Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e) (2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Cohoes Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
(2) Aggregate number of securities to which transaction applies: 7,834,685
shares and 803,085 options
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):Each
of the 7,834,685 issued and outstanding shares of Common Stock
(except for certain restricted shares referenced below) will, upon
consummation of the merger, be converted into the right to receive
$19.50 in cash. With respect to 205,906 restricted shares of
common stock subject to stock awards which generally vest in three
equal installments in 2002, 2003 and 2004, such shares will be
converted into the right to receive $15.77584, $12.14933 and
$8.61530, respectively. With respect to 513,633 options to purchase
shares of Registrant's common stock at $12.0625 per share which
vest in three equal installments in 2002, 2003 and 2004, holders
thereof will receive, in consideration for the cancellation
thereof, an amount per option share in cash equal to $6.01707,
$4.63411 and $3.28596, respectively. With respect to 289,452
options to purchase Registrant's common stock at $12.0625 per share
which are already vested or will vest in 2001, holders thereof will
receive, in consideration for the cancellation thereof, an amount
per option share in cash equal to $7.4375.
(4) Proposed maximum aggregate value of transaction: $155,808.193.50
(5) Total fee paid: $31,161.64
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:_________________________________
(2) Form, schedule or registration statement no.:___________
(3) Filing party:___________________________________________
(4) Date filed:_____________________________________________
[Cohoes Bancorp, Inc. letterhead]
January 10, 2001
Dear Fellow Stockholder:
We cordially invite you to attend a special meeting of the stockholders
of Cohoes Bancorp, Inc. The meeting will be held at the Cohoes Music Hall, 58
Remsen Street, Cohoes, New York, on Thursday, February 15, 2001 at 2:00 p.m.,
Eastern Time.
At the special meeting, you will be asked to adopt a merger agreement
which provides for the merger of Cohoes Bancorp, Inc. and a subsidiary of
Hudson River Bank & Trust Company. If the merger is completed, you will be
entitled to receive a cash payment of $19.50 for each share of Cohoes stock
that you own, other than certain shares covered by restricted stock awards.
Upon completion of the merger, you will not own any stock or other interest in
Cohoes Bancorp, Inc. nor will you receive, as a result of the merger, any
stock of Hudson River Bank & Trust Company or its parent holding company,
Hudson River Bancorp, Inc.
Your exchange of shares of Cohoes stock for cash generally will cause
you to recognize taxable gain or loss for federal, and possibly state and
local, income tax purposes. You should consult your personal tax advisor for
a full understanding of the tax consequences of the merger to you.
Completion of the merger is subject to certain conditions, including
receipt of various regulatory approvals and adoption of the merger agreement
by the affirmative vote of a majority of our outstanding shares of common
stock. As of January 2, 2001, the directors and officers of Cohoes Bancorp,
Inc. beneficially owned 7.9% of the shares of Cohoes stock. We expect that
all of the shares held by our directors and officers will be voted in favor of
the merger.
We urge you to read the attached proxy statement carefully. It
describes the merger agreement in detail and includes a copy of the merger
agreement as Appendix A.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT BECAUSE
THE BOARD BELIEVES IT TO BE IN THE BEST INTERESTS OF OUR STOCKHOLDERS.
It is very important that your shares be represented at the special
meeting. Whether or not you plan to attend the special meeting, please
complete, date and sign the enclosed proxy form and return it promptly in the
postage-paid envelope provided.
On behalf of the Board of Directors, I thank you for your prompt
attention to this important matter.
Sincerely,
/s/ Harry L. Robinson
---------------------
Harry L. Robinson
President and Chief Executive Officer
Cohoes Bancorp, Inc.
75 Remsen Street
Cohoes, New York 12047
(518) 233-6500
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 15, 2001
NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Cohoes
Bancorp, Inc. will be held at the Cohoes Music Hall, 58 Remsen Street, Cohoes,
New York on February 15, 2001 commencing at 2:00 p.m., Eastern Time.
A proxy form and a proxy statement for the special meeting are enclosed.
The meeting is for the purpose of considering and acting upon:
1. The adoption of the Agreement and Plan of Merger, dated November
24, 2000, by and between Hudson River Bancorp, Inc., Hudson River Bank & Trust
Company and Cohoes Bancorp, Inc. Pursuant to the terms of the merger
agreement, we will be merged with a wholly owned subsidiary of Hudson River
Bank and will become a wholly owned subsidiary of Hudson River Bank. You will
be entitled to receive $19.50 in cash for each share of Cohoes common stock
that you own, other than certain shares covered by restricted stock awards. A
copy of the merger agreement is included as Appendix A to the accompanying
proxy statement;
2. The potential adjournment of the special meeting of stockholders if
necessary to solicit additional proxies; and
3. Such other matters as may properly come before the special meeting
or any adjournments or postponements thereof. We are not aware of any other
business to come before the special meeting.
Our stockholders of record at the close of business on January 2, 2001
are entitled to vote at the special meeting, and any adjournments or
postponements of the special meeting. You have a right to dissent from the
merger and obtain payment of the fair value of your shares by complying with
the Delaware law provisions contained in Appendix C.
You are cordially invited to attend the special meeting. However, to
ensure your representation at the special meeting, please complete, sign, date
and promptly mail your proxy form in the enclosed postage-paid envelope. The
proxy form will not be used if you attend and vote at the special meeting in
person. If you are a stockholder whose shares are not registered in your
name, you will need additional documentation from the holder of record of your
shares to vote in person at the meeting. The prompt return of your proxy will
save us the expense of further requests for proxies.
By Order of the Board of Directors,
/s/ Harry L. Robinson
---------------------
Harry L. Robinson
President and Chief Executive Officer
Cohoes, New York
January 10, 2001
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT.
TABLE OF CONTENTS
Page
Questions and Answers About Voting
Procedures for the Special Meeting . . . . . . . . . . . . . . . . 1
Summary Term Sheet . . . . . . . . . . . . . . . . . . . . . . . . . 2
Selected Consolidated Financial and
Other Information About Cohoes . . . . . . . . . . . . . . . . . . 5
Where You Can Find More Information. . . . . . . . . . . . . . . . . 6
The Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . 7
Place, Time and Date. . . . . . . . . . . . . . . . . . . . . . . 7
Matters to Be Considered. . . . . . . . . . . . . . . . . . . . . 7
Record Date; Vote Required. . . . . . . . . . . . . . . . . . . . 7
Beneficial Ownership of Cohoes Common Stock . . . . . . . . . . . 8
Cohoes Common Stock . . . . . . . . . . . . . . . . . . . . . . . 8
Proxies. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Background of the Merger. . . . . . . . . . . . . . . . . . . . . 10
Our Reasons for the Merger; Recommendation
of Your Board of Directors. . . . . . . . . . . . . . . . . . . 12
The Consideration is Fair According to
Keefe, Bruyette & Woods, Inc., Our
Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . 14
You Will Receive Cash for Your Shares of Cohoes Stock . . . . . . 19
Treatment of Options and Restricted Shares. . . . . . . . . . . . 19
Procedure for Surrendering Your Certificates. . . . . . . . . . . 20
Representations and Warranties Made by Us,
Hudson River and Hudson River Bank . . . . . . . . . . . . . . . 21
Conditions to the Merger. . . . . . . . . . . . . . . . . . . . . 22
Conduct of Business Prior to the Completion of the Merger . . . . 23
Approvals Needed to Complete the Merger . . . . . . . . . . . . . 26
Waiver and Amendment of the Merger Agreement;
Alternative Structure . . . . . . . . . . . . . . . . . . . . . 27
Termination of the Merger Agreement . . . . . . . . . . . . . . . 28
Interests of Directors and Officers in
the Merger that are Different from Your Interests . . . . . . . 29
Employees and Benefit Plans . . . . . . . . . . . . . . . . . . . 32
You Have Dissenters' Rights of Appraisal. . . . . . . . . . . . . 32
Federal Income Tax Consequences of the Merger to You. . . . . . . 35
Accounting Treatment of the Merger. . . . . . . . . . . . . . . . 36
Who Pays for What . . . . . . . . . . . . . . . . . . . . . . . . 36
Certain Related Agreements . . . . . . . . . . . . . . . . . . . . . 36
Plan of Liquidation . . . . . . . . . . . . . . . . . . . . . . . 36
Bank Merger Agreement . . . . . . . . . . . . . . . . . . . . . . 36
Voting Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 37
Adjournment of the Special Meeting . . . . . . . . . . . . . . . . . 37
Beneficial Ownership of Cohoes Common Stock. . . . . . . . . . . . . 38
Stockholder Proposals. . . . . . . . . . . . . . . . . . . . . . . . 40
Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Appendix A -- Agreement and Plan of Merger
(excluding the exhibits thereto) . . . . . . . . . . . . . . . . . A-1
Appendix B -- Opinion of Our Financial Advisor . . . . . . . . . . . B-1
Appendix C -- Section 262 of the Delaware General Corporation Law. . C-1
i
QUESTIONS AND ANSWERS
ABOUT VOTING PROCEDURES OF THE SPECIAL MEETING
Q: What do I need to do now? Q: Can I change my vote?
A: After you have carefully read A: Yes. If you have not voted
this proxy statement, indicate on through your broker or other
your proxy form how you want your nominee, there are three ways you
shares to be voted. Then sign, can change your vote after you
date and mail your proxy form in have sent in your proxy form.
the enclosed prepaid return
envelope as soon as possible. * First, you may send a written
This will enable your shares to notice to the person to whom
be represented and voted at the you submitted your proxy
special meeting. stating that you would like to
revoke your proxy.
Q: Why is my vote important?
* Second, you may complete and
A: The merger agreement must be adopted submit a new proxy form. Any
by a majority of the outstanding earlier proxies will be
shares of Cohoes common stock. revoked automatically.
If you do not return your proxy
form or vote in person at the * Third, you may attend the
special meeting, it will have the special meeting and vote in
same effect as a vote against the person. Any earlier proxy
merger agreement. will be revoked. However,
simply attending the special
Q: If my shares are held in street meeting without voting in
name by my broker, will my broker person will not revoke your
automatically vote my shares for proxy.
me?
If you have instructed a broker
or other nominee to vote your
A: No. Your broker will not be able shares, you must follow
to vote your shares without directions you receive from your
instructions from you. You broker or other nominee to change
should instruct your broker to your vote.
vote your shares, following the
directions your broker provides. Q: Should I send in my stock
certificates now?
Q: What if I fail to instruct my
broker? A: No. You should not send in your
stock certificates at this time.
A: If you fail to instruct your
broker to vote your shares, it Instructions for surrendering
will have the same effect as a your Cohoes stock certificates in
vote against the merger exchange for $19.50 per share in
agreement. cash will be sent to you after we
complete the merger.
Q: Can I attend the meeting and vote
my shares in person? Q: Whom should I call with
questions?
A: Yes. All stockholders are
invited to attend the special A: You should call our proxy
meeting. Stockholders of record solicitor, Regan & Associates,
can vote in person at the special Inc. at (800) 737-3426.
meeting. If your shares are held
in street name, then you are not
the stockholder of record and you
must ask your broker or other
nominee how you can vote at the
special meeting.
1
SUMMARY TERM SHEET
This summary term sheet highlights selected information from this proxy
statement. It does not contain all the information that may be important to
you. We urge you to read carefully the entire document and the other
documents to which we refer, including the merger agreement, to fully
understand the merger.
You Will Be Entitled to Receive $19.50 * The merger cannot occur unless
in Cash Per Share of Cohoes Common our stockholders adopt the
Stock (see page 19). merger agreement by the
affirmative vote of
When the merger is completed, a majority of the outstanding
each Cohoes stockholder will be shares of Cohoes common stock and
entitled to receive $19.50 in cash we receive approvals from banking
for each share of Cohoes common regulators (see pages 7, 26-27).
stock held, other than certain
shares covered by restricted stock * If the merger is not completed on
awards. For example, if you own 50 or before August 31, 2001, the
shares of Cohoes common stock, you merger may be terminated by
will be entitled to receive $975.00 either Hudson River or Cohoes,
upon the surrender of your unless the failure to close is
certificate for those shares. due to a breach of the party
seeking to terminate (see page
28).
Our Reasons for the Merger (see
pages 12-13). * Harry L. Robinson, our President
and Chief Executive Officer, will
Our Board of Directors believes be appointed to the Board of
that the merger is in the best Directors of Hudson River with
interests of Cohoes and Cohoes' the title of Vice Chairman. Mr.
stockholders and recommends that Robinson, Duncan S. MacAffer and
stockholders vote "FOR" the adoption two other directors of Cohoes
of the merger agreement. The Savings Bank will be appointed to
merger will enable our stockholders the Board of Directors of Hudson
to realize significant value on their River Bank. Mr. Robinson will
investment in Cohoes. In reaching also be appointed as a Vice
its decision to approve the merger Chairman of the Hudson River Bank
agreement, our Board considered Board of Directors (see page 31).
various factors which are discussed
in detail in this proxy statement. * In connection with the merger,
each of our directors and
Some Material Terms of the Merger executive officers entered into a
Agreement. voting agreement with Hudson
River and Hudson River Bank.
Each of our directors and
* As currently structured, Cohoes executive officers agreed, among
will first merge with a newly other things, to cause all of
formed, wholly owned their shares of Cohoes common
subsidiary of Hudson River Bank stock to be voted in favor of the
and will become a subsidiary of adoption of the merger agreement
Hudson River Bank; simultaneously (see page 37).
with the merger, Cohoes will be
liquidated and dissolved by * We have agreed not to solicit or
transferring all of its assets encourage a competing transaction
and liabilities to Hudson River to acquire us or Cohoes Savings
Bank (see pages 9-10 and 27-28). Bank, except where failure to do
so would cause our Board to
breach its fiduciary duties (see
page 26).
* Cohoes Savings Bank will
subsequently merge with * We will pay Hudson River a
Hudson River Bank with Hudson liquidated damages fee of $4.7
River Bank as the surviving million upon the occurrence of
bank (see pages 9-10). certain events (see page 29).
2
* We and Cohoes Savings Bank have financial advisor in issuing its
agreed to conduct our business opinion. We have agreed to pay
according to particular Keefe, Bruyette & Woods a fee
requirements (see pages 23-26). equal to 1% of the total merger
consideration, which is estimated
* The completion of the merger to amount to approximately
depends on a number of conditions $1,558,000. Of this amount,
being satisfied or waived (see $350,000 has been paid.
pages 22-23).
You Have Dissenters' Rights (see
The Merger Will be Taxable to Our pages 32-35).
Stockholders (see pages 35-36).
Under Delaware law, you have
Our stockholders will recognize dissenters' appraisal rights with
gain or loss for federal, and possibly respect to your Cohoes shares. If
state and local, income tax purposes, you do not wish to accept the $19.50
on the exchange of their Cohoes shares per share cash merger consideration,
for cash. You will recognize gain you can dissent from the merger and
or loss equal to the difference instead choose to have the fair
between the amount of cash you value of your shares judicially
receive and your tax basis in your determined and paid to you in cash.
Cohoes shares. You should However, in order to exercise your
determine the actual tax rights, you must follow specific
consequences of the merger to you. procedures. You should carefully
They will depend on your specific read Section 262 of the Delaware
situation and factors not within our General Corporation Law which is
control. You should consult your included as Appendix C.
personal tax advisor for a full
understanding of the merger's The Merger Is Expected to Be Completed
specific tax consequences to you. in the Second Quarter of Year 2001
(see page 23).
Our Board of Directors Recommends
Stockholder Approval (see pages The merger will only occur after
12-13). all the conditions to its completion
have been satisfied or waived.
Our Board of Directors believes Currently, we anticipate that the
that the merger is in the best merger will be completed in the second
interests of Cohoes and our quarter of 2001.
stockholders and has unanimously
approved the merger agreement. Financial Interests of Cohoes'
Our Board recommends that Cohoes Officers and Directors in the Merger
stockholders vote "FOR" adoption of (see pages 29-31).
the merger agreement.
Our directors and executive
Our Financial Advisor Says the officers have interests in the
Merger Consideration is Fair from a merger as individuals in addition
Financial Point of View to Our to, or different from, their
Stockholders (see pages 14-18). interests as stockholders, such as
receiving severance payments,
Our financial advisor, Keefe, indemnification and insurance
Bruyette & Woods, Inc. has given coverage, and other benefits.
our Board of Directors a written
opinion dated November 24, 2000 * Mr. Robinson and Richard A. Ahl,
and updated as of January 10, our Executive Vice President and
2001 that states the cash Chief Financial Officer, will be
consideration to be paid to our entitled to receive payments
stockholders is fair from a under their employment agreements
financial point of view. A copy with Cohoes and Cohoes Savings
of the updated opinion is attached Bank. Because the full amount of
to this proxy statement as Appendix these payments, together with
B. You should read it completely other benefits they will receive
to understand the assumptions in connection with the merger,
made, matters considered and will include excess parachute
limitations on the review
performed by our
3
payments under the Internal Hudson River Bank's Board of
Revenue Code, Messrs. Robinson Directors and will receive the
and Ahl have agreed to fees received by Hudson River
voluntarily reduce these payments Bank board members. In addition,
to facilitate the merger and to Mr. Robinson will be appointed
reduce the non-deductibility of to the Board of Directors of
these payments to us or Hudson Hudson River.
River Bank. As reduced, the
payments under the employment * Each director and executive
agreements are approximately $2.6 officer of Cohoes and Cohoes
million to Mr. Robinson and $1.3 Savings Bank has entered into a
million to Mr. Ahl, excluding cancellation agreement with
payments for stock options, respect to their unvested Cohoes
restricted stock awards and stock options and restricted
excise taxes. Messrs. Robinson shares. The cancellation
and Ahl will receive tax gross up agreements provide for the
payments which are estimated to cancellation of such stock
be approximately $1.6 million and options and restricted shares,
$846,000, respectively. in exchange for each director
and executive officer receiving a
* Albert J. Picchi, the Senior Vice cash payment for his or her
President of Cohoes Savings Bank, unvested stock options and
is entitled to receive a restricted shares pursuant to a
severance payment under his fixed schedule. The aggregate
employment agreement with Cohoes value of these payments will be
Savings Bank. The payment to Mr. approximately $2.8 million for
Picchi is estimated to be the unvested stock options and
approximately $320,000, excluding approximately $2.9 million for
payments for stock options and the unvested restricted shares.
restricted stock awards. In addition, other officers and
employees of Cohoes Savings Bank
* Five other officers of Cohoes will also have the right to enter
Savings Bank are entitled to into cancellation agreements.
severance payments pursuant to
change of control severance * Hudson River has agreed to
agreements entered into by each indemnify our and our
of them and Cohoes Savings Bank. subsidiaries' officers and
The aggregate payments due under directors for events that
the change of control severance occurred before the merger and
agreements is estimated to be to provide directors' and
approximately $399,000. In officers' insurance coverage
addition, if these five officers for a period of six years
remain employed until the after the merger.
completion of the merger and
agree to cancel their stock Our Board of Directors was aware
options and restricted shares, of these interests and considered
they will receive special bonuses them in its decision to approve the
aggregating approximately merger agreement.
$110,000. Other officers and
employees of Cohoes Savings Bank
will also be eligible to receive
special bonuses aggregating
approximately $81,000.
* Each director and director
emeritus of Cohoes Savings Bank
who continues in such capacity
until completion of the merger
will receive a special bonus of
approximately $28,000.
* Four members of the Board of
Directors of Cohoes Savings Bank
will be appointed to
4
SELECTED CONSOLIDATED FINANCIAL AND OTHER
INFORMATION ABOUT COHOES
The following tables set forth selected historical consolidated financial
and other data about Cohoes at the dates and for the periods shown. The
historical consolidated financial data for the three months ended September
30, 2000 and 1999 are derived from unaudited consolidated financial
statements. However, in the opinion of management, all adjustments consisting
of normal recurring accruals, necessary for a fair presentation at September
30, 2000 and for such quarterly periods have been made. Operating results for
the three months ended September 30, 2000 are not necessarily indicative of the
results that may be expected for any other interim period or for the entire
year ended June 30, 2001. The financial information for the five years ended
June 30, 2000 of Cohoes is based on, and qualified in its entirety by, our
consolidated financial statements, including the notes thereto, which have
been filed previously with the SEC. See "Where You Can Find More Information."
<TABLE>
At
At September June 30,
30, --------------------------------------------------
2000 2000 1999 1998 1997 1996
----------------------------------------------------------------
Selected Consolidated Financial Condition Data: (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . . . $739,335 $727,014 $650,470 $535,716 $491,700 $463,363
Cash and cash equivalents. . . . . . . . . 12,010 12,658 11,114 14,229 16,664 8,900
Loans, net . . . . . . . . . . . . . . . . 614,719 600,413 521,005 412,759 398,530 393,970
Investment securities . . . . . . . . . . 51,649 55,129 54,455 45,424 25,273 25,969
Securities available-for-sale . . . . . . 40,174 40,074 44,742 48,720 35,475 20,886
Deposits . . . . . . . . . . . . . . . . . 497,632 494,875 446,123 449,541 429,390 404,539
Borrowings . . . . . . . . . . . . . . . . 109,316 96,201 49,045 19,897 -- 2,116
Stockholders' equity . . . . . . . . . . . 123,632 121,306 139,430 53,282 49,092 44,290
Real estate owned . . . . . . . . . . . . 1,073 561 724 509 1,874 421
Nonperforming loans. . . . . . . . . . . . 4,113 4,043 4,993 5,649 6,688 7,793
</TABLE>
<TABLE>
For the Three Months For the
Ended September 30, Year Ended June 30,
-------------------- ----------------------------------------------------
2000 1999 2000 1999 1998 1997 1996
-------------------- ----------------------------------------------------
Selected Operating Data: (Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income. . . . . . . . . . . . . . $13,383 $11,753 $49,685 $43,038 $38,423 $36,285 $35,383
Interest expense . . . . . . . . . . . . . 6,495 5,114 22,540 20,334 19,262 17,821 18,164
------ ------ ------ ------ ------ ------ ------
Net interest income. . . . . . . . . . . 6,888 6,639 27,145 22,704 19,161 18,464 17,219
Provision for loan losses. . . . . . . . . 300 340 1,600 1,235 1,400 1,325 490
------ ------ ------ ------ ------ ------ ------
Net interest income after provision
for loan losses. . . . . . . . . . . . 6,588 6,299 25,545 21,469 17,761 17,139 16,729
Noninterest income . . . . . . . . . . . . 1,026 662 2,381 2,916 2,743 2,790 2,467
Noninterest expense. . . . . . . . . . . . 5,445 4,311 18,655 20,443 13,767 12,314 11,919
----- ----- ------ ------ ------ ------ ------
Income before income taxes . . . . . . . . 2,169 2,650 9,271 3,942 6,737 7,615 7,277
Income taxes . . . . . . . . . . . . . . . 786 1,005 3,392 1,511 2,650 2,972 2,882
----- ----- ----- ------- ------ ------ ------
Net income . . . . . . . . . . . . . . . $ 1,383 $ 1,645 $ 5,879 $ 2,431 $ 4,087 $ 4,643 $ 4,395
===== ===== ===== ===== ===== ===== =====
Basic earnings per share(1). . . . . . . . $0.19 $0.19 $0.74 $0.37 N/A N/A N/A
Diluted earnings per share(1). . . . . . . $0.19 $0.19 $0.74 $0.37 N/A N/A N/A
___________________________
(1) Earnings per share for fiscal 1999 reflect earnings since the mutual to stock conversion of Cohoes Savings Bank on
December 31, 1998.
</TABLE>
5
<TABLE>
For the Three Months For the
Ended September 30, Year Ended June 30,
-------------------- ----------------------------------------------------
2000 1999 2000 1999 1998 1997 1996
-------------------- ----------------------------------------------------
Selected Operating Ratios and Other Data:
Performance Ratios:
<S> <C> <C> <C> <C> <C> <C> <C>
Yield on average interest-earning assets . 7.52% 7.27% 7.42% 7.42% 7.96% 8.04% 7.98%
Rate paid on average interest-bearing
liabilities. . . . . . . . . . . . . . . 4.28 3.86 4.02 4.06 4.33 4.27 4.42
Net interest rate spread . . . . . . . . . 3.24 3.41 3.40 3.36 3.63 3.77 3.56
Net interest income after provision for
loan losses to noninterest expense . . . 120.99 146.11 136.93 105.02 129.01 139.18 140.36
Noninterest expense as a percent of
average assets . . . . . . . . . . . . . 2.96 2.57 2.69 3.40 2.75 2.62 2.59
Return on average assets . . . . . . . . . 0.75 0.98 0.85 0.40 0.82 0.99 0.95
Return on average equity . . . . . . . . . 4.47 4.92 4.62 2.53 7.88 9.87 10.28
Ratio of average equity to
average assets . . . . . . . . . . . . . 16.81 19.96 18.35 15.95 10.35 10.03 9.28
Efficiency ratio . . . . . . . . . . . . . 68.80 59.05 63.18 79.79 62.85 57.94 60.55
Dividend payout ratio. . . . . . . . . . . 36.84 31.58 35.14 16.22 N/A N/A N/A
Book value per share . . . . . . . . . . . 15.62 14.35 15.33 14.62 N/A N/A N/A
Asset Quality Ratios:
Nonperforming loans as a percent of
total loans. . . . . . . . . . . . . . . 0.66 0.76 0.67 0.95 1.36 1.66 1.96
Nonperforming assets as a percent of
total assets . . . . . . . . . . . . . . 0.70 0.80 0.63 0.88 1.15 1.74 1.77
Allowance for loan losses as a percent
of total loans . . . . . . . . . . . . . 0.84 0.79 0.83 0.77 0.85 0.77 0.82
Allowance for loan losses as a percent
of nonperforming loans . . . . . . . . . 126.70 103.14 123.99 80.62 62.54 46.43 41.69
Net loans charged-off to average loans . . 0.07 0.02 0.11 0.16 0.24 0.37 0.10
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
As a public company, we are obligated to file annual, quarterly and
current reports, proxy statements and other information with the SEC. You may
read and copy any reports, statements or other information that we file at the
SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. In addition, our public filings
are available to the public from commercial document retrieval services and
on the Internet World Wide Website maintained by the SEC at
"http://www.sec.gov."
6
THE SPECIAL MEETING
Place, Time and Date
The special meeting is scheduled to be held at 2:00 p.m., Eastern Time,
on Thursday, February 15, 2001, at the Cohoes Music Hall, 58 Remson Street,
Cohoes, New York.
Matters to Be Considered
At the special meeting, you will be asked to approve a proposal to adopt
the merger agreement, a proposal to adjourn the special meeting if necessary
to solicit additional proxies and such other matters as are properly brought
before the special meeting. As of January 10, 2001, we do not know of any
business that will be presented for consideration at the special meeting other
than the adoption of the merger agreement and the proposal to possibly adjourn
the special meeting.
Record Date; Vote Required
Only our stockholders of record at the close of business on January 2,
2001 are entitled to notice of and to vote at the special meeting. As
provided in our certificate of incorporation, no one who beneficially owns,
either directly or indirectly, in excess of 10% of our outstanding shares will
be entitled to vote any shares held in excess of the 10% limit. As of January
2, 2001, there were 7,838,685 shares of our common stock outstanding and
entitled to vote at the special meeting.
Each outstanding share of our common stock will be entitled to cast one
vote per share at the special meeting. You may vote in person or by
submitting a properly executed proxy. The presence, in person or by properly
executed proxies, of the holders of at least one-third of all the shares
entitled to vote at the special meeting will constitute a quorum. Abstentions
and broker non-votes will be treated as shares present at the special meeting
for purposes of determining the presence of a quorum. A broker non-vote is an
unvoted proxy submitted by a broker. Under applicable rules, brokers or other
nominees who hold shares in street name for customers who are the beneficial
owners of such shares may not vote those shares with respect to the merger
agreement unless they have received specific instructions from their
customers.
To approve and adopt the merger agreement, the holders of a majority of
the outstanding shares of Cohoes common stock entitled to vote must vote in
favor of the merger agreement. Consequently, a failure to vote, an abstention
or a broker non-vote will have the same effect as voting against the merger
agreement. In addition, a majority of the votes cast at the special meeting
must vote in favor of the proposal to adjourn the special meeting.
Accordingly, abstentions will have the same effect as voting against the
proposal to adjourn the special meeting. Broker non-votes will have no effect
on this proposal.
Adoption of the merger agreement by our stockholders is one of the
conditions that must be satisfied to complete the merger. See "The Merger -
Conditions to the Merger."
7
Beneficial Ownership of Cohoes Common Stock
As of January 2, 2001, our directors and executive officers and their
affiliates beneficially owned in the aggregate 616,904 shares (excluding stock
options) of our common stock, or 7.9% of our outstanding shares of common
stock entitled to vote at the special meeting. Our executive officers,
directors and emeritus director have entered into a voting agreement with
Hudson River and Hudson River Bank agreeing to vote their shares of Cohoes
common stock in favor of the adoption of the merger agreement. As of January
2, 2001, Hudson River did not own any shares of Cohoes common stock.
Cohoes Common Stock
Our common stock is traded on the Nasdaq National Market under the
symbol "COHB." On November 24, 2000, the last trading day prior to the joint
announcement by Cohoes and Hudson River that they had entered into the merger
agreement, the closing price per share of our common stock was $17.125. On
January 5, 2001, which is the last practicable date prior to printing this
proxy statement, the closing price per share of our common stock was $18.9375.
Proxies
Shares of our common stock represented by properly executed proxies
received prior to or at the special meeting will, unless they have been
revoked, be voted at the special meeting in accordance with the instructions
indicated in the proxies. If no instructions are indicated on a properly
executed proxy, the shares will be voted "FOR" the adoption of the merger
agreement.
You should complete and return the proxy form accompanying this proxy
statement to ensure that your vote is counted at the special meeting,
regardless of whether you plan to attend the special meeting. If you are the
record holder of your shares, you can revoke your proxy at any time before the
vote is taken at the special meeting by:
* submitting written notice of revocation to the Secretary of Cohoes,
* submitting a properly executed proxy of a later date, or
* voting in person at the special meeting, but simply attending the
special meeting without voting will not revoke an earlier proxy.
Written notice of revocation and other communications about revoking
your proxy should be addressed to:
Cohoes Bancorp, Inc.
75 Remsen Street
Cohoes, New York 12047
Attention: Richard A. Ahl, Secretary
If any other matters are properly presented at the special meeting for
consideration, the proxy holders will have discretion to vote on such matters
in accordance with their best judgment. As of January 10, 2001, we know of no
other matters to be presented at the meeting.
8
Certain material events or changes in circumstances including a material
amendment to the merger agreement or a material revision of the fairness
opinion issued by Keefe, Bruyette & Woods may result in a resolicitation of
your vote. Under those circumstances, we will provide you with supplemental
information about the material event or change in circumstances and give you
an opportunity to recast your vote.
If your Cohoes common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow to
have your shares voted. Your broker, bank or other nominee may allow you to
deliver your voting instructions via telephone or the Internet. Please see
your instruction form provided by your broker, bank or other nominee that
accompanies this proxy statement.
In addition to solicitation by mail, our directors, officers and
employees, who will not receive additional compensation for such services, may
solicit proxies from our stockholders, personally or by telephone, telegram or
other forms of communication. Brokerage houses, nominees, fiduciaries and
other custodians will be requested to forward soliciting materials to
beneficial owners and will be reimbursed for their reasonable expenses
incurred in sending proxy material to beneficial owners. We will bear our own
expenses in connection with the solicitation of proxies for the special
meeting.
We have retained Regan & Associates, Inc., a professional proxy
solicitation firm, to assist in the solicitation of proxies. We will pay
Regan & Associates a fee of $6,000, plus expenses. We also will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending the proxy materials to the beneficial
owners of Cohoes common stock. In addition to solicitations by mail, our
directors, officers and employees may solicit proxies personally or by
telephone without additional compensation.
You are requested to complete, date and sign the accompanying proxy form
and to return it promptly in the enclosed postage-paid envelope.
You should not forward stock certificates with your proxy forms.
THE MERGER
The information in this proxy statement concerning the terms of the
merger is qualified in its entirety by reference to the full text of the
merger agreement, which is attached as Appendix A and incorporated by
reference herein. All stockholders are urged to read the merger agreement in
its entirety, as well as the opinion of our financial advisor attached as
Appendix B.
General
As soon as possible after the conditions to consummation of the merger
described below have been satisfied or waived, and unless the merger agreement
has been terminated or an alternative structure used as discussed below,
Cohoes and a subsidiary of Hudson River Bank will merge in accordance with
Delaware law. Cohoes will be the surviving corporation of the merger and will
become a subsidiary of Hudson River Bank. Simultaneously with the merger,
Cohoes will be liquidated and dissolved by transferring all of its assets and
liabilities to Hudson River Bank. Immediately after the liquidation is
completed, Cohoes Savings Bank will merge with and into Hudson River Bank.
Hudson River Bank will be the surviving bank.
9
Upon completion of the merger, our stockholders will be entitled to
receive $19.50 in cash for each share of Cohoes common stock they hold (other
than certain restricted shares subject to restricted stock awards) and will
cease to be stockholders of Cohoes. Four directors from Cohoes will become
directors of Hudson River Bank, with Mr. Robinson as a Vice Chairman. Mr.
Robinson also will become Vice Chairman of the Board of Directors of Hudson
River.
The Companies
Cohoes Bancorp, Inc.
75 Remen Street
Cohoes, New York 12047
(518) 233-6500
Cohoes is a Delaware corporation and the parent bank holding company of
Cohoes Savings Bank. Cohoes Savings Bank is a New York-chartered stock
savings bank which is headquartered in Cohoes, New York. Cohoes Savings Bank
operates 21 branch offices located in Albany, Greene, Rensselaer, Saratoga,
Schenectady and Warren counties.
Hudson River Bancorp, Inc.
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, New York 12534
(518) 828-4600
Hudson River Bank is a New York-chartered savings bank which is
headquartered in Hudson, New York. Hudson River Bank operates 17 branch
offices located throughout the greater Albany, New York region. Hudson River
is the parent company of Hudson River Bank.
Background of the Merger
Over the last several years, the financial services industry has become
increasingly competitive and has undergone industry-wide consolidation. The
market in which Hudson River and Cohoes operate has been affected by this
trend, experiencing a period of rapid acquisition and consolidation that has
affected many of the banks and thrift institutions. In addition, large
financial institutions have entered this market through acquisitions of local
financial institutions. In response to these developments, the board of each
of Hudson River and Cohoes has, on an ongoing basis, considered strategic
options for increasing stockholder value, including potential acquisitions of
other institutions.
At a trade association meeting during the summer of 1999, the chief
executive officers of each of Hudson River and Cohoes discussed the
possibility of increasing stockholder value through a merger of equals of the
two companies. On the basis of this discussion, the chief financial officers
of each company met on August 3, 1999 to further explore the possibility of a
merger of equals. From January through March of 2000, the two chief executive
officers met several more times to explore common ground and discuss the
possible terms of a merger of equals.
On April 13, 2000, the Cohoes board formally authorized retaining Keefe
Bruyette & Woods, Inc. to act as Cohoes' financial advisor in connection with
the proposed merger of equals. KBW has
10
provided general merger and acquisition advisory services to Cohoes since the
completion of Cohoes' initial public offering in December 1998.
On April 13, 2000, the boards of each company met and considered the
terms of the proposed transaction. After consultation with each company's
executive officers and financial advisors, the consensus of each board was to
move ahead with the transaction. During the period from April 14 to April 25,
2000, the parties negotiated the terms of the merger of equals agreement and
completed their respective due diligence efforts.
On April 25, 2000, the board of each company met with its respective
financial advisors and special counsel to review the financial and legal
arrangements of the definitive agreement. After careful consideration, each
board authorized the execution of the merger of equals agreement. Following
the conclusion of the board meetings, Hudson River and Cohoes executed and
delivered the merger of equals agreement and reciprocal stock option
agreements. Each director of both companies also executed a voting agreement
obligating them to vote their shares for the adoption of the merger of equals
agreement.
After the merger of equals had been publicly announced, each of Hudson
River and Cohoes received an unsolicited acquisition proposal from TrustCo
Bank Corp NY in early June 2000. The proposals were exchange offers of
TrustCo's common stock equal to $14.00 per Hudson River share and $16.00 per
Cohoes share. The unsolicited TrustCo proposals were each contingent upon,
among other factors, Hudson River and Cohoes terminating their merger of
equals agreement with the other party. A week later, Cohoes received an
unsolicited acquisition proposal from Ambanc Holding Co., Inc. This proposal
was a cash offer of $14.75 for each share of Cohoes common stock. Ambanc
subsequently increased its proposal to $15.25 per share in cash and indicated
that it would be willing to have the consideration paid in a combination of
cash and stock. After considering their duties and responsibilities to
stockholders, including the price of each proposal, the respective boards of
directors of Hudson River and Cohoes each decided not to pursue any
discussions with the third parties making the proposals.
On June 26, 2000, TrustCo publicly announced its intent to make a
hostile tender offer for the Cohoes shares at $16.00 per share in TrustCo
stock. On July 27, 2000, Ambanc announced its intent to make a hostile tender
offer for the Cohoes shares at $16.50 per share in cash, which offer commenced
on August 9, 2000. TrustCo and Ambanc also solicited proxies against the
merger of equals agreement with Hudson River. On August 17, 2000, the
stockholders of Cohoes did not approve the merger of equals agreement with
Hudson River by the requisite vote.
In August 2000, Ambanc nominated three persons to be elected as
directors of Cohoes at the 2000 annual meeting of Cohoes stockholders.
TrustCo nominated two persons in August 2000 and an additional two persons in
September 2000 to be elected as directors of Cohoes at the 2000 annual
meeting.
On August 30, 2000, Cohoes received a letter from TrustCo proposing to
revise its offer to $18.00 per share in TrustCo common stock or a mixture of
stock and cash and requesting a meeting. We agreed to such meeting and
arrived at the meeting only to be told by TrustCo's chairman that he would not
proceed with discussions in the absence of our chairman. On September 7,
2000, we received a second letter reiterating TrustCo's offer. On September
15, 2000, we requested to meet with TrustCo to discuss the latest letter,
which we did on September 20, 2000. Immediately after such meeting, we
received a letter from TrustCo withdrawing the offer.
11
On September 28, 2000, we announced the mutual termination of the merger
of equals agreement with Hudson River and the amendment of the April 25, 2000
reciprocal stock options to limit the economic value realizable thereon by
each party to $3.5 million. On the same day, we announced that our Board of
Directors was committed to exploring all of our strategic options, including a
sale of Cohoes to a larger financial institution. On October 19, 2000, in
furtherance of our analysis of our strategic options, we announced a 14%
increase in our quarterly cash dividend and the receipt of regulatory approval
to repurchase approximately 12.5% of our stock.
In September and early October 2000, KBW contacted 12 bank or thrift
holding companies on behalf of Cohoes to explore the market for a potential
sale of Cohoes. Nine companies signed confidentiality agreements in October
2000 and received earnings projections and a cost savings analysis. TrustCo
and Ambanc, two of the 12 companies, elected not to sign the confidentiality
agreement, and the remaining company declined to proceed. Ambanc allowed its
tender offer to expire on October 6, 2000 and subsequently withdrew its
director nominees on November 3, 2000. In late October 2000, TrustCo
commenced a proxy solicitation in favor of its director nominees, and on
November 1, 2000 TrustCo commenced its tender offer for Cohoes shares at
$18.00 per share. The Cohoes Board recommended on November 2, 2000 that its
shareholders not tender their shares to TrustCo, stating that it believed it
could obtain a better price for its stockholders.
Of the nine companies who received the confidential information, eight
of them declined in late October or early November 2000 to proceed further at
this time. Of these nine companies, only Hudson River indicated a firm
interest in acquiring Cohoes at this time. TrustCo re-affirmed its price of
$18.00 per share, and Ambanc re-affirmed its price of $16.50 per share. As a
result, the Board of Directors authorized management to negotiate a definitive
agreement with Hudson River.
On November 13, 2000, the Board of Directors of Cohoes met with its
financial and legal advisors to review a draft of a merger agreement with
Hudson River. Additional negotiations occurred over the next week and a half.
A revised draft of the agreement was delivered to the Cohoes Board on November
22, 2000.
On November 24, 2000, the board of each company met with its respective
financial advisors and special counsel to review the financial and legal
arrangements of the definitive agreement. After careful consideration, each
board authorized the execution of the merger agreement. Following the
conclusion of the board meetings, Hudson River, Hudson River Bank and Cohoes
executed and delivered the merger agreement and issued a joint press release.
Each of the directors and executive officers of Cohoes also executed a voting
agreement obligating them to vote their shares for adoption of the merger
agreement.
Our Reasons for the Merger; Recommendation of Your Board of Directors
Our Board of Directors believes that the terms of the merger agreement,
which are the product of arm's length negotiations between representatives of
Hudson River and Cohoes, are in the best interests of our stockholders. In
the course of reaching its determination, our Board of Directors considered
the following factors:
12
* the merger consideration to be paid to our stockholders in
relation to the market value, book value and earnings per share of
our common stock,
* information concerning our financial condition, results of
operations, capital levels, asset quality and prospects,
* industry and economic conditions,
* our assessment of Hudson River Bank's ability to pay the aggregate
merger consideration,
* the opinion of our financial advisor as to the fairness of the
merger consideration from a financial point of view to the holders
of our common stock,
* the termination of the stock option we granted to Hudson River on
April 25, 2000, the requirement to pay Hudson River $4.7 million
of liquidated damages under certain circumstances, and the
retention of our April 25, 2000 option to purchase Hudson River
common stock under certain circumstances,
* the general structure of the transaction and the compatibility of
management and business philosophy,
* the greater resources and product offerings that Hudson River Bank
will have after the merger than we currently have,
* the impact of the merger on the depositors, employees, customers
and communities served by us through expanded commercial, consumer
and retail banking products and services,
* the results of our due diligence investigation of Hudson River
Bank, including the likelihood of receiving the requisite
regulatory approvals in a timely manner,
* the ability of Hudson River Bank after the merger to compete in
relevant banking and non-banking markets, and
* our strategic alternatives to the merger, including the continued
operation of Cohoes Savings Bank as an independent financial
institution.
In making its determination, our Board of Directors did not ascribe any
relative or specific weights to the factors which it considered. The
foregoing discussion of the factors considered by our Board is not intended to
be exhaustive, but it does include the material factors considered by our
Board.
Our Board of Directors believes that the merger is in the best interests
of Cohoes and our stockholders. The Board of Directors unanimously recommends
that our stockholders vote for the adoption of the merger agreement.
13
The Consideration is Fair According to Keefe, Bruyette & Woods, Our Financial
Advisor
On September 12, 2000, Cohoes entered into a new agreement with KBW for
KBW to act as Cohoes' exclusive financial advisor in connection with the
merger. KBW agreed to assist Cohoes in analyzing, structuring, negotiating
and effecting a transaction with a potential acquiror, which after discussions
with several possible acquirors was Hudson River. Cohoes selected KBW because
KBW is a nationally recognized investment-banking firm with substantial
experience in transactions similar to the merger and is familiar with Cohoes
and its business. As part of its investment banking business, KBW is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions.
As part of its engagement, representatives of KBW participated in the
telephonic meeting of the Board of Directors of Cohoes held on November 24,
2000 during which the Board considered and approved the merger agreement.
During the November 24, 2000 meeting, KBW rendered an oral opinion
(subsequently confirmed in writing by delivering a written opinion to the
Cohoes Board dated November 24, 2000) that, as of that date, the cash
consideration was fair to Cohoes and its stockholders from a financial point
of view. That opinion was reconfirmed in writing as of the date of this proxy
statement.
The full text of KBW's updated written opinion is attached as Appendix B
to this proxy statement and is incorporated herein by reference. Stockholders
of Cohoes are urged to read the opinion in its entirety for a description of
the procedures followed, assumptions made, matters considered, and
qualifications and limitations on the review undertaken by KBW. No
limitations were imposed by the Cohoes board upon KBW with respect to the
investigations made or procedures followed by KBW in rendering its opinion.
KBW's opinion is directed to the Board of Cohoes and addresses only the
cash consideration. It does not address the underlying business decision to
proceed with merger and does not constitute a recommendation to any
stockholder of Cohoes as to how the stockholder should vote at Cohoes' meeting
with respect to the merger or any matter related thereto.
In rendering its opinion, KBW:
1. Reviewed the merger agreement;
2. Reviewed certain historical financial and other information concerning
Cohoes for the two fiscal years ending June 30, 2000, including Cohoes'
Annual Reports to Stockholders, Annual Reports on Form 10-K, and interim
Quarterly Reports on Form 10-Q;
3. Reviewed certain historical financial and other information concerning
Hudson River for the three fiscal years ending March 31, 2000, including
Hudson River's Annual Reports to Stockholders, Annual Reports on Form
10-K, and interim Quarterly Reports on Form 10-Q;
4. Reviewed and studied the historical stock prices and trading volumes of
the common stock of both Cohoes and Hudson River;
14
5. Held discussions with senior management of Cohoes and Hudson River with
respect to their past and current financial performance, financial
condition and future prospects;
6. Reviewed certain internal financial data, projections and other
information of Cohoes and Hudson River, including financial projections
prepared by management;
7. Analyzed certain publicly available information of other financial
institutions that KBW deemed comparable or otherwise relevant to its
inquiry, and compared Cohoes and Hudson River from a financial point of
view with certain of those institutions;
8. Reviewed the financial terms of certain recent business combinations in
the banking industry that KBW deemed comparable or otherwise relevant to
its inquiry; and
9. Conducted such other financial studies, analyses and investigations and
reviewed such other information as KBW deemed appropriate to enable it
to render its opinion.
In conducting its review and arriving at its opinion, KBW relied upon
and assumed the accuracy and completeness of all of the financial and other
information provided to it or publicly available. KBW did not attempt to
verify such information independently. KBW relied upon the management of
Cohoes as to the reasonableness and achievability of the financial and
operating forecasts and projections (and assumptions and bases therefor)
provided to KBW. KBW assumed that those forecasts and projections reflected
the best available estimates and judgments of the management of Cohoes and
that those forecasts and projections will be realized in the amounts and in
the time periods estimated by the management of Cohoes. KBW also assumed,
without independent verification, that the aggregate allowances for loan
losses for Cohoes and Hudson River are adequate to cover those losses. KBW did
not make or obtain any evaluations or appraisals of the property of Cohoes or
Hudson River, and KBW did not examine any individual credit files.
The projections furnished to KBW and used by it in certain of its
analyses were prepared by the senior management of Cohoes and Hudson River.
Cohoes and Hudson River do not publicly disclose internal management
projections of the type provided to KBW in connection with its review of the
merger. As a result, such projections were not prepared with a view towards
public disclosure. The projections were based on numerous variables and
assumptions which are inherently uncertain, including factors related to
general economic and competitive conditions. Accordingly, actual results
could vary significantly from those set forth in the projections.
The following is a summary of the material analyses performed,
procedures followed, findings and recommendations made, the bases for and
methods of arriving at such findings and recommenda-tions, as presented by KBW
to the Cohoes Board at its meeting on November 24, 2000 in connection with
KBW's opinion dated that date. We have presented some of these summaries in
tabular form. In order to understand the analyses used by KBW, you must read
the tables together with the accompanying text. The tables alone do not
constitute a complete summary of KBW's financial analyses.
Financial Impact Analysis. KBW performed pro forma merger analysis that
combined projected income statement and balance sheet information of Cohoes
and Hudson River. Assumptions regarding the accounting treatment, acquisition
adjustments and cost savings were used to calculate the financial impact that
the merger would have on certain projected financial results of Hudson River.
This analysis
15
indicated that the merger is expected to be accretive to estimated earnings
per share and cash earnings per share in 2001 and 2002. The analysis also
indicated that the merger is expected to be dilutive to Hudson River's book
value per share and tangible book value per share, but that Hudson River would
maintain a healthy leverage ratio and thus had the financial ability to
execute the merger. This analysis was based on internal projections provided
by Cohoes' senior management and Hudson River's financial advisor. For all of
the above analysis, the actual results achieved by Hudson River following the
merger may vary from the projected results, and the variations may be
material.
Selected Transaction Analysis. KBW reviewed certain financial data
related to three sets of comparable bank and thrift acquisitions and compared
them with the consideration received in the merger.
The first group of comparable transactions included nationwide highly
capitalized thrift acquisitions announced after January 1, 1999 with seller
equity/asset ratios above 8.00% and deal values between $50 million and $200
million. The transactions included in the group were:
Glacier Bancorp, Inc. / WesterFed Financial Corp.
Union Planters Corporation / Jefferson Savings Bancorp, Inc.
BB&T Corporation / FirstSpartan Financial Corp.
Seacoast Financial Services / Home Port Bancorp, Inc.
Troy Financial Corporation / Catskill Financial Corporation
Richmond County Financial / South Jersey Financial Corp.
Mutual Savings Bank / First Northern Capital Corp.
SouthBanc Shares, Inc. / Heritage Bancorp, Inc.
Niagara Bancorp, Inc. / CNY Financial Corp.
Old National Bancorp / Permanent Bancorp, Inc.
First Bancorp / First Savings Bancorp, Inc.
NewSouth Bancorp, Inc. / Green Street Financial Corp.
Provident Financial Group / OHSL Financial Corp.
First M&F Corporation / Community Federal Bancorp
Independence Community Bank Corp. / Statewide Financial Corp.
Hudson United Bancorp / Little Falls Bancorp, Inc.
The second group of comparable transactions included recent nationwide
bank acquisitions announced after June 30, 2000 with transaction values above
$50 million. The transactions included in this group were:
Fifth Third Bancorp / Old Kent Financial Corp.
Prosperity Bancshares, Inc. / Commercial Bancshares Inc.
Financial Institutions, Inc. / Bath National Corp.
Comerica Incorporated / Imperial Bancorp
Wachovia Corporation / Republic Security Financial Corp.
Fifth Third Bancorp / Capital Holdings, Inc.
Sterling Bancshares, Inc. / CaminoReal Bancshares of Texas
Southwest Bancorporation of Texas / Citizens Bankers, Inc.
Firstar Corporation / U.S. Bancorp
FleetBoston Financial Corp. / Summit Bancorp
16
Whitney Holding Corporation / American Bank
Synovus Financial Corp. / Carolina Southern Bank
Valley National Bancorp / Merchants New York Bancorp
Compass Bancshares, Inc. / FirsTier Corporation
BB&T Corporation / BankFirst Corporation
BOK Financial Corporation / CNBT Bancshares, Inc.
BB&T Corporation / FCNB Corp.
M&T Bank Corporation / Premier National Bancorp, Inc.
Wells Fargo & Company / Brenton Banks, Inc.
F&M National Corporation / Atlantic Financial Corporation
The third group of comparable transactions included recent nationwide
thrift acquisitions announced after June 30, 2000 with transaction values
above $50 million. The transactions included in this group were:
Glacier Bancorp, Inc. / WesterFed Financial Corp.
Union Planters Corporation / Jefferson Savings Bancorp, Inc.
BB&T Corporation / FirstSpartan Financial Corp.
Fifth Third Bancorp / Ottawa Financial Corporation
Washington Mutual, Inc. / Bank United Corporation
Seacoast Financial Services / Home Port Bancorp, Inc.
Comparisons were made with the multiples derived from the $19.50 per
share deal price and financial data as of September 30, 2000 for Cohoes. The
multiples referred to as "Deal Price / Adjusted Book Value" and "Deal Price /
Adjusted Tangible Book Value" were calculated by assuming the seller had an
8.00% equity/assets and tangible equity/assets ratio, respectively, and that
all excess equity was deducted from the transaction value. The resulting
transaction value was then divided by the remaining equity. The results of the
analysis are set forth in the following table.
<TABLE>
Hudson Highly Highly Recent Recent Recent Recent
River/Cohoes Capitalized Capitalized Bank Bank Thrift Thrift
Transaction Thrift Average Thrift Median Average Median Average Median
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Deal Price/Book Value 125% 149% 139% 259% 243% 162% 156%
Deal Price/Tangible
Book Value 125% 147% 133% 279% 261% 178% 165%
Deal Price/Adjusted
Book Value 158% 171% 165% N/A N/A N/A N/A
Deal Price/Adjusted
Tangible Book Value 158% 174% 170% N/A N/A N/A N/A
Deal Price/Trailing
12 Months Earnings
per Share 21.98x 20.96x 20.99x 17.36x 17.23x 13.57x 12.70x
Deal Price/Forward
12 Months Earnings
per Share 18.57x 17.83x 17.71x 16.24x 15.50x 13.20x 12.32x
Deal Price/Total Assets 21.33% 20.79% 20.73% 20.23% 20.09% 13.64% 3.10%
Core Deposit Premium 10.83% 13.61% 11.20% 19.96% 19.05% 11.34% 10.54%
</TABLE>
17
No company or transaction used as a comparison in the above analysis is
identical to Cohoes, Hudson River or the merger. Accordingly, an analysis of
these results is not mathematical. Rather, it involves complex considerations
and judgments concerning differences in financial and operating
characteristics of the companies.
Discounted Cash Flow Analysis. KBW estimated the present value of
Cohoes' common stock by adding (1) the present value of the estimated future
dividend stream that Cohoes could generate over the period beginning January
2001 and ending in December 2005, and (2) the present value of the "terminal
value" of the Cohoes common stock. For purposes of this analysis, internal
projections of Cohoes were used for earnings and dividend assumptions. A
sensitivity table was presented with a range of discount rates from 11.0% to
17.0% and a range of terminal multiples from 10.0 times to 16.0 times applied
to the 2005 earnings per share estimate. This resulted in a range of values
from $12.08 to $23.89 per share.
KBW stated that the discounted cash flow present value analysis is a
widely used valuation methodology but noted that it relies on numerous
assumptions, including asset and earnings growth rates, terminal values and
discount rates. The analysis did not purport to be indicative of the actual
values or expected values of Cohoes common stock.
In connection with its opinion dated as of the date of this proxy
statement, KBW performed procedures to update, as necessary, certain of the
analyses described above. KBW reviewed the assumptions on which the analyses
described above were based and the factors considered in connection therewith.
KBW did not perform any analyses in addition to those described above in
updating its November 24, 2000 opinion.
The Board of Cohoes has retained KBW as an independent contractor to act
as financial adviser to Cohoes regarding the merger. As part of its
investment banking business, KBW is continually engaged in the valuation of
banking businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. As specialists in the
securities of banking companies, KBW has experience in, and knowledge of, the
valuation of banking enterprises. In the ordinary course of its business as a
broker-dealer, KBW may, from time to time, purchase securities from, and sell
securities to, Cohoes and Hudson River. As a market maker in securities, KBW
may from time to time have a long or short position in, and buy or sell, debt
or equity securities of Cohoes and Hudson River for KBW's own account and for
the accounts of its customers.
Cohoes and KBW have entered into an agreement relating to the services
to be provided by KBW in connection with the merger. Cohoes agreed to pay KBW
a cash fee equal to the sum of $250,000 on November 1, 2000, and Cohoes had
previously paid a $100,000 fee to KBW in connection with the terminated merger
of equals agreement with Hudson River. In addition, Cohoes has agreed to pay
KBW at the time of closing a cash fee equal to 1.0% of the market value of the
aggregate consideration offered in exchange for the outstanding shares of
common stock of Cohoes in the merger minus $350,000. Pursuant to the KBW
engagement agreement, Cohoes also agreed to reimburse KBW for its reasonable
out-of-pocket expenses and disbursements incurred in connection with its
retention and to indemnify against certain liabilities, including liabilities
under the federal securities laws.
18
You Will Receive Cash for Your Shares of Cohoes Stock
Upon completion of the merger, each outstanding share of Cohoes common
stock (other than shares as to which dissenters' rights have been asserted and
perfected in accordance with Delaware law, treasury shares and certain
restricted shares subject to restricted stock awards) shall be converted into
and represent the right to receive $19.50 in cash without any interest
thereon. The aggregate amount of the cash payment represents the merger
consideration. The merger consideration to be paid in connection with the
merger is expected to be approximately $155.8 million, including payment for
the cancellation of all Cohoes stock options and unvested restricted shares,
assuming all such options and unvested restricted shares are cancelled.
Treatment of Options and Restricted Shares
At the effective time of the merger, each vested stock option to
purchase Cohoes common stock issued pursuant to the Cohoes 1999 Stock Option
and Incentive Plan that has not been exercised before the merger is completed
will be canceled and the holder of the unexercised stock option will be
entitled to receive a cash payment equal to $19.50 less the exercise price per
share of the stock option, multiplied by the number of shares of Cohoes common
stock subject to the stock option, less any required tax withholding.
At the effective time of the merger, each unvested stock option to
purchase Cohoes common stock issued pursuant to the Cohoes stock option plan
will be converted into an option to purchase shares of Hudson River common
stock under the same terms as the Cohoes option plan, except that the
converted Cohoes option will represent the right to purchase shares of Hudson
River common stock equal to the product of (1) the number of shares of Cohoes
common stock subject to the Cohoes stock option and (2) the exchange ratio, as
defined in the merger agreement. The exercise price for the converted Cohoes
options will be adjusted by dividing the per share exercise of the Cohoes
option by the exchange ratio. At the effective time of the merger, all of the
unvested restricted shares of Cohoes common stock issued pursuant to the
Cohoes 1999 Recognition and Retention Plan will be converted into restricted
shares of Hudson River common stock under the same terms as the Cohoes
recognition plan, except that the converted Cohoes restricted shares will
represent a number of shares of Hudson River common stock equal to the product
of (1) the number of Cohoes restricted shares held and (2) the exchange ratio,
as defined in the merger agreement.
At least 25 days prior to the effective time of the merger, each holder
of an unvested Cohoes option and/or unvested restricted shares will have the
opportunity to enter into cancellation agreements with Hudson River. Each of
the directors and executive officers of Cohoes and Cohoes Savings Bank have
executed cancellation agreements. The cancellation agreements provide that
Hudson River will pay cash to the holder of converted Cohoes options and/or
unvested restricted shares for cancellation of his or her options and unvested
restricted shares. The amount paid for cancellation of the converted Cohoes
options will be equal to:
* the number of converted Cohoes options to purchase shares of
Hudson River common stock that vest on July 2, 2001 multiplied by
the quotient of $7.4375 and the exchange ratio (provided that the
merger occurs before July 2, 2001), plus
19
* the number of converted Cohoes options to purchase shares of
Hudson River common stock that vest on July 2, 2002 multiplied by
the quotient of $6.01707 and the exchange ratio, plus
* the number of converted Cohoes options to purchase shares of Hudson
River common stock that vest on July 2, 2003 multiplied by the
quotient of $4.63411 and the exchange ratio, plus
* the number of converted Cohoes options to purchase shares of Hudson
River common stock that vest on July 2, 2004 multiplied by the
quotient of $3.28596 and the exchange ratio, less any required tax
withholding.
The amount paid for cancellation of the converted Cohoes restricted
shares will be equal to:
* the number of converted Cohoes restricted shares that vest on July
2, 2001 multiplied by the quotient of $19.50 and the exchange
ratio (provided that the merger occurs before July 2, 2001), plus
* the number of converted Cohoes restricted shares that vest on July
2, 2002 multiplied by the quotient of $15.77584 and the exchange
ratio, plus
* the number of converted Cohoes restricted shares that vest on July
2, 2003 multiplied by the quotient of $12.14993 and the exchange
ratio, plus
* the number of converted Cohoes restricted shares that vest on July
2, 2004 multiplied by the quotient of $8.61530 and the exchange
ratio, plus
* the amount of the accrued but unpaid cash dividends on the Cohoes
restricted shares of the holder, less any required tax
withholding.
To receive the payment described above, the holder of unvested Cohoes
options and/or unvested restricted shares must sign and deliver a cancellation
agreement to Hudson River no later than the 15th day after it is provided to
the holder. Hudson River is not obligated to pay the amount described above
to the holder of unvested Cohoes options and/or unvested restricted shares if
the cancellation agreement is not timely delivered to Hudson River.
Procedure for Surrendering Your Certificates
At or prior to the effective time of the merger, or at such other time
or times as the bank or trust company that will serve as exchange agent may
otherwise request, Hudson River Bank will deliver to the exchange agent an
amount of cash equal to the aggregate merger consideration. The exchange
agent receiving the deposit will act as paying agent for the benefit of the
holders of certificates of Cohoes common stock in exchange for the merger
consideration. Each holder of Cohoes common stock (other than unvested
restricted shares) who surrenders his or her Cohoes shares to the exchange
agent will be entitled to receive a cash payment of $19.50 per share of Cohoes
common stock upon acceptance of the shares by the exchange agent.
20
No later than five business days after the effective time of the merger,
a letter of transmittal will be mailed by the exchange agent to Cohoes
stockholders. The letter of transmittal will contain instructions for
surrendering your certificates of Cohoes common stock.
You should not return your Cohoes common stock certificates with the
enclosed proxy, and you should not send your stock certificates to the
exchange agent until you receive the letter of transmittal.
If a certificate for Cohoes common stock has been lost, stolen or
destroyed, the exchange agent is not obligated to deliver payment until the
holder of the shares delivers:
* an appropriate affidavit by the person claiming the loss, theft or
destruction of his or her certificate,
* an indemnity agreement, and
* if required by the exchange agent or Hudson River Bank, a bond.
After six months following the effective time of the merger, the
exchange agent will deliver to Hudson River Bank any funds not claimed by
former Cohoes stockholders. Thereafter, the payment obligation for any
certificate representing Cohoes common stock which has not been satisfied will
become the responsibility of Hudson River Bank.
If certificates for Cohoes common stock are not surrendered prior to the
date on which such payments would otherwise escheat to or become the property
of any governmental agency, the unclaimed amounts will become the property of
Hudson River Bank to the extent permitted by applicable law, free and clear of
all claims or interest of any person previously entitled to such property.
None of Hudson River Bank, Cohoes, the exchange agent or any other party to
the merger will be liable to any former holder of Cohoes common stock for any
amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
Representations and Warranties Made by Us, Hudson River and Hudson River Bank
The merger agreement contains representations and warranties made by us,
Hudson River and Hudson River Bank which are customary for this type of merger
transaction, including, among others, representations and warranties
concerning:
* the organization and registration of Cohoes, Hudson River and
Hudson River Bank,
* the due authorization, execution, delivery and performance of the
merger agreement,
* the financial statements of Hudson River and us,
* the receipt of a fairness opinion from each of Cohoes' financial
advisor and Hudson River's financial advisor regarding the merger
consideration,
* the regulatory reports filed by Cohoes and Hudson River and their
subsidiaries,
21
* governmental approvals required for the consummation of the
merger,
* the absence of actions, facts or circumstances that would
materially impede or delay consummation of the merger, and
* the accuracy of the information in this proxy statement.
We made certain additional representations and warranties (which are
also customary), among others, regarding our capitalization, our subsidiaries,
the absence of certain interim events, the absence of any broker's and
finder's fees other than that owed KBW, our equity holdings in other
companies, other material agreements, employee and officer benefit plans,
registration of our securities, our compliance with laws, absence of certain
violations as a result of the merger, litigation and environmental matters,
the adequacy of insurance coverage, labor matters, any claims for
indemnification, the status of our loan and investment portfolios, the absence
of certain defaults, the value of real estate loans and investments, the
liquidation account created in our mutual-to-stock conversion, tax matters,
the absence of derivative contracts, real estate owned or leased by us,
material interests of certain persons and the accuracy of our disclosures.
Hudson River Bank has represented that it will have the funds sufficient to
pay the merger consideration required of it under the merger agreement and
that it is and will be immediately after the merger in compliance with all
capital, debt and financial and nonfinancial provisions applicable to it under
federal and state financial institution laws and regulations.
Some of the representations and warranties made by us are qualified by
materiality. The representations, warranties, agreements and covenants in the
merger agreement will expire at the effective time of the merger, except for
agreements and covenants that by their terms are to be performed after the
effective time of the merger. If the merger agreement is terminated, there
will be no liability on the part of either us or Hudson River and Hudson River
Bank other than the possible payment of liquidated damages to Hudson River as
discussed below under "-Termination of the Merger Agreement," and except that
no party shall be relieved or released from any liability arising out of a
willful breach by it of any covenant, undertaking representation or warranty
in the merger agreement.
Conditions to the Merger
The respective obligations of Hudson River, Hudson River Bank and Cohoes
to effect the merger are subject to the satisfaction or waiver of the
following conditions specified in the merger agreement:
* approval of the merger agreement by our stockholders,
* the receipt of all required regulatory and third party approvals,
consents or waivers; provided that none of such approvals,
consents or waivers contain in the reasonable opinion of Hudson
River, any conditions or requirements that are unduly burdensome
or would materially reduce the value of the merger transactions to
Hudson River,
* the absence of any statute, rule, regulation, injunction or other
order which prohibits, restricts or makes illegal the completion
of the merger transactions,
* the absence of any order, decree or injunction of a court or
agency of competent jurisdiction which prevents the completion of
the merger transactions,
22
* the accuracy of the other party's representations and warranties
in all material respects,
* the performance by the other party of its obligations contained in
the merger agreement in all material respects, and
* the receipt of certain certificates.
Hudson River's and Hudson River Bank's obligation to effect the merger
also is subject to the following conditions:
* from the date of the merger agreement to the closing of the
merger, Cohoes will not have been affected by any event which has
had or caused, or is reasonably likely to have or cause, a
material adverse effect, and
* each director and executive officer of Cohoes and Cohoes Savings
Bank signs and delivers cancellation agreements to Hudson River
with respect to their unvested options and restricted shares of Cohoes
common stock, which condition has been met.
There can be no assurance that the conditions to consummation of the
merger will be satisfied or waived. The merger will become effective when the
certificate of merger is filed with the Secretary of State of the State of
Delaware. It is currently anticipated that the effective time of the merger
will occur during the second quarter of 2001.
Conduct of Business Prior to the Completion of the Merger
Hudson River, Hudson River Bank and we have agreed that during the
period from the date of the merger agreement to the completion of the merger
none of us will, except with prior written consent of the other party:
* take any action that would cause our, Hudson River's or Hudson
River Bank's representations and warranties contained in the
merger agreement not to be true and correct in any material
respect at the effective time of the merger or that would cause
any of the conditions to the merger not to be satisfied,
* voluntarily take any action that would materially impede or delay
the completion of the merger transactions or the ability of the
parties to perform their respective covenants and agreements under
the merger agreement, or
* agree to do any of the foregoing.
We also have agreed that during the period from the date of the merger
agreement to the effective time of the merger (except as expressly provided in
the merger agreement), we and our subsidiaries will:
* conduct our business in the ordinary course consistent with our
past practice,
* preserve intact our business organization,
23
* keep available the services of our employees,
* preserve the good will of our customers and business
relationships,
* confer regularly with Hudson River regarding our consolidated
financial condition, operations and business and matters relating
to the completion of the merger transactions; deliver to Hudson
River or Hudson River Bank all reports and documents filed by us
or Cohoes Savings Bank with the SEC or under banking regulations;
and deliver to Hudson River or Hudson River Bank monthly
consolidated balance sheets and statement of income, and
* if requested by Hudson River or Hudson River Bank within 10 days
of the acquisition or lease by us of any real property after the
date of the merger agreement, we will provide to it a report of a
phase one environmental investigation, or a phase two
environmental investigation if required, on real property owned or
leased by us or our subsidiaries, with the costs of the
environmental reports to be paid by Hudson River or Hudson River
Bank.
We also agreed, among other things, that, except as contemplated by the
merger agreement or unless Hudson River or Hudson River Bank provides its
written consent, we and our subsidiaries will not:
* declare, set aside, make or pay any dividend or other
distribution, except for regularly quarterly dividends not to
exceed $0.08 per share of Cohoes common stock or dividends by
Cohoes Savings Bank to Cohoes to facilitate the regular quarterly
dividend paid to Cohoes stockholders or any other cash payments to
be made by Cohoes pursuant to the merger,
* issue, grant, modify, authorize or purchase shares of our common
stock, with certain exceptions,
* amend our certificate of incorporation, charter or bylaws, except
for the deletion of Section 7 of the charter of Cohoes Savings
Bank,
* waive or release any material right or cancel or compromise any
material debt or claim,
* increase the compensation or benefits of our directors or
employees, or pay or agree to pay any bonus, severance or any
other new benefit to our directors or employees, with certain
exceptions,
* enter into or, except as may be required by law or as permitted by
the merger agreement, modify any employee benefit plan,
* originate or purchase any new brokered loans, any unsecured loan
in excess of $50,000, any loan secured by a first trust or
mortgage on a one- to four-family residential property in excess
of $250,000, any loan secured by a first trust or mortgage on
commercial real property in excess of $400,000 or any other loan
in excess of $100,000,
24
* except as otherwise permitted, enter into or amend any agreement,
arrangement, commitment, contract, indenture or other instrument:
* for the purchase, sale, transfer, encumbrance or other
disposition of any properties or assets,
* not made in the ordinary course of business,
* relating to the borrowing of money or guarantee of any
obligations, with certain exceptions,
* relating to the employment of any employee or consultant, or
* with a labor union.
* change any of our methods of accounting or any of our methods of
reporting income and deductions for federal income tax purposes,
except as required by changes in laws, regulations or generally
accepted accounting principles,
* enter into or renew any lease of real or personal property or any
service contract; fail to give any required notice to prevent a
lease or service contract from being renewed; or make any new
capital expenditures in excess of $25,000 individually or $50,000
in the aggregate, other than expenditures necessary to maintain
existing assets in good repair,
* enter into or agree to enter into certain agreements, arrangements
or commitments with any present or former employees, consultants,
directors, which limit the ability of Cohoes' subsidiaries to
engage in any line of business, which relate to the sale with
recourse of loans or subservicing, or which are required to be
filed with the SEC.
* file any applications or make any contract for branching, site
location or relocation,
* purchase any security or acquire control over or any equity
interest in any business or entity, other than marketable
securities (of less than 1% of such securities outstanding) in the
ordinary course of business,
* except for real estate acquired in foreclosure or repossessed
assets, enter or agree to enter into any agreement or arrangement
granting any preferential right to purchase any of our assets or
rights or requiring the consent of any party to the transfer and
assignment of any such assets or rights,
* materially change or modify any of our lending, investment or
deposit gathering policies, except to the extent required by law,
regulatory authority or except as necessitated, in Cohoes Savings
Bank's reasonable opinion, due to changes in interest rates,
* enter into any futures contract, option contract, interest rate
caps, interest rate floors, interest rate exchange agreement or
other agreement for purposes of hedging the exposure of our
interest-earning assets and interest-bearing liabilities to
changes in market interest rates, or
25
* agree to do any of the foregoing.
In addition, we have agreed that neither us nor any of our subsidiaries
or any of our respective officers, directors, employees, representatives or
agents will solicit or encourage inquiries or proposals with respect to,
furnish any information relating to, or participate in any negotiations or
discussions concerning, any alternative proposal with any person other than
Hudson River or Hudson River Bank. An alternative proposal is a written
proposal by a third party to engage in a merger, consolidation, purchase or
lease of substantially all of our or Cohoes Savings Bank assets, purchase
securities representing more than 20% of the voting power of Cohoes or Cohoes
Savings Bank shares or any similar transaction. We are permitted, however, to
furnish information to or engage in discussions or negotiations with third
parties if, after having consulted with and received the advice of our
counsel, we determine that the failure to do so may cause our Board of
Directors to breach its fiduciary duties. We are required to promptly inform
Hudson River or Hudson River Bank of any requests for information or of any
negotiations or discussions regarding any alternative proposal. In addition,
we may not provide any information to a third party that we have not provided
to Hudson River or Hudson River Bank.
If our Board of Directors determines, after consultation with our
financial advisor and legal counsel, that we have received an offer from a
third party that is superior to Hudson River's, we may terminate the merger
agreement. We are required to notify Hudson River of our intent to terminate
the merger agreement, specify the terms and conditions of the superior offer
and identify the person making the offer. Hudson River will have five
business days to match the offer from the third party, in which case we may
not accept the offer from the third party. We shall have five business days
to evaluate Hudson River's revised proposal to determine whether the revised
merger consideration is equal to or exceeds that proposed by the superior
offer.
Approvals Needed to Complete the Merger
In addition to the approval of the merger agreement by our stockholders,
completion of the merger and the transactions contemplated by the merger
agreement are subject to the prior approval of the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation and the New York State
Banking Department. The required applications for these approvals have been
filed and are currently pending. In reviewing applications under the Home
Owners Loan Act and the Bank Merger Act, the OTS and the FDIC must consider,
among other factors, the financial and managerial resources and future
prospects of the existing and resulting institutions, and the convenience and
needs of the communities to be served. In addition, the OTS and the FDIC may
not approve a transaction if it will result in a monopoly or otherwise be
anti-competitive.
Under the Community Reinvestment Act of 1977, the OTS and the FDIC must
take into account the record of performance of Cohoes Savings Bank and Hudson
River Bank in meeting the credit needs of the entire community, including low-
and moderate-income neighborhoods, served by each institution. As part of the
review process, the banking agencies frequently receive comments and protests
from community groups and others. Cohoes Savings Bank and Hudson River Bank
each received a "satisfactory" rating during their respective last Community
Reinvestment Act examinations.
The New York State Banking Board also must approve the merger under its
regulations. The applications to the New York Banking Board will be
substantially the same as the applications to the OTS and the FDIC.
26
In addition, a period of up to 30 days must expire following approval by
the FDIC, within which period the United States Department of Justice may file
objections to the merger under the federal anti-trust laws. Although we
believe that the likelihood of such action by the Department of Justice is
remote in this merger, there can be no assurance that the Department of
Justice will not initiate such proceeding. If such proceeding is instituted or
challenge is made, we cannot ensure a favorable result.
We are not aware of any other regulatory approvals required for
completion of the merger, except as described above. Should any other
approvals be required, it is presently contemplated that such approvals would
be sought. There can be no assurance that any other approvals, if required,
will be obtained.
The approval of any application merely implies the satisfaction of
regulatory criteria for approval, which does not include review of the merger
from the standpoint of the adequacy of the consideration to be received by
Cohoes stockholders. Furthermore, regulatory approvals do not constitute an
endorsement or recommendation of the merger.
There can be no assurances that the requisite regulatory approvals will
be received in a timely manner, in which event the consummation of the merger
may be delayed. If the merger is not consummated on or before August 31,
2001, the merger agreement may be terminated by either Hudson River or us.
It is a condition to the consummation of the merger that the regulatory
approvals be obtained without any conditions or requirements that are unduly
burdensome or would materially reduce the value of the merger transactions to
Hudson River. No assurance can be provided that any such approvals will not
contain terms, conditions or requirements which fail to satisfy this condition
of the merger.
Waiver and Amendment of the Merger Agreement; Alternative Structure
By written approval of its Board of Directors, each party to the merger
agreement may extend the time for the performance of any of the obligations or
acts of the other party and may waive:
* any inaccuracies in the representations and warranties contained
in the merger agreement or any document delivered pursuant to the
merger agreement,
* compliance with any covenant, undertaking or agreement,
* to the extent permitted by law, satisfaction of any condition of
the merger agreement, or
* the performance by the other party of any of its obligations under
the merger agreement.
The merger agreement may be amended at any time by mutual agreement of
the parties as approved by their Boards; provided, however, that after our
stockholders have adopted the merger agreement no amendment can modify the
form or decrease the amount of the merger consideration or otherwise
materially adversely affect our stockholders without their approval.
With our written consent, Hudson may at any time modify the structure of the
acquisition of Cohoes provided that:
27
* the $19.50 per share to be paid to our stockholders is not reduced and
the form of the consideration is not changed, and
* the change in the structure of the merger will not materially delay or
jeorpardize receipt of the required regulatory approvals of the merger.
Termination of the Merger Agreement
The merger agreement may be terminated in writing prior to the effective
time of the merger by:
* the mutual consent of the Boards of Hudson River and Cohoes,
* by the Boards of Hudson River or Cohoes if:
* the other party has materially breached any of its
covenants, agreements or representations and warranties and
the breach has not been cured within 30 days after the
giving of written notice,
* any governmental entity of competent jurisdiction issues a
nonappealable order prohibiting the completion of the merger
transactions or if any application for regulatory approval
is denied or withdrawn at the request or recommendation of
the regulatory authority, provided that the denial or
request or recommendation for withdrawal is not due to a
breach of any provision of the merger agreement by the party
seeking to terminate,
* our stockholders fail to adopt the merger agreement,
* if the merger is not consummated by August 31, 2001,
provided that the party seeking to terminate is not then in
breach of any of its covenants, agreements or
representations and warranties,
* by the Board of Hudson River if our Board of Directors fails to
recommend, or fails to continue its recommendation, that our
stockholders adopt the merger agreement or if our Board modifies,
withdraws or changes in any manner adverse to Hudson River or
Hudson River Bank its recommendation for adoption of the merger
agreement, or
* by our Board if we have received an offer that is superior to the
Hudson River offer and Hudson River or Hudson River Bank has not
timely matched the superior offer, and our Board has determined to
accept the superior offer and simultaneously with the termination
of the merger agreement we enter into an acquisition agreement
with respect to the superior offer or our Board adopts a binding
resolution to recommend to our stockholders that they accept a
tender offer with respect to a superior offer.
In the event that the merger agreement is terminated, the merger
agreement will become void and have no effect, except for:
* provisions relating confidential information,
28
* provisions relating to press releases,
* provisions relating to a liquidated damages fee in the amount of
$4.7 million payable to Hudson River by Cohoes following the
occurrence of:
* our termination of the merger agreement to accept of a superior
offer from a third party or to recommend acceptance thereof to
our stockholders,
* our termination of the merger agreement for any reason prior
to the date of the special meeting of stockholders to vote
on the merger, unless the other party has materially
breached any of its covenants, agreements or representations
and warranties and the breach is not timely cured, or any
government entity issues a nonappealable order prohibiting
the merger or regulatory approval is denied or withdrawn at
the request of the regulatory authority; provided that the
denial or withdrawal is not due to a breach of the merger
agreement by us, or
* our entering into an agreement with a third party relating
to an alternative proposal to acquire us or Cohoes Savings
Bank or the consummation of such an agreement within 18
months after (1) the termination of the merger agreement by
Hudson River due to our material breach of any of our
covenants, agreements or representations and warranties and
the breach is not timely cured; (2) our Board's failure to
recommend, or failure to continue its recommendation, that
our stockholders adopt the merger agreement or our Board's
modification, withdrawal or change in any manner adverse to
Hudson River or Hudson River Bank its recommendation for
adoption of the merger agreement; (3) the failure of our
stockholders to adopt the merger agreement; or (4) August
31, 2001 if a meeting of our stockholders has not been held
to vote on the adoption of the merger agreement, and
* a breaching party will not be relieved from any liability or
damages for its willful breach of any provision of the merger
agreement. If demand is made to us to pay liquidated damages
and we timely pay such damages, then we are not liable for any
other damages under the merger agreement.
Interests of Directors and Officers in the Merger that are Different from Your
Interests
Some members of our management and Board of Directors may have interests
in the merger that are in addition to or different from the interests of our
stockholders. Our Board was aware of these interests and considered them in
approving the merger agreement.
Cohoes Stock Options. As of January 2, 2001, directors and executive
officers held options to purchase in the aggregate 602,880 shares of Cohoes
common stock under our stock option plan. Under the terms of the merger
agreement, each director and executive officer of Cohoes and Cohoes Savings
Bank has signed and delivered to Hudson River a cancellation agreement with
respect to his or her unvested Cohoes stock options. Accordingly, each
director and executive officer will receive payment for their stock options as
described earlier in this proxy statement. The aggregate value of the payout
for these stock options will be approximately $3.4 million. In addition,
other officers and employees and the
29
director emeritus of Cohoes Savings Bank also have the right to enter into
cancellation agreements. See " -Treatment of Options and Restricted Shares."
Cohoes Restricted Stock Awards. As of January 2, 2001, an aggregate of
209,220 unvested shares of our common stock have been awarded to our directors
and executive officers pursuant to the Cohoes recognition plan. Under the
terms of the merger agreement, each director and executive officer of Cohoes
and Cohoes Savings Bank has signed and delivered to Hudson River a
cancellation agreement with respect to his or her Cohoes unvested restricted
shares. Accordingly, each director and executive officer will receive payment
for their restricted shares as described earlier in this proxy statement. The
aggregate value of the payment for these restricted shares will be
approximately $2.9 million. In addition, other officers and employees and the
director emeritus of Cohoes Savings Bank also have the right to enter into
cancellation agreements. See "-Treatment of Options and Restricted Shares."
Cohoes Employee Stock Ownership Plan. As of January 2, 2001, our ESOP
held 638,104 shares of our common stock which had not yet been allocated to
participants and which were pledged as collateral for the remaining $8.0
million loan to the ESOP. The ESOP will be terminated upon completion of the
merger, at which time the loan will be repaid with the cash received by the
ESOP in the merger. Based on the number of unallocated shares and the current
loan balance, the ESOP will have approximately $4.4 million of cash after
repayment of the ESOP loan, which cash will be allocated to the participants
in accordance with the terms of the ESOP and distributed to participants in
the ESOP following receipt of a favorable determination letter from the
Internal Revenue Service.
Employment Agreements. Effective January 6, 1999, Cohoes and Cohoes
Savings Bank entered into employment agreements with Messrs. Robinson and Ahl.
Under the employment agreements, Messrs. Robinson and Ahl are each entitled to
receive a severance payment upon termination of their employment. Messrs.
Robinson and Ahl, however, have agreed to voluntarily reduce their severance
payments by $300,000 and $150,000, respectively, in order to facilitate the
merger and to reduce the amount of the non-deductible portion of the
severance payments to Cohoes or Hudson River Bank. As reduced, the severance
payments and benefits are approximately $2.6 million to Mr. Robinson and $1.3
million to Mr. Ahl, excluding payments for stock options, restricted stock
awards and excise taxes. In addition, since the amounts payable to Messrs.
Robinson and Ahl are subject to excise taxes, an additional payment will be
made so that after the payment of all excise taxes, Messrs. Robinson and Ahl
will be in the same position as if the taxes had not been imposed. These tax
gross up payments are estimated to be approximately $1.6 million to Mr.
Robinson and $846,000 to Mr. Ahl.
Effective January 29, 1999, Cohoes Savings Bank entered into an
employment agreement with Mr. Picchi. Under the employment agreement, Mr.
Picchi is entitled to receive a severance payment upon termination of his
employment which is estimated to be approximately $320,000, excluding payments
for stock options and restricted stock awards.
Messrs. Robinson, Ahl and Picchi will receive cash payments pursuant to
the merger agreement upon cancellation of their stock options and restricted
shares. For the currently vested stock options and for those stock options
and restricted shares scheduled to vest on July 2, 2001, the merger agreement
provides for a cash payment equal to 100% of the economic value of these stock
options and restricted shares. The merger agreement provides for a cash
payment less than the economic value for those stock options and restricted
shares scheduled to vest in 2002, 2003 or 2004. Pursuant to their employment
agreements, Messrs. Robinson, Ahl and Picchi will receive an additional cash
payment equal to the
30
difference between (1) the economic value of the stock options and restricted
shares scheduled to vest in 2002 or later based on the $19.50 per share merger
consideration, and (2) the reduced amount to be paid with respect to these
stock options and restricted shares pursuant to the merger agreements. These
additional cash payments are approximately $772,000 for Mr. Robinson, $386,000
for Mr. Ahl and $193,000 for Mr. Picchi.
Change of Control Agreements. In 1999, Cohoes Savings Bank entered into
change of control severance agreements with five of its officers. The change
in control agreements provide for a payment to each of the officers equal to
100% of the officer's average annual compensation for the preceding five years
upon the officer's termination of employment by the Bank, other than for
cause, or the officer terminates his or her employment for good reason within
12 months following a change in control. For purposes of the change in
control agreements, the merger will constitute a "change in control." The
aggregate amount due under the change in control agreements is approximately
$399,000. In addition, to the extent the amounts payable to the five officers
are subject to excise taxes, an additional payment will be made so that after
the payment of all excise taxes, the five officers will be in the same
position as if the taxes had not be imposed. We believe there will not be any
tax gross up payments to the five officers.
Bonus Payments. Certain directors, officers and employees of Cohoes and
Cohoes Savings Bank who continue their employment with us until the effective
time of the merger will receive cash bonuses, excluding Messrs. Robinson, Ahl
and Picchi. The aggregate value of these bonuses is approximately $497,538.
Officers' Severance Plan. Under the terms of the Cohoes Savings Bank
Employee Severance Compensation Plan, eligible officers of Cohoes or the Bank
are entitled to receive a cash payment if the officer's employment is
terminated for any one of several specified reasons within one year following
a change of control. The merger will constitute a "change of control" for
purposes of this plan. The cash payment entitled to be received by a
terminated officer is equal to the product of 3.846% of the terminated
officer's annual compensation times the number of years of continuous
employment of the officer, provided that no payment will exceed 50% of the
officer's annual compensation. This severance plan does not apply to
executive officers who are covered by employment or severance agreements. If
the employment of all of the covered officers is terminated, the aggregate
value of the officer severance payments would be approximately $230,000.
Board of Directors. Upon completion of the merger, Mr. Robinson will be
appointed to the Board of Directors of Hudson River with the title of Vice
Chairman. Messrs. Robinson and MacAffer and two other directors of Cohoes
Savings Bank will be elected to the Board of Directors of Hudson River Bank.
Mr. Robinson will be the Vice Chairman of the Hudson River Bank Board of
Directors. Such persons will receive the same board fees as those received by
other members of the board upon which they sit.
Protection of Directors, Officers and Employees Against Claims. In the
merger agreement, Hudson River has agreed to indemnify our and our
subsidiaries' directors and officers after the completion of the merger to the
fullest extent permitted under law and our or our subsidiaries' certificate of
incorporation, charter or bylaws. Hudson River also has agreed to maintain,
for a period of six years after the effective time of the merger, our and our
subsidiaries' current directors' and officers' liability insurance policies,
provided that Hudson River may substitute insurance policies of at least the
same
31
coverage and amount containing terms and conditions which are substantially
no less advantageous or containing terms and conditions consistent with Hudson
River's current insurance policies, or Hudson River may purchase single limit
tail coverage for the six-year period.
Employees and Benefit Plans
The merger agreement provides that our and our subsidiaries' full-time
employees who remain employed by Hudson River or Hudson River Bank after the
effective time of the merger will be eligible to participate in the benefit
plans of Hudson River and Hudson River Bank that are generally available to
their full-time employees subject to the terms and provisions of the benefit
plans. Continuing employees will receive credit for years of service with us
and our subsidiaries for purposes of determining eligibility for
participation, vesting and entitlement to vacation time and sick pay (but not
for purposes of accrual or restoration of benefits that are calculated on an
actuarial basis, including any qualified or non-qualified defined benefit plan
or restoration plan) with Hudson River and Hudson River Bank. Contributions
to and accrual of benefits under benefit plans of Hudson River and Hudson
River Bank on behalf of continuing employees will only relate to qualifying
compensation earned by the employees after the effective time of the merger,
subject to the terms and provisions of such benefit plans. Continuing full
time employees will not be eligible to participate in the Hudson River Bank
benefit restoration plan or any qualified plan of Hudson River or Hudson River
Bank until the plan year commencing in 2002.
In light of the termination of the Cohoes ESOP in connection with the
merger and the resulting allocation to the Cohoes employees who participate in
the Cohoes ESOP of all of the unallocated assets remaining after payment of
the loan to the Cohoes ESOP, continuing employees will not be entitled to
participate in Hudson River's ESOP until the plan year commencing in 2002.
Continuing full time employees who are not participants in the Cohoes ESOP
immediately prior to the effective time of the merger and otherwise meet the
eligibility requirements of the Hudson River ESOP will be permitted to
participate in the Hudson River ESOP on the first entry date following
completion of the merger, subject to applicable laws. In addition, the Cohoes
401(k) plan will either be terminated at the effective time of the merger or
merged into the Hudson River 401(k) plan. Following the receipt of a favorable
determination letter from the Internal Revenue Service, the account balances
in the Cohoes ESOP and 401(k) plan (if such 401(k) plan is terminated) will be
distributed to participants and beneficiaries or transferred to an eligible
individual retirement account as directed by the participant or beneficiary.
The Cohoes Restoration Plan was terminated effective December 31, 2000. No
participant in the Restoration Plan will receive any contribution or benefit
award under the Restoration Plan as a result of the termination of the Cohoes
ESOP and 401(k) plan.
Under the terms of the Cohoes Savings Bank General Severance Plan,
eligible non-officer employees of the Bank are entitled to receive a cash
payment if the employee's employment is involuntary terminated, except for
just cause, or voluntarily terminated due to relocation requirements of more
than 15 miles away from the employee's current employment location within one
year following a change of control. The merger will constitute a "change of
control" for purposes of this plan. The cash payment entitled to be received
by a terminated employee is equal to the product of the terminated employee's
salary for a two-week period multiplied by the number of whole years of full-
time employment of the employee, but not to exceed aggregate severance of more
than 26 weeks of the employee's salary. The aggregate amount of severance
payments to non-branch employees may not exceed $260,000, subject to certain
conditions.
You Have Dissenters' Rights of Appraisal
Under Delaware law, if you do not wish to accept the cash payment
provided for in the merger agreement, you have the right to dissent from the
merger and to have an appraisal of the fair value of
32
your shares conducted by the Delaware Court of Chancery. Stockholders
electing to exercise dissenters' rights must strictly comply with the
provisions of Section 262 of the Delaware General Corporation Law to perfect
their rights. A copy of Section 262 is attached as Appendix C.
The following is intended as a brief summary of the material provisions
of the Delaware statutory procedures required to dissent from the merger and
perfect a stockholder's dissenters' rights. This summary, however, is not a
complete statement of all applicable requirements and is qualified in its
entirety by reference to Section 262 of the Delaware General Corporation Law.
Section 262 requires that stockholders be notified not less than 20 days
before the special meeting to vote on the merger that dissenters' appraisal
rights will be available. A copy of Section 262 must be included with such
notice. This proxy statement constitutes our notice to you of the
availability of dissenters' rights in connection with the merger. If you wish
to consider exercising your dissenters' rights you should carefully review the
text of Section 262 contained in Appendix C because failure to timely and
properly comply with the requirements of Section 262 will result in the loss
of your dissenters' rights under Delaware law.
If you elect to demand appraisal of your shares, you must satisfy all of
the following conditions:
* You must deliver to us a written demand for appraisal of your
shares before the vote with respect to the merger is taken. This
written demand for appraisal must be in addition to and separate
from any proxy or vote abstaining from or against the merger.
Voting against or failing to vote for the merger by itself does
not constitute a demand for appraisal within the meaning of
Section 262.
* You must not vote in favor of the merger. An abstention or
failure to vote will satisfy this requirement, but a vote in favor
of the merger, by proxy or in person, will constitute a waiver of
your dissenters' rights in respect of the shares so voted and will
nullify any previously filed written demands for appraisal.
* You must continuously hold your shares of Cohoes common stock
through the effective time of the merger.
If you fail to comply with all of these conditions and the merger is
completed, you will be entitled to receive the cash payment for any shares of
Cohoes common stock you hold as of the effective time of the merger as
provided for in the merger agreement but will have no dissenters' rights of
appraisal for your shares of Cohoes common stock.
All demands for appraisal should be addressed to the Corporate
Secretary, Cohoes Bancorp, Inc., 75 Remsen Street, Cohoes, New York 12047,
before the vote on the merger is taken at the special meeting, and should be
executed by, or on behalf of, the record holder of the shares of Cohoes
common stock. The demand must reasonably inform us of the identity of the
stockholder and the intention of the stockholder to demand appraisal of his or
her shares.
To be effective, a demand for appraisal by a holder of Cohoes common
stock must be made by or in the name of such registered stockholder, fully and
correctly, as the stockholder's name appears on his or her stock
certificate(s) and cannot be made by the beneficial owner if he or she does
not also hold the shares of record. The beneficial holder must, in such
cases, have the registered owner submit the required demand in respect of such
shares.
33
If shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, execution of a demand for appraisal should be
made in such capacity. If the shares are owned of record by more than one
person, as in a joint tenancy or tenancy in common, the demand should be
executed by or for all joint owners. An authorized agent, including one of
two or more joint owners, may execute the demand for appraisal for a
stockholder of record. However, the agent must identify the record owner or
owners and expressly disclose the fact that, in executing the demand, he or
she is acting as agent for the record owner. A record owner, such as a
broker, who holds shares as a nominee for others, may exercise his or her
right of appraisal with respect to the shares held for one or more beneficial
owners, while not exercising this right for other beneficial owners. In such
case, the written demand should state the number of shares as to which
appraisal is sought. Where no number of shares is expressly mentioned, the
demand will be presumed to cover all shares held in the name of such record
owner.
If you hold your shares of Cohoes common stock in a brokerage account or
in other nominee form and you wish to exercise appraisal rights, you should
consult with your broker or such other nominee to determine the appropriate
procedures for the making of a demand for appraisal by such nominee.
Within ten days after the effective date of the merger, Hudson River
must give written notice that the merger has become effective to each Cohoes
stockholder who has properly filed a written demand for appraisal and who did
not vote in favor of the merger. Within 120 days after the effective date,
either Hudson River or any stockholder who has complied with the requirements
of Section 262 may file a petition in the Delaware Court of Chancery demanding
a determination of the fair value of the shares held by all stockholders
entitled to appraisal. A dissenting stockholder may request from Hudson River
during this 120 day period a statement setting forth (a) the aggregate number
of shares not voted in favor of the merger and with respect to which demands
for appraisal have been received, and (b) the aggregate number of holders of
such shares. We have been informed that Hudson River does not presently
intend to file such a petition in the event there are dissenting stockholders
and has no obligation to do so. Accordingly, your failure to timely file a
petition could nullify your demand for appraisal.
At any time within 60 days after the effective date of the merger, any
stockholder who has demanded an appraisal has the right to withdraw the demand
and to accept the cash payment specified by the merger agreement for his or
her shares of Cohoes common stock. If a petition for appraisal is duly filed
by a stockholder and a copy of the petition is delivered to Hudson River,
Hudson River will then be obligated within 20 days after receiving service of
a copy of the petition to provide the Chancery Court with a duly verified list
containing the names and addresses of all stockholders who have demanded an
appraisal of their shares. After notice to dissenting stockholders, the
Chancery Court is empowered to conduct a hearing upon the petition, to
determine those stockholders who have complied with Section 262 and who have
become entitled to the appraisal rights provided thereby. The Chancery Court
may require the stockholders who have demanded payment for their shares to
submit their stock certificates to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the court may dismiss the proceedings as
to such stockholder.
After determination of the stockholders entitled to appraisal of their
shares of Cohoes common stock, the Chancery Court will appraise the shares,
determining their fair value exclusive of any element of value arising from
the accomplishment or expectation of the merger, together with a fair rate of
interest, if any. When the value is determined, the court will direct the
payment of such value, with interest thereon accrued during the pendency of
the proceeding if the Chancery Court so determines, to
34
the stockholders entitled to receive the same, upon surrender by such holders
of the certificates representing such shares.
In determining fair value, the Chancery Court is required to take into
account all relevant factors. You should be aware that the fair value of the
shares as determined under Section 262 could be more, the same, or less than
the value that you are entitled to receive pursuant to the merger agreement.
Costs of the appraisal proceeding may be imposed upon Hudson River and
the stockholders participating in the appraisal proceeding by the Chancery
Court as the court deems equitable in the circumstances. Upon the
application of a stockholder, the Chancery Court may order all or a portion of
the expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorneys' fees and the
fees and expenses of experts, to be charged pro rata against the value of all
shares entitled to appraisal.
Any stockholder who demands appraisal rights will not, after the
effective date, be entitled to vote shares subject to such demand for any
purpose or to receive payments of dividends or any other distribution with
respect to such shares, other than with respect to payment as of a record date
prior to the effective date; however, if no petition for appraisal is filed
within 120 days after the effective date, or if such stockholder delivers a
written withdrawal of his or her demand for appraisal and an acceptance of the
merger within 60 days after the effective date, then the right of such
stockholder to appraisal will cease and such stockholder will be entitled to
receive the cash payment for shares of his or her Cohoes common stock
pursuant to the merger agreement. Any withdrawal of a demand for appraisal
made more than 60 days after the effective date of the merger may only be made
with the written approval of the surviving corporation.
In view of the complexity of Section 262, Cohoes stockholders who may
wish to dissent from the merger and pursue appraisal rights should consult
their legal advisors.
Federal Income Tax Consequences of the Merger to You
The exchange of our common stock for cash pursuant to the terms of the
merger agreement will be a taxable transaction for federal income tax purposes
under the Internal Revenue Code, and may also be a taxable transaction under
state, local and other tax laws. Similarly, any Cohoes stockholders who
exercise their dissenters' appraisal rights and receive cash in exchange for
their shares of Cohoes common stock will recognize gain or loss for federal
income tax purposes and may recognize gain or loss under state, local and
other tax laws. A stockholder of Cohoes will recognize gain or loss equal to
the difference between the amount of cash received by the stockholder pursuant
to the merger and the tax basis in the Cohoes common stock exchanged by such
stockholder pursuant to the merger. Gain or loss must be determined
separately for each block of Cohoes common stock surrendered pursuant to the
merger. For purposes of federal tax law, a block consists of shares of Cohoes
common stock acquired by the stockholder at the same time and price.
Gain or loss recognized by the stockholder exchanging his or her Cohoes
common stock pursuant to the merger or pursuant to the exercise of dissenters'
rights will be capital gain or loss if such Cohoes common stock is a capital
asset in the hands of the stockholder. If the Cohoes common stock has been
held for more than one year, the gain or loss will be long-term. Capital
gains recognized by an exchanging individual stockholder generally will be
subject to federal income tax at capital gain rates
35
applicable to the stockholder (up to a maximum of 39.6% for short-term
capital gains and 20% for long-term capital gains), and capital gains
recognized by an exchanging corporate stockholder generally will be subject
to federal income tax at a maximum rate of 35%.
Neither Hudson River nor Cohoes has requested or will request a ruling
from the Internal Revenue Service as to any of the tax effects to Cohoes's
stockholders of the transactions discussed in this proxy statement, and no
opinion of counsel has been or will be rendered to Cohoes's stockholders with
respect to any of the tax effects of the merger to stockholders.
The federal income tax discussion set forth above is based upon current
law and is intended for general information only. You are urged to consult
your tax advisor concerning the specific tax consequences of the merger to
you, including the applicability and effect of state, local or other tax laws
and of any proposed changes in those tax laws and the Internal Revenue Code.
Accounting Treatment of the Merger
The merger will be accounted for under the purchase method of
accounting. Under this method of accounting, Hudson River and Cohoes will be
treated as one company as of the date of the merger, and Hudson River will
record the fair market value of Cohoes's assets less liabilities on its
consolidated financial statements. Acquisition costs in excess of the fair
values of the net assets acquired, if any, will be recorded as an intangible
asset and amortized for financial accounting purposes. The reported
consolidated income of Hudson River will include our operations after the
completion of the merger.
Who Pays for What
All out-of-pocket costs and expenses incurred in connection with the
merger (including, but not limited to, counsel fees) will be paid by the
party incurring such costs and expenses.
CERTAIN RELATED AGREEMENTS
Plan of Liquidation
In connection with the merger, Cohoes and Hudson River Bank will enter
into a plan of liquidation under which Cohoes immediately after the completion
of the merger will be liquidated and dissolved by transferring all of its
assets and liabilities to Hudson River Bank.
Bank Merger Agreement
In connection with the merger, Cohoes Savings Bank and Hudson River Bank
will enter into a bank merger agreement under which Cohoes Savings Bank and
Hudson River Bank will merge, with Hudson River Bank being the surviving bank.
The bank merger agreement provides that it may be terminated by mutual consent
of the parties at any time and will be terminated automatically if the merger
agreement is terminated.
36
Voting Agreement
As an inducement for Hudson River and Hudson River Bank to enter into
the merger agreement, the executive officers, directors and emeritus director
of Cohoes entered into a voting agreement with Hudson River and Hudson River
Bank. Pursuant to the voting agreement, our executive officers, directors and
emeritus director agreed to vote all of their shares of Cohoes common stock
owned, controlled or for which they possess voting power in favor of the
adoption of the merger agreement.
ADJOURNMENT OF THE SPECIAL MEETING
Each proxy solicited requests authority to vote for an adjournment of
the special meeting, if an adjournment is deemed to be necessary. Cohoes may
seek an adjournment of the special meeting so that we can solicit additional
votes in favor of the merger agreement if the merger proposal has not received
the requisite vote of stockholders at the special meeting and has not received
the negative votes of the holders of a majority of Cohoes' stock. If Cohoes
desires to adjourn the meeting, it will request a motion that the meeting be
adjourned for up to 29 days with respect to the merger proposal (and solely
with respect to the merger proposal, provided that a quorum is present at the
special meeting), and no vote will be taken on the merger proposal at the
originally scheduled special meeting. Each proxy solicited, if properly
signed and returned to Cohoes and not revoked prior to its use, will be voted
on any motion for adjournment in accordance with the instructions contained
therein. If no contrary instructions are given, each proxy received will be
voted in favor of any motion to adjourn the meeting. Unless revoked prior to
its use, any proxy solicited for the special meeting will continue to be valid
for any adjourned meeting, and will be voted in accordance with instructions
contained therein, and if no contrary instructions are given, for the proposal
in question.
Any adjournment will permit Cohoes to solicit additional proxies and
will permit a greater expression of the stockholders' views with respect to
the merger proposal. The adjournment would be disadvantageous to stockholders
who are against the merger agreement because an adjournment will give Cohoes
additional time to solicit favorable votes and thus increase the chances of
passing the merger proposal.
If a quorum is not present at the special meeting, no proposal will be
acted upon and the Cohoes Board of Directors will adjourn the special meeting
to a later date to solicit additional proxies on each of the proposals being
submitted to stockholders.
An adjournment for up to 29 days will not require either the setting of
a new record date or notice of the adjourned meeting as in the case of an
original meeting. Cohoes has no reason to believe that an adjournment of the
special meeting will be necessary at this time.
Because the Board of Directors recommends that stockholders vote "FOR"
the proposed merger agreement, the Board of Directors also recommends that
stockholders vote "FOR" the possible adjournment of the special meeting on the
merger proposal. Approval of the proposal to adjourn the special meeting on
the merger proposal requires the approval of a majority of the votes cast on
the adjournment proposal.
37
BENEFICIAL OWNERSHIP OF COHOES COMMON STOCK
Stockholders of record as of the close of business on January 2, 2001
will be entitled to one vote for each share of our common stock then held. As
of that date, we had 7,834,685 shares of common stock issued and outstanding.
The following table sets forth information regarding the share ownership of:
* each holder of more than 5% of our outstanding common stock,
including our Employee Stock Ownership Plan,
* each member of our Board of Directors and each executive officer who is
not a director, and
* all of our and Cohoes Savings Bank's directors and executive
officers as a group.
Shares Beneficially
Name of Beneficial Owner Owned(1)(2)(3) Percent of Class
------------------------------------------------------------------------------
Cohoes Bancorp, Inc. 760,231 (4) 9.7%
Employee Stock Ownership Plan
75 Remsen Street
Cohoes, New York 12047
Directors:
Harry L. Robinson 214,353 (5) 2.7%
Arthur E. Bowen 36,103 (6) .5%
Peter G. Casabonne 21,603 .3%
Michael L. Crotty 22,978 .3%
Chester C. DeLaMater 41,603 (7) .5%
Frederick G. Field, Jr. 22,878 (8) .3%
Duncan S. MacAffer 28,442 (9) .4%
J. Timothy O'Hearn 38,756 (10) .5%
R. Douglas Paton 32,624 (11) .4%
Walter H. Speidel 37,103 (12) .5%
Donald A. Wilson 22,303 .3%
Executive Officers:
Richard A. Ahl 128,053(13) 1.6%
Albert J. Picchi 49,945(14) .6%
Directors and executive officers
as a group (13 persons) 696,744(15) 8.8%
_________________________
(1) Based upon filings made pursuant to the Securities Exchange Act of 1934,
as amended, and information furnished by the respective individuals.
Under regulations promulgated pursuant to the Exchange Act, shares of
common stock are deemed to be beneficially owned by a person if he or
she directly or indirectly has or shares (a) voting power, which
includes the power to vote or to direct the voting of the shares, or (b)
investment power, which includes the power to dispose or to direct the
disposition of the shares. Unless otherwise indicated, the named
(Footnotes continued on following page)
38
(Footnotes continued from previous page)
beneficial owner has sole (or shares with spouse or other immediate
family members) voting and dispositive power with respect to the shares.
(2) Under applicable regulations, a person is deemed to have beneficial
ownership of any shares of Cohoes common stock which may be acquired
within 60 days of the date shown pursuant to the exercise of outstanding
stock options. Shares of Cohoes common stock which are subject to stock
options are deemed to be outstanding for the purpose of computing the
percentage of outstanding common stock owned by such person or group but
not deemed outstanding for the purpose of computing the percentage of
Cohoes common stock owned by any other person or group. The amounts set
forth in the table include shares which may be received upon the
exercise of stock options pursuant to Cohoes' stock option plan within
60 days of the date shown as follows: for each of the 10 non-employee
directors, 5,201 shares; for Mr. Robinson, 8,290 shares; for Mr. Ahl,
8,290 shares; for Mr. Picchi, 11,250 shares; and for all directors and
executive officers as a group, 79,840 shares.
(3) Includes unvested restricted shares granted pursuant to Cohoes'
recognition and retention plan as follows: for each of the 10 non-
employee directors, 8,322 shares; for Mr. Robinson, 72,000 shares; for
Mr. Ahl, 36,000 shares; for Mr. Picchi, 18,000 shares; and for all
directors and executive officers as a group, 209,220 shares. These
shares will be voted by Cohoes' Board since they were subject to
restriction as of January 2, 2001.
(4) Includes 122,126 shares allocated to ESOP participants, including 53,175
shares allocated for the year ended December 31, 2000. The participants
are entitled to direct the voting of these allocated shares. First
Bankers Trust Company, NA, the trustee of the ESOP, may be deemed to own
beneficially the unallocated shares held by the ESOP. Unallocated shares
will be voted in the same proportion as allocated shares voted by
participants, subject to the requirements of applicable law and the
fiduciary duties of the trustee. The ESOP administrators are entitled to
direct the voting of the allocated shares for which timely voting
instructions are not received from the participants.
(5) Includes 21,000 shares owned by Mr. Robinson through the Cohoes Savings
Bank 401(k) Plan; and 2,553 shares allocated to Mr. Robinson in the ESOP
through December 31, 1999.
(6) Includes 8,500 shares owned by the Cohoes Savings Bank rabbi trust of
which Mr. Bowen is the beneficiary and 500 shares owned by Mr. Bowen's
wife.
(7) Includes 1,000 shares owned by Mr. DeLaMater's spouse.
(8) Includes 3,277 shares owned by Mr. Field's spouse.
(9) Includes 2,627 shares owned by an inter vivos trust of which Mr.
MacAffer is trustee.
(10) Includes 1,700 shares owned directly by Mr. O'Hearn's children.
(Footnotes continued on following page)
39
(Footnotes continued from previous page)
(11) Includes 7,935 shares owned by the Cohoes Savings Bank rabbi trust of
which Mr. Paton is the beneficiary.
(12) Includes 500 shares owned directly by Mr. Speidel's son.
(13) Includes 4,000 shares owned by Mr. Ahl through the Cohoes Savings Bank
401(k) Plan; 25,000 shares owned by Mr. Ahl's spouse; and 2,553 shares
allocated to Mr. Ahl in the ESOP through December 31, 1999.
(14) Includes 4,648 shares owned through the Cohoes Savings Bank 401(k) Plan;
and 2,121 shares allocated to Mr. Picchi in the ESOP through December
31, 1999.
(15) This total includes shares beneficially owned by all directors and
executive officers listed in the table.
STOCKHOLDER PROPOSALS
If the merger is not consummated prior to the next regularly scheduled
annual meeting of our stockholders, any proposal which a stockholder wishes to
have included in our proxy materials for the next annual meeting of
stockholders must be received at our main office located at 75 Remsen Street,
Cohoes, New York 12047, Attention: Richard A. Ahl, Secretary, no later than
June 25, 2001. Otherwise, any stockholder proposal to take action at the next
annual meeting requires the stockholder to provide notice to us which must be
received at our main office located at 75 Remsen Street, Cohoes, New York
12047 not less than sixty (60) days prior to the anniversary date of the
preceding year's annual meeting. The stockholder's notice must include
certain information as specified in our bylaws. Nothing in this paragraph
shall be deemed to require us to include in our proxy statement or the proxy
relating to any annual meeting any stockholder proposal which does not meet
all of the requirements for inclusion established by the SEC in effect at the
time such proposal is received. In addition, all stockholder proposals must
comply with our bylaws and Delaware law.
OTHER MATTERS
Each proxy solicited also confers discretionary authority on our Board
of Directors to vote the proxy with respect to matters incident to the conduct
of the meeting and upon such other matters as may properly come before the
special meeting. Our Board of Directors is not aware of any business to come
before the special meeting other than those matters described above in this
proxy statement. However, if any other matter should properly come before the
special meeting, it is intended that proxy holders will act in accordance with
their best judgment.
40
Appendix A
AGREEMENT AND PLAN OF MERGER
by and between
HUDSON RIVER BANCORP, INC.
HUDSON RIVER BANK & TRUST COMPANY
and
COHOES BANCORP, INC.
Dated November 24, 2000
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . A-1
1.2 Rules of Interpretation. . . . . . . . . . . . . . . . . A-8
ARTICLE II
PLAN OF MERGER
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . A-8
2.2 Surviving Corporation. . . . . . . . . . . . . . . . . . A-8
2.3 Conversion of Cohoes Common Stock. . . . . . . . . . . . A-9
2.4 Dissenting Shares/Cohoes-Owned Shares. . . . . . . . . . A-9
2.5 Shareholders Rights, Stock Transfers . . . . . . . . . . A-10
2.6 Exchange Procedures. . . . . . . . . . . . . . . . . . . A-10
2.7 Cohoes Options/Cohoes Restricted Shares. . . . . . . . . A-11
2.8 Closing. . . . . . . . . . . . . . . . . . . . . . . . . A-13
ARTICLE III
UNQUALIFIED REPRESENTATIONS AND WARRANTIES
OF COHOES
3.1 Capital Structure. . . . . . . . . . . . . . . . . . . . A-13
3.2 Registrations. . . . . . . . . . . . . . . . . . . . . . A-13
3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . A-14
3.4 This Agreement . . . . . . . . . . . . . . . . . . . . . A-14
3.5 Financial Statements; No Adverse Change. . . . . . . . . A-14
3.6 Fairness Opinion . . . . . . . . . . . . . . . . . . . . A-14
3.7 Interim Events . . . . . . . . . . . . . . . . . . . . . A-14
3.8 Regulatory Reports . . . . . . . . . . . . . . . . . . . A-15
3.9 Governmental Approvals . . . . . . . . . . . . . . . . . A-15
3.10 No Broker's or Finder's Fees. . . . . . . . . . . . . . A-15
3.11 Equity Holdings . . . . . . . . . . . . . . . . . . . . A-15
3.12 Certain Agreements. . . . . . . . . . . . . . . . . . . A-16
3.13 No Impediments. . . . . . . . . . . . . . . . . . . . . A-16
3.14 Cohoes Officer Severance Plan . . . . . . . . . . . . . A-17
3.15 Proxy Statement Information . . . . . . . . . . . . . . A-17
3.16 Cohoes Restoration Plan . . . . . . . . . . . . . . . . A-17
3.17 Registration Obligations. . . . . . . . . . . . . . . . A-17
A-i
ARTICLE IV
QUALIFIED REPRESENTATIONS AND WARRANTIES
OF COHOES
4.1 Organization and Good Standing . . . . . . . . . . . . . A-17
4.2 Compliance with Law. . . . . . . . . . . . . . . . . . . A-18
4.3 No Violations. . . . . . . . . . . . . . . . . . . . . . A-18
4.4 Litigation and Other Proceedings . . . . . . . . . . . . A-18
4.5 Environmental Matters. . . . . . . . . . . . . . . . . . A-18
4.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . A-19
4.7 Labor. . . . . . . . . . . . . . . . . . . . . . . . . . A-19
4.8 Indemnification. . . . . . . . . . . . . . . . . . . . . A-19
4.9 Loan Portfolio . . . . . . . . . . . . . . . . . . . . . A-19
4.10 Investment Portfolio. . . . . . . . . . . . . . . . . . A-19
4.11 Defaults. . . . . . . . . . . . . . . . . . . . . . . . A-20
4.12 Real Estate Loans and Investments . . . . . . . . . . . A-20
4.13 Employee Benefit Plans. . . . . . . . . . . . . . . . . A-20
4.14 Liquidation Account . . . . . . . . . . . . . . . . . . A-22
4.15 Tax Matters . . . . . . . . . . . . . . . . . . . . . . A-22
4.16 Derivatives Contracts . . . . . . . . . . . . . . . . . A-23
4.17 Properties. . . . . . . . . . . . . . . . . . . . . . . A-23
4.18 Material Interests of Certain Persons . . . . . . . . . A-23
4.19 Disclosures . . . . . . . . . . . . . . . . . . . . . . A-24
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF HUDSON AND HUDSON BANK
5.1 Organization and Good Standing . . . . . . . . . . . . . A-24
5.2 Registrations. . . . . . . . . . . . . . . . . . . . . . A-24
5.3 This Agreement . . . . . . . . . . . . . . . . . . . . . A-24
5.4 Financial Statements . . . . . . . . . . . . . . . . . . A-25
5.5 Fairness Opinion . . . . . . . . . . . . . . . . . . . . A-25
5.6 Regulatory Reports . . . . . . . . . . . . . . . . . . . A-25
5.7 Governmental Approvals . . . . . . . . . . . . . . . . . A-25
5.8 No Impediments . . . . . . . . . . . . . . . . . . . . . A-25
5.9 Proxy Statement Information. . . . . . . . . . . . . . . A-26
5.10 Financial Ability . . . . . . . . . . . . . . . . . . . A-26
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Reasonable Best Efforts. . . . . . . . . . . . . . . . . A-26
6.2 Shareholders Meeting . . . . . . . . . . . . . . . . . . A-26
6.3 Regulatory Matters . . . . . . . . . . . . . . . . . . . A-27
6.4 Investigation and Confidentiality. . . . . . . . . . . . A-27
6.5 Press Releases . . . . . . . . . . . . . . . . . . . . . A-28
A-ii
6.6 Business of the Parties. . . . . . . . . . . . . . . . . A-28
6.7 Certain Actions. . . . . . . . . . . . . . . . . . . . . A-32
6.8 Current Information. . . . . . . . . . . . . . . . . . . A-33
6.9 Indemnification. . . . . . . . . . . . . . . . . . . . . A-33
6.10 Environmental Reports . . . . . . . . . . . . . . . . . A-34
6.11 Employees and Employee Benefit Plans. . . . . . . . . . A-35
6.12 Litigation Matters. . . . . . . . . . . . . . . . . . . A-37
6.13 Conforming Entries. . . . . . . . . . . . . . . . . . . A-37
6.14 Systems Integration . . . . . . . . . . . . . . . . . . A-38
6.15 Disclosure Supplements. . . . . . . . . . . . . . . . . A-38
6.16 Failure to Fulfill Conditions . . . . . . . . . . . . . A-39
6.17 Proxy Solicitor . . . . . . . . . . . . . . . . . . . . A-39
6.18 Previous Transaction Stock Option Agreements
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-39
6.19 Organization of Merger Sub. . . . . . . . . . . . . . . A-39
6.20 Liquidated Damages. . . . . . . . . . . . . . . . . . . A-39
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions Precedent - the Parties . . . . . . . . . . . A-40
7.2 Conditions Precedent - Cohoes. . . . . . . . . . . . . . A-40
7.3 Conditions Precedent - Hudson. . . . . . . . . . . . . . A-41
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT
AND SPECIFIC PERFORMANCE
8.1 Termination. . . . . . . . . . . . . . . . . . . . . . . A-42
8.2 Effect of Termination. . . . . . . . . . . . . . . . . . A-43
8.3 Survival of Representations, Warranties and Covenants. . A-43
8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . A-43
8.5 Amendment or Supplement. . . . . . . . . . . . . . . . . A-43
8.6 Specific Performance . . . . . . . . . . . . . . . . . . A-44
ARTICLE IX
MISCELLANEOUS
9.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . A-44
9.3 No Assignment. . . . . . . . . . . . . . . . . . . . . . A-44
9.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . A-44
9.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . A-45
9.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . A-45
9.7 Severability . . . . . . . . . . . . . . . . . . . . . . A-45
9.8 Standard of Breach . . . . . . . . . . . . . . . . . . . A-46
9.9 Alternative Structure. . . . . . . . . . . . . . . . . . A-46
A-iii
EXHIBITS
EXHIBIT A - Cohoes Savings Bank General Severance Plan
EXHIBIT B - Voting Agreement
A-iv
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is dated as of November 24, 2000, by
and between Hudson, Hudson Bank and Cohoes.
WHEREAS, the Boards of the Parties deem it advisable and in the best
interests of the respective companies and their shareholders to consummate the
Transactions consisting of: (a) the Merger pursuant to which Merger Sub shall
be merged into Cohoes and in connection therewith each share of Cohoes Common
Stock outstanding immediately prior to Effective Time (excluding Dissenting
Shares and Cohoes-Owned Shares) shall be canceled in exchange for the right to
receive the Merger Consideration, (b) the Liquidation pursuant to which Cohoes
shall be liquidated and dissolved by transferring all of its assets and
liabilities to Hudson Bank, and (c) the Bank Merger pursuant to which Cohoes
Bank shall merge into Hudson Bank;
WHEREAS, the Board of Directors of the Parties have approved and adopted
this Agreement and the Merger;
WHEREAS, Hudson and Cohoes have mutually agreed to terminate the Cohoes
Stock Option Agreement as of the date hereof;
WHEREAS, as a material inducement for Hudson and Hudson Bank to enter
into this Agreement, the executive officers, directors and emeritus director
of Cohoes have entered into the Voting Agreement pursuant to which they have
agreed to vote all of the shares of Cohoes Common Stock owned, controlled or
for which they possess voting power in favor of the Merger and the adoption of
this Agreement; and
WHEREAS, the Parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
Transactions.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the Parties do agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION
The following meanings shall apply for purposes of this Agreement.
1.1 Definitions
"Agreement" means this Agreement and Plan of Merger.
"Alternative Proposal" shall mean any bona fide written proposal by any
person other than Hudson and Hudson Bank to engage in a merger, consolidation,
purchase or lease of substantially all assets, purchase of securities
representing more than 20% of the voting power, or any similar transaction,
involving Cohoes or Cohoes Bank.
A-1
"Bank Merger" means the merger of Cohoes Bank into Hudson Bank.
"Bank Merger Effective Time" means the time the Plan of Merger is filed
in the Office of the Superintendent by the Superintendent.
"Board" means the Board of Directors of an entity, or any committee duly
authorized to act on behalf of the Board of Directors of such entity with
respect to the relevant matter.
"Cause" means termination because of the employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties or willful violation of
any law, rule or regulation (other than traffic violations or similar
offenses).
"Certificate" means any certificate which immediately prior to the
Effective Time represented shares of Cohoes Common Stock.
"Certificate of Merger" means the certificate of merger to be executed
and filed by Merger Sub and Cohoes with the Secretary of State of the State of
Delaware pursuant to the DGCL to make the Merger effective.
"Claim" has the meaning attributed to it in Section 6.9(a).
"Closing" means the closing of the Transactions.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Cohoes" means Cohoes Bancorp, Inc., a Delaware corporation.
"Cohoes Bank" means Cohoes Savings Bank, a New York chartered savings
bank.
"Cohoes ESOP" means the Cohoes Employee Stock Ownership Plan and Trust
Agreement, as in effect as of the date hereof.
"Cohoes 401(k) Plan" means the Cohoes Savings Bank 401(k) Retirement
Savings Plan and Trust Agreement in RSI Retirement Trust as in effect on the
date hereof.
"Cohoes General Severance Plan" means the Cohoes Savings Bank General
Severance Plan (for non-officer employees) as adopted on the date hereof in
the form of EXHIBIT A hereto.
"Cohoes Officer Severance Plan" means the Cohoes Savings Bank Employee
Severance Compensation Plan as in effect on the date hereof.
"Cohoes Option Plan" means the Cohoes 1999 Stock Option and Incentive
Plan as the same may be amended pursuant to the Previously Disclosed
amendments at the 2000 annual meeting of shareholders of Cohoes.
A-2
"Cohoes Options" means options to purchase shares of Cohoes Common Stock
granted under the Cohoes Option Plan.
"Cohoes-Owned Shares" means any shares of Cohoes' Common Stock which are
owned beneficially or of record by any Party or any Subsidiary of a Party
immediately prior to the Effective Time, other than shares held in a fiduciary
capacity for the benefit of third parties or as a result of debts previously
contracted.
"Cohoes Recognition Plan" means the Cohoes 1999 Recognition and
Retention Plan as the same may be amended pursuant to the Previously Disclosed
amendments at the 2000 annual meeting of shareholders of Cohoes.
"Cohoes Restoration Plan" means the Benefit Restoration Plan of Cohoes
as in effect on the date hereof.
"Cohoes Restricted Shares" means shares of Cohoes Common Stock awarded
under the Cohoes Recognition Plan which are subject to restriction.
"Cohoes Special Bonus" means the special bonus to be paid by Cohoes
Savings Bank immediately prior to the Effective Time to each holder of an
unvested Cohoes Option who (a) is an employee or director of Cohoes Savings
Bank immediately prior to the Effective Time but specifically excluding
Messrs. Robinson, Ahl and Picchi and (b) timely executes and delivers to
Hudson cancellation agreements with respect to his or her Substitute Option
and Substitute Restricted Shares.
"Cohoes Stock Option Agreement" means that certain Stock Option
Agreement between Cohoes, as issuer, and Hudson, as grantee, dated April 25,
2000, as amended.
"Common Stock" means the common stock of any entity which has only one
authorized class of common stock.
"CRA" means the Community Reinvestment Act.
"Delivered" means provided by a Party or any of its Subsidiaries to the
other Party or Parties.
"DGCL" means the Delaware General Corporation Law.
"Dissenting Shares" means any shares of Cohoes Common Stock whose holder
becomes entitled to fair value of such shares under the DGCL.
"DOL" means the U.S. Department of Labor.
"Effective Time" means the time that the Merger becomes effective under
the DGCL.
"Employee Plans" means all stock option, restricted stock, employee
stock purchase and stock bonus plans, pension, profit- sharing and retirement
plans, deferred compensation, consultant, bonus and group insurance agreements
and all other incentive, health, welfare and benefit plans and arrangements
A-3
maintained for the benefit of any present or former directors or employees of
Cohoes or any of its Subsidiaries, whether written or oral.
"Encumbrance" means any lien, claim, charge, restriction, security
interest, rights of third parties, or encumbrance.
"Environmental Claim" means any written notice from any Governmental
Entity or third party alleging potential liability (including potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or penalties)
arising out of, based on, or resulting from the presence, or release into the
environment, of any Materials of Environmental Concern.
"Environmental Laws" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any
Governmental Entity relating to (i) the protection, preservation or
restoration of the environment (including air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental
Concern. The term Environmental Law includes (x) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601, et seq; the Resource Conservation and Recovery Act, as amended,
42 U.S.C. Section 6901, et seq; the Clean Air Act, as amended, 42 U.S.C.
Section 7401, et seq; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251, et seq; the Toxic Substances Control Act, as amended, 15
U.S.C. Section 9601, et seq; the Emergency Planning and Community Right to Know
Act, 42 U.S.C. Section 1101, et seq; the Safe Drinking Water Act, 42 U.S.C.
Section 300f, et seq; and all comparable state and local laws, and (y) any
common law (including common law that may impose 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 Materials of Environmental
Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 4.13(f).
"ERISA Affiliate Plan" has the meaning set forth in Section 4.13(f).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" means an exchange agent designated by Hudson or Hudson
Bank and reasonably acceptable to Cohoes.
"Exchange Ratio" means a number equal to the quotient of $19.50 and the
average closing sale price of a share of Hudson Common Stock as reported on
the Nasdaq Stock Market, or any other nationally recognized stock exchange, on
the most recent trading day prior to the day that the Effective Time occurs.
"FDIA" means the Federal Deposit Insurance Act, as amended.
A-4
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"FHLB" means the Federal Home Loan Bank of New York.
"Financial Advisor" means Keefe, Bruyette & Woods, Inc. with respect to
Cohoes, and Sandler O'Neill & Partners, L.P. with respect to Hudson and Hudson
Bank.
"Financial Statements" means both the Annual Financial Statements and
Interim Financial Statements of Cohoes or Hudson, whichever is applicable.
(a) "Financial Reports" means the consolidated balance sheets,
consolidated statements of income and statements of changes in
shareholders' equity and cash flows, including any related notes and
schedules.
(b) "Annual Financial Statements" means all the Financial
Reports filed by Cohoes or Hudson, whichever is applicable, in its most
recent annual report under the Securities Laws.
(c) "Interim Financial Statements" means the Financial Reports
filed by Cohoes or Hudson, whichever is applicable, in all of its
quarterly reports under the Securities Laws since the filing of its most
recent Annual Financial Statements.
"GAAP" means generally accepted accounting principles applied
consistently with prior practices.
"Governmental Entity" means any federal or state court, administrative
agency or commission or other governmental authority or instrumentality.
"HOLA" means the Home Owners' Loan Act, as amended.
"Hudson" means Hudson River Bancorp, Inc., a Delaware corporation.
"Hudson Bank" means Hudson River Bank & Trust Company, a New York
chartered savings bank.
"Hudson Proposal" has the meaning set forth in Section 6.7(b).
"Hudson Stock Option Agreement" means that certain Stock Option
Agreement between Hudson, as issuer, and Cohoes, as grantee, dated April 25,
2000, as amended.
"Indemnified Liabilities" has the meaning attributed to it in Section
6.9(a).
"Indemnified Parties " has the meaning attributed to it in Section
6.9(a).
"Insider Loans" means loans from Cohoes or any of its Subsidiaries to
any of its officers, directors or employees or any associate or related
interest of any such person.
"IRS" means the Internal Revenue Service or any successor thereto.
A-5
"Knowledge Qualification" means to the best knowledge, after reasonable
investigation, of the Party receiving the benefit of the qualification.
"Liquidation" means the liquidation and dissolution of Cohoes pursuant
to which all of the assets and liabilities of Cohoes shall be transferred to
Hudson Bank.
"Material Adverse Effect" means, (a) in the case of Cohoes, any effect
that is material and adverse to the condition (financial or otherwise),
results of operations or business of Cohoes and Cohoes Bank, taken as a whole,
or that materially impairs the ability of Cohoes or Cohoes Bank to consummate
any of the Transactions, provided, however, that a Material Adverse Effect
shall not be deemed to include the impact of (i) changes in laws and
regulations or interpretations thereof that are generally applicable to the
banking or savings institution industries, (ii) changes in GAAP that are
generally applicable to the banking or savings institution industries, (iii)
expenses incurred in connection with this Agreement and the Transactions, (iv)
actions or omissions of Cohoes or Cohoes Bank taken with the prior informed
written consent of Hudson or Hudson Bank in contemplation of the Transactions
or (v) changes attributable to or resulting from changes in general economic
conditions generally affecting financial institutions, including changes in
the prevailing level of interest rates; and (b) in the case of Hudson Bank,
any effect that materially impairs the ability of Hudson Bank to make payment
at the Effective Time of the aggregate Merger Consideration or otherwise
materially impairs the ability of Hudson or Hudson Bank to consummate any of
the Transactions.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"Merger" means the merger of Merger Sub into Cohoes, with Cohoes being
the surviving corporation.
"Merger Consideration" means $19.50, without interest, for each share of
Cohoes Common Stock that is outstanding immediately prior to the Effective
Time (but excluding Dissenting Shares and Cohoes-Owned Shares).
"Merger Sub" means a Delaware corporation to be formed and wholly owned
by Hudson Bank as a transitory Subsidiary to effectuate the Merger.
"OTS" means the Office of Thrift Supervision of the U.S. Department of
the Treasury or any successor thereto.
"Party" means Cohoes, Hudson, Hudson Bank or Merger Sub, after it
becomes a party to this Agreement, whichever is applicable.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Plan of Bank Merger" means the plan of merger to be entered into by
Cohoes Bank and Hudson Bank to effectuate the Bank Merger.
"Pension Plan" has the meaning set forth in Section 4.13(c).
A-6
"Previously Disclosed" means disclosed in a written disclosure schedule
delivered on or prior to the date hereof by Cohoes to Hudson or Hudson Bank
specifically referring to the appropriate section of this Agreement and
describing in reasonable detail the matters contained therein.
"Previous Transaction Stock Option Agreements" means the Cohoes Stock
Option Agreement and the Hudson Stock Option Agreement.
"Proxy Statement" means the proxy statement, together with any
supplements thereto, to be delivered to the holders of Cohoes Common Stock in
connection with the solicitation of their adoption of this Agreement.
"Regulatory Reports" means all reports, including Securities Documents,
which a Party or any of its Subsidiaries is required to file with any banking
or thrift Governmental Entity or the SEC.
"Rights" means all warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended."
"Securities Documents" means all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or
required to be filed, pursuant to the Securities Laws.
"Securities Laws" means the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939, as amended; and the rules
and regulations of the SEC promulgated thereunder.
"Subsidiary" when used with respect to any Party means any entity,
whether incorporated or unincorporated, which is consolidated with such Party
for financial reporting purposes.
"Substitute Option" has the meaning set forth in Section 2.7(b).
"Substitute Restricted Shares" has the meaning set forth in Section
2.7(c).
"Superintendent" means the Superintendent of Banks of the State of New
York.
"Superior Offer" has the meaning set forth in Section 6.7(d).
"Thrift Regulations" means the banking laws of the State of New York,
the FDIA, the HOLA and the rules and regulations promulgated thereunder.
"Transactions" means the Merger, Liquidation and Bank Merger.
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"Voting Agreement" means that certain agreement entered into between
Hudson and the executive officers, directors and emeritus directors of Cohoes
on the date hereof in the form of Exhibit B hereto.
1.2 Rules of Interpretation
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement. All provisions of this Agreement are
subject to applicable law and to the other terms and conditions of this
Agreement. No provision of this Agreement shall be construed to require a
party or its affiliate to take any action which would violate applicable law.
The word "accurate" includes the concept "true and complete."
The word "agreement" includes every sort of contract, commitment, or
understanding, whether written or oral.
The word "authority" includes the concept "all requisite power and
authority."
The word "authorized" includes the concepts "duly approved and
authorized," "adopted," "advised," and any other similar term which may be
required by law.
All forms of the verb "include" includes the concept "without
limitation."
With respect to any securities, "outstanding" means "issued and
outstanding."
ARTICLE II
PLAN OF MERGER
2.1 The Merger
At the Effective Time, Merger Sub shall be merged into Cohoes. The
separate corporate existence of Merger Sub shall cease, Cohoes shall be the
surviving corporation, and Cohoes shall continue its corporate existence under
the DGCL.
2.2 Surviving Corporation
(a) The name of the surviving corporation shall be "Cohoes
Bancorp, Inc.
(b) The Certificate of Incorporation and Bylaws of Cohoes as in
effect immediately prior to the Effective Time shall be the Certificate
of Incorporation and Bylaws of Cohoes, as the surviving corporation, at
and after the Effective Time, until thereafter altered, amended or
repealed in accordance with Delaware law.
(c) The directors and officers of Merger Sub immediately prior
to the Effective Time shall be the directors and officers of Cohoes, as
the surviving corporation, at and after the Effective Time, each to hold
office until his or her successor is elected and qualified or otherwise
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in accordance with the Certificate of Incorporation and Bylaws of
Cohoes, as the surviving corporation.
2.3 Conversion of Cohoes Common Stock
At the Effective Time, by virtue of the Merger and without any action on
the part of the Parties or the holders of Common Stock of the Parties, the
following shall occur:
(a) each share of Cohoes Common Stock outstanding immediately
prior to the Effective Time shall cease to be outstanding and shall be
converted into the right to receive the Merger Consideration, except as
provided in Section 2.4;
(b) each share of Hudson Common Stock outstanding immediately
prior to the Effective Time shall remain an outstanding share of Hudson
Common Stock at and after the Effective Time; and
(c) each share of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted into and
become one share of Cohoes Common Stock.
2.4 Dissenting Shares/Cohoes-Owned Shares
(a) Any holders of Dissenting Shares shall be entitled to
payment for such shares only to the extent permitted by and in
accordance with the DGCL; provided, however, that if any holder of
Dissenting Shares shall forfeit such right to payment, such shares shall
thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration from Hudson Bank without interest. Dissenting
Shares shall not, after the Effective Time, be entitled to vote for any
purpose or receive any dividends or other distributions and shall be
entitled only to such rights as are afforded in respect of Dissenting
Shares pursuant to the DGCL.
(b) Cohoes shall give Hudson or Hudson Bank (i) prompt notice of
any written objections to the Merger and any written demands for the
payment of the fair value of any shares, withdrawals of such demands,
and any other instruments served upon or received by Cohoes pursuant to
Section 262 of the DGCL and (ii) the opportunity to participate in all
negotiations and proceedings with respect to such demands under the
DGCL. Cohoes shall not voluntarily make any payment with respect to any
demands for payment of fair value and shall not, except with the prior
written consent of Hudson or Hudson Bank, settle or offer to settle any
such demands.
(c) Any Cohoes-Owned Shares shall cease to exist at the
Effective Time, the Certificates for such shares shall as promptly as
practicable be canceled, such shares shall not be converted into the
Merger Consideration, and no cash or other consideration shall be issued
or exchanged therefor.
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2.5 Shareholders Rights, Stock Transfers
At the Effective Time, holders of Certificates shall cease to be and
shall have no rights as shareholders of Cohoes, other than such rights as they
may have under the DGCL. After the Effective Time, there shall be no
transfers on the stock transfer books of Cohoes of Certificates and if
Certificates are presented for transfer after the Effective Time, they shall
be delivered to the Exchange Agent or Hudson Bank for cancellation against
delivery of the Merger Consideration. No interest shall be paid on the Merger
Consideration.
2.6 Exchange Procedures
(a) No later than five business days following the Effective
Time, Hudson Bank shall cause the Exchange Agent to mail or make
available to each holder of record any Certificate a notice and letter
of transmittal disclosing the effectiveness of the Merger and the
procedure for exchanging Certificates for the Merger Consideration.
Such letter of transmittal shall specify that delivery shall be effected
and risk of loss and title shall pass only upon proper delivery of
Certificates to the Exchange Agent.
(b) At or prior to the Effective Time, or at such other time or
times as the Exchange Agent may otherwise request, Hudson Bank shall
deliver to the Exchange Agent for the benefit of the holders of
Certificates (other than the holders of Dissenting Shares and Cohoes-
Owned Shares) an amount of cash equal to the aggregate Merger
Consideration for payment of the aggregate Merger Consideration to such
holders of Certificates.
(c) Each holder of any outstanding Certificate (other than
holders of Dissenting Shares and Cohoes-Owned Shares) who surrenders
such Certificate to the Exchange Agent will, upon acceptance thereof by
the Exchange Agent, be entitled to the Merger Consideration. The
Exchange Agent shall accept Certificates upon compliance with such
reasonable terms and conditions as the Exchange Agent may impose to
effect an orderly exchange in accordance with normal exchange practices.
Each outstanding Certificate which is not surrendered to the Exchange
Agent shall, except as provided in Section 2.4, evidence ownership of
only the right to receive the Merger Consideration without interest.
(d) The Exchange Agent shall not be obligated to deliver the
Merger Consideration until the holder surrenders a Certificate as
provided in this Section 2.6, or, in default thereof, an appropriate
affidavit of loss and indemnity agreement and/or a bond as may be
required in each case by the Exchange Agent or Hudson Bank. If any
check is to be issued in a name other than that in which the Certificate
is registered, it shall be a condition of the issuance thereof that the
Certificate so surrendered shall be properly endorsed or accompanied by
an executed form of assignment separate from the Certificate and
otherwise in proper form for transfer and that the person requesting
such exchange pay to the Exchange Agent any transfer or other tax
required by reason of the issuance of a check in any name other than
that of the registered holder of the Certificate surrendered or
otherwise establish to the satisfaction of the Exchange Agent that such
tax has been paid or is not payable.
(e) Any portion of the cash delivered to the Exchange Agent by
Hudson Bank pursuant to Section 2.6(b) that remains unclaimed by the
former shareholders of Cohoes for six
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months after the Effective Time shall be delivered by the Exchange Agent
to Hudson Bank. Any shareholders of Cohoes who have not theretofore
complied with Section 2.6(c) shall thereafter look only to Hudson Bank for
the Merger Consideration. If outstanding Certificates are not surrendered
or the payment for them is not claimed prior to the date on which such
payment would otherwise escheat to or become the property of any
Governmental Entity, the unclaimed items shall, to the extent permitted by
abandoned property and any other applicable law, become the property of
Hudson Bank (and to the extent not in its possession shall be delivered to
it), free and clear of all claims or interest of any person previously
entitled to such property. Neither the Exchange Agent nor any of the
Parties shall be liable to any holder of Cohoes Common Stock represented
by any Certificate for any consideration paid to a public official
pursuant to applicable abandoned property, escheat or similar laws.
Hudson Bank and the Exchange Agent shall be entitled to rely upon the
stock transfer books of Cohoes to establish the identity of those
persons entitled to receive the Merger Consideration, which books shall
be conclusive with respect thereto.
(f) The Exchange Agent or Hudson Bank shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Certificates such amounts as
it is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by the Exchange Agent
or Hudson Bank, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the Certificates
in respect of which such deduction and withholding was made.
2.7 Cohoes Options/Cohoes Restricted Shares
(a) At the Effective Time, each Cohoes Option granted pursuant
to the Cohoes Option Plan that is then vested, outstanding and
unexercised shall be canceled, and in lieu thereof the holder of such
Cohoes Option shall be paid in cash an amount equal to the product of
(i) the number of shares of Cohoes Common Stock subject to such vested
option at the Effective Time and (ii) the amount by which the Merger
Consideration exceeds the exercise price per share of such Cohoes
Option, net of any cash which must be withheld under federal and state
income and employment tax requirements.
(b) At the Effective Time, each Cohoes Option granted pursuant
to the Cohoes Option Plan that is then unvested and outstanding will be
converted into an option (the "Substitute Option") to purchase shares of
Hudson Common Stock under the same terms and provisions of the Cohoes
Option Plan and the underlying stock option agreement by which the
Cohoes Option is evidenced (including the vesting schedule), which plan
and agreement shall be assumed by Hudson, except that the Substitute
Option shall represent the right to purchase (when and to the extent it
becomes exercisable and during the exercise period) a number of shares
of Hudson Common Stock (rounded to the nearest whole share) equal to the
product of (i) the number of shares of Cohoes Common Stock subject to
the Cohoes Option being converted and (ii) the Exchange Ratio. The
exercise price for each share of Hudson Common Stock subject to the
Substitute Option shall be adjusted by dividing the per share exercise
price contained in the Cohoes Option by the Exchange Ratio (rounded to
the nearest cent).
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(c) At the Effective Time, all of the Cohoes Restricted Shares
of a holder awarded pursuant to the Cohoes Recognition Plan that are
then outstanding will be converted into restricted shares of Hudson
Common Stock (the "Substitute Restricted Shares") under the same terms
and provisions of the Cohoes Recognition Plan and the underlying award
agreement by which the Cohoes Restricted Shares are evidenced (including
the vesting schedule), which plan and agreement shall be assumed by
Hudson, except that the Substitute Restricted Shares shall represent a
number of shares of Hudson Common Stock (rounded to the nearest whole
share) equal to the product of (i) the number of Cohoes Restricted
Shares of the holder and (ii) the Exchange Ratio.
(d) At least 25 days prior to the Effective Time, each holder of
an unvested Cohoes Option will be offered the opportunity to enter into
a cancellation agreement with Hudson with respect to the Substitute
Option to be received by the holder pursuant to Section 2.7(b). The
cancellation agreement shall provide that Hudson shall pay to the holder
of the Substitute Option on the first business day following the day the
Effective Time occurs, in cancellation of the Substitute Option of the
holder, a cash amount, by check, equal to (i) the number of options to
purchase shares of Hudson Common Stock that vest on July 2, 2001
multiplied by the quotient of $7.43750 and the Exchange Ratio (provided
this subpart (i) shall only apply if the Effective Time occurs prior to
July 2, 2001), plus (ii) the number of options to purchase shares of
Hudson Common Stock that vest on July 2, 2002 multiplied by the quotient
of $6.01707 and the Exchange Ratio, plus (iii) the number of options to
purchase shares of Hudson Common Stock that vest on July 2, 2003
multiplied by the quotient of $4.63411 and the Exchange Ratio, plus (iv)
the number of options to purchase shares of Hudson Common Stock that
vest on July 2, 2004 multiplied by the quotient of $3.28596 and the
Exchange Ratio, less any cash which must be withheld under applicable
federal and state income and employment tax requirements. In order to
accept the aforesaid offer, the holder of an unvested Cohoes Option must
execute and deliver the cancellation agreement to Hudson no later than
the 15th day after it is provided to the holder by Hudson, time being of
the essence. Accordingly, Hudson shall not be obligated to abide by its
offer herein to any holder of an unvested Cohoes Option who does not
timely provide his or her executed cancellation agreement to Hudson.
(e) At least 25 days prior to the Effective Time, each holder of
Cohoes Restricted Shares will be offered the opportunity to enter into a
cancellation agreement with Hudson with respect to the Substitute
Restricted Shares to be received by the holder pursuant to Section
2.7(c). The cancellation agreement shall provide that Hudson shall pay
to the holder of the Substitute Restricted Shares on the first business
day following the day the Effective Time occurs, in cancellation of the
Substitute Restricted Shares of the holder, a cash amount, by check,
equal to (i) the number of Substitute Restricted Shares that vest on
July 2, 2001 multiplied by the quotient of $19.50 and the Exchange Ratio
(provided this subpart (i) shall only apply if the Effective Time occurs
prior to July 2, 2001), plus (ii) the number of Substitute Restricted
Shares that vest on July 2, 2002 multiplied by the quotient of $15.77584
and the Exchange Ratio, plus (iii) the number of Substitute Restricted
Shares that vest on July 2, 2003 multiplied by the quotient of $12.14993
and the Exchange Ratio, plus (iv) the number of Substitute Restricted
Shares that vest on July 2, 2004 multiplied by the quotient of $8.61530
and the Exchange Ratio, plus (v) the amount of the accrued but unpaid
cash dividends on the Cohoes Restricted Shares of the holder, less any
cash which must be withheld under applicable federal and state income
and employment tax requirements. In order to accept the aforesaid
offer, the holder of Cohoes
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Restricted Shares must execute and deliver the cancellation agreement to
Hudson no later than the 15th day after it is provided to the holder by
Hudson, time being of the essence. Accordingly, Hudson shall not be
obligated to abide by its offer herein to any holder of Cohoes Restricted
Shares who does not timely provide his or her executed cancellation
agreement to Hudson.
(f) Notwithstanding the foregoing, each director and executive
officer of Cohoes and Cohoes Bank will execute and deliver to Hudson
within 15 business days of the date hereof (i) a cancellation agreement
with respect to his or her Substitute Option and (ii) a cancellation
agreement with respect to his or her Substitute Restricted Shares.
2.8 Closing
Within 30 days following the satisfaction or waiver of all the
conditions set forth in Article VII(other than the delivery of certificates,
opinions and other instruments and documents to be furnished at Closing), the
Closing shall take place on a date and at a time and place designated in
writing by Hudson or Hudson Bank. The Parties shall use their best efforts to
cause all of the Transactions to be completed on the Closing Date with the
Merger and Liquidation occurring simultaneously and the Bank Merger occurring
immediately thereafter.
ARTICLE III
UNQUALIFIED REPRESENTATIONS AND WARRANTIES
OF COHOES
As of the date hereof, Cohoes represents and warrants to Hudson and
Hudson Bank as follows:
3.1 Capital Structure
(a) Its authorized capital stock consist of 25,000,000 shares of
Cohoes Common Stock of which 7,911,985 are outstanding (inclusive of
Cohoes Restricted Shares) and 1,623,240 are held by it as treasury
shares, and 5,000,000 shares of preferred stock, none of which are
outstanding or held as treasury shares of outstanding shares of Cohoes
Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable, and have not been issued in violation of the
preemptive rights of any person.
(b) Its outstanding Rights consist solely of Cohoes Options.
There are outstanding (i) Rights to acquire 858,305 shares of Cohoes
Common Stock and 275,262 Cohoes Restricted Shares. It has Previously
Disclosed a schedule of its Rights and Cohoes Restricted Shares that
includes the name of each optionee and holder of Restricted Shares, the
number of options held by each optionee, the number of shares of
Restricted Shares held by each holder thereof, the exercise price of
each option and the vesting date of each option and each of the
Restricted Shares.
3.2 Registrations
It is duly registered as a savings and loan holding company under the
HOLA and is registered under the Exchange Act.
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3.3 Subsidiaries
It has Previously Disclosed a list of all its Subsidiaries. All
outstanding shares or ownership interests of its Subsidiaries are validly
issued, fully paid, nonassessable and owned beneficially and of record by it
or one of its Subsidiaries free and clear of any Encumbrance. There are no
Rights authorized, issued or outstanding with respect to any of its
Subsidiaries. All eligible accounts of Cohoes Bank are insured by the FDIC to
the maximum extent permitted by law.
3.4 This Agreement
(a) It has authority to enter into this Agreement, and any other
documents and instruments that are to be executed by it in connection
with the Transactions and, subject to any necessary approvals from
Governmental Entities and/or its shareholders, to consummate the
Transactions.
(b) Its Board has authorized the execution, delivery and
performance of this Agreement and the consummation of the Transactions.
It has properly executed and delivered this Agreement. Its obligations
under this Agreement are valid and binding upon it, and this Agreement
does not violate its Certificate of Incorporation, Bylaws, or any law,
judgment or order of any Governmental Entity applicable to it.
(c) No "business combination," "moratorium," "control share" or
other state anti-takeover statute or regulation prohibits, restricts or
subjects to any material condition its ability to perform its
obligations under this Agreement.
3.5 Financial Statements; No Adverse Change
Its Financial Statements have been prepared in accordance with GAAP,
fairly present its consolidated financial position, and contain adequate
reserves for losses. Since the period covered by its most recent Annual
Financial Statements prior to the date hereof, it and its Subsidiaries have
conducted their businesses only in the ordinary course and, except as
Previously Disclosed, it has not suffered a Material Adverse Effect. Except as
disclosed in such Annual Financial Statements or as otherwise Previously
Disclosed, no circumstances exist that could reasonably be expected to result
in a Material Adverse Effect to it. It and its Subsidiaries have no
liabilities, known or unknown, asserted or unasserted, absolute, contingent or
otherwise, that are required under GAAP to be reflected in audited financial
statements or the notes thereto which are not reflected in its Annual
Financial Statements other than liabilities incurred in the ordinary course of
business since such date.
3.6 Fairness Opinion
It has received an opinion from its Financial Advisor to the effect that
Merger Consideration is fair, from a financial point of view, to its
shareholders.
3.7 Interim Events
Except as Previously Disclosed, since its most recent Interim Financial
Statements neither it nor any of its Subsidiaries paid or declared any
dividend (other than its regular quarterly cash dividend) or
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made any other distribution to shareholders or taken any action (other than
loan originations) which if taken after the date hereof would require the prior
written consent of Hudson or Hudson Bank hereunder.
3.8 Regulatory Reports
The Regulatory Reports filed by it and its Subsidiaries during the past
three years, as filed or amended, complied with applicable requirements of law
and, as of their respective dates or the dates as amended, did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.9 Governmental Approvals
No approval of, or filing with, any Governmental Entity is required by
it or any of its Subsidiaries for the consummation of the Transactions except
for:
(a) any filings or approvals under the Thrift Regulations;
(b) the clearance of the Proxy Statement;
(c) the filing of the Certificate of Merger;
(d) the filing of the Plan of Bank Merger; and
(e) any anti-trust filings or approvals.
It is not aware of any reasons relating to it or any of its Subsidiaries
why such consents and approvals should not be granted, free of any conditions
or requirements which would be unduly burdensome to Hudson or Hudson Bank or
which would materially reduce the value of the Transactions to Hudson.
3.10 No Broker's or Finder's Fees
No agent, broker, investment banker, person or firm acting on behalf of
it or any of its Subsidiaries will be entitled to any fee or commission in
connection with the Transactions, except for its Financial Advisor. It has
Previously Disclosed the engagement letter that it entered into with its
Financial Advisor which sets forth all of the fees and expenses to be paid to
its Financial Advisor in connection with the Transactions.
3.11 Equity Holdings
Except as Previously Disclosed, neither it nor any of its Subsidiaries
own more than 2% of the capital stock or other equity securities (including
securities convertible or exchangeable into such securities) of or more than
2% of the aggregate profit participations in any entity other than a
Subsidiary.
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3.12 Certain Agreements
Except as Previously Disclosed or for agreements, arrangements,
commitments and understandings which are not material in the aggregate,
neither it nor any of its Subsidiaries is a party to, is bound or affected by,
or receives or is obligated to pay benefits (other than those that relate to
benefits which previously have been fully accrued as a liability or expensed
and for which there is no future financial reporting obligation) under:
(a) any agreement, arrangement or commitment, including any
agreement, indenture or other instrument, relating to the borrowing of
money(other than in the case of deposits, FHLB advances and federal
funds purchased) or the guarantee of any obligation;
(b) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election or retention in
office of any present or former director, advisory director, officer or
employee;
(c) any agreement, arrangement or understanding pursuant to
which any payment (whether of severance pay or otherwise) is or may
become due to any present or former director, advisory director, officer
or employee;
(d) any agreement, arrangement or understanding pursuant to
which any present or former director, advisory director, officer,
employee or agent is entitled to indemnification;
(e) any agreement, arrangement or understanding which limits its
or any of its Subsidiaries freedom to compete in any line of business or
with any person;
(f) any agreement, arrangement or understanding which would be
required to be filed as an exhibit to its Annual Report on Form 10-K
under the Exchange Act and which has not been so filed;
(g) any agreement pursuant to which loans have been sold, which
impose any potential recourse obligations (by representation, warranty,
covenant or other contractual terms) upon it or any of its Subsidiaries;
or
(h) any subservicing agreement.
3.13 No Impediments
Except as Previously Disclosed, neither it nor any of its Subsidiaries
has taken or agreed to take any action, nor does it have knowledge of any fact
or circumstance, that would materially impede or delay the consummation of the
Transactions or the ability of the Parties to obtain any approval of any
Governmental Entity required for consummation of the Transactions or to
perform their covenants and agreements under this Agreement.
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3.14 Cohoes Officer Severance Plan
All current participants and all persons who may become participants in
the Cohoes Officer Severance Plan prior to the Effective Time have been
Previously Disclosed.
3.15 Proxy Statement Information
None of the information relating to it or any of its Subsidiaries which
is included in the Proxy Statement, as of the date such Proxy Statement is
mailed to its shareholders and up to and including the date of the meeting of
its shareholders to which such Proxy Statement relates, will contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, provided that information as of a later date shall
be deemed to modify information as of an earlier date.
3.16 Cohoes Restoration Plan
Upon the termination of the Cohoes ESOP and Cohoes 401(k) Plan as of the
Effective Time in accordance with Sections 6.11(e) and 6.11(f), none of
Cohoes, any Cohoes Subsidiary or any of their respective successors in
interest will have any obligation to make further contributions to or awards
of benefits under the Cohoes Restoration Plan. No participant in the Cohoes
Restoration Plan will receive any contribution or benefit award under the
Cohoes Restoration Plan as a result of the aforesaid termination of the Cohoes
ESOP and Cohoes 401(k) Plan.
3.17 Registration Obligations
It is not under any obligation, contingent or otherwise, which will
survive the Effective Time to register any of its securities under the
Securities Act or other federal or state securities laws or regulations.
ARTICLE IV
QUALIFIED REPRESENTATIONS AND WARRANTIES
OF COHOES
As of the date hereof, except as Previously Disclosed and subject to the
standard set forth in Section 9.8, Cohoes as to itself and separately as to
each of its Subsidiaries, represents and warrants to Hudson and Hudson Bank as
follows:
4.1 Organization and Good Standing
It is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has authority to own, operate and
lease its assets and properties and to carry on its business. It is qualified
to do business and is in good standing in each jurisdiction where the
character of its assets or the nature of its business requires it to be
qualified. It has Delivered accurate copies of its organizational documents,
bylaws and other governing documents as currently in effect. Its minute books
contain complete and accurate records of all meetings and other actions taken
by its shareholders, owners, Board, or committees of its Board. Its stock
ledgers or other ownership ledgers reflect all transactions in its capital
stock or ownership interests, since its inception.
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4.2 Compliance with Law
(a) It is in compliance with all laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to its operations and
business.
(b) It has all permits, licenses, certificates of authority,
orders and approvals of, and has made all filings, applications and
registrations with, all Governmental Entities that are required in order
to permit it to carry on its business as it is presently being
conducted.
(c) It has not received in the last three years any notification
or communication from any Governmental Entity or the staff thereof
asserting that it was not in compliance with any statutes, regulations
or ordinances, threatening to revoke any license, franchise, permit or
authorization; or threatening or contemplating any enforcement action.
(d) It is not required to give prior notice to any regulatory
agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive
officer.
4.3 No Violations
Neither the execution of this Agreement nor the consummation of the
Transactions will result in any violation, breach, termination, default or
loss of a material benefit under, or permit the acceleration of any obligation
under, or require the consent of a third party under, or result in the
creation of any Encumbrance on any of the property or assets under, any of its
agreements or other instruments.
4.4 Litigation and Other Proceedings
It is not a defendant in nor is any of its property subject to any
pending (or, subject to the Knowledge Qualification, threatened), claim,
action, suit, investigation or proceeding or subject to any judicial order,
judgment or decree.
4.5 Environmental Matters
(a) It is in compliance with all Environmental Laws. It has not
received any communication alleging that it is not in such compliance
and, subject to the Knowledge Qualification, there are no present
circumstances that would prevent or interfere with the continuation of
such compliance.
(b) Subject to the Knowledge Qualification, none of the
properties owned, leased or operated by it has been or is in violation
of or liable under any Environmental Law.
(c) Subject to the Knowledge Qualification, there are no past or
present actions, activities, circumstances, conditions, events or
incidents that could reasonably form the basis of any Environmental
Claim or other claim or action or governmental investigation that could
result in the imposition of any liability against or obligation on the
part of it or any person or entity whose liability or obligation for any
Environmental Claim it has or may have retained or assumed either
contractually or by operation of law.
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(d) It has not conducted (i) any phase one environmental
investigations during the past three years (other than in connection
with loan originations or purchases) or (ii) any phase two environmental
investigations during the past five years, in each case, with respect to
any properties owned by it, leased by it or securing loans held by it.
4.6 Insurance
It is insured for reasonable amounts with financially sound and
reputable insurance companies against such risks as companies or institutions
engaged in a similar business would, in accordance with good business
practice, customarily be insured and has maintained all insurance required by
its agreements and applicable laws and regulations. It has not, during the
past five years, had an insurance policy canceled or non-renewed or been
denied any insurance coverage for which it has applied.
4.7 Labor
No work stoppage involving it is pending or, subject to the Knowledge
Qualification, threatened. It is not involved in or, subject to the Knowledge
Qualification, threatened with or affected by, any labor dispute,
discrimination or sexual harassment claims, arbitration, lawsuit or
administrative proceeding involving any of its current or former employees.
It is not a party to any collective bargaining agreement.
4.8 Indemnification
Subject to the Knowledge Qualification, no action or failure to take
action by any present or former director, advisory director, officer, employee
or agent of it has occurred which would give rise to a claim or a potential
claim by any such person for indemnification from it.
4.9 Loan Portfolio
Each loan reflected as an asset on its Annual Financial Statements and
each loan originated or acquired thereafter is evidenced by appropriate and
sufficient documentation and constitutes a legal, valid and binding obligation
of the obligor named therein, enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
or doctrines. All such loans are free and clear of any Encumbrance, other than
the lien of the FHLB. It has no loan or other asset that has been classified
by examiners or others as "Other Loans of Concern," "Substandard," "Doubtful"
or "Loss." It has Previously Disclosed a complete list of the real estate
acquired by it through foreclosure, repossession or deed in lieu thereof which
are currently held by it.
4.10 Investment Portfolio
All investment securities held by it are carried on its financial books
and records in accordance with GAAP. Except for pledges to secure public and
trust deposits, none of its investment securities are subject to any
restriction, whether contractual or statutory, which materially impairs its
ability to freely dispose of such investment securities at any time, other
than those restrictions imposed on securities held to maturity under GAAP.
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4.11 Defaults
There has not been any default in any obligation to be performed by it
under any agreement and it has not waived any material right under any
agreement. Subject to the Knowledge Qualification, no other party to any
agreement is in default in any obligation to be performed by such party.
4.12 Real Estate Loans and Investments
Except for properties acquired by it in settlement of loans, there are
no facts, circumstances or contingencies known to it which exist and would
require a reduction under GAAP in the present carrying value of any of its
real estate investments, joint ventures, construction loans, other investments
or other loans (either individually or in the aggregate with its other loans
and investments).
4.13 Employee Benefit Plans
(a) It has Previously Disclosed all Employee Plans (other than
those that relate to benefits which previously have been fully accrued
as a liability or expensed and for which there is no future financial
reporting obligation) and has heretofore delivered accurate copies of
each (including amendments and agreements relating thereto) together
with, in the case of qualified plans, (i) the most recent financial
reports and actuarial reports prepared with respect thereto, (ii) the
most recent annual reports filed with any Governmental Entity with
respect thereto, and (iii) all rulings and determination letters and any
open requests for rulings or letters that pertain thereto.
(b) Each Employee Plan has been operated and administered in
accordance with its terms and with applicable law, including, to the
extent applicable, ERISA, the Code, the Securities Act, the Exchange
Act, the Age Discrimination in Employment Act, and the regulations or
rules promulgated thereunder; and all filings, disclosures and notices
required by ERISA, the Code, the Securities Act, the Exchange Act, the
Age Discrimination in Employment Act and any other applicable law have
been timely made.
(c) Each Employee Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan") and
which is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter (including a determination
that the related trust under such Pension Plan is exempt from tax under
Section 501(a) of the Code) from the IRS, and it is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter.
(d) There is no pending or, subject to the Knowledge
Qualification, threatened legal action, suit or claim relating to any
Employee Plan (other than routine claims for benefits) or against any
related trust thereto or fiduciary thereof.
(e) It has not engaged in a transaction, or omitted to take any
action, with respect to any Employee Plan that has or would reasonably
be expected to subject it to a tax or penalty imposed by either Section
4975 of the Code or Section 502 of ERISA, assuming for purposes of
Section 4975 of the Code that the taxable period of any such transaction
expired as of the date hereof.
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(f) No liability (other than for payment of premiums to the PBGC
which have been made or will be made on a timely basis) under Title IV
of ERISA has been or is expected to be incurred by it with respect to
any ongoing, frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by it, or any single-employer plan of any entity (an "ERISA
Affiliate") which is considered one employer with it under Section
4001(a)(14) of ERISA or Section 414(b) or (c) of the Code (an "ERISA
Affiliate Plan").
(g) Neither it nor any ERISA Affiliate has contributed, or has
been obligated to contribute, to a multiemployer plan under Subtitle E
of Title IV of ERISA at any time since September 26, 1980.
(h) No notice of a "reportable event", within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not
been waived, has been required to be filed for any Employee Plan or by
any ERISA Affiliate Plan within the 12-month period ending on the date
hereof. The PBGC has not instituted proceedings to terminate any
Pension Plan or ERISA Affiliate Plan and, subject to the Knowledge
Qualification, no condition exists that presents a risk that such
proceedings will be instituted by the PBGC.
(i) There is no pending investigation or enforcement action by
the PBGC, DOL or IRS or any other Governmental Entity with respect to
any Employee Plan.
(j) All contributions required to be made under the terms of any
Employee Plan or ERISA Affiliate Plan have been timely made.
(k) Neither any Pension Plan nor any ERISA Affiliate Plan has an
"accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and all
required payments to the PBGC with respect to each Pension Plan or ERISA
Affiliate Plan have been made on or before their due dates.
(l) Neither it nor any ERISA Affiliate (i) has provided, or
would reasonably be expected to be required to provide, security to any
Pension Plan or to any ERISA Affiliate Plan pursuant to
Section 401(a)(29) of the Code, or (ii) has taken any action, or omitted
to take any action, that has resulted, or would reasonably be expected
to result, in the imposition of an Encumbrance under Section 412(n) of
the Code or pursuant to ERISA.
(m) It is not currently a sponsor of or a participating employer
in any Pension Plan that is a defined benefit plan.
(n) It has no obligation to provide retiree health and life
insurance or other retiree death benefits under any Employee Plan, other
than benefits mandated by Section 4980B of the Code. There has been no
communication to its employees that would reasonably be expected to
promise or guarantee such employees retiree health or life insurance or
other retiree death benefits.
(o) Except as Previously Disclosed with respect to parachute
payments to be made to Messrs. Robinson and Ahl, it has neither made any
payments, nor is obligated to make any
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payments by virtue of the consummation of any of the Transactions or any
termination of employment in connection therewith, nor is a party to any
agreement or any Employee Plan, that under any circumstances could obligate
it or its successor to make payments or deemed payments that (i) are not or
will not be deductible because of Sections 162(m) or 280G of the Code or
(ii) would require Hudson or any of its Subsidiaries to record any charge
or expense therefor (or any tax gross-up payments) for financial reporting
purposes on a post-acquisition basis.
4.14 Liquidation Account
In the case of Cohoes Bank, the liquidation account established by it in
connection with its conversion from mutual to stock form has been maintained
since its establishment in accordance with applicable laws and the records
with respect to said account are accurate.
4.15 Tax Matters
(a) It has timely filed all federal, state and local (and, if
applicable, foreign) income, franchise, bank, excise, real property,
personal property and other tax returns and reports required by
applicable law to be filed by it(including estimated tax returns, income
tax returns, information returns and withholding and employment tax
returns) and has paid, or where payment is not required to have been
made, has set up adequate reserves or accruals for the payment of, all
taxes in respect of the periods covered by such returns and reports and,
as of the Effective Time, will have paid, or where payment is not
required to have been made will have set up adequate reserves or
accruals for the payment of, all taxes for any subsequent periods ending
on or prior to the Effective Time. It will not have any liability for
any such taxes in excess of the amounts so paid or reserves or accruals
so established.
(b) All federal, state and local (and, if applicable, foreign)
income, franchise, bank, excise, real property, personal property and
other tax returns and reports filed by it are accurate and complete. It
is either not delinquent in the payment of any tax, assessment or
governmental charge or has requested an extension of time without
penalty within which to file any tax returns or reports in respect of
any fiscal year or portion thereof. Its federal, state and local tax
returns and reports that are open to audit have not been audited by the
applicable tax authorities and no deficiencies for any tax, assessment
or governmental charge have been proposed, asserted or assessed
(tentatively or otherwise) against it which have not been settled and
paid. There are currently no agreements in effect as to it to extend the
period of limitations for the assessment or collection of any tax. No
audit, examination or deficiency or refund litigation with respect to
any of its returns or reports is pending or, subject to the Knowledge
Qualification, threatened.
(c) It(i) is not a party to any agreement providing for the
allocation or sharing of taxes, (ii) is not required to include in
income any adjustment pursuant to Section 481(a) of the Code or by
reason of any change in accounting method (nor does it have any
knowledge that the IRS has proposed any such adjustment or change of
accounting method) and (iii) has not filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code
apply.
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(d) It has withheld amounts from its employees, shareholders,
and holders of public deposit accounts in compliance with the tax
withholding provisions of applicable federal, state and local laws, has
filed all federal, state and local returns and reports for all periods
for which such returns or reports would be due with respect to income
tax withholding, social security, unemployment taxes, income and other
taxes and all payments or deposits with respect to such taxes have been
timely made.
4.16 Derivatives Contracts
It is not a party to and has not agreed to enter into any
exchange-traded or over-the-counter swap, forward, future, option, cap, floor
or collar financial contract or any other contract not included in Cohoes'
Annual Financial Statement which is a derivatives contract (including various
combinations thereof) and it does not own any securities that are identified
in OTS Thrift Bulletin No. 65 or otherwise referred to as structured notes.
4.17 Properties
(a) All real and personal property owned by it or presently used
by them it is in good condition (ordinary wear and tear excepted) and
are sufficient to carry on its business in the ordinary course
consistent with past practices. It has good and marketable title free
and clear of all Encumbrances (other than equitable rights of redemption
laws relating to property acquired in foreclosure) to all of its
properties and assets, real and personal, except
(i) liens for current taxes not yet due or payable,
(ii) pledges to secure deposits,
(iii) such imperfections of title, easements and
non-monetary Encumbrances affecting real property, if any, which
do not adversely affect the value or use of such real property,
and
(iv) any monetary Encumbrances, reflected in Cohoes' Annual
Financial Statements.
(b) All real and personal property that is leased or licensed by
it is held pursuant to leases or licenses which are valid and
enforceable in accordance with their respective terms and no such lease
or license will terminate or lapse prior to the Effective Time or
thereafter by reason of completion of the Transactions. All improved
real property owned or leased by it or any of its Subsidiaries is in
compliance in all material respects with all applicable laws including
zoning laws.
4.18 Material Interests of Certain Persons
(a) None of its officers, directors or employees or any
"associate" (as such term is defined in Rule 14a-1 under the Exchange
Act) or related interest of any such persons has any material interest
in any material agreement or property (real or personal, tangible or
intangible), used in, or pertaining to, its business.
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(b) Except as set forth in the Cohoes proxy statement for its
most recent annual meeting of the shareholders, there are no outstanding
Insider Loans. All outstanding Insider Loans were made in the ordinary
course of business and on substantially the same terms as those
prevailing at the time for comparable transactions with third parties
and were, with respect to executive officers and directors, approved by
its Board in accordance with applicable law and regulations.
4.19 Disclosures
None of the representations and warranties pursuant to Articles III and
IV hereof or any of the information Previously Disclosed or Delivered by it or
on its behalf, contains any untrue statement of a material fact, or omits to
state any material fact required to be stated or necessary to make any such
information, in light of the circumstances, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF HUDSON AND HUDSON BANK
As of the date hereof, Hudson and Hudson Bank, jointly and severally,
represent and warrant to Cohoes as follows:
5.1 Organization and Good Standing
It is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has authority to own, operate and
lease its assets and properties and to carry on its business. It is qualified
to do business and is in good standing in each jurisdiction where the
character of its assets or the nature of its business requires it to be
qualified. It has Delivered accurate copies of its organizational documents,
bylaws and other governing documents as currently in effect.
5.2 Registrations
Hudson is duly registered as a savings and loan holding company under
the HOLA and is registered under the Exchange Act.
5.3 This Agreement
(a) It has authority to enter into this Agreement, and any other
documents and instruments that are to be executed by it in connection
with the Transactions and, subject to any necessary approvals from
Governmental Entities, to consummate the Transactions.
(b) Its Board has authorized the execution, delivery and
performance of this Agreement and the consummation of the Transactions.
It has properly executed and delivered this Agreement. Its obligations
under this Agreement are valid and binding upon it, and this Agreement
does not violate its Certificate of Incorporation or Charter, Bylaws, or
any law, judgment or order of any Governmental Entity applicable to it.
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(c) No "business combination," "moratorium," "control share" or
other state anti-takeover statute or regulation prohibits, restricts or
subjects to any material condition its ability to perform its
obligations under this Agreement.
5.4 Financial Statements
The Financial Statements of Hudson have been prepared in accordance with
GAAP, fairly present its consolidated financial position, and contain adequate
reserves for losses. It has not suffered a Material Adverse Effect. No
circumstance exists that could reasonably be expected to result in a Material
Adverse Effect to it.
5.5 Fairness Opinion
It has received an opinion from its Financial Advisor to the effect that
Merger Consideration is fair, from a financial point of view, to it and its
shareholders.
5.6 Regulatory Reports
The Regulatory Reports filed by it and its Subsidiaries during the past
three years, as filed or amended, complied with applicable requirements of law
and, as of their respective dates or the dates as amended, did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
5.7 Governmental Approvals
No approval of, or filing with, any Governmental Entity is required by
it for the consummation of the Transactions except for:
(a) any filings or approvals under the Thrift Regulations;
(b) the filing of the Certificate of Merger;
(c) the filing of the Plan of Bank Merger; and
(d) any anti-trust filings or approvals;
It is not aware of any reasons relating to it why such consents and
approvals should not be granted, free of any conditions or requirements which
would be unduly burdensome to it or which would materially reduce the value of
the Transactions to it.
5.8 No Impediments
It has not taken or agreed to take any action, nor does it have
knowledge of any fact or circumstance, that would materially impede or delay
the consummation of the Transactions or the ability
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of the Parties to obtain any approval of any Governmental Entity required for
consummation of the Transactions or to perform their covenants and agreements
under this Agreement.
5.9 Proxy Statement Information
None of the information relating to it or any of its Subsidiaries which
is supplied by it in writing for inclusion in the Proxy Statement, as of the
date such Proxy Statement is mailed to the shareholders of Cohoes and up to
and including the date of the meeting of the shareholders of Cohoes to which
such Proxy Statement relates, will contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that information as of a later date shall be deemed to
modify information as of an earlier date.
5.10 Financial Ability
At the Effective Time, Hudson Bank will have sufficient cash funds to
pay the aggregate Merger Consideration and will use such funds for the payment
of the Merger Consideration subject to the completion of the Transactions in
accordance with the terms of this Agreement. Hudson Bank is, and will be
immediately following completion of the Transactions, in material compliance
with all capital, debt, and financial and nonfinancial provisions applicable
to it, under the Thrift Regulations.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Reasonable Best Efforts
Subject to the terms and conditions of this Agreement, each of the
Parties (i) shall use its reasonable best efforts in good faith to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary or advisable under applicable laws and regulations so as to permit
and otherwise enable completion of the Transactions as promptly as reasonably
practicable, and (ii) shall cooperate fully with each other to that end.
Consistent with the foregoing, prior to Closing (or earlier if necessary to
facilitate the Transactions), Cohoes shall take all necessary action to delete
Section 7 of the Charter of Cohoes Bank.
6.2 Shareholders Meeting
Cohoes shall take all action necessary to properly call and convene a
meeting of its shareholders as soon as practicable after the date hereof to
consider and vote upon the adoption of this Agreement. The Board of Cohoes
has agreed as of the date hereof to recommend to its shareholders that they
vote in favor of the adoption of this Agreement. The Board of Cohoes will
continue to make such favorable recommendation, provided that the Board of
Cohoes may fail to continue to make such recommendation, or withdraw, modify
or change such recommendation, if it has determined in good faith, after the
receipt of advice from its outside counsel, that the making of such
recommendation would result in a breach of its fiduciary duties to the
shareholders of Cohoes under applicable Delaware law.
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6.3 Regulatory Matters
(a) The Parties shall promptly cooperate with each other in the
preparation of the Proxy Statement to be filed by Cohoes with the SEC
and after the SEC has cleared the Proxy Statement, Cohoes shall promptly
mail the Proxy Statement to its shareholders.
(b) The Parties shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file within 30 days
after the date hereof or as soon thereafter as is reasonably
practicable, all necessary documentation, to effect all applications
(including applications of Merger Sub), notices, petitions and filings,
and to obtain as promptly as practicable all permits, consents,
approvals and authorizations of all Governmental Entities and third
parties which are necessary or advisable to consummate the Transactions;
provided however, nothing herein shall require the Board of Cohoes to
solicit proxies from Cohoes' shareholders or make any other
communications to such shareholders to vote for adoption of this
Agreement, if such Board has determined pursuant to Section 6.2 that it
can no longer favorably recommend adoption of this Agreement to the
Cohoes' shareholders. Each Party shall have the right to review in
advance, and to the extent practicable each will consult with the other
on, in each case subject to applicable laws relating to the exchange of
information, all the information which appears in any filing made by
another Party or written materials submitted by another Party to any
third party or any Governmental Entity in connection with the
Transactions. In exercising the foregoing right, each Party shall act
reasonably and as promptly as practicable. The Parties agree that they
will consult with each other with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the
Transactions and each Party will keep the other Parties apprised of the
status of matters relating to completion of the Transactions. The
Parties agree that they will use their reasonable best efforts to cause
the Closing Date to occur by April 30, 2001.
(c) Each Party shall, upon the request of another Party, furnish
to such other Party all information concerning itself and its
Subsidiaries, their respective present and former directors and
officers, the shareholders of Cohoes and such other matters as may be
reasonably necessary or advisable in connection with any statement,
filing, notice or application made by or on behalf of a Party or any of
its Subsidiaries to any Governmental Entity in connection with the
Transactions.
(d) Each Party shall promptly furnish the other Parties with
copies of written communications received from, or delivered to, any
Governmental Entity in respect of the Transactions.
6.4 Investigation and Confidentiality
(a) Cohoes shall, and shall cause its Subsidiaries to, permit
Hudson and Hudson Bank and their representatives reasonable access to
their properties and personnel, and shall disclose and make available to
them, upon reasonable request, all books, papers and records relating to
their assets, stock or other ownership records, properties, operations,
obligations and liabilities, including all books of account (including
the general ledger), tax records, minute books of meetings of boards of
directors (and any committees thereof) and shareholders,
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organizational documents, bylaws, material contracts and agreements,
filings with any Governmental Entity, accountants' work papers,
litigation files, loan files, plans affecting employees, and any other
business activities or prospects in which Hudson or Hudson Bank may have
a reasonable interest, provided that such access and any such reasonable
request shall be reasonably related to the Transactions and shall not
unduly interfere with the normal operations of Cohoes and its Subsidiaries.
Cohoes shall make its, and shall cause Cohoes Bank to make its, directors,
officers, employees and agents and authorized representatives (including
counsel and independent public accountants) available to confer with Hudson
or Hudson Bank and its representatives, provided that such access shall be
reasonably related to the Transactions and shall not unduly interfere
with Cohoes' and Cohoes Bank's normal operations.
(b) All information furnished previously in connection with the
Transactions or pursuant to this Agreement shall be treated as the sole
property of the Party furnishing the information until completion of the
Transactions and, if the Transactions shall not be completed, the Party
receiving the information shall either destroy or return to the Party
which furnished such information all documents or other materials
containing, reflecting or referring to such information, shall use its
best efforts to keep confidential all such information, and shall not
directly or indirectly use such information for any competitive or other
commercial purposes. The obligation to keep such information
confidential shall continue for two years from the date the Transactions
are abandoned but shall not apply to (i) any information which (A) the
Party receiving the information can establish was already in its
possession prior to the disclosure thereof by the Party furnishing the
information; (B) was then generally known to the public; or (C) became
known to the public through no fault of the Party receiving the
information; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction, provided
that the Party which is the subject of any such legal requirement or
order shall use its best efforts to give the Party, at least ten
business days' prior notice thereof.
6.5 Press Releases
Hudson and Cohoes shall agree with each other as to the form and
substance of any press release related to this Agreement or the Transactions,
and consult with each other as to the form and substance of other public
disclosures which may relate to the Transactions provided, however, that
nothing contained herein shall prohibit either of them, following notification
to the other, from making any disclosure which it believes is required by law
or regulation.
6.6 Business of the Parties
(a) During the period from the date of this Agreement and
continuing until the Effective Time, except as expressly contemplated or
permitted by this Agreement or with the prior written consent of Hudson
or Hudson Bank, Cohoes shall, and shall cause each of its Subsidiaries
to, carry on its business only in the ordinary course consistent with
past practice. During such period, Cohoes will, and will cause each of
its Subsidiaries to, use all reasonable efforts to (x) preserve its
business organization intact, (y) keep available the present services of
its employees and (z) preserve the goodwill of its customers and others
with whom it has business relationships. Without limiting the generality
of the foregoing, except with the prior written consent of Hudson or
Hudson Bank (which consent shall not be unreasonably withheld or
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delayed with respect to subparts (vi), (ix) and (xv)) or as expressly
contemplated hereby, between the date hereof and the Effective Time,
neither Cohoes nor any of its Subsidiaries shall:
(i) declare, set aside, make or pay any dividend or
other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock,
except for (A) the declaration and payment of regular
quarterly cash dividends by Cohoes in an amount not in
excess of $0.08 per outstanding share of Cohoes Common Stock
with usual record and payment dates for such dividends
consistent with the past dividend practices of Cohoes and
(B) the declaration and payment of cash dividends by Cohoes
Bank to Cohoes to facilitate the payment of any cash
dividend by Cohoes pursuant to clause (A) above or any other
cash payments to be made by Cohoes pursuant to or as
contemplated by this Agreement;
(ii) issue any shares of its capital stock, other
than upon exercise of Cohoes Options referred to in Section
3.1 hereof; issue, grant, modify or authorize any Rights
other than a modification pursuant to the Previously
Disclosed amendments to the Cohoes Option Plan approved by
Cohoes' shareholders at Cohoes' 2000 annual meeting of
shareholders; purchase any shares of its capital stock or
ownership interests; or effect any recapitalization,
reclassification, stock dividend, stock split or like change
in capitalization;
(iii) except for the deletion of Section 7 of the
Charter of Cohoes Bank, amend its Certificate of
Incorporation, Charter, Bylaws or similar organizational
documents; or waive or release any material right or cancel
or compromise any material debt or claim;
(iv) increase the rate of compensation of or benefits
to any of its directors, officers or employees, or pay or
agree to pay any bonus or severance to, or provide any other
new benefit or incentive to, any of its directors, officers
or employees, except (A) compensation increases and bonus
payments as may be required pursuant to Previously Disclosed
commitments existing on the date hereof, and in the case of
Previously Disclosed bonuses the amounts accrued therefor
through December, 2000 may be paid in December, 2000 and
unpaid amounts accrued immediately before the Closing may be
paid on the Closing Date, (B) the Cohoes Special Bonus to
the persons and in the amounts Previously Disclosed if such
persons are employees or directors of Cohoes Bank
immediately prior to the Effective Time,(C) as may be
required by law; or (D) merit increases to rank and file
employees consistent with past practices;
(v) enter into or, except as may be required by law,
modify any Employee Plan other than a modification pursuant
to the Previously Disclosed amendments to the Cohoes Option
Plan and the Cohoes Recognition Plan approved by Cohoes'
shareholders at Cohoes' 2000 annual meeting of shareholders;
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(vi) originate or purchase (A) any brokered loan not
pursuant to a commitment Previously Disclosed and existing
on the date hereof, (B) any unsecured loan in excess of
$50,000,(C) any loan secured by a first trust or mortgage on
a one- to four-family residential property in excess of
$250,000, (D) any loan secured by a first trust or mortgage
on commercial real property in excess of $400,000, or (E)
any other loan in excess of $100,000;
(vii) except as otherwise permitted hereunder, enter
into (A) any agreement for the purchase, sale, transfer,
Encumbrance or other disposition of any properties or assets
(other than real estate acquired in foreclosure (or by deed
in lieu thereof) or repossessed assets, in each case, with a
carrying value on Cohoes' Financial Reports of less than
$300,000 individually),(B) any other transaction, agreement,
arrangement or commitment not made in the ordinary course of
business, (C) any agreement, indenture or other instrument
relating to the borrowing of money or guarantee of any
obligations, except for deposits, FHLB advances not to
exceed six months to maturity, federal funds purchased and
securities sold under agreements to repurchase in the
ordinary course of business consistent with past practice,
(D) any agreement, arrangement or commitment relating to the
employment of an employee or consultant, or amend any such
existing agreement, arrangement or commitment; or (E) any
contract, agreement or understanding with a labor union;
(viii) change any of its methods of accounting,
except as required by changes in laws or regulations or
GAAP, or change any of its methods of reporting income and
deductions for federal income tax purposes from those
employed in the preparation of its last federal income tax
return, except as required by changes in laws or
regulations;
(ix) enter into or renew any lease of real or
personal property or any service contract; or fail to give
any required notice to prevent a lease or service contract
from being renewed; or make any capital expenditures in
excess of $25,000 individually or $50,000 in the aggregate,
other than pursuant to binding commitments Previously
Disclosed and existing on the date hereof and expenditures
necessary to maintain existing assets in good repair;
(x) enter into or agree to enter into any agreement,
arrangement or commitment described in Section 3.12(b) -
(h);
(xi) file any applications or make any contract with
respect to branching or site location or relocation;
(xii) purchase any security or acquire in any manner
whatsoever (other than to realize upon collateral for a
defaulted loan) control over or any equity interest in any
business or entity, other than marketable securities (which
do not exceed 1% of the securities outstanding within such
class) in the ordinary course of business;
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(xiii) except with respect to real estate acquired in
foreclosure (or by deed in lieu thereof) or repossessed assets,
enter or agree to enter into any agreement or arrangement granting
any preferential right to purchase any of its assets or rights or
requiring the consent of any party to the transfer and assignment
of any such assets or rights;
(xiv) except as necessitated in the reasonable opinion
of Cohoes Bank due to changes in interest rates, and in
accordance with safe and sound banking practices, change or
modify in any material respect any of its lending,
investment, or deposit gathering policies, except to the
extent required by law or an applicable regulatory
authority;
(xv) enter into any futures contract, option
contract, interest rate caps, interest rate floors, interest
rate exchange agreement or other agreement for purposes of
hedging the exposure of its interest-earning assets and
interest-bearing liabilities to changes in market rates of
interest;
(xvi) take any action that would cause any of the
representations and warranties of Cohoes contained in this
Agreement not to be true and correct in any material respect
at the Effective Time or that would cause any of the
conditions of Section 7.1 or 7.3 hereof not to be satisfied;
(xvii) voluntarily take any action that would
materially impede or delay the completion of the Transactions or
the ability of the Parties to perform their covenants and
agreements under this Agreement; or
(xviii) agree to do any of the foregoing.
(b) Except with the prior written consent of Cohoes or as
expressly contemplated hereby, between the date hereof and the Effective
Time, neither Hudson nor Hudson Bank shall:
(i) take any action that would cause any of its
representations and warranties contained in this Agreement not to
be true and correct in any material respect at the Effective Time
or that would cause any of the conditions of Section 7.1 or 7.2
hereof not to be satisfied;
(ii) voluntarily take any action that would materially
impede or delay the completion of the Transactions or its ability
to perform its covenants and agreements under this Agreement; or
(iii) agree to do any of the foregoing.
(c) Each Party shall promptly notify the other Parties in
writing of the occurrence of any matter or event known to and directly
involving it, that could have, either individually or in the aggregate,
a Material Adverse Effect upon it.
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6.7 Certain Actions
(a) Neither Cohoes nor any of its Subsidiaries or any of their
respective officers, directors, employees, representatives or agents
shall solicit or encourage inquiries or proposals with respect to,
furnish any information relating to, or participate in any negotiations
or discussions concerning, any Alternative Proposal, provided, however,
that the Board of Cohoes may furnish such information or participate in
such negotiations or discussions if it, after having consulted with and
considered the advice of outside counsel and its Financial Advisor, has
determined in good faith that the failure to do the same would result in
a breach of the fiduciary duties of such Board to Cohoes' shareholders
under applicable Delaware law. Cohoes will promptly inform Hudson or
Hudson Bank orally and in writing of any such request for information or
of any such negotiations or discussions, as well as instruct its and its
Subsidiaries directors, officers, representatives and agents to refrain
from taking any action prohibited by this Section 6.7. In no event may
Cohoes provide any information to a third party that it has not provided
to Hudson or Hudson Bank.
(b) In the event that the Board of Cohoes determines in good
faith, after consultation with its Financial Advisor and upon advice
from outside counsel, that it has received a Superior Offer (as defined
below), it shall notify Hudson in writing of its intent to terminate
this Agreement and concurrently with or after such termination cause
Cohoes to enter into an acquisition agreement with respect to, or
recommend acceptance of, the Superior Offer. Such notice shall specify
all of the terms and conditions of such Superior Offer and identify the
person making such Superior Offer. Hudson shall have five business days
to evaluate and respond to the Cohoes notice. If Hudson notifies Cohoes
in writing prior to the expiration of the five business day period
provided above that it or Hudson Bank shall increase the Merger
Consideration to an amount at least equal to that of such Superior Offer
(the "Hudson Proposal"), then Cohoes shall not be permitted to enter
into an acquisition agreement with respect to, or permit its Board to
recommend acceptance to its shareholders of, such Superior Offer. Such
notice by Hudson shall specify the new Merger Consideration. Cohoes
shall have five business days to evaluate the Hudson Proposal.
(c) In the event the Superior Offer involves consideration to
Cohoes' shareholders consisting of securities, in whole or in part, a
Hudson Proposal shall be deemed to be at least equal to the Superior
Offer, if the Hudson Proposal offers cash Merger Consideration that
equals or exceeds the consideration being offered to Cohoes'
shareholders in the Superior Offer valuing any securities forming a part
of the Superior Offer at its cash equivalent based upon (a) the average
trading price of such securities for the 20 trading days immediately
preceding the date of the Hudson Proposal or (b) the written valuation
of such securities by a nationally recognized investment banking firm
selected by Hudson(who shall not be Hudson's Financial Advisor) if such
securities are not traded on a nationally recognized exchange or will be
newly issued securities that are not of a class then trading on a
nationally recognized exchange. Any written valuation shall be attached
as an Exhibit to the Hudson Proposal.
(d) In the event that the Board of Cohoes determines in good
faith, upon the advice of its Financial Advisor and outside counsel,
that the Hudson Proposal is not at least equal to the Superior Offer,
Cohoes can terminate this Agreement in order to execute an acquisition
agreement with respect to, or to allow its Board to adopt a resolution
recommending acceptance
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to the Cohoes' shareholders of, the Superior Offer as provided in
Section 8.1(g). For purposes of this Agreement, a "Superior Offer"
means any bona fide proposal, including a tender offer, made by a
third party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than 40% of the voting
power of the shares of Cohoes or Cohoes Bank Common Stock then
outstanding or all or substantially all the assets of Cohoes or Cohoes
Bank and provides consideration to the Cohoes' shareholders which the
Board of Cohoes determines in its good faith judgment (based on the
advice of its Financial Advisor) to be materially more favorable than
the Merger Consideration and for which third-party financing, to the
extent required, is then firmly committed.
6.8 Current Information
During the period from the date hereof to the Effective Time, Cohoes
shall, upon the request of Hudson, cause one or more of its designated
representatives to confer on a monthly or more frequent basis with
representatives of Hudson regarding Cohoes' consolidated financial condition,
operations and business and matters relating to the completion of the
Transactions. As soon as reasonably available, but in no event more than two
business days after filing, Cohoes will deliver to Hudson or Hudson Bank all
reports and documents including Securities Documents filed by it or Cohoes
Bank with the SEC or under the Thrift Regulations subsequent to the date
hereof. Within 45 days after the end of each month, Cohoes will deliver to
Hudson or Hudson Bank an unaudited consolidated balance sheet and an unaudited
consolidated statement of income, without related notes, for such month
prepared in accordance with GAAP.
6.9 Indemnification
(a) After the Effective Time, Hudson shall indemnify, defend and
hold harmless each person who is now, or who has been at any time before
the date hereof or who becomes before the Effective Time, an officer or
director of Cohoes or any of its Subsidiaries(the "Indemnified Parties")
against all losses, claims, damages, costs, expenses (including
attorney's fees), liabilities or judgments or amounts that are paid in
settlement (which settlement shall require the prior written consent of
Hudson, which consent shall not be unreasonably withheld) of or in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, or administrative (each a "Claim"), in which an
Indemnified Party is, or is threatened to be made, a party or a witness
based in whole or in part on or arising in whole or in part out of the
fact that such person is or was a director or officer of Cohoes or any
of its Subsidiaries if such Claim pertains to any matter or fact
arising, existing or occurring before the Effective Time (including,
without limitation, the Transactions, regardless of whether such Claim
is asserted or claimed before, or at or after, the Effective Time (the
"Indemnified Liabilities"), to the fullest extent permitted under
applicable state law or the Thrift Regulations, whichever is applicable,
in effect as of the date hereof or as amended applicable to a time
before the Effective Time and under the Certificate of Incorporation,
Charter or Bylaws of Cohoes or any of its Subsidiaries, whichever is
applicable, as in effect on the date hereof. Hudson shall pay expenses
in advance of the final disposition of any such action or proceeding to
each Indemnified Party to the fullest extent permitted by applicable
state law or the Thrift Regulations, whichever is applicable, in effect
on the date hereof or as amended applicable to a time before the
Effective Time upon receipt of any undertaking required by applicable
state law or the Thrift Regulations. Any Indemnified Party wishing to
claim indemnification under this Section 6.9(a), upon learning of
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any Claim, shall notify Hudson (but the failure so to notify Hudson shall
not relieve it from any liability which it may have under this Section
6.9(a)except to the extent such failure materially prejudices Hudson)
and shall deliver to Hudson any undertaking required by applicable state
law or the Thrift Regulations, whichever is applicable. Hudson shall
ensure, to the extent permitted under applicable state law or the
Thrift Regulations, whichever is applicable, that all limitations of
liability existing in favor of the Indemnified Parties as provided in
the Certificate of Incorporation, Charter or Bylaws of Cohoes or any of
its Subsidiaries(as the case may be), as in effect on the date hereof,
or allowed under applicable state law or the Thrift Regulations,
whichever is applicable, as in effect on the date hereof or as such law
or regulation may be amended applicable to a time before the Effective
Time, with respect to Indemnified Liabilities shall survive the
consummation of the Transactions.
(b) From and after the Effective Time, the directors, and
officers of Cohoes and its Subsidiaries who become directors or officers
of Hudson or its Subsidiaries, shall have indemnification rights having
prospective application with respect to acts or omissions occurring
after the Effective Time. The prospective indemnification rights shall
consist of such rights to which directors and officers of Hudson or its
Subsidiaries, whichever is applicable, are entitled to under the
provisions of the Certificate of Incorporation, Charter or Bylaws of
Hudson or its Subsidiaries, whichever is applicable, as in effect from
time to time after the Effective Time, and the provisions of applicable
state law and the Thrift Regulations, whichever is applicable, as in
effect from time to time after the Effective Time.
(c) For a period of six years from and after the Effective Time,
Hudson shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Cohoes and
its Subsidiaries (provided that Hudson may substitute therefor policies
from a financially capable insurer of at least the same coverage and
amount containing terms and conditions which are substantially no less
advantageous, or in the event such coverage is provided through Hudson's
insurer it may be on terms and conditions (other than coverage and
amounts) consistent with Hudson's current coverage), or in lieu thereof
single limit tail coverage for such period (which shall be purchased by
Cohoes immediately prior to Closing upon the request of Hudson), with
respect to claims arising from facts or events which occurred before the
Effective Time. Following the Effective Time, the directors and
officers of Hudson and its Subsidiaries shall be covered by the
directors' and officers' liability insurance maintained by Hudson and/or
its Subsidiaries, whichever is applicable.
(d) The obligations of Hudson provided under paragraphs (a), (b)
and (c) of this Section 6.9 are intended to be enforceable against
Hudson directly by the Indemnified Parties and shall be binding on all
successors and permitted assigns of Hudson.
6.10 Environmental Reports
If requested by Hudson or Hudson Bank within 20 days of the date hereof
(or within 10 days after Hudson or Hudson Bank is informed of the permitted
acquisition or lease of any real property by Cohoes or any of its Subsidiaries
after the date hereof), Cohoes shall provide to Hudson or Hudson Bank, as soon
as reasonably practicable, but not later than 30 days from the receipt by
Cohoes of the request of Hudson or Hudson Bank therefor, a report of a phase
one environmental investigation on real property owned or leased by Cohoes or
any of its Subsidiaries (but excluding space in office or retail and similar
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establishments leased by Cohoes or any of its Subsidiaries for automatic
teller machines or bank branch facilities or other office uses where the space
leased comprises less than 20% of the total space leased to all tenants of
such property). If required by the phase one environmental investigation in
Hudson's or Hudson Bank's reasonable opinion, Cohoes shall provide to Hudson
or Hudson Bank, within 45 days of the receipt by Cohoes of the request of
Hudson or Hudson Bank therefor, a report of a phase two environmental
investigation on properties requiring such additional study. Hudson or Hudson
Bank shall have ten days from its receipt of the phase one environmental
investigation to request a phase two environmental investigation. The costs
of the phase one and phase two environmental investigations, if any, shall be
borne by Hudson or Hudson Bank.
6.11 Employees and Employee Benefit Plans
(a) Full time employees of Cohoes and its Subsidiaries who
remain employed after the Effective Time will be eligible to participate
in benefit plans of Hudson and its Subsidiaries that are generally
available to their full-time employees on a uniform and
non-discriminatory basis in accordance with and subject to the terms and
provisions of such benefit plans, with credit for years of service with
Cohoes and its Subsidiaries for the purpose of determining eligibility
for participation, vesting and entitlement to vacation time and sick pay
(but not for the purpose of accrual or restoration of benefits under any
existing or future benefit plan of Hudson or any of its Subsidiaries
where benefits are calculated on an actuarial basis, including any
qualified or non-qualified defined benefit plan or restoration plan).
Contributions to (and accrual of benefits, to the extent applicable, if
any, under) benefit plans of Hudson and its Subsidiaries on behalf of
continuing full-time employees of Cohoes and its Subsidiaries shall only
relate to qualifying compensation earned by such employees after the
Effective Time subject to the terms and provisions of such benefit
plans. Notwithstanding anything contained above, continuing full time
employees of Cohoes and its Subsidiaries shall not be eligible to
participate in the Hudson Bank benefit restoration plan or any qualified
plan of Hudson or any of its Subsidiaries, including the Hudson Bank
retirement plan, Hudson Bank savings plan and Hudson employee stock
ownership plan until the plan year commencing in 2002, except that, to
the extent permitted by the Code and any other applicable law,
continuing full time employees of Cohoes and its Subsidiaries who are
not participants in the Cohoes ESOP immediately prior to the Effective
Time and otherwise meet the eligibility requirements of the Hudson
employee stock ownership plan (after taking into account their past
service credit with Cohoes and its Subsidiaries) shall be permitted to
participate in the Hudson employee stock ownership plan as of the first
entry date in such plan on or following the date of the Effective Time.
Hudson shall amend its employee stock ownership plan to accomplish the
foregoing, to the extent such amendments are consistent with the Code
and any other applicable law. Hudson shall use its best efforts to cause
any and all pre-existing condition limitations (to the extent such
limitations did not apply to a pre-existing condition under the
corresponding Cohoes group health plan) and eligibility waiting periods
under its group health plans to be waived with respect to such
participants and their eligible dependents.
(b) Hudson or Hudson Bank agrees to honor the Cohoes Officer
Severance Plan, the Cohoes General Severance Plan, the Cohoes Option
Plan, the Cohoes Recognition Plan, and the terms of all Previously
Disclosed employment and change in control severance agreements to which
Cohoes or Cohoes Bank is a party; provided however, in the case of the
employment agreements of Harry L. Robinson and Richard A. Ahl, such
individuals shall accept a reduction
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in their monetary benefits upon termination of their employment by
virtue of (i) their monetary benefits being calculated from and after
July 2, 2001 (as if such date were the employment termination date)
and (ii)Harry L. Robinson and Richard A. Ahl shall take an additional
reduction in monetary benefits in the amounts of $300,000 and $150,000,
respectively. It is acknowledged by the Parties that the employment of
Messrs Robinson and Ahl will be terminated on the day next following the
date on which the Effective Time occurs, and that any subsequent employment
of such individuals by Hudson or Hudson Bank shall be at will. Cohoes
covenants that the amounts Previously Disclosed are the sole amounts of
monetary benefits to be received by Messrs. Robinson and Ahl pursuant to
their employment agreements upon a termination of their employment at or
following the Effective Time, other than any adjustments to be made with
respect to the tax gross up payments under Section 12 of their respective
employment agreements; and that Messrs. Robinson and Ahl have agreed in
writing to accept the Previously Disclosed monetary benefits in full
satisfaction of all monetary obligations under their respective
employment agreements (other than any adjustments to be made with
respect to the tax gross up payments under Section 12 of their
respective employment agreements) and to take a tax filing position on
their federal income tax returns with respect to parachute payments
consistent with the tax filing position taken by Hudson on its federal
income tax return with respect thereto. Hudson or Hudson Bank,
whichever is applicable, hereby expressly assumes at the Effective Time
the Cohoes Officer Severance Plan, the Cohoes General Severance Plan,
the Cohoes Option Plan, the Cohoes Recognition Plan, and every such
employment (subject to the foregoing provisions) and change in control
severance agreement which by its terms requires express assumption by a
successor. Such express assumption shall occur by virtue of Hudson's and
Hudson Bank's execution of this Agreement without any further action
required by them upon the completion of the Transactions.
(c) In the sole discretion of Hudson or Hudson Bank payments
made by it in full and complete satisfaction of obligations under
Section 6.11(b) shall be subject to the recipient's delivery to it of
(i) a written acknowledgment signed by such recipient that the payment
or payments and benefits to be made to him or her is in full and
complete satisfaction of all liabilities and obligations thereunder of
Cohoes, Cohoes Bank, Hudson and Hudson Bank and their respective
affiliates, directors, officers, employees and agents and (ii) a written
release signed by such recipient releasing such parties from further
liability in connection with such obligations and from all other matters
relating to the recipient's employment.
(d) Cohoes and its Subsidiaries shall take all necessary action
to cause the Cohoes ESOP to be terminated as of the Effective Time. The
Merger Consideration received by the Cohoes ESOP trustee in connection
with the Merger with respect to the unallocated shares of Cohoes Common
Stock shall be first applied by the Cohoes ESOP trustee to the full
repayment of the Cohoes ESOP loan. The balance of the Merger
Consideration (if any) received by the Cohoes ESOP trustee with respect
to the unallocated shares of Cohoes Common Stock shall be allocated to
the accounts of all participants in the Cohoes ESOP who have accounts
remaining under the Cohoes ESOP (whether or not such participants are
then actively employed) and beneficiaries in proportion to the account
balances of such participants and beneficiaries as they exist as of the
Effective Time as earnings, to the maximum extent permitted under the
Code and applicable law. As soon as practicable after the date hereof,
Cohoes shall file or cause to be filed all necessary documents with the
IRS for a determination letter for termination of the Cohoes ESOP as of
the Effective Time. As soon as practicable after receipt of a favorable
determination
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letter for termination from the IRS, the account balances in the Cohoes
ESOP shall be distributed to participants and beneficiaries or transferred
to an eligible individual retirement account as a participant or
beneficiary may direct. Prior to the Effective Time, no prepayments shall
be made on the Cohoes ESOP loan and contributions to the Cohoes ESOP and
payments on the Cohoes ESOP loan shall be made consistent with past
practices on the regularly scheduled payment dates.
(e) Cohoes and its Subsidiaries shall take all necessary action
to cause the Cohoes 401(k) Plan to be terminated as of the Effective
Time. As soon as practicable after the date hereof, Cohoes shall file
or cause to be filed all necessary documents with the Internal Revenue
Service for a determination letter for termination of the Cohoes 401(k)
Plan as of the Effective Time. As soon as practicable after receipt of
the favorable determination letter for termination from the IRS, the
account balances in the Cohoes 401(k) Plan shall be distributed to
participants and beneficiaries or transferred to an eligible individual
retirement account as a participant or beneficiary may direct. From the
date hereof through the Closing Date, Cohoes and its Subsidiaries shall
be permitted to make accrued employer profit sharing contributions and
401(k) matching contributions to the Cohoes 401(k) Plan on a periodic or
monthly basis.
(f) At the Effective Time, Hudson shall cause Harry L. Robinson
to be added to its Board with the official title of Vice Chairman. If
the initial term of Harry L. Robinson's directorship at Hudson is for a
period of less than three years, then the Hudson Board agrees, subject
to their fiduciary duties, to nominate him as part of the management
slate of directors for one additional three year term and if he is so
elected, he shall continue to serve as Vice Chairman of the Board. The
provisions hereof shall not be binding upon any successor of Hudson.
(g) At the Bank Merger Effective Time, Hudson, as the sole
shareholder of Hudson Bank, shall cause Harry L. Robinson, Duncan S.
MacAffer and two other current directors of Cohoes Bank selected by the
President of Hudson Bank after consultation with Messrs. Robinson and
MacAffer, to be elected as directors of Hudson Bank, with Mr. Robinson
having the official title of Vice Chairman. Subject to its fiduciary
duties, Hudson shall cause such individuals to be re-elected as
directors of Hudson Bank so that their service as directors does not
cease prior to the expiration of three years from the Effective Time.
The provisions of this paragraph shall only apply during the period that
Hudson possesses voting control of Hudson Bank and such provisions shall
not be binding upon any successor of Hudson or Hudson Bank.
6.12 Litigation Matters
Cohoes will consult with Hudson or Hudson Bank about any proposed
settlement, or any disposition of, any litigation to which Cohoes or any of
its Subsidiaries is a party.
6.13 Conforming Entries
(a) Cohoes recognizes that Hudson and its Subsidiaries may have
adopted different loan, accrual and reserve policies (including loan
classifications and levels of reserves for possible loan losses).
Subject to applicable law, from and after the date hereof to the
Closing, Cohoes and Hudson shall consult and cooperate with each other
with respect to conforming the loan, accrual and reserve policies of
Cohoes and its Subsidiaries to those policies of Hudson and
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its Subsidiaries, as specified in each case in writing from Hudson to
Cohoes, based upon such consultation and subject to the conditions in
Section 6.13(c) below.
(b) Subject to applicable law, Cohoes and Hudson shall consult
and cooperate with each other with respect to determining, as specified
in a written notice from Hudson to Cohoes, based upon such consultation
and subject to the conditions in Section 6.13(c) below, the amount and
the timing for recognizing for financial accounting purposes of Cohoes'
expenses of the Transactions and the restructuring charges relating to
or to be incurred in connection with the Transactions.
(c) Subject to applicable law, Cohoes and its Subsidiaries shall
(i) establish and take such reserves and accruals at such time as Hudson
shall reasonably request to conform the loan, accrual and reserve
policies of Cohoes and its Subsidiaries to the policies of Hudson and
its Subsidiaries, and (ii) establish and take such accruals, reserves
and charges in order to implement such policies and to recognize for
financial accounting purposes such expenses of the Transactions and
restructuring charges related to or to be incurred in connection with
the Transactions, in each case at such times as are reasonably requested
by Hudson, but in no event prior to five days before the Closing Date;
provided, however, that on the date such reserves, accruals and charges
are to be taken, Hudson shall certify to Cohoes that all conditions to
Hudson's obligation to consummate the Transactions set forth in Sections
7.1 and 7.3 hereof (other than the delivery of certificates, opinions
and other instruments and documents to be delivered at the Closing by
Cohoes, the delivery of which shall continue to be conditions to
Hudson's obligation to consummate the Transactions) have been satisfied
or waived; and provided, further, that Cohoes and its Subsidiaries shall
not be required to take any such action that is not consistent with GAAP
and regulatory accounting principles.
(d) No reserves, accruals or charges taken in accordance with
this Section may be a basis to assert a violation or a breach of a
representation, warranty or covenant of Cohoes herein.
6.14 Systems Integration
During the period from the date hereof to the Effective Time, Cohoes
shall cause its and Cohoes Bank's directors, officers and employees to, and
shall make all reasonable efforts to cause Cohoes Bank's data processing
service providers to, cooperate and assist Hudson Bank in connection with an
electronic and systematic conversion of all applicable data regarding Cohoes
Bank to Hudson Bank's system of electronic data processing. In furtherance of
the foregoing, Cohoes shall cause Cohoes Bank to make reasonable arrangements
during normal business hours to permit representatives of Hudson Bank to train
Cohoes Bank employees in Hudson Bank's system of electronic data processing.
6.15 Disclosure Supplements
From time to time prior to the Closing, each Party shall promptly
supplement or amend any materials Previously Disclosed or Delivered pursuant
hereto with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to
be set forth or described in materials Previously Disclosed or Delivered or
which is necessary to correct any information in such materials which has been
rendered materially inaccurate thereby. No such supplement or amendment to
such materials shall be deemed to have modified the representations,
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warranties and covenants of the disclosing Party for the purpose of
determining whether the conditions set forth in Article VII hereof have been
satisfied.
6.16 Failure to Fulfill Conditions
If a Party determines that a condition to its obligations to consummate
the Transactions may not be fulfilled, it will promptly notify the other
Parties. Each Party will promptly inform the other Parties of any facts
applicable to it that would be likely to prevent or materially delay approval
of any of the Transactions by any Governmental Entity or third party or which
would otherwise prevent or materially delay completion of any of the
Transactions.
6.17 Proxy Solicitor
Cohoes may, and if requested by Hudson or Hudson Bank shall, retain a
proxy solicitor in connection with its meeting of shareholders held to vote on
the adoption of this Agreement.
6.18 Previous Transaction Stock Option Agreements
Hudson and Cohoes do hereby agree to terminate the Cohoes Stock Option
Agreement. Accordingly, upon the execution of this Agreement, the Cohoes
Stock Option Agreement shall terminate and have no further force and effect.
The Hudson Stock Option Agreement shall continue in full force and effect in
accordance with its terms.
6.19 Organization of Merger Sub
Hudson Bank shall cause Merger Sub to be organized under the DGCL. The
Board of Merger Sub shall approve this Agreement and the Merger, whereupon
Merger Sub shall become a party to, and be bound by, this Agreement, and
Hudson Bank shall adopt and ratify this Agreement in its capacity as the sole
shareholder of Merger Sub.
6.20 Liquidated Damages
Due to expenses, direct and indirect, incurred by Hudson and Hudson Bank
in negotiating and executing this Agreement and in taking steps to effect the
Transactions, the loss by them of other opportunities, and as material
inducement for Hudson agreeing to terminate the Cohoes Stock Option Agreement
as provided in Section 6.18, Cohoes shall pay to Hudson and Hudson Bank,
collectively, agreed upon cash liquidated damages of $4.7 million, within 5
days after written demand for payment is made by Hudson and Hudson Bank,
following the occurrence of any of the events set forth below:
(a) Cohoes terminates this Agreement pursuant to Section 8.1(g);
(b) the termination of this Agreement by Cohoes for any reason
(other than a termination by Cohoes pursuant to Section 8.1(b) or (c))
prior to the date of the meeting of the shareholders of Cohoes to vote
on this Agreement; or
(c) the entering into a definitive agreement by Cohoes or Cohoes
Bank relating to an Alternative Proposal or the consummation of an
Alternative Proposal involving Cohoes or Cohoes Bank within 18 months
after the occurrence of any of the following: (i) the termination
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of this Agreement by Hudson pursuant to Section 8.1(b) or 8.1(f); (ii) the
failure of the shareholders of Cohoes to adopt this Agreement at the
Cohoes' shareholders meeting held to vote on this Agreement; or (iii)
August 31, 2001 if prior thereto the Cohoes' shareholders meeting has
not been held to vote on the adoption of this Agreement.
If demand for payment of cash liquidated damages is made pursuant to
this Section 6.20 and payment is timely made, then neither Hudson nor Hudson
Bank will have any other rights or claims against Cohoes, its Subsidiaries,
and their respective officers, directors, attorneys and financial advisors
under this Agreement, it being agreed that the acceptance of cash liquidated
damages under this Section 6.20 will constitute the sole and exclusive remedy
of Hudson and Hudson Bank against Cohoes, its Subsidiaries and their
respective officers, directors, attorneys and financial advisors.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions Precedent - the Parties
The respective obligations of both Parties to effect the Merger shall be
subject to the satisfaction of the following conditions at or prior to the
Closing unless waived by the Parties to the extent permitted by Section 8.4.
(a) The shareholders of Cohoes shall have adopted this Agreement
in accordance with all legal requirements.
(b) All approvals and consents from any Governmental Entity, the
approval or consent of which is required for the completion of the
Transactions, shall have been received and all statutory waiting periods
in respect thereof shall have expired; and the Parties shall have
procured all other approvals, consents and waivers of each person (other
than the Governmental Entities referred to above) whose approval,
consent or waiver is necessary to the completion of the Transactions;
provided, however, that the approvals and consents referred to in this
Section 7.1(b) shall not be deemed to have been received if,
individually or in the aggregate, they shall include any conditions or
requirements that, in the reasonable opinion of the Hudson Board, are
unduly burdensome or would materially reduce the value of the
Transactions to Hudson.
(c) None of Hudson, Hudson Bank, Cohoes or Cohoes Bank shall be
subject to any statute, rule, regulation, injunction or other order or
decree which shall have been enacted, entered, promulgated or enforced
by any Governmental Entity which prohibits, restricts or makes illegal
completion of any of the Transactions.
(d) No proceeding initiated by any Government Entity seeking an
order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the
completion of any of the Transactions shall be pending or threatened.
7.2 Conditions Precedent - Cohoes
The obligations of Cohoes to effect the Merger shall be subject to
satisfaction of the following conditions at or prior to the Closing unless
waived by Cohoes to the extent permitted by Section 8.4.
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(a) The representations and warranties of Hudson and Hudson Bank
made herein shall be true and correct as of the date hereof and in all
material respects as of the Closing as though made anew at the Closing
(as if the Closing Date was the date hereof for such purpose).
(b) Hudson and Hudson Bank shall have performed in all material
respects all obligations and complied in all material respects with all
covenants and agreements required to be performed and complied with by
it pursuant to this Agreement on or prior to the Closing.
(c) Hudson and Hudson Bank shall have delivered to Cohoes a
certificate, dated the Closing Date and signed by their respective Chief
Executive Officers, to the effect that the conditions set forth in
Sections 7.2(a) and 7.2(b) have been satisfied.
(d) Hudson and Hudson Bank shall have furnished Cohoes with such
certificates of their officers or others and such other documents to
evidence fulfillment of the conditions set forth in Section 7.1 as such
conditions relate to Hudson and Hudson Bank as Cohoes may reasonably
request.
7.3 Conditions Precedent - Hudson
The obligations of Hudson, Hudson Bank and Merger Sub to effect the
Merger shall be subject to satisfaction of the following conditions at or
prior to the Closing unless waived by Hudson to the extent permitted by
Section 8.4.
(a) Between the date hereof and the Closing, Cohoes shall not
have been affected by any event or change which has had or caused, or is
reasonably likely to have or cause, a Material Adverse Effect.
(b) The representations and warranties of Cohoes set forth
herein shall be true and correct as of the date hereof and (other than
the representations and warranties in Section 3.1 with respect to the
effects of any exercise of Rights or vesting of Restricted Shares) in
all material respects as of the Closing as though made anew at the
Closing (as if the Closing Date was the date hereof for such purpose),
except that in each case the representations and warranties under
Article IV shall be subject to the standard set forth in Section 9.8.
(c) Cohoes shall have performed in all material respects all
obligations and complied in all material respects with all covenants and
agreements required to be performed and complied with by it pursuant to
this Agreement on or prior to the Closing.
(d) Cohoes shall have delivered to Hudson Bank a certificate,
dated the Closing Date and signed by its Chief Executive Officer, to the
effect that the conditions set forth in Sections 7.3(a) through 7.3(c)
have been satisfied.
(e) Cohoes shall have furnished Hudson Bank with such
certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in Section 7.1 as such
conditions relate to Cohoes and its Subsidiaries as Hudson Bank may
reasonably request.
(f) Each director and executive officer of Cohoes and Cohoes
Bank shall have executed and delivered cancellation agreements to Hudson
as provided in Section 2.7(f).
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ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT
AND SPECIFIC PERFORMANCE
8.1 Termination
This Agreement may be terminated by a written instrument prior to the
Effective Time:
(a) by the mutual consent of the Boards of Hudson and Cohoes;
(b) by the Board of the non-breaching Party if the other Party
has breached in any material respect any of its covenants, agreements or
representations and warranties (but in the case of representations and
warranties under Article IV subject to the standard set forth in Section
9.8) herein, and such breach has not been cured within 30 days after
written notice (and for purposes hereof Hudson and Hudson Bank shall be
deemed to be one Party);
(c) by the Board of either Hudson or Cohoes, (i) if any
Governmental Entity of competent jurisdiction shall have issued a final
nonappealable order prohibiting the completion of the Transactions or
(ii) if application for any necessary prior approval of a Governmental
Entity is denied or withdrawn at the request or recommendation of the
Governmental Entity, provided that such denial or request or
recommendation for withdrawal is not due to the terminating Party's
breach of any provision of this Agreement;
(d) by the Board of either Hudson or Cohoes if the shareholders
of Cohoes fail to adopt this Agreement at the Cohoes' shareholders
meeting held to vote on this Agreement;
(e) by the Board of either Hudson or Cohoes if the Effective
Time has not occurred by the close of business on August 31, 2001,
provided that the terminating Party is not then in breach of any of its
covenants, agreements or representations and warranties (but in the case
of representations and warranties under Article IV subject to the
standard set forth in Section 9.8) herein;
(f) by the Board of Hudson if the Cohoes Board either (i) fails
to recommend, or fails to continue its recommendation, that the
shareholders of Cohoes vote in favor of the adoption of this Agreement,
or (ii) modifies, withdraws or changes in any manner adverse to Hudson
or Hudson Bank its recommendation that the shareholders of Cohoes vote
in favor of the adoption of this Agreement; or
(g) by the Board of Cohoes if Cohoes has received a Superior
Offer which is not timely matched by Hudson and Hudson Bank pursuant to
Section 6.7, and the Board of Cohoes has made a determination to accept
such Superior Offer subject to approval thereof by the Cohoes'
shareholders, and simultaneously with the termination of this Agreement
pursuant to this paragraph Cohoes enters into an acquisition agreement
with respect to the Superior Offer if the Superior Offer is for a merger
or the Board of Cohoes adopts a binding resolution to recommend to the
shareholders of Cohoes that they accept the Superior Offer if the
Superior Offer is for a tender offer.
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8.2 Effect of Termination
In the event that this Agreement is terminated it shall become void and
have no effect, except for:
(a) the provisions relating to confidentiality set forth in
Section 6.4,
(b) the provision relating to press releases set forth in
Section 6.5,
(c) The provision relating to cash liquidated damages set
forth in Section 6.20; and
(d) except as provided in Section 6.20, a termination
pursuant to Section 8.1(b) shall not relieve the breaching Party from any
liability or damages if such termination arises out of its willful
breach of any provision of this Agreement; in such event the non-
breaching Party shall be entitled to such monetary remedies and relief
against the breaching Party as are available at law (and for purposes
hereof Hudson and Hudson Bank shall be deemed to be one Party).
8.3 Survival of Representations, Warranties and Covenants
All representations, warranties, agreements and covenants in this
Agreement or in any other document or instrument delivered pursuant hereto or
in connection herewith shall expire on, and be terminated and extinguished at,
the Effective Time other than agreements or covenants contained herein or
therein that by their terms are to be performed after the Effective Time. No
such representations, warranties, agreements or covenants shall be deemed to
be terminated or extinguished so as to deprive Hudson or Hudson Bank or any of
its affiliates of any defense at law or in equity which otherwise would be
available against the claims of any person, including any shareholder or
former shareholder.
8.4 Waiver
Each Party hereto by written instrument approved by its Board and signed
by an executive officer of such Party, may at any time (whether before or
after approval of this Agreement by the shareholders of Cohoes) extend the
time for the performance of any of the obligations or other acts of the other
Party hereto and may waive (i) any inaccuracies of the other Party in the
representations or warranties contained in this Agreement or any document
delivered pursuant hereto, (ii) compliance with any of the covenants,
undertakings or agreements of the other Party, (iii) to the extent permitted
by law, satisfaction of any of the conditions precedent to its obligations
contained herein or (iv) the performance by the other Party of any of its
obligations set forth herein.
8.5 Amendment or Supplement
This Agreement may be amended at any time by mutual written agreement of
the Parties approved by their Boards and signed by an executive officer of
each Party, provided that any such amendment after the adoption of this
Agreement by shareholders of Cohoes shall not either modify the form or
decrease the amount of the Merger Consideration or otherwise materially
adversely affect such shareholders without the approval of the shareholders to
the extent required by applicable law.
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8.6 Specific Performance
The Parties acknowledge and agree that the Transactions contemplated
herein are unique and that any remedy at law for breach is inadequate to
compensate the aggrieved Party or Parties. Accordingly, each Party shall have
the right to seek specific performance of this Agreement and the other
Parties' duties, obligations, covenants and agreements herein in order to
cause the Transactions to be consummated. To this end, each Party, to the
extent permitted by law, irrevocably waives any defense it might have based on
the adequacy of a remedy at law which might be asserted as a bar to specific
performance or any other equitable relief. Notwithstanding the foregoing,
neither Hudson nor Hudson Bank shall be entitled to seek specific performance
under any circumstances where it is entitled to receive liquidated damages
pursuant to Section 6.20 upon termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses
Each Party hereto shall bear and pay all costs and expenses incurred by
it in connection with this Agreement and the Transactions, including fees and
expenses of its Financial Advisor, counsel and accountants.
9.2 Entire Agreement
This Agreement together with any other documents or instruments executed
by the Parties relating to the subject matter hereto concurrently with or on
the same day as the execution of this Agreement contains the entire agreement
among the Parties with respect to the Transactions and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other
than documents referred to herein which are to be executed after the date
hereof. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the Parties hereto and their respective successors.
Nothing in this Agreement, expressed or implied, is intended to confer upon
any person, other than the Parties, and their respective successors, any
rights, remedies, obligations or liabilities other than as set forth in
Article II and in Sections 6.9 and 6.11 hereof.
9.3 No Assignment
None of the Parties hereto may assign any of its rights or obligations
under this Agreement to any other person.
9.4 Notices
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally,
telecopied (with confirmation) or sent by overnight mail service or by
registered or certified mail (return receipt requested), postage prepaid,
addressed as follows:
A-44
If to Cohoes:
Cohoes Bancorp, Inc.
75 Remsen Street
Cohoes, New York 12047
Attention: Harry L. Robinson
President and Chief Executive Officer
With a required copy to:
Elias, Matz, Tiernan & Herrick, L.L.P.
734 15th Street, N.W.
Washington, DC 20005
Attn: Raymond A. Tiernan, Esq.
Gerald F. Heupel, Jr., Esq.
If to Hudson, Hudson Bank or Merger Sub:
Hudson River Bancorp, Inc.
One Hudson City Center
Hudson, New York 12534
Attention: Carl A. Florio
President and Chief Executive Officer
With a required copy to:
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W., 7th Floor East
Washington, D.C. 20005
Attn: Robert L. Freedman, P.C.
9.5 Counterparts
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
9.6 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to agreements made and entirely to be
performed within such jurisdiction. The Parties hereby designate Wilmington,
Delaware to be the proper jurisdiction and venue for any suit or action
arising out of this Agreement.
9.7 Severability
Any term, provision, covenant or restriction contained in this Agreement
held to be invalid, void or unenforceable, shall be ineffective to the extent
of such invalidity, voidness or unenforceability, but neither the remaining
terms, provisions, covenants or restrictions contained in this Agreement nor
the
A-45
validity or enforceability thereof in any other jurisdiction shall be
affected or impaired thereby. Any term, provision, covenant or restriction
contained in this Agreement that is so found to be so broad as to be
unenforceable shall be interpreted to be as broad as is enforceable.
9.8 Standard of Breach
None of the representations or warranties contained in Article IV shall
be deemed untrue or incorrect, and Cohoes shall not be deemed to have breached
its representations or warranties therein as a consequence of the existence of
any fact, circumstance or event, which would not, either individually or taken
together with all other facts, circumstances or events, have a Material
Adverse Effect on it.
9.9 Alternative Structure
Notwithstanding any provision of this Agreement to the contrary, Hudson
may at any time modify the structure of the acquisition of Cohoes set forth
herein, subject to the prior written consent of Cohoes which consent shall not
be unreasonably withheld or delayed, provided that (i) the Merger
Consideration to be paid to the holders of Cohoes Common Stock is not thereby
changed in kind or reduced in amount as a result of such modification and (ii)
such modification will not materially delay or jeopardize receipt of any
required approvals of Governmental Entities.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers and attested by their officers
thereunto duly authorized, all as of the day and year first above written.
COHOES BANCORP, INC.
Attest:
/s/ Richard A. Ahl By: /s/ Harry L. Robinson
---------------------- -------------------------
Name: Richard A. Ahl Name: Harry L. Robinson
Title: Secretary Title: President
HUDSON RIVER BANCORP, INC.
Attest:
/s/ Holly Rappleyea By: /s/ Carl A. Florio
---------------------- ---------------------------
Name: Holly Rappleyea Name: Carl A. Florio
Title: Secretary Title: President
A-46
HUDSON RIVER BANK & TRUST COMPANY
Attest:
/s/ Holly Rappleyea By: /s/ Carl A. Florio
---------------------- ----------------------------
Name: Holly Rappleyea Name: Carl A. Florio
Title: Secretary Title: President
HUDSON RIVER ACQUISITION CORP., Merger Sub, has joined as a Party to this
Agreement on this __ day of ___________, 2001.
HUDSON RIVER ACQUISITION CORP.
Attest:
By:
---------------------- ------------------------------
Name: Holly Rappleyea Name: Carl A. Florio
Title: Secretary Title: President
A-47
Appendix B
January 10, 2001
The Board of Directors
Cohoes Bancorp, Inc.
75 Remsen Street
Cohoes, New York 12047
Members of the Board:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to Cohoes Bancorp, Inc. ("Cohoes") and its
stockholders of the consideration to be paid ("Merger Consideration") in the
proposed merger (the "Merger") of Cohoes with and into a subsidiary of Hudson
River Bank & Trust Company ("Hudson River Bank") pursuant to the Agreement and
Plan of Merger ("Agreement") dated as of November 24, 2000 between Cohoes,
Hudson River Bancorp, Inc. ("Hudson River") and Hudson River Bank. It is our
understanding that the Merger will be accounted for as a purchase transaction
under generally accepted accounting principles.
As is more specifically set forth in the Agreement, upon consummation of
the Merger, each outstanding share of Cohoes stock, par value $0.01 per share
("Cohoes Common Stock"), will be entitled to receive $19.50 in cash (the
"Merger Consideration"), other than certain restricted shares.
Keefe, Bruyette & Woods, Inc. ("Keefe Bruyette"), as part of its
investment banking business, is continually engaged in the valuation of bank
holding companies and banks, thrift holding companies and thrifts and their
securities in connection with mergers and acquisitions, underwritings, private
placements, competitive bidding processes, market making as a NASD market
maker, and valuations for various other purposes. As specialists in the
securities of banking companies we have experience in, and knowledge of, the
valuation of banking enterprises. In the ordinary course of our business as a
broker-dealer, we may, from time to time, trade the securities of Hudson River
or Cohoes, for our own account, and for the accounts of our customers and,
accordingly, may at any time hold a long or short position in such securities.
To the extent we have any such positions as of the date of this opinion it has
been disclosed to Cohoes. Keefe Bruyette has served as financial advisor to
Cohoes in the negotiation of the Agreement and in rendering this fairness
opinion and will receive a fee from Cohoes for those services.
B-1
January 10, 2001
In arriving at our opinion, we have reviewed, analyzed and relied upon
material bearing upon the financial and operating condition of Hudson River
and Cohoes and the Merger.
In the course of our engagement as financial advisor we have, among other
things:
1. Reviewed the Agreement;
2. Reviewed certain historical financial and other information concerning
Cohoes for the two fiscal years ending June 30, 2000, including Cohoes'
Annual Reports to Stockholders, Annual Reports on Form 10-K, and interim
Quarterly Reports on Form 10-Q;
3. Reviewed certain historical financial and other information concerning
Hudson River for the three fiscal years ending March 31, 2000, including
Hudson River's Annual Reports to Stockholders, Annual Reports on Form
10-K, and interim Quarterly Reports on Form 10-Q;
4. Reviewed and studied the historical stock prices and trading volumes of
the common stock of both Cohoes and Hudson River;
5. Held discussions with senior management of Cohoes and Hudson River with
respect to their past and current financial performance, financial
condition and future prospects;
6. Reviewed certain internal financial data, projections and other
information of Cohoes and Hudson River, including financial projections
prepared by management;
7. Analyzed certain publicly available information of other financial
institutions that we deemed comparable or otherwise relevant to our
inquiry, and compared Cohoes and Hudson River from a financial point of
view with certain of those institutions;
8. Reviewed the financial terms of certain recent business combinations in
the banking industry that we deemed comparable or otherwise relevant to
our inquiry; and
9. Conducted such other financial studies, analyses and investigations and
reviewed such other information as we deemed appropriate to enable us to
render our opinion.
In conducting our review and arriving at our opinion, we have relied
upon the accuracy and completeness of all of the financial and other
information provided to us or publicly available and we have not assumed any
responsibility for independently verifying the accuracy or completeness of any
such information. We have relied upon the management of Cohoes as to the
reasonableness and achievability of the financial and operating forecasts and
projections (and the assumptions and bases therefor) provided to us, and we
have assumed that such forecasts and projections reflect the best currently
available estimates and judgments of such management. We are not experts in
the independent verification of the adequacy of allowances for loan losses and
we have assumed that the current and projected aggregate reserves for loan
losses for Cohoes and Hudson River are adequate to cover such losses. We did
not make or obtain any
B-2
January 10, 2001
independent evaluations or appraisals of any assets or liabilities of Cohoes,
Hudson River, or any of their respective subsidiaries nor did we verify any
of Cohoes' or Hudson River's books or records or review any individual loan
or credit files.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including, among others, the following:
(1) the historical and financial position and results of operations of Cohoes
and Hudson River; (2) the assets and liabilities of Cohoes and Hudson River;
and (3) the nature and terms of certain other merger transactions involving
banks and bank holding companies. We have also taken into account our
assessment of general economic, market and financial conditions and our
experience in other transactions, as well as our experience in securities
valuation and knowledge of the banking industry generally. Our opinion is
necessarily based upon conditions as they exist and can be evaluated on the
date hereof and the information made available to us through the date hereof.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Merger Consideration is fair, from a financial point of
view, to Cohoes and its stockholders.
Very truly yours,
/s/ Keefe, Bruyette & Woods, Inc.
KEEFE, BRUYETTE & WOODS, INC.
B-3
Appendix C
DELAWARE CODE ANNOTATED
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER OR CONSOLIDATION
SECTION 262 APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant
to Section 228 of this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholder's shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used
in this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinary meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257, Section
258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or (ii) held of record by
more than 2,000 holders; and further provided that no appraisal rights shall
be available for any shares of stock of the constituent corporation surviving
a merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in subsection (f) of
Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series of
stock of a constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation pursuant to Sections 251,
252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
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a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this paragraph;
or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts described
in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially
all of the assets of the corporation. If the certificate of incorporation
contains such a provision, the procedures of this section, including those set
forth in subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for such
meeting with respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) hereof that appraisal rights are available
for any or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder electing to
demand the appraisal of such stockholder's shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholder's shares. Such demand will
be sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal
of such stockholder's shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein provided.
Within 10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of each
constituent corporation who
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has complied with this subsection and has not voted in favor of or consented
to the merger or consolidation of the date that the merger or consolidation
has become effective; or
(2) If the merger or consolidation was approved pursuant to Section
228 or Section 253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective date
of the merger or consolidation, such notice shall be given by the surviving or
resulting corporation to all such holders of any class or series of stock of a
constituent corporation that are entitled to appraisal rights. Such notice
may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the effective
date of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or within
10 days after such effective date; provided, however, that if such second
notice is sent more than 20 days following the sending of the first notice,
such second notice need only be sent to each stockholder who is entitled to
appraisal rights and who has demanded appraisal of such holder's shares in
accordance with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is required to give
either notice that such notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be not
more than 10 days prior to the date the notice is given, provided, that if the
notice is given on or after the effective date of the merger or consolidation,
the record date shall be such effective date. If no record date is fixed and
the notice is given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the notice is
given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise entitled
to appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms
offered upon the merger or consolidation. Within 120 days after the effective
date of the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d)
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hereof, upon written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor of
the merger or consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such shares. Such
written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of
a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If
the petition shall be filed by the surviving or resulting corporation, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown on the list
at the addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail
and by publication shall be approved by the Court, and the costs thereof shall
be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such stockholder's
certificates of stock to the Register in Chancery, if such is required, may
C-4
participate fully in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the
case of holders of shares represented by certificates upon the surrender to
the corporation of the certificates representing such stock. The Court's
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized
and unissued shares of the surviving or resulting corporation. (Last amended
by Ch. 339, L. '98, eff. 7-1-98.)
C-5
Please mark
COHOES BANCORP, INC. your votes as
SPECIAL MEETING OF STOCKHOLDERS indicated
in this [X] FOR
example
The undersigned hereby appoints the Board of Directors of Cohoes Bancorp,
Inc. ("Cohoes"), and its successors, with full power of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of common
stock of Cohoes which the undersigned is entitled to vote at Cohoes' Special
Meeting of Stockholders (the "Meeting"), to be held on Thursday, February 15,
2001, at the Cohoes Music Hall, 58 Remsen St., Cohoes, New York at 2:00 p.m.,
local time, and at any and all adjournments and postponements thereof, as
follows:
FOR AGAINST ABSTAIN
1. Approval of the Agreement and Plan of Merger,
dated as of November 24, 2000, by and between [ ] [ ] [ ]
Hudson River Bancorp, Inc., Hudson River Bank &
Trust Company and Cohoes Bancorp, Inc.
2. Approval of motion to FOR AGAINST ABSTAIN
adjourn the Special
Meeting, if necessary, [ ] [ ] [ ]
to solicit additional
proxies with respect
to approval of the
Agreement and Plan of
Merger.
Your Board of Directors I plan to attend the YES NO
recommends a vote "FOR" Cohoes Special Meeting. [ ] [ ]
proposals 1 and 2.
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Special Meeting or any adjournment or
postponement thereof.
This proxy will be voted as directed. If you date, sign and return this proxy
but do not provide specific voting instructions, this proxy will be voted FOR
Proposals 1 and 2. If any other business is presented at the Special Meeting,
this proxy will be voted by those named in this proxy in their best judgment.
At the present time, the Board of Directors knows of no other business to be
presented at the Special Meeting. The stockholder may revoke this proxy at
any time before it is voted.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned acknowledges receipt from Cohoes, prior to the execution
of this proxy, of Notice of the Special Meeting, the Proxy Statement and their
materials.
Dated:_______________________ _____________________________________
Print Name of Stockholder(s)
_____________________________ _____________________________________
Signature of Stockholder Signature of Stockholder
Please sign exactly as your name appears above on this form. When signing as
attorney, executor, administrator, trustee, guardian or corporate officer,
please give your full title. If shares are held jointly, each holder should
sign.
______________________________________________________________________________
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
______________________________________________________________________________
