) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of or exposure to any Hazardous Material.
"HAZARDOUS MATERIAL" means any substance (whether solid, liquid or
gas) which is or could be detrimental to human health or safety or to the
environment, currently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any substance
containing any such substance as a component. Hazardous Material includes,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial
substance, oil or petroleum, or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos-containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl.
(r) Loan Portfolio; Allowance.
-------------------------
(i) With respect to each loan owned by Fulton or its
Subsidiaries in whole or in part, to Fulton's knowledge (A) the note and the
related security documents are each legal, valid and binding obligations of the
maker or obligor thereof, enforceable against such maker or obligor in
accordance with their terms, (B) the note and the related security documents,
copies of which are included in the loan files, are true and correct copies of
the documents they purport to be and have not been suspended, amended, modified,
canceled or otherwise changed except as otherwise disclosed by documents in the
applicable loan file and (C) Fulton or one of its Subsidiaries is the sole
holder of legal and beneficial title to each loan reflected in the consolidated
financial statements of Fulton except as otherwise disclosed in the applicable
loan file or on the books and records of Fulton and its Subsidiaries.
(ii) The allowance for loan losses reflected in Fulton's
statement of financial condition at March 31, 1999 was, and the allowance for
possible losses shown on the balance sheets in Fulton's Reports for periods
ending after March 31, 1999 will be, in the opinion of management, adequate to
provide for losses inherent in Fulton's loan portfolio. At the Effective Time,
Fulton Savings' allowance for loan losses shall be not less than $1,100,000.
18
<PAGE> 19
(s) Deposits. None of the deposits of Fulton or any of its
--------
Subsidiaries is a "brokered" deposit.
(t) Anti-takeover Provisions Inapplicable. Fulton and its
-------------------------------------
Subsidiaries have taken all actions required to exempt Fulton, Central,
Acquisition Sub, Central Bank, the Agreement, the Plan of Bank Merger, the
Merger and the Bank Merger from any provisions of an antitakeover nature
contained in their organizational documents, and the provisions of any federal
or state "anti-takeover," "fair price," "moratorium," "control share
acquisition" or similar laws or regulations.
(u) Material Interests of Certain Persons. No officer or director of
-------------------------------------
Fulton, or any "associate" (as such term is defined in Rule 12b-2 under the
Exchange Act) of any such officer or director, has any material interest in any
material contract or property (real or personal), tangible or intangible, used
in or pertaining to the business of Fulton or any of its Subsidiaries.
(v) Insurance. In the opinion of management, Fulton and its
---------
Subsidiaries are presently insured for amounts deemed reasonable by management
against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. All of the
insurance policies and bonds maintained by Fulton and its Subsidiaries are in
full force and effect, Fulton and its Subsidiaries are not in default thereunder
and all material claims thereunder have been filed in due and timely fashion.
(w) Investment Securities; Derivatives.
----------------------------------
(i) Except for investments in Federal Home Loan Bank ("FHLB")
Stock, pledges to secure FHLB borrowings, reverse repurchase agreements entered
into in arms-length transactions pursuant to normal commercial terms and
conditions and entered into in the ordinary course of business and restrictions
that exist for securities to be classified as "held to maturity," none of the
investments reflected in the consolidated balance sheet of Fulton at March 31,
1999, and none of the investment securities held by it or any of its
Subsidiaries since March 31, 1999, is subject to any restriction (contractual or
statutory) that would materially impair the ability of the entity holding such
investment freely to dispose of such investment at any time.
(ii) Except for adjustable-rate mortgage loans and
adjustable-rate advances, neither Fulton nor any of its Subsidiaries is a party
to or has agreed to enter into an exchange-traded or over-the-counter equity,
interest rate, foreign exchange or other swap, forward, future, option, cap,
floor or collar or any other contract that is a derivative contract (including
various combinations thereof) or owns securities that (a) are referred to
generically as "structured notes," "high risk mortgage derivatives," "capped
floating rate notes" or "capped floating rate mortgage derivatives" or (b) are
likely to have changes in value as a result of interest or exchange rate changes
that significantly exceed normal changes in value attributable to interest or
exchange rate changes.
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<PAGE> 20
(x) Indemnification. Except as provided in the certificate of
---------------
incorporation or bylaws of Fulton and the similar governing documents of its
Subsidiaries, neither Fulton nor any Subsidiary is a party to any
indemnification agreement with any of its present or former directors, officers,
or employees, and, to the best knowledge of Fulton, there are no claims for
which any such person would be entitled to indemnification under the
organization certificate of incorporation or bylaws of Fulton or the similar
governing documents of any of its Subsidiaries, under any applicable law or
regulation or under any indemnification agreement.
(y) Books and Records. The books and records of Fulton and its
-----------------
Subsidiaries on a consolidated basis have been, and are being, maintained in
accordance with applicable legal and accounting requirements and reflect in all
material respects the substance of events and transactions that should be
included therein.
(z) Corporate Documents. Complete and correct copies of the
-------------------
certificate of incorporation, bylaws and similar governing documents of Fulton
and each of Fulton's Subsidiaries, as in effect as of the date of this
Agreement, have previously been delivered to Central. The minute books of Fulton
and Fulton Savings constitute a complete and correct record of all actions taken
by their respective boards of directors (and each committee thereof) and their
stockholders. The minute books of each of Fulton's other Subsidiaries
constitutes a complete and correct record of all actions taken by their
respective boards of directors (and each committee thereof) and the stockholders
of each such Subsidiary.
(aa) Year 2000 Matters. Fulton and its Subsidiaries have completed a
-----------------
review of their computer systems to identify systems that could be affected by
the "Year 2000" issue and reasonably believe they have identified all such Year
2000 problems. Fulton's management has developed and commenced implementation of
a plan which is designed to complete any required initial changes to the
computer systems of Fulton and its Subsidiaries and to complete testing of those
changes by June 30, 1999 (the "YEAR 2000 PLAN"). Between the date of this
Agreement and the Effective Time, Fulton shall use commercially practicable
efforts to implement and/or continue to undertake its Year 2000 Plan. Year 2000
issues have not had, and are not reasonably expected to have, a Material Adverse
Effect on Fulton and its Subsidiaries, taken as a whole.
(bb) Proxy Statement. The information regarding Fulton to be
---------------
included in the proxy statement to be filed with the SEC by Fulton under the
Exchange Act and distributed in connection with Fulton's meeting of stockholders
to vote upon this Agreement and the Merger (as amended or supplemented from time
to time, the "PROXY STATEMENT") will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(cc) Community Reinvestment Act Compliance. Fulton Savings is in
-------------------------------------
material compliance with the applicable provisions of the Community Reinvestment
Act ("CRA") and the regulations promulgated thereunder, and Fulton Savings
currently has a CRA rating of satisfactory or better. To Fulton's knowledge,
there is no fact or circumstance or set of facts or
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circumstances that would cause Fulton Savings to fail to comply with such
provisions or cause the CRA rating of Fulton Savings to fall below satisfactory.
(dd) Undisclosed Liabilities. As of the date hereof, Fulton and its
-----------------------
Subsidiaries have not incurred any debt, liability or obligation of any nature
whatsoever (whether accrued, contingent, absolute or otherwise and whether due
or to become due) except for (i) liabilities reflected on or reserved against in
the consolidated financial statements of Fulton as of June 30, 1998, (ii)
liabilities incurred since June 30, 1998 in the ordinary course of business
consistent with past practice that, either alone or when combined with all
similar liabilities, have not had, and would not reasonably be expected to have,
a Material Adverse Effect on Fulton and its Subsidiaries, taken as a whole, and
(iii) liabilities incurred for legal, accounting, financial advising fees and
out-of-pocket expenses in connection with a proposed sale or merger of Fulton.
Section 2.3. Representations and Warranties of Central. Central
-----------------------------------------
represents and warrants to Fulton that, except as specifically disclosed in
Central's Disclosure Letter:
(a) Organization.
------------
(i) Central is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri and is registered
as a bank holding company under the Bank Holding Company Act, as amended
("BHCA"). Central Bank is a trust company duly organized, validly existing and
in good standing under the laws of the State of Missouri and is a Subsidiary of
Central. Each Subsidiary of Central other than Central Bank is a corporation,
limited liability company or partnership duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization. Each of Central and its Subsidiaries has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(ii) Central and each of its Subsidiaries has the requisite
corporate power and authority and is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary.
(iii) All of the shares of capital stock of Central Bank are
fully paid, nonassessable and not subject to any preemptive rights and (except
for directors' qualifying shares) are owned by Central free and clear of any
claims, liens, encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws) and there are no agreements or
understandings with respect to the voting or disposition of any such shares.
(iv) The deposits of Central Bank are insured by the Bank
Insurance Fund of the FDIC to the extent provided in the FDIA.
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<PAGE> 22
(b) Authority.
---------
(i) Central has all requisite corporate power and authority to
enter into this Agreement and, subject to receipt of all required regulatory or
governmental approvals, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate actions on the part of Central. This Agreement has been duly and
validly executed and delivered by Central and constitutes a valid and binding
obligation of Central, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general principles
of equity, whether applied in a court of law or a court of equity.
(ii) Central Bank has all requisite corporate power and
authority to enter into the Plan of Bank Merger and, subject to approval of the
Plan of Bank Merger by the stockholders of Central Bank and the receipt of all
required regulatory or governmental approvals, to consummate the transactions
contemplated thereby. The execution and delivery of the Plan of Bank Merger and,
subject to the approval of the stockholders of Central Bank, the consummation of
the transactions contemplated thereby, have been duly authorized by all
necessary corporate actions on the part of Central Bank. The Plan of Bank
Merger, upon execution and delivery by Central Bank, will be duly and validly
executed and delivered by Central Bank and will constitute a valid and binding
obligation of Central Bank, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general principles
of equity, whether applied in a court of law or a court of equity.
(c) No Violations; Consents. The execution, delivery and performance
-----------------------
of this Agreement by Central do not, and the consummation of the transactions
contemplated hereby will not, constitute (i) assuming receipt of all Requisite
Regulatory Approvals, a violation of any law, rule or regulation or any
judgment, decree, order, governmental permit or license to which Central or any
of its Subsidiaries (or any of their respective properties) is subject, (ii) a
violation of the articles of incorporation or bylaws of Central or the similar
organizational documents of any of its Subsidiaries or (iii) a breach or
violation of, or a default under (or an event which, with due notice or lapse of
time or both, would constitute a default under), or result in the termination
of, accelerate the performance required by, or result in the creation of any
lien, pledge, security interest, charge or other encumbrance upon any of the
properties or assets of Central or any of its Subsidiaries under, any of the
terms, conditions or provisions of any note, bond, indenture, deed of trust,
loan agreement or other agreement, instrument or obligation to which Central or
any of its Subsidiaries is a party, or to which any of their respective
properties or assets may be subject. The consummation by Central and Central
Bank of the transactions (including the Bank Merger) contemplated hereby
(exclusive of the effect of any changes effected pursuant to SECTION 1.8) will
not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement, or
instrument, other than (x) the approval of Central as the sole shareholder of
Acquisition Sub, (y) the approval of the shareholders of Central Bank, and (z)
the
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approval of the Board of Governors of the Federal Reserve System ("FRB") under
the BHCA, the approval of the Missouri Division of Finance under Chapter 362 of
the Missouri Revised Statutes, and the approval of the FDIC under Section 18(c)
of the FDIA (collectively, the "REQUISITE REGULATORY APPROVALS"). As of the date
hereof, the executive officers of Central know of no reason pertaining to
Central why any of the approvals referred to in this SECTION 2.3(C) should not
be obtained.
(d) Reports and Financial Statements.
--------------------------------
(i) Central and each of its Subsidiaries have each timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file since December 31, 1996 with (a) the FDIC, (b) the FRB and (c) the Missouri
Division of Finance (collectively, "CENTRAL'S REPORTS") and, to Central's
knowledge, have paid all fees and assessments due and payable in connection
therewith. As of their respective dates, none of Central's Reports contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(ii) The financial statements of Central, as of December 31,
1998 and 1997 and for each of the years in the three-year period ended December
31, 1998, have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto). The consolidated statements of condition at December 31, 1998 and 1997
(including in each case any related notes and schedules) and each of the
consolidated statements of operations, consolidated statements of cash flows and
consolidated statements of changes in stockholders' equity, for the years ended
December 31, 1998, 1997 and 1996 (including in each case any related notes and
schedules) fairly presented (a) the financial position of the entity or entities
to which it relates as of its date and (b) the results of operations,
stockholders' equity and cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein, in each case in
accordance with GAAP, except as may be noted therein.
(e) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
Central's Reports filed on or prior to the date of this Agreement, since
December 31, 1998, there has not been any Material Adverse Effect with respect
to Central and its Subsidiaries, taken as a whole.
(f) Absence of Claims. No litigation, proceeding, controversy, claim
-----------------
or action before any court or governmental agency is pending or has been
threatened against Central or any of its Subsidiaries that would reasonably be
expected to prevent or would adversely affect or which seeks to prohibit the
consummation of the transactions contemplated by this Agreement.
(g) Absence of Regulatory Actions. Neither Central nor any of its
-----------------------------
Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar written
undertaking to, or is subject to
23
<PAGE> 24
any action, proceeding, order or directive by, or is a recipient of any
extraordinary supervisory letter from any Government Regulator, or has adopted
any board resolutions at the request of any Government Regulator, nor has it
been advised by any Governmental Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such action, proceeding, order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar written undertaking.
(h) Year 2000 Matters. Central has completed a review of its
-----------------
computer systems to identify systems that could be affected by the "Year 2000"
issue and reasonably believes it has identified all Year 2000 problems.
Central's management has developed and commenced implementation of a plan which
is designed to complete any required initial changes to its computer systems and
to complete testing of those changes by June 30, 1999. Between the date of this
Agreement and the Effective Time, Central shall use commercially practicable
efforts to implement and/or continue to undertake such plan. Year 2000 issues
are not reasonably expected to prevent or adversely affect the ability of
Central to obtain the Requisite Regulatory Approvals.
(i) Proxy Statement. The information regarding Central to be
---------------
provided to Fulton by Central for inclusion in the Proxy Statement will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(j) Community Reinvestment Act Compliance. Central's depository
-------------------------------------
institution Subsidiaries are each in material compliance with the applicable
provisions of the CRA and the regulations promulgated thereunder, and each
currently has a CRA rating of satisfactory or better. To Central's knowledge,
there is no fact or circumstance or set of facts or circumstances that would
cause any of its depository institution Subsidiaries to fail to comply with such
provisions or cause the CRA rating of any such institution to fall below
satisfactory.
(k) Availability of Funds. Central has readily available to it
---------------------
sufficient funds to satisfy its obligations under Article I of this Agreement.
ARTICLE III
CONDUCT PENDING THE MERGER
--------------------------
Section 3.1. Conduct of Fulton's Business Prior to the Effective
---------------------------------------------------
Time. Except as expressly provided in this Agreement, during the period from the
- ----
date of this Agreement to the Effective Time, Fulton shall, and shall cause its
Subsidiaries to, use its best efforts to (i) conduct its business in the
regular, ordinary and usual course consistent with past practice, (ii) maintain
and preserve intact its business organization, properties, leases, employees and
advantageous business relationships and retain the services of its officers and
key employees, (iii) take no action which would adversely affect or delay the
ability of Fulton or Central to perform their
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respective covenants and agreements on a timely basis under this Agreement, (iv)
take no action which would adversely affect or delay the ability of Fulton,
Fulton Savings, Central or Central Bank to obtain any necessary approvals,
consents or waivers of any governmental authority required for the transactions
contemplated hereby or which would reasonably be expected to result in any such
approvals, consents or waivers containing any material condition or restriction,
and (v) take no action that results in or is reasonably likely to have a
Material Adverse Effect on Fulton or Fulton Savings.
Section 3.2. Forbearance by Fulton. Without limiting the covenants
----------------------
set forth in SECTION 3.1 hereof, except as otherwise provided in this Agreement
and except to the extent required by law or regulation or any Governmental
Entity, during the period from the date of this Agreement to the Effective Time,
Fulton shall not, and shall not permit any of its Subsidiaries to, without the
prior consent of Central:
(a) change any provisions of the certificate of incorporation or
bylaws of Fulton or the similar governing documents of its Subsidiaries;
(b) issue, deliver or sell any shares of its capital stock or any
securities or obligations convertible or exercisable for any shares of its
capital stock or change the terms of any of its outstanding stock options or
warrants or issue, grant or sell any option, warrant, call, commitment, stock
appreciation right, right to purchase or agreement of any character relating to
the authorized or issued capital stock of Fulton except pursuant to the exercise
of stock options or warrants outstanding as of the date of this Agreement, or
split, combine, reclassify or adjust any shares of its capital stock or
otherwise change its capitalization;
(c) other than regular quarterly dividends not in excess of $0.075
per share of Fulton Common Stock, make, declare or pay any cash or stock
dividend or make any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or any securities
or obligations convertible into or exchangeable for any shares of its capital
stock. Subject to applicable regulatory restrictions, if any, Fulton Savings may
pay a cash dividend that is, in the aggregate, sufficient to fund any dividend
by Fulton permitted hereunder;
(d) other than in the ordinary course of business consistent with
past practice, sell, transfer, assign, mortgage, encumber or otherwise dispose
of any of its material properties, leases, assets or other rights or agreements
to any individual, corporation or other entity other than a direct or indirect
wholly owned Subsidiary of Fulton;
(e) (i) increase in any manner the compensation or fringe benefits
of any of its employees or directors, other than general increases in
compensation for non-executive officer employees in the ordinary course of
business consistent with past practice; (ii) except as specifically provided for
elsewhere herein or as required by applicable law or to maintain qualification
pursuant to the IRC, adopt, amend, renew or terminate any Fulton Employee Plan;
(iii) hire any employee with an annual total compensation payment in excess of
$35,000; or (iv)
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enter into, modify or renew any employment contract or other agreement or
arrangement with any director, officer or other employee;
(f) except as contemplated by SECTION 4.2, change its method of
accounting as in effect at March 31, 1999, except as required by changes in GAAP
as concurred in by Fulton's independent auditors;
(g) settle any claim, action or proceeding involving any liability
of Fulton or any of its Subsidiaries for money damages in excess of $50,000 or
impose material restrictions upon the operations of Fulton or any of its
Subsidiaries;
(h) acquire or agree to acquire, by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case which are
material, individually or in the aggregate, to Fulton, except in satisfaction of
debts previously contracted;
(i) except pursuant to commitments existing at the date hereof which
have previously been disclosed to Central, other than in the ordinary course
consistent with past practice, make any real estate loans secured by undeveloped
land or real estate located outside the State of Missouri (other than real
estate secured by one-to-four family homes) or make any construction loans
(other than construction loans secured by one-to-four family homes) outside the
State of Missouri;
(j) establish or commit to the establishment of any new branch or
other office facilities or file any application to relocate or terminate the
operation of any banking office;
(k) other than in the ordinary course of business consistent with
past practice in individual amounts not to exceed $50,000 and other than
investments for Fulton's portfolio made in accordance with SECTION 3.2(L), make
any investment either by purchase of stock or securities, contributions to
capital, property transfers, or purchase of any property or assets of any other
individual, corporation or other entity;
(l) make any investment in any debt security, including
mortgage-backed and mortgage-related securities (other than U.S. government and
U.S. government agency securities with final maturities not greater than five
years, mortgage-backed or mortgage related securities which would not be
considered "high risk" securities pursuant to Thrift Bulletin Number 52 issued
by the OTS or securities of the FHLB, in each case that are purchased in the
ordinary course of business consistent with past practice), or materially
restructure or change its investment securities portfolio, through purchases,
sales or otherwise;
(m) enter into, renew, amend or terminate any contract or agreement,
or make any change in any of its leases or contracts, other than with respect to
those involving aggregate
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payments of less than, or the provision of goods or services with a market value
of less than, $20,000 per annum and other than contracts or agreements covered
by SECTION 3.2(N);
(n) make, renegotiate, renew, increase, extend, modify or purchase
any loan, lease (credit equivalent), advance, credit enhancement or other
extension of credit, or make any commitment in respect of any of the foregoing,
except (A) in conformity with existing lending practices in amounts not to
exceed an aggregate of $500,000 with respect to any individual borrower or (B)
loans or advances as to which Fulton has a binding obligation to make such loan
or advances as of the date hereof;
(o) incur any additional borrowings other than short-term (six
months or less) FHLB borrowings and reverse repurchase agreements consistent
with past practice, or pledge any of its assets to secure any borrowings other
than as required pursuant to the terms of borrowings of Fulton or any Subsidiary
in effect at the date hereof or in connection with borrowings or reverse
repurchase agreements permitted hereunder;
(p) make any capital expenditures in excess of $20,000 per
expenditure other than pursuant to binding commitments existing on the date
hereof disclosed in the Fulton Disclosure Schedule and other than expenditures
necessary to maintain existing assets in good repair or to make payment of
necessary taxes;
(q) organize, capitalize, lend to or otherwise invest in any
Subsidiary;
(r) elect to any senior executive office any person who is not a
member of the senior executive officer team of Fulton as of the date of this
Agreement or elect to the Board of Directors of Fulton any person who is not a
member of the Board of Directors of Fulton as of the date of this Agreement;
(s) enter into any new line of business;
(t) take or omit to take any action that is intended or may
reasonably be expected to result in any of Fulton's representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect, or which would make any of such representations and warranties untrue
or incorrect in any material respect if made anew after taking such action;
(u) agree or make any commitment to take any action that is
prohibited by this SECTION 3.2.
In the event that Central does not respond in writing to Fulton
within five business days of receipt by Central of a written request for Fulton
to engage in any of the actions for which Central's prior written consent is
required pursuant to this SECTION 3.2, Central shall be deemed to have consented
to such action. Any request by Fulton or response thereto by Central shall be
made in accordance with the notice provisions of SECTION 8.7, shall note that it
is a
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request pursuant to this SECTION 3.2 and shall state that a failure to respond
within five business days shall constitute consent.
Section 3.3. Conduct of Central's Business Prior to the Effective
---------------------------------------------------
Time. Except as expressly provided in this Agreement, during the period from the
- ----
date of this Agreement to the Effective Time, Central shall, and shall cause its
Subsidiaries to, use its best efforts to (i) take no action which would
materially adversely affect or delay the ability of Fulton or Central to perform
their respective covenants and agreements on a timely basis under this Agreement
and (ii) take no action which would adversely affect or delay the ability of
Fulton, Central, Fulton Savings or Central Bank to obtain any necessary
approvals, consents or waivers of any governmental authority required for the
transactions contemplated hereby or which would reasonably be expected to result
in any such approvals, consents or waivers containing any material condition or
restriction.
ARTICLE IV
COVENANTS
Section 4.1. Acquisition Proposals. From and after the date hereof
---------------------
until the termination of this Agreement, neither Fulton or Fulton Savings, nor
any of their respective officers, directors, employees, representatives, agents
or affiliates (including, without limitation, any investment banker, attorney or
accountant retained by Fulton or any of its Subsidiaries), will, directly or
indirectly, initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or facilitate knowingly, any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal (as defined below), or enter into
or maintain or continue discussions or negotiate with any person or entity in
furtherance of such inquiries or to obtain an Acquisition Proposal or agree to
or endorse any Acquisition Proposal; PROVIDED, HOWEVER, that nothing contained
in this SECTION 4.1 shall prohibit the Board of Directors of Fulton from (i)
furnishing information to, or entering into discussions or negotiations with
any, person or entity that makes an unsolicited written, bona fide proposal to
acquire Fulton pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar transaction, if, and only
to the extent that, (A) the Board of Directors of Fulton receives a written
opinion from its independent financial advisor that such proposal may be
superior to the Merger from a financial point-of-view to Fulton's stockholders
and (B) the Board of Directors of Fulton, after consultation with independent
legal counsel, determines in good faith that such action is necessary for the
Board of Directors of Fulton to comply with its fiduciary duties to stockholders
under applicable law (such proposal that satisfies (A) and (B) being referred to
herein as a "SUPERIOR PROPOSAL"), (ii) complying with Rule 14e-2 promulgated
under the Exchange Act with regard to a tender or exchange offer or (iii)
failing to make or withdrawing or modifying its recommendation and entering into
a Superior Proposal if there exists a Superior Proposal and the Board of
Directors of Fulton, after consultation with independent legal counsel,
determines in good faith that such action is necessary for the Board of
Directors of Fulton to comply with its fiduciary duties to stockholders under
applicable law.
28
<PAGE> 29
For purposes of this Agreement, "ACQUISITION PROPOSAL" shall mean any of
the following (other than the transactions contemplated hereunder) involving
Fulton or any of its Subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more
of the assets of Fulton or Fulton Savings, taken as a whole, in a single
transaction or series of transactions; (iii) any tender offer or exchange offer
for 25% or more of the outstanding shares of capital stock of Fulton or the
filing of a registration statement under the Securities Act of 1933 in
connection therewith; or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing.
Section 4.2. Certain Policies of Fulton.
--------------------------
(a) At the request of Central, Fulton shall cause Fulton Savings to
modify and change its loan, litigation and real estate valuation policies and
practices (including loan classifications and levels of reserves) and investment
and asset/liability management policies and practices after the date on which
all Requisite Regulatory Approvals and stockholder approvals are received, and
after receipt of written confirmation from Central that it is not aware of any
fact or circumstance that would prevent completion of the Merger, and prior to
the Effective Time so as to be consistent on a mutually satisfactory basis with
those of Central Bank; PROVIDED, HOWEVER, that Fulton shall not be required to
take such action more than 30 days prior to the Effective Date; and PROVIDED,
FURTHER, that such policies and procedures are not prohibited by GAAP or any
applicable laws and regulations.
(b) Fulton's representations, warranties and covenants contained in
this Agreement shall not be deemed to be untrue or breached in any respect for
any purpose as a consequence of any modifications or changes undertaken solely
on account of this SECTION 4.2. Central agrees to hold harmless, indemnify and
defend Fulton and its Subsidiaries, and their respective directors, officers and
employees, for any loss, claim, liability or other damage caused by or resulting
from compliance with this SECTION 4.2.
Section 4.3. Access and Information. Upon reasonable notice, Fulton
----------------------
shall (and shall cause its Subsidiaries to) afford Central and its
representatives (including, without limitation, directors, officers and
employees of Central and its affiliates and counsel, accountants and other
professionals retained by Central) such reasonable access during normal business
hours throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), contracts, properties, personnel and to such other information
relating to Fulton and its Subsidiaries as Central may reasonably request;
PROVIDED, HOWEVER, that no investigation pursuant to this SECTION 4.3 shall
affect or be deemed to modify any representation or warranty made herein. Fulton
shall provide Central with true and complete copies of all financial and other
information relating to the business or operations of Fulton and its
Subsidiaries that is provided to directors of Fulton and Fulton Savings in
connection with meetings of their Board of Directors of committees thereof. In
furtherance, and not in limitation of the foregoing, Fulton shall make available
to Central all information necessary or appropriate for the preparation and
filing of all real property and real estate transfer tax returns and reports
required by reason of the Merger or the Bank Merger.
29
<PAGE> 30
Central will not, and will cause its representatives not to, use any information
obtained pursuant to this SECTION 4.3 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. Subject to the
requirements of applicable law, Central will keep confidential, and will cause
its representatives to keep confidential, all information and documents obtained
pursuant to this SECTION 4.3 unless such information (i) was already known to
Central or an affiliate of Central, other than pursuant to a confidentiality
agreement or other confidential relationship, (ii) becomes available to Central
or an affiliate of Central from other sources not known by such party to be
bound by a confidentiality agreement or other obligation of secrecy, (iii) is
disclosed with the prior written approval of Fulton or (iv) is or becomes
readily ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents or extracts thereof containing information and
data as to another party hereto (or an affiliate of any party hereto) to be
returned to the party that furnished the same.
Section 4.4. Certain Filings, Consents and Arrangements. Central
-------------------------------------------
shall as soon as practicable and in cooperation with Fulton (and in any event
within 45 days after the date hereof) make, or cause to be made, any filings and
applications and provide any notices required to be filed or provided in order
to obtain all approvals, consents and waivers of Governmental Entities and third
parties necessary or appropriate for the consummation of the transactions
contemplated hereby. Central shall provide Fulton and its counsel with an
opportunity to review all filings, applications and notices prior to their being
submitted to any governmental authority and shall provide Fulton with copies of
all filings, applications and notices submitted to any governmental authority.
Section 4.5. Antitakeover Provisions. Fulton and its Subsidiaries
-----------------------
shall take all steps required by any relevant federal or state law or regulation
or under any relevant agreement or other document to exempt or continue to
exempt Central, Acquisition Sub, Central Bank, the Agreement, the Plan of Bank
Merger, the Merger and the Bank Merger from any provisions of an antitakeover
nature contained in Fulton's or its Subsidiaries' organization certificates and
bylaws and the provisions of any federal or state antitakeover laws.
Section 4.6. Additional Agreements. Subject to the terms and
---------------------
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take promptly, or cause to be taken promptly, all actions
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including the Merger
and the Bank Merger, as expeditiously as possible, including using efforts to
obtain all necessary actions or non-actions, extensions, waivers, consents and
approvals from all applicable Governmental Entities, effecting all necessary
registrations, applications and filings (including, without limitation, filings
under any applicable state securities laws) and obtaining any required
contractual consents and regulatory approvals.
30
<PAGE> 31
Section 4.7. Publicity. Fulton and Central shall consult with each
---------
other in issuing any press releases or otherwise making public statements with
respect to the Merger and any other transaction contemplated hereby and in
making any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
Section 4.8. Stockholders Meeting. Fulton shall take all action
--------------------
necessary, in accordance with applicable law and its Certificate of
Incorporation and Bylaws, to convene a meeting of its stockholders ("STOCKHOLDER
MEETING") as promptly as practicable for the purpose of considering and voting
on approval and adoption of this Agreement, the Merger and the other
transactions provided for in this Agreement. Except to the extent legally
required for the discharge by the Board of Directors of its fiduciary duties as
advised by such Board's counsel, the Board of Directors of Fulton shall (a)
recommend at its Stockholder Meeting that the stockholders vote in favor of and
approve the transactions provided for in this Agreement and (b) use its best
reasonable efforts to solicit such approvals. Fulton may employ professional
proxy solicitors to assist in contacting stockholders in connection with
soliciting favorable votes on the Merger.
Section 4.9. Proxy Statement. As soon as practicable after the date
---------------
hereof, Fulton shall prepare a Proxy Statement for the purpose of taking
stockholder action on the Merger and this Agreement and shall file the Proxy
Statement with the SEC, respond to comments of the staff of the SEC and,
promptly after the Proxy Statement is cleared by the SEC, mail the Proxy
Statement to the holders of record (as of the applicable record date) of shares
of voting stock of Fulton. Fulton shall provide Central and its counsel with an
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall provide Central and its counsel with copies of the definitive Proxy
Statement.
Section 4.10. Notification of Certain Matters. Fulton shall give
-------------------------------
prompt notice to Central of: (a) any event or notice of, or other communication
relating to, a default or event that, with notice or lapse of time or both,
would become a default, received by Fulton or any of its Subsidiaries subsequent
to the date of this Agreement and prior to the Effective Time, under any
contract material to the financial condition, properties, businesses or results
of operations of Fulton and its Subsidiaries taken as a whole to which Fulton or
any Subsidiary is a party or is subject; and (b) any event, condition, change or
occurrence which individually or in the aggregate has, or which, so far as
reasonably can be foreseen at the time of its occurrence, is reasonably likely
to result in a Material Adverse Effect with respect to Fulton and its
Subsidiaries taken as a whole. Each of Fulton and Central shall give prompt
notice to the other party of any (i) notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with any of the transactions contemplated by this Agreement and
(ii) the occurrence or non-occurrence of any fact or event which would be
reasonably likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any respect at any time from the date
hereof to the Effective Time or to cause any covenant, condition or agreement
under this Agreement not to be complied with or satisfied in all material
respects.
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Section 4.11. Employees, Directors and Officers.
---------------------------------
(a) All persons who are employees of Fulton Savings immediately
prior to the Effective Time and whose employment is not specifically terminated
at or prior to the Effective Time (a "CONTINUING EMPLOYEE") shall, at the
Effective Time, become employees of Central Bank; PROVIDED, HOWEVER, that in no
event shall any of Fulton's employees be officers of Central Bank, or have or
exercise any power or duty conferred upon such an officer, unless and until duly
elected or appointed to such position in accordance with the bylaws of Central
Bank. All of the Continuing Employees shall be employed at the will of Central
Bank and no contractual right to employment shall inure to such employees
because of this Agreement. Central will use its best efforts to retain all of
the employees of Fulton Savings, subject to the qualifications of such employees
and the needs of Central Bank.
(b) Except as otherwise provided in paragraph (d) of this SECTION
4.11, appropriate steps shall be taken to terminate all Fulton Employee Plans as
of the Effective Time or as promptly as practical thereafter. Immediately
following the Effective Time, each Continuing Employee shall be eligible to
participate in Central's benefit plans on the same basis as a new employee of
Central or Central Bank (it being understood that inclusion of Continuing
Employees in Central's benefit plans may occur at different times with respect
to different plans); PROVIDED, HOWEVER, that with respect to each Central
benefit plan, for purposes of determining eligibility to participate and vesting
(but not for the accrual of benefits), service with Fulton or Fulton Savings
shall be treated as service with Central Bank. Service with Fulton or Fulton
Savings also shall be treated as service with Central Bank for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitation with respect to any Central
or Central Bank "welfare benefit plan", as defined in Section 3(1) of ERISA.
Each Continuing Employee shall receive credit for service with Fulton or Fulton
Savings for purposes of computing vacation pay benefits.
(c) Central agrees to honor existing employment agreements,
including the change in control provisions of such agreements, between Fulton
and Fulton Savings and certain employees as set forth in Fulton's Disclosure
Letter. Such payments may be made by Fulton immediately prior to the Effective
Time if so agreed to by Central, or on such other schedule as may be mutually
agreed upon by the individual employee and Central.
(d) Prior to the Effective Time, Fulton shall terminate the Fulton
Employee Stock Ownership Plan ("ESOP") by proper action of the Board of
Directors of Fulton. As soon as administratively practicable after the Effective
Time, the ESOP shall apply any cash received in the Merger with respect to
unallocated shares of Fulton Common Stock to the repayment in full of the
outstanding ESOP indebtedness. Any surplus cash remaining after repayment of
such indebtedness shall be allocated as investment earnings of the ESOP to the
stock accounts of ESOP participants (and, if required, to the accounts of former
participants or their beneficiaries) in proportion to their stock account
balances in a manner consistent with the terms of the ESOP plan document.
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<PAGE> 33
(e) Central shall cause all of the members of Fulton's Board of
Directors as of the date of this Agreement, who are willing to so serve, to be
elected to or appointed as members of an advisory board ("ADVISORY BOARD") as of
the Effective Time. Central shall maintain the Advisory Board for a period of
not less than one year, but may modify or dissolve the Advisory Board in its
sole discretion after the first anniversary of the Effective Time. The function
of the Advisory Board shall be to advise Central with respect to deposit and
lending activities in Fulton's market area and to maintain and develop customer
relationships. Each member of the Advisory Board shall receive a monthly fee of
$200, plus appropriate fees for any additional services such member shall
perform.
Section 4.12. Indemnification.
----------------
(a) From and after the Effective Time through the sixth anniversary
of the Effective Date, Central (and any successor) agrees to indemnify and hold
harmless each present and former director and officer of Fulton and its
Subsidiaries and each officer or employee of Fulton and its Subsidiaries that is
serving or has served as a director or trustee of another entity expressly at
Fulton's request or direction (each, an "INDEMNIFIED PARTY"), against any costs
or expenses (including reasonable attorneys' fees), judgments, fines, amounts
paid in settlement, losses, claims, damages or liabilities (collectively,
"COSTS") incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of matters existing or occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement), whether asserted or
claimed prior to, at or after the Effective Time, and to advance any such Costs
to each Indemnified Party as they are from time to time incurred, in each case
to the fullest extent such Indemnified Party would have been permitted to be
indemnified as a director, officer or employee of Fulton and its Subsidiaries
and under the DGCL (as in effect on the Effective Date).
(b) Any Indemnified Party wishing to claim indemnification under
SECTION 4.12(A), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Central thereof, but the failure to so
notify shall not relieve Central of any liability it may have hereunder to such
Indemnified Party if such failure does not materially and substantially
prejudice Central. In the event of any such claim, action, suit, proceeding or
investigation: (i) Central shall have the right to assume the defense thereof
with counsel reasonably acceptable to the Indemnified Party and Central shall
not be liable to such Indemnified Party for any legal expenses of other counsel
subsequently incurred by such Indemnified Party in connection with the defense
thereof, except that if Central does not elect to assume such defense within a
reasonable time or counsel for the Indemnified Party at any time advises that
there are issues which raise conflicts of interest between Central and the
Indemnified Party (and counsel for Central does not disagree), the Indemnified
Party may retain counsel satisfactory to such Indemnified Party, and Central
shall remain responsible for the reasonable fees and expenses of such counsel as
set forth above, to be paid promptly as statements therefor are received;
PROVIDED, HOWEVER, that Central shall be obligated pursuant to this paragraph
(b) to pay for only one firm of counsel for all Indemnified Parties in any one
jurisdiction with respect to any given claim, action, suit, proceeding or
investigation unless the use of one counsel for such Indemnified Parties would
present such counsel with a conflict of interest; (ii) the Indemnified
33
<PAGE> 34
Party will reasonably cooperate in the defense of any such matter; and (iii)
Central shall not be liable for any settlement effected by an Indemnified Party
without its prior written consent, which consent may not be withheld unless such
settlement is unreasonable in light of such claims, actions, suits, proceedings
or investigations against, or defenses available to, such Indemnified Party.
(c) Central shall pay all reasonable Costs, including attorneys'
fees, that may be incurred by any Indemnified Party in successfully enforcing
the indemnity and other obligations provided for in this SECTION 4.12 to the
fullest extent permitted under the DGCL (as in effect on the Effective Date).
The rights of each Indemnified Party hereunder shall be in addition to any other
rights such Indemnified Party may have under applicable law.
(d) Central shall maintain Fulton's existing directors and officers'
insurance policy (or provide a policy providing comparable coverage and amounts
on terms no less favorable to the persons currently covered by Fulton's existing
policy, including Central's existing policy if its meets the foregoing standard)
covering persons who are currently covered by such insurance for a period of six
years after the Effective Date.
(e) In the event Central or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any person or entity, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Central
assume the obligations set forth in this SECTION 4.12.
(f) The provisions of this SECTION 4.12 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
representatives.
ARTICLE V
CONDITIONS TO CONSUMMATION
--------------------------
Section 5.1. Conditions to Each Party's Obligations. The respective
--------------------------------------
obligations of each party to effect the Merger shall be subject to the
satisfaction of the following conditions:
(a) This Agreement shall have been approved by the requisite vote of
Fulton's stockholders in accordance with applicable laws and regulations.
(b) The Requisite Regulatory Approvals shall have been obtained and
shall remain in full force and effect, and all statutory waiting periods in
respect thereof shall have expired.
(c) No party hereto shall be subject to any order, decree, ruling or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger, the Bank Merger or any other
transactions contemplated by this Agreement and no
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<PAGE> 35
Governmental Entity shall have instituted any proceeding for the purpose of
enjoining or prohibiting the consummation of the Merger, the Bank Merger or any
transactions contemplated by this Agreement.
(d) No statute, rule or regulation shall have been enacted,
promulgated, or enforced by any governmental authority which prohibits,
restricts or makes illegal consummation of the Merger, the Bank Merger or any
other transactions contemplated by this Agreement.
Section 5.2. Conditions to the Obligations of Central. The
----------------------------------------
obligations of Central to effect the Merger shall be further subject to the
satisfaction of the following additional conditions, any one or more of which
may be waived by Central:
(a) Each of the obligations of Fulton and Fulton Savings,
respectively, required to be performed by it at or prior to the Closing pursuant
to the terms of this Agreement shall have been duly performed and complied with
in all material respects and the representations and warranties of Fulton and
Fulton Savings contained in this Agreement shall be true and correct as of the
date of this Agreement and as of the Effective Time as though made at and as of
the Effective Time (except as to any representation or warranty which
specifically relates to an earlier date) except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to "materiality" set forth therein) would not have,
individually or in the aggregate, a Material Adverse Effect on Fulton, and
Central shall have received a certificate to the foregoing effect signed by the
chief executive officer and the chief financial or principal accounting officer
of Fulton.
(b) On the Closing Date, Dissenters' Shares shall not constitute
more than 10% of the outstanding shares of Fulton Common Stock.
Section 5.3. Conditions to the Obligations of Fulton. The
---------------------------------------
obligations of Fulton to effect the Merger shall be further subject to the
satisfaction of the following additional conditions, any one or more of which
may be waived by Fulton:
(a) Each of the obligations of Central and Central Bank,
respectively, required to be performed by it at or prior to the Closing pursuant
to the terms of this Agreement shall have been duly performed and complied with
in all material respects and the representations and warranties of Central and
Central Bank contained in this Agreement shall be true and correct as of the
date of this Agreement and as of the Effective Time as though made at and as of
the Effective Time (except as to any representation or warranty which
specifically relates to an earlier date) except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to "materiality" set forth therein) would not have,
individually or in the aggregate, a Material Adverse Effect on Central, and
Fulton shall have received a certificate to the foregoing effect signed by the
chief executive officer and the chief financial or principal accounting officer
of Central.
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<PAGE> 36
(b) Central shall have provided to the Exchange Agent sufficient
cash to pay the aggregate Merger Consideration and Fulton shall have received a
certificate from the Exchange Agent to such effect.
ARTICLE VI
TERMINATION
-----------
Section 6.1. Termination. This Agreement may be terminated, and the
-----------
Merger abandoned, at or prior to the Effective Date, either before or after any
requisite stockholder approval:
(a) by the mutual consent of Central and Fulton in a written
instrument, if the Board of Directors of each so determines by vote of a
majority of the members of its entire Board; or
(b) by Central or Fulton, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event of the
failure of the stockholders of Fulton to approve the Agreement at the
Stockholder Meeting; PROVIDED, HOWEVER, that Fulton shall only be entitled to
terminate the Agreement pursuant to this clause if it has complied in all
material respects with its obligations under SECTION 4.8; or
(c) by Central or Fulton, by written notice to the other party, if
either (i) any approval, consent or waiver of a governmental agency required to
permit consummation of the transactions contemplated hereby shall have been
denied or (ii) any governmental authority of competent jurisdiction shall have
issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement; or
(d) by Central or Fulton, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by March 31, 2000, unless the failure to so consummate
by such time is due to the breach of any representation, warranty or covenant
contained in this Agreement by the party seeking to terminate; or
(e) by Central or Fulton (provided that the party seeking
termination is not then in material breach of any representation, warranty,
covenant or other agreement contained herein), in the event of (i) a failure to
perform or comply by the other party with any covenant or agreement of such
other party contained in this Agreement, which failure or non-compliance is
material in the context of the transactions contemplated by this Agreement, or
(ii) any inaccuracies, omissions or breach in the representations, warranties,
covenants or agreements of the other party contained in this Agreement the
circumstances as to which either individually or in the aggregate have, or
reasonably could be expected to have, a Material Adverse Effect on such other
party; in either case which has not been or cannot be cured within 30 calendar
days after written notice thereof is given by the party seeking to terminate to
such other party; or
36
<PAGE> 37
(f) by Fulton, if the Board of Directors of Fulton reasonably
determines that a proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of Fulton Common Stock
then outstanding or all or substantially all of the assets of Fulton constitutes
a Superior Proposal and that such proposal must be accepted in order to comply
with the Board of Directors' fiduciary duties to stockholders under applicable
law; PROVIDED, HOWEVER, that prior to any such termination, Fulton shall use its
reasonable efforts to negotiate in good faith with Central to make such
adjustments in the terms and conditions of this Agreement a would enable Fulton
to proceed with the transactions contemplated herein.
Section 6.2. Termination Fees.
----------------
(a) In the event that (a) Fulton terminates this Agreement pursuant
to SECTION 6.1(F) or (b) Central or Fulton terminates this Agreement pursuant to
SECTION 6.1(B) after it has been publicly announced prior to the Stockholders
Meeting that a person (other than Central) has made or disclosed an intention to
make a proposal to engage in a merger, consolidation, share exchange or other
similar transaction with Fulton or Fulton Savings and within 12 months after the
termination of this Agreement Fulton or Fulton Savings enters into an agreement
with any person to effect a merger, consolidation, share exchange or other
similar transaction, then Fulton shall, within 10 business days following
written demand by Central, pay to Central an amount equal to $750,000.
(b) In the event that Fulton willfully breaches a representation,
warranty or covenant contained herein and, as a result thereof, Central
terminates this Agreement pursuant to SECTION 6.1(E) at a time when Fulton was
not entitled to terminate this Agreement under Section 6.1(B), (C), (D), (E) or
(F), then Fulton shall, within 10 business days following written demand by the
Central, pay to Central an amount equal to $200,000.
(c) In the event that Central willfully breaches a representation,
warranty or covenant contained herein and, as a result thereof, Fulton
terminates this Agreement pursuant to SECTION 6.1(E) at a time when Central was
not entitled to terminate this Agreement under Section 6.1(B), (C), (D), or (E),
then Central shall, within 10 business days following written demand by the
Fulton, pay to Fulton an amount equal to $200,000.
Section 6.3. Effect of Termination. In the event of termination of
---------------------
this Agreement by either Central or Fulton prior to the consummation of the
Merger as provided in SECTION 6.1, this Agreement shall forthwith become void
and have no effect except (i) the obligations of the parties under SECTIONS 4.3
(with respect to confidentiality and the return of information), 6.2 and 8.6
shall survive any termination of this Agreement and (ii) that notwithstanding
anything to the contrary contained in this Agreement, no party shall be relieved
or released from any liabilities or damages arising out of its willful breach of
any provision of this Agreement.
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<PAGE> 38
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
------------------------------------------
Section 7.1. Effective Date and Effective Time. The closing of the
---------------------------------
transactions contemplated hereby ("CLOSING") shall take place at the offices of
Central, 238 Madison Avenue, Jefferson City, Missouri, unless another place is
agreed to by Central and Fulton, on a date designated by Central ("CLOSING
DATE") that is no later than the last day of the month in which the expiration
of the last applicable waiting period in connection with notices to and
approvals of governmental authorities shall occur and all conditions to the
consummation of this Agreement are satisfied or waived, or on such other date as
may be agreed to by the parties. Prior to the Closing Date, Acquisition Sub and
Fulton shall execute a Certificate of Merger in accordance with all appropriate
legal requirements, which shall be filed as required by law on the Closing Date,
and the Merger provided for therein shall become effective upon such filing or
on such date as may be specified in such Certificate of Merger. The date of such
filing or such later effective date as specified in the Certificate of Merger is
herein referred to as the "EFFECTIVE DATE." The "EFFECTIVE TIME" of the Merger
shall be as set forth in the Certificate of Merger.
Section 7.2. Deliveries at the Closing. Subject to the provisions of
-------------------------
Articles V and VI, on the Closing Date there shall be delivered to Central and
Fulton the documents and instruments required to be delivered under Article V.
ARTICLE VIII
CERTAIN OTHER MATTERS
---------------------
Section 8.1. Certain Definitions; Interpretation. As used in this
-----------------------------------
Agreement, the following terms shall have the meanings indicated:
"material" means material to Central or Fulton (as the case may be)
and its respective Subsidiaries, taken as a whole.
"Material Adverse Effect" means an effect which is material and
adverse to the business, financial condition or results of operations of
Fulton or Central, as the context may dictate, and its Subsidiaries (as
defined herein) taken as a whole; PROVIDED, HOWEVER, that any such effect
resulting from any (A) changes in laws, rules or regulations or generally
accepted accounting principles or regulatory accounting requirements or
interpretations thereof that apply to both Central and Central Bank and
Fulton and Fulton Savings, as the case may be, or to similarly situated
financial and/or depository institutions or (B) changes in economic
conditions affecting financial institutions generally, including but not
limited to, changes in the general level of market interest rates shall
not be considered in determining if a Material Adverse Effect has
occurred.
"knowledge" shall mean, with respect to a party hereto, actual
knowledge of any of the members of the Board of Directors of that party or
any officer of that party with the title ranking not less than vice
president.
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<PAGE> 39
"person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization.
When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of, Exhibit or Schedule to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for ease of reference only and shall not affect
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular. Any
reference to gender in this Agreement shall be deemed to include any other
gender.
Section 8.2. Survival. Only those agreements and covenants of the
--------
parties that are by their terms applicable in whole or in part after the
Effective Time, including SECTIONS 4.3, 4.11 and 4.12 of this Agreement, shall
survive the Effective Time. All other representations, warranties, agreements
and covenants shall be deemed to be conditions of the Agreement and shall not
survive the Effective Time.
Section 8.3. Waiver; Amendment. Prior to the Effective Time, any
-----------------
provision of this Agreement may be (i) waived in writing by the party benefitted
by the provision or (ii) amended or modified at any time (including the
structure of the transaction) by an agreement in writing between the parties
hereto except that, after the vote by the stockholders of Fulton or Central, no
amendment or modification may be made that would reduce the amount or alter or
change the kind of consideration to be received by holders of Fulton Common
Stock or contravene any provision of the DGCL or the federal banking laws, rules
and regulations.
Section 8.4. Counterparts. This Agreement may be executed in
------------
counterparts each of which shall be deemed to constitute an original, but all of
which together shall constitute one and the same instrument.
Section 8.5. Governing Law. This Agreement shall be governed by, and
-------------
interpreted in accordance with, the laws of the State of Missouri, without
regard to conflicts of laws principles.
Section 8.6. Expenses. Each party hereto will bear all expenses
--------
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
Section 8.7. Notices. All notices, requests, acknowledgments and
-------
other communications hereunder to a party shall be in writing and shall be
deemed to have been duly given when delivered by hand, overnight courier or
facsimile transmission (confirmed in writing) to such party at its address or
facsimile number set forth below or such other address or facsimile transmission
as such party may specify by notice (in accordance with this provision) to the
other party hereto.
39
<PAGE> 40
If to Fulton, to:
Fulton Bancorp, Inc.
410 Market Street
Fulton, Missouri 65251
Facsimile: (573) 642-6570
Attention:Kermit D. Gohring, President
With copies to:
Paul M. Aguggia, Esq.
Muldoon, Murphy & Faucette LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Facsimile: (202) 966-9409
If to Central, to:
Central Bancompany, Inc.
238 Madison
Jefferson City, Missouri 65101
Facsimile: (573) 635-1434
Attention:Robert M. Robuck
Vice Chairman of the Board
With copies to:
Charles A. Weber, Esq.
Executive Vice President, Secretary
and General Counsel
and to:
Thomas A. Vetter, Esq.
Cook, Vetter, Doerhoff and Landwehr
231 Madison
Jefferson City, Missouri 65101
Facsimile: (573) 635-7414
Section 8.8. Entire Agreement; etc. This Agreement, together with
---------------------
the Plan of Bank Merger and the Disclosure Letters, represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. All 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. Except for SECTIONS 4.11 and 4.12, which confer rights
on the parties described therein,
40
<PAGE> 41
nothing in this Agreement is intended to confer upon any other person any rights
or remedies of any nature whatsoever under or by reason of this Agreement.
Section 8.9. Successors and Assigns; Assignment. This Agreement
----------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that this Agreement may
not be assigned by either party hereto without the written consent of the other
party.
41
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the 18th day of May, 1999.
CENTRAL BANCOMPANY, INC.
By: /s/ Robert M. Robuck
----------------------------------------
Robert M. Robuck
Vice Chairman of the Board
FULTON BANCORP, INC.
By: /s/ Kermit D. Gohring
----------------------------------------
Kermit D. Gohring
President and Chief Executive Officer
42
<PAGE> 1
*FOR IMMEDIATE RELEASE*
CENTRAL BANCOMPANY, INC. AGREES TO ACQUIRE
FULTON BANCORP, INC.
Fulton, Missouri (May 18, 1999) -- Fulton Bancorp, Inc. (Nasdaq: FTNB)
today announced that it has entered into an Agreement and Plan of Merger with
Central Bancompany, Inc. pursuant to which Central would acquire Fulton Bancorp
for cash. Under the terms of the merger agreement, each share of Fulton Bancorp
common stock would be exchanged for $19.15 in cash.
Central will pay a total of approximately $31.7 million to acquire all of
the outstanding shares of Fulton Bancorp. This represents approximately 1.25
times book value at March 31, 1999 and 29.6 times earnings for the 12 months
ended March 31, 1999 for Fulton Bancorp.
Central Bancompany is a bank holding company based in Jefferson City,
Missouri. Central operates a total of 82 banking offices in Missouri through 13
banks and one trust company.
Fulton Bancorp is the savings and loan holding company for Fulton Savings
Bank, F.S.B. Fulton Savings operates one office in Fulton and one office in
Holts Summit, Missouri and specializes in mortgage and consumer lending. At
March 31, 1999, Fulton Bancorp had total assets of $117.8 million, total
deposits of $72.2 million and total stockholders' equity of $25.4 million.
Central intends to merge Fulton Savings with its subsidiary, The Central
Trust Bank and to operate Fulton Savings' two offices as branches of Central
Trust.
"We are extremely pleased to be joining the Central family," said Kermit
D. Gohring, President and Chief Executive Officer of Fulton Bancorp. "Central
has established itself as a premier Missouri-based financial institution. With
Central, our customers will have even more products and services to choose from
and will still enjoy the community banking approach they have enjoyed at Fulton
Savings."
"Fulton Bancorp has a great franchise that will compliment our operations
in the Jefferson City - Columbia area," said Robert M. Robuck, Vice Chairman of
the Board of Central. "We look forward to building on Fulton Bancorp's long
history of banking excellence and providing our new customers with a complete
line of financial products."
The merger is subject to the approval of the shareholders of Fulton
Bancorp and to the receipt of all required regulatory approvals. The transaction
is expected to close in the fourth quarter of 1999.
<PAGE> 2
For further information contact:
Kermit D. Gohring
President and CEO
Fulton Bancorp, Inc.
(573) 642-6618
Robert M. Robuck
Vice Chairman of the Board
Central Bancompany, Inc.
(573) 634-1197
