<PAGE>
As filed with the Securities and Exchange Commission on June 4, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
FIRST MARYLAND BANCORP
(Exact name of registrant as specified in its charter)
MARYLAND 52-0981378
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or formation)
25 South Charles Street
Baltimore, Maryland 21201
(Address, including zip code,
and telephone number,
including area code, of registrant's
principal executive offices)
Gregory K. Thoreson, Senior Vice
President and General Counsel
First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
(410) 244-3800
(Name, address, including zip code and telephone number,
including area code, of agent for service of process)
Copies to:
John B. Tehan, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
<PAGE>
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS AMOUNT OFFERING AGGREGATE AMOUNT OF
OF SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
Subordinated Debt
Securities........... $350,000,000 100% $350,000,000 $106,061
</TABLE>
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(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED _________, 1997.
PROSPECTUS
FIRST MARYLAND BANCORP
Subordinated Debt Securities
The Company may from time to time offer up to $350,000,000 aggregate
principal amount of Subordinated Debt Securities consisting of debentures, notes
and/or other unsecured evidences of indebtedness in one or more series. The
Subordinated Debt Securities may be offered as separate series in amounts, at
prices and on terms to be determined at the time of sale. A Prospectus
Supplement to this Prospectus, which will be delivered together with this
Prospectus, will set forth the particular terms of the Subordinated Debt
Securities to be issued, including, where applicable, the title, aggregate
principal amount, denominations, maturity, rate, if any (which may be fixed or
variable), and time of payment of any interest, any terms for redemption at the
option of the Company or the holder, any terms for sinking fund payments, any
listing on a securities exchange and the initial public offering price and any
other terms in connection with the offering and sale of such series of
Subordinated Debt Securities.
The Subordinated Debt Securities will be unsecured obligations of the
Company, will not be savings accounts, deposits or other obligations of any bank
or nonbank subsidiary of the Company and will not be insured by the Federal
Deposit Insurance Corporation, the Bank Insurance Fund or any other government
agency.
The Company may sell Subordinated Debt Securities to or through
underwriters, and also may sell Subordinated Debt Securities directly to other
purchasers or through agents. See "Plan of Distribution". The accompanying
Prospectus Supplement will also set forth the names of any underwriters or
agents involved in the sale of the Subordinated Debt Securities in respect of
which this Prospectus is being delivered, the principal amounts, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters or
agents.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
-----------------------
The date of this Prospectus is __________, 1997.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus or in the Prospectus Supplement in
connection with the offer made by this Prospectus or in the Prospectus
Supplement and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. Neither the delivery of
this Prospectus or the Prospectus Supplement nor any sale made hereunder or
thereunder shall under any circumstance create an implication that there has
been no change in the affairs of the Company since the date hereof. This
Prospectus and the Prospectus Supplement do not constitute an offer or
solicitation by anyone in any state in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
AVAILABLE INFORMATION
First Maryland Bancorp (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, information statements and other information can be
inspected and copied at the public reference facilities of the Commission, at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and
at the Commission's Regional Offices in New York at 7 World Trade Center, Suite
1300, 13th Floor, New York, New York 10048 and in Chicago at Suite 1400,
Citicorp Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661-
2511. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web site
(http://www.sec.gov) that contains reports, information statements and other
information regarding the Company.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all exhibits thereto, the "Registration Statement") filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement for further information with respect
to the Company and the Securities. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Company's 7.875%
Noncumulative Preferred Stock, Series A, is
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listed on the New York Stock Exchange. Reports and other information concerning
the Company can also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports previously filed with the Commission (File No. 1-7273)
pursuant to Section 13 of the Exchange Act: (a) the Company's Annual Report on
Form 10-K for the year ended December 31, 1996; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997; and (c) the Company's
Current Reports on Form 8-K dated January 21, 1997, February 3, 1997, March 5,
1997 and May 21, 1997. All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of any such person, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents which are not
specifically incorporated by reference in such documents). Written requests for
such copies should be directed to First Maryland Bancorp, 25 South Charles
Street, Baltimore, Maryland 21201, Attention: James A. Smith. Telephone
requests may be directed to (410) 545-2100.
THE COMPANY
The Company is a Maryland corporation incorporated in 1973 and is
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "Bank Holding Company Act"). At March 31, 1997, the Corporation
had consolidated total assets of $11.2 billion, total deposits of $7.6 billion,
and total stockholders' equity of $1.3 billion. Its
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principal subsidiaries are The First National Bank of Maryland ("First
National"), First Omni Bank, N. A. ("First Omni") and The York Bank and Trust
Company ("York Bank"). These banks provide comprehensive corporate, commercial,
correspondent and retail banking services, personal and corporate trust services
and related financial products and services to individuals, businesses,
governmental units and financial institutions primarily in Maryland and the
adjacent states. The assets of these banks at March 31, 1997 accounted for
approximately 96% of the Corporation's consolidated total assets.
Allied Irish Banks, p.l.c. ("AIB") owns 100% of the common stock, and
controls 99% of the voting power of the capital stock, of the Company. AIB is
an Irish banking corporation whose securities are traded on the Dublin, London
and New York Stock Exchanges, and is a registered bank holding company under the
Bank Holding Company Act. At December 31, 1996, based upon United States
generally accepted accounting principles, AIB and its subsidiaries
(collectively, "AIB Group") had total assets of approximately $43.7 billion,
making it the largest banking corporation organized under the laws of Ireland.
AIB Group provides a full range of banking, financial and related services
principally in Ireland, the United States and the United Kingdom.
First National, the Company's largest subsidiary, is a national banking
association chartered under the laws of the United States. It commenced
operations in Baltimore, Maryland on July 10, 1865 and is the successor to a
Maryland banking institution founded in 1806. At March 31, 1997, First National
was the second largest commercial bank headquartered in Maryland in terms of
assets, loans and deposits, with assets of $9.3 billion, net loans of $5.3
billion, and deposits of $7.1 billion. Its assets at such date comprised
approximately 83% of the consolidated assets of the Company. Including its main
office, First National operates 211 banking facilities in Maryland, the District
of Columbia and Virginia, including 159 full service offices, and loan
production offices in Washington, D.C., Easton, Maryland, and York,
Pennsylvania. It conducts international activities at its Baltimore
headquarters, a Cayman Islands branch and a representative office in London, and
maintains correspondent accounts with approximately 54 foreign banks. First
National offers investment, foreign exchange and securities brokerage services,
operates a brokerage subsidiary and, through a subsidiary, acts as investment
adviser to the ARK Funds, a family of proprietary mutual funds.
York Bank was acquired by the Company on December 31, 1991. It is a
Pennsylvania chartered commercial bank organized in 1960 as the product of a
consolidation of two banks chartered in 1810 and 1890. At March 31, 1997, York
Bank had assets of $1.1 billion, net loans of $675.1 million and deposits of
$887.9 million. York Bank operates 37 banking facilities, including 35 full
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service offices in south central Pennsylvania. It is the largest banking
institution headquartered in York County, Pennsylvania, a market contiguous with
First National's principal market.
First Omni is a national banking subsidiary of the Corporation
headquartered in Millsboro, Delaware, which conducts retail bankcard services.
It offers MasterCard (R) and VISA (R) bankcards both directly and as agent for
other banks. At March 31, 1997, it managed bankcard receivables of $1.0 billion
(including $500 million of securitized bankcard receivables).
The Company operates various other subsidiaries, including First National
Mortgage Corporation, a mortgage banking company which originates, sells and
services residential mortgage loans through its network of offices in Maryland,
Virginia, Pennsylvania, Kentucky, Tennessee and Mississippi; First Maryland
Leasecorp, a commercial finance company specializing in equipment financing; and
First Maryland Mortgage Corporation, a commercial real estate lender.
The Company has its principal executive office at 25 S. Charles Street,
Baltimore, Maryland 21201, telephone number (410) 244-4000.
RECENT EVENTS
On January 21, 1997, the Company, AIB and Dauphin Deposit Corporation
("Dauphin") entered into a definitive Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which AIB and the Company will acquire Dauphin. In the
Merger (defined below), Dauphin shareholders will receive cash and AIB American
Depository Shares ("AIB ADSs") having an aggregate value of approximately $1.36
billion based on the market price of AIB ADSs on January 21, 1997. Dauphin is
headquartered in Harrisburg, Pennsylvania and, through its bank and nonbank
subsidiaries, provides corporate, commercial, correspondent and retail banking
services, personal and corporate trust services and related financial products
and services to individuals, businesses, governmental units and financial
institutions, primarily in south-central Pennsylvania. At March 31, 1997,
Dauphin had consolidated total assets of $5.8 billion, total deposits of $4.1
billion and total stockholders' equity of $573.4 million.
Under the Merger Agreement, (i) Dauphin will merge into the Company (the
"Merger") and (ii) shareholders of Dauphin will receive either (a) $43.00 per
share of Dauphin common stock in cash or (b) that number (the "Exchange Ratio")
of AIB ADSs having a Closing Market Price (as defined below) of $43.00, at each
holder's election, but subject to certain limitations described in the following
sentences. If the Closing Market Price of an AIB ADS shortly before the
effective time of the Merger is below $37.00, then the Exchange Ratio will equal
1.1620, and if the Closing Market Price is more than $43.00, then the Exchange
Ratio will be 1.0000. If the market price of an AIB ADS as measured during a
period shortly before the effective time
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of the Merger is below $32.00, then Dauphin has the right to terminate the
Merger Agreement unless AIB adjusts the Exchange Ratio such that the value of
the AIB ADSs to be received by holders of Dauphin Common Stock is not less than
$37.19. "Closing Market Price" means the average closing price of the AIB ADSs
on the New York Stock Exchange for the ten New York Stock Exchange trading days
ending on the fifth business day prior to the closing date of the Merger.
At least 51% of the outstanding shares of Dauphin Common Stock must be
converted into AIB ADSs. If an insufficient number of Dauphin shareholders elect
to receive AIB ADSs, then a shareholder who elects to receive all cash may have
some or all of his shares converted in to AIB ADSs. A shareholder who makes no
election may receive cash or AIB ADSs, in the discretion of AIB.
Consummation of the transaction is subject to, among other things, receipt
of regulatory approvals from the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Minister for Enterprise and Employment
of Ireland and the Central Bank of Ireland, and approval by the shareholders of
Dauphin and AIB. On May 19, 1997, the Federal Reserve Board approved AIB's
application to acquire Dauphin. On May 20, 1997, the shareholders of Dauphin
approved the Merger and on May 21, 1997, the shareholders of AIB approved the
acquisition of Dauphin, in each case by more than the requisite percentage under
applicable law. Consummation of the transaction is expected to occur during the
third quarter of 1997. Reference is made to the Merger Agreement for additional
information concerning the Merger.
CERTAIN REGULATORY CONSIDERATIONS
General
As a bank holding company, the Company is subject to the regulation and
supervision of the Federal Reserve Board. First National and First Omni, as
national banking associations, are subject to supervision and examination by the
Office of the Comptroller of the Currency (the "Comptroller"), and York Bank is
subject to supervision and examination by the Pennsylvania Department of Banking
and the Federal Deposit Insurance Company (the "FDIC"). First National, First
Omni and York Bank (the "Subsidiary Banks") are also subject to various
requirements and restrictions, including requirements to maintain reserves
against deposits, restrictions on the types and amounts of loans that may be
granted and the interest that may be charged thereon, and limitations on the
types of investments that may be made and the types of services that may be
offered. Various consumer laws and regulations also affect the operations of the
Subsidiary Banks. In addition to the impact of regulation, commercial banks are
affected significantly by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy.
The federal banking agencies have broad enforcement powers over depository
institutions, including the power to terminate deposit insurance, to impose
substantial fines and other civil and criminal penalties, and to appoint a
conservator or receiver if any of a number of conditions are met. The federal
banking
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agencies also have broad enforcement powers over bank holding companies,
including the power to impose substantial fines and other civil and criminal
penalties.
Almost every aspect of the operations and financial condition of the
Subsidiary Banks is subject to extensive regulation and supervision and to
various requirements and restrictions under federal and state law, including
requirements governing capital adequacy, liquidity, earnings, dividends,
reserves against deposits, management practices, branching, loans, investments
and the provision of services. The activities and operations of the Company
also are subject to extensive federal supervision and regulation which, among
other things, limit non-banking activities, impose minimum capital requirements
and require approval to acquire 5% of any class of voting shares or
substantially all of the assets of a bank or other company. In addition to the
impact of regulation, banks and bank holding companies may be significantly
affected by legislation, which can change banking statutes in substantial and
unpredictable ways, and by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy.
Payment of Dividends and Other Restrictions
The Company is a legal entity separate and distinct from its subsidiaries,
including the Subsidiary Banks. Accordingly, the right of the Company, and thus
the rights of the Company's creditors, to participate in any distribution of the
assets or earnings of any subsidiary other than in the Company's capacity as a
bona fide creditor of the subsidiary is necessarily subject to the prior
satisfaction of claims of creditors of the subsidiary.
There are various legal and regulatory limitations on the extent to which
the Company's subsidiaries, including its bank subsidiaries, can finance or
otherwise supply funds to the Company. The principal source of the Company's
cash revenues is dividends from its subsidiaries and there are certain legal
restrictions under federal and state law on the payment of dividends by such
subsidiaries. The prior approval of the Comptroller is required if the total of
all dividends declared by any national banking association in any calendar year
exceeds the bank's net income for that year combined with its retained net
income for the preceding two calendar years, less any required transfers to
surplus or a fund for the retirement of any preferred stock. In addition, a
dividend may not be paid in excess of a bank's "undivided profits then on hand."
The relevant regulatory agencies also have authority to prohibit a bank holding
company or a national banking association from engaging in what, in the opinion
of such regulatory body, constitutes an unsafe or unsound practice in conducting
its business. The payment of dividends could, depending upon the financial
condition of the subsidiary, be deemed to constitute such an unsafe or unsound
practice. In addition, the Subsidiary Banks and their subsidiaries are subject
to limitations under Section 23A of the Federal Reserve Act with respect to
extensions of credit to, investments in, and certain
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other transactions with, the Company and its other subsidiaries. Furthermore,
loans and extensions of credit are also subject to various collateral
requirements.
Capital Adequacy
The federal bank regulatory agencies have adopted minimum risk-based and
leverage capital guidelines for United States banking organizations. The minimum
required risk-based capital ratio of qualifying total capital to risk-weighted
assets (including certain off-balance-sheet items, such as standby letters of
credit) is 8%, of which 4% must consist of Tier 1 capital. At March 31, 1997,
the Company had a Tier 1 capital to risk-adjusted assets ratio of 15.71% and a
total capital ratio of 18.75%. The minimum required leverage capital ratio (Tier
1 capital to average total assets) is 3% for banking organizations that meet
certain specified criteria, including that they have the highest regulatory
rating. A higher leverage ratio may apply under certain circumstances. At March
31, 1997, the Company's leverage capital ratio was 13.68%. Neither the Company
nor any Subsidiary Bank has been advised by the appropriate federal
regulatory agency of any specific leverage ratio applicable to it.
Failure to meet capital guidelines can subject a banking organization to a
variety of enforcement remedies, including additional substantial restrictions
on its operations and activities, termination of deposit insurance by the FDIC,
and under certain conditions the appointment of a receiver or conservator.
Federal banking statutes establish five capital categories for depository
institutions ("well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized"), and impose
significant restrictions on the operations of an institution that is not at
least adequately capitalized. Under certain circumstances, an institution may be
downgraded to a category lower than that warranted by its capital levels, and
subjected to the supervisory restrictions applicable to institutions in the
lower capital category. A depository institution is generally prohibited from
making capital distributions (including paying dividends) or paying management
fees to a holding company if the institution would thereafter be
undercapitalized. Adequately capitalized institutions may accept brokered
deposits only with a waiver from the FDIC, while undercapitalized institutions
may not accept, renew, or roll over brokered deposits.
An undercapitalized depository institution is also subject to restrictions
in a number of areas, including asset growth, acquisitions, branching, new lines
of business, and borrowing from the Federal Reserve System. In addition, an
undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee the
capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the
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capital of the institution to the levels required for the institution to be
classified as adequately capitalized at the time the institution fails to comply
with the plan and any such guarantee would be entitled to a priority of payment
in bankruptcy. A depository institution is treated as if it is significantly
undercapitalized if it fails to submit a capital plan that is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. Significantly undercapitalized depository institutions may be subject
to a number of additional significant requirements and restrictions, including
requirements to sell sufficient voting stock to become adequately capitalized,
to replace or improve management, to reduce total assets, to cease acceptance of
correspondent bank deposits, to restrict senior executive compensation and to
limit transactions with affiliates. Critically undercapitalized depository
institutions are further subject to restrictions on paying principal or interest
on subordinated debt, making investments, expanding, acquiring or selling
assets, extending credit for highly-leveraged transactions, paying excessive
compensation, amending their charters or bylaws and making any material changes
in accounting methods. In general, a receiver or conservator must be appointed
for a depository institution within 90 days after the institution is deemed to
be critically undercapitalized.
Support of Subsidiary Banks
Under Federal Reserve Board policy, the Company is expected to act as a
source of financial strength to, and to commit resources to support, each of the
Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve Board policy, the Company may not have the resources to provide
it. Any capital loan by the Company to a Subsidiary Bank would be subordinate in
right of payment to deposits and certain other indebtedness of the Subsidiary
Bank. In the event of a bank holding company's bankruptcy, any commitment by the
bank holding company to a federal bank regulatory agency to maintain the capital
of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC-insured depository
institution or any assistance provided by the FDIC to any commonly controlled,
FDIC-insured depository institution "in danger of default". "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Liability for the losses of commonly-controlled depository institutions can lead
to the failure of some or all depository institutions in a holding company
structure, if the remaining institutions are unable to pay the liability
assessed by the FDIC. Any obligation or liability owed by a subsidiary bank to
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its parent company is subordinate to the subsidiary bank's cross-guarantee
liability for losses of commonly-controlled depository institutions.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's consolidated ratio of earnings to fixed charges for each of
the periods indicated is set forth below:
<TABLE>
<CAPTION>
Years Ended December 31,
Three Months Ended ----------------------------------
March 31, 1997 1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits 2.70x 2.78x 2.59x 3.16x 3.55x 3.22x
Including Interest on Deposits 1.65 1.64 1.57 1.69 1.73 1.49
</TABLE>
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For purposes of computing the ratio of earnings to fixed charges,
earnings represent net income plus applicable income taxes and fixed charges.
Fixed charges, excluding interest on deposits, represent interest expense on
long-term debt and short-term borrowings and the interest factor included in
rents (which is deemed to be one-third of rental expense). Fixed charges,
including interest on deposits, represent all interest expense and the interest
factor included in rents.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement (each, a
"Prospectus Supplement") setting forth the particular terms of the Subordinated
Debt Securities (the "Securities") to be offered, the net proceeds from the sale
of the Securities will be used for general corporate purposes, principally to
fund investments in, or extensions of credit to, the Company's banking and
nonbanking subsidiaries, including to allow its subsidiaries to repay borrowings
incurred by such subsidiaries. The precise amount and timing of such investments
in and extensions of credit to the subsidiaries will depend upon their funding
requirements and the availability of other funds to the Company and its
subsidiaries. If the Merger is consummated, the Company may use all or a portion
of the net proceeds from one or more series of Securities to pay all or a
portion of the cash consideration payable in the Merger. In addition to the
foregoing, the Company may also use a portion of the net proceeds to fund
possible acquisitions if suitable opportunities develop in the future.
DESCRIPTION OF SECURITIES
The following sets forth certain general terms and provisions of the
Securities offered hereby. The particular terms of the Securities offered by any
Prospectus Supplement (the "Offered Securities") will be described in the
Prospectus Supplement relating to such Offered Securities. The Securities will
be issued under an Indenture, dated as of May 15, 1992 (the "Indenture"),
between the Company and Bankers Trust Company, as trustee (the "Trustee"). A
copy of the Indenture is included as an exhibit to the Registration Statement of
which this Prospectus is a part.
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General
The following summaries of certain provisions of the Securities and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections, Articles
or defined terms of the Indenture is referred to, it is intended that such
Sections, Articles or defined terms shall be incorporated herein by reference.
Article and Section references used herein are references to the Indenture.
Capitalized terms not otherwise defined in this Prospectus shall have the
meanings given to them in the Indenture.
The Securities will be unsecured and will be subordinated and junior to all
Senior Indebtedness (as defined below under "Subordination of Securities"). The
Indenture does not contain covenants prohibiting the Company from disposing of
voting stock of its subsidiaries, including the stock of any of its banking
subsidiaries.
The Indenture does not limit the amount of Securities that may be issued
thereunder and provides that Securities may be issued thereunder from time to
time in one or more series (Section 3.1). Neither the Indenture nor the
Securities will limit or otherwise restrict the amount of other indebtedness
which may be incurred by the Company or any of its subsidiaries. In addition,
the Indenture and the Securities will not contain any provision that would
require the Company to repurchase or redeem or otherwise modify the terms of the
Securities upon a change in control or other events involving the Company that
may adversely affect the credit quality of the Company. Because the Company is a
holding company, its rights and the rights of its creditors, including the
holders of the Securities, to participate in the assets or earnings of any
subsidiary upon the liquidation or reorganization of such a subsidiary will be
subject to the prior claims of such subsidiaries' creditors (including, in the
case of a Subsidiary Bank, its depositors) except to the extent that the Company
may itself be a bona fide creditor of the subsidiary. Claims on subsidiaries of
the Company by creditors other than the Company include claims with respect to
long-term debt and substantial obligations with respect to deposit liabilities,
federal funds purchased, securities sold under repurchase agreements and other
short-term borrowings.
Unless otherwise indicated in the Prospectus Supplement relating to the
Offered Securities, principal of and premium, if any, and interest on the
Securities will be payable at the office or agency of the Trustee maintained for
such purpose in New York, New York, and at any other office or agency maintained
by the Company for such purposes, except that, at the option of the Company,
interest may be paid by mailing a check to the address
12
<PAGE>
of the person entitled thereto as it appears on the Security Register. The
transfer of Securities (other than Book-Entry Securities) will be registrable
for each series of Securities at the corporate trust office of the Trustee. The
corporate trust offices of the Trustee are located in New York, New York.
Interest on the Securities will be payable to the person in whose name the
Securities are registered at the close of business on the Regular Record Date
designated for an Interest Payment Date (Section 3.7). If issued in certificated
form, the Securities will be issued only in fully registered form without
coupons and, unless otherwise indicated in the applicable Prospectus Supplement,
in denominations of $1,000 or integral multiples thereof (Section 3.2). No
service charge will be required for any registration of transfer or exchange of
the Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge imposed in connection therewith other than
certain exchanges not involving any transfer (Section 3.5).
The applicable Prospectus Supplement will describe the following terms of
the Offered Securities: (a) the title of the Offered Securities; (b) any limit
on the aggregate principal amount of the Offered Securities; (c) the date or
dates on which the Offered Securities will mature; (d) the rate or rates (which
may be fixed or variable) per annum at which the Offered Securities will bear
interest, if any, the date or dates from which such interest, if any, will
accrue, the dates on which such interest, if any, will be payable and the
Regular Record Dates for such Interest Payment Dates; (e) the place or places,
if any, in addition to the office or agency of the Trustee, where the principal
of and premium, if any, and interest on the Offered Securities will be payable;
(f) the period or periods within which, the price or prices at which and the
terms and conditions upon which the Offered Securities may be redeemed, in whole
or in part, at the option of the Company; (g) the obligation, if any, of the
Company to redeem or purchase the Offered Securities pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and the period
or periods within which, the price or prices at which and the terms and
conditions upon which Offered Securities shall be redeemed or purchased, in
whole or in part, pursuant to such obligation; (h) if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which the
Offered Securities will be issuable; (i) the currency or currency unit of
payment of principal of and premium, if any, and interest on the Offered
Securities if other than the currency of the United States of America; (j) any
index used to determine the amount of payment of principal of, premium, if any,
or interest on the Offered Securities; (k) if other than the principal amount
thereof, the portion of the principal amount of the Offered Securities which
will be payable upon the declaration of acceleration of the Maturity thereof;
(l) if the Offered
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<PAGE>
Securities are Global Securities, information with respect to book-entry
procedures, if any; (m) any other terms of the Offered Securities (Section 3.1);
and (n) if applicable, a discussion of certain United States federal income tax
consequences.
Securities may be issued as Original Issue Discount Securities to be
offered and sold at a substantial discount below their stated principal amount.
"Original Issue Discount Security" means any security which provides for an
amount less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof. (Section 1.1)
Global Securities
The Securities of a series may be issued in the form of one or more book-
entry securities in global form ("Global Securities") that will be deposited
with a Depositary or its nominee identified in the applicable Prospectus
Supplement (Section 3.1). In such a case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of Outstanding Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Securities in definitive registered form, a
Global Security may not be transferred except as a whole by the Depositary for
such Global Security to a nominee of such Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. The specific terms of the depositary arrangement with respect to
any portion of a series of Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement.
The Company anticipates that the following provisions will apply to all
depositary arrangements. Upon the issuance of a Global Security, the designated
Depositary or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Securities represented
by such Global Security to the accounts of persons that have accounts with such
Depositary ("participants"). Such accounts shall be designated by the
underwriters or agents with respect to such Securities or by the Company if such
Securities are offered and sold directly by the Company. Participants include
securities brokers and dealers, banks and trust companies, clearing corporations
and certain other organizations. Access to the Depositary's system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
14
<PAGE>
directly or indirectly ("indirect participants"). Persons who are not
participants may beneficially own Global Securities held by the Depositary only
through participants or indirect participants.
Ownership of beneficial interests in any Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the designated Depositary or its nominee (with respect to
interests of participants) and on the records of participants (with respect to
interests of indirect participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws, as well as the limits on participation in the
Depositary's book-entry system, may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, such Depositary or such nominee will be considered the sole
owner or holder of the Securities represented by such Global Security for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in Securities represented by Global Securities will not be entitled to
have Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Securities in definitive form, and will not be considered the owners or
holders thereof under the Indenture.
Payments of principal of and any premium and interest on Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Securities. The Company expects that the
Depositary for a series of Securities or its nominee, upon receipt of any
payment of principal, premium or interest, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Security for such Securities, as
shown on the records of such Depositary or its nominee. The Company also expects
that payments by participants and indirect participants to owners of beneficial
interests in such Global Security held through such persons will be governed by
standing instructions and customary practices, as is now the case with
securities registered in "street name," and will be the responsibility of such
participants and indirect participants. Neither the Company, the Trustee, any
Authenticating Agent, any Paying Agent nor the Security Registrar for such
Securities will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Security for such Securities or for
15
<PAGE>
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests (Section 3.11).
If the Depositary for Securities of a series notifies the Company that it
is unwilling or unable to continue as Depositary or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, and
if the Company has not appointed a successor depositary, then the Company will
issue Securities of such series in definitive registered form in exchange for
the Global Security representing such series of Securities. In addition, the
Company may at any time and in its sole discretion determine that the Securities
of any series issued in the form of one or more Global Securities shall no
longer be represented by such Global Security or Securities and, in such event,
will issue Securities of such series in definitive registered form in exchange
for such Global Security or Securities representing such series of Securities.
Further, if the Company so specifies with respect to the Securities of a series,
or if an Event of Default, or an event which with notice, lapse of time or both
would be an Event of Default with respect to the Securities of such series has
occurred and is continuing, an owner of a beneficial interest in a Global
Security representing Securities of such series may receive Securities of such
series in definitive registered form. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive registered form of Securities of the series represented by such
Global Security equal in principal amount to such beneficial interest and to
have such Securities registered in its name (Sections 3.5, 3.11). Securities so
issued in definitive form will be issued in denominations of $1,000 and integral
multiples thereof and will be issued in registered form only, without coupons.
Restrictive Covenants Applicable to Securities
The Indenture contains a covenant that, with certain exception, the Company
will not directly or indirectly, sell or permit to be issued any shares of
Voting Stock of a Major Constituent Bank (other than directors' qualifying
shares) or any securities convertible into or rights to subscribe to such Voting
Stock, unless, after giving effect to such transaction and to shares issuable
upon conversion or exercise of rights into such Voting Stock, at least 80% of
the outstanding shares of Voting Stock of each class of such Major Constituent
Bank shall be owned at the time, directly or indirectly, by the Company (Section
10.6). The term "Major Constituent Bank" means any Subsidiary Bank, the total
assets of which constitute more than 30% of the consolidated total assets of the
Company and its Subsidiaries (Section 1.1). At the date of this Prospectus, the
only Subsidiary Bank which was a Major Constituent Bank was The First National
Bank of Maryland.
16
<PAGE>
The Indenture also contains a covenant that the Company will not permit a
Major Constituent Bank to merge into or consolidate with, or to lease, sell,
assign or transfer all or substantially all of its properties or assets to, any
Person other than to the Company or to a Person the Voting Stock of which is at
least 80% owned by the Company (Section 10.7).
Subordination
The obligations of the Company to make any payment on account of the
principal of and premium, if any, and interest on the Subordinated Securities
will be subordinate and junior in right of payment to all Senior Indebtedness of
the Company (Article Thirteen).
"Senior Indebtedness" is defined in the Indenture to mean (a) all
indebtedness of the Company for money borrowed, whether now outstanding or
subsequently created, assumed or incurred, other than any indebtedness which by
its terms is expressly stated not to superior in right of payment to the
Securities, and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness. The term "indebtedness for money borrowed" means, when used with
respect to the Company, any obligation of, or any obligation guaranteed by, the
Company for repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligations for
payment of the purchase price of property or assets acquired other than in the
ordinary course of business (Section 1.1). The Company's outstanding 8 3/8%
Subordinated Notes due 2002 in the aggregate principal amount of $100 million
and its 10 3/8% Subordinated Capital Notes due 1999 in the aggregate principal
amount of $60 million (together, "the Existing Subordinated Notes") will rank on
a parity with any of the Offered Securities. The Company's Floating Rate Junior
Subordinated Debentures due 2027 and its Floating Rate Junior Subordinated
Debentures due 2027, Series B, in the aggregate principal amount of $300
million, will rank junior to any of the Offered Securities.
The Securities will be subordinate in right of payment to all Senior
Indebtedness, as provided in the Indenture. No payment on account of the
principal of and premium, if any, or interest in respect of the Securities may
be made unless all amounts of principal, premium, if any, sinking funds and
interest then due on all Senior Indebtedness shall have been paid in full or
duly provided for and at the time of such payment pursuant to the Securities or
immediately thereafter, there shall not have occurred and be continuing a
default in payment with respect to Senior Indebtedness or an event of default
with respect to any Senior Indebtedness that would permit a holder thereof to
accelerate the maturity of such Senior Indebtedness. Upon any payment or
distribution of assets to creditors upon any insolvency, receivership,
conservatorship, reorganization, read-
17
<PAGE>
justment of debt, marshalling of assets and liabilities or similar proceedings
or any liquidation or winding-up of or relating to the Company as a whole,
whether voluntary or involuntary, the holders of all Senior Indebtedness will
first be entitled to receive payment in full before the Holders of the
Securities will be entitled to receive any payment in respect of the principal
of and premium, if any, sinking funds and interest on the Securities. In the
event the Holders of Securities receive payment or distributions of assets of
the Company and all Senior Indebtedness has not been paid in full, then such
payment or distribution shall be held in trust for the benefit of the holders of
Senior Indebtedness and shall be paid over or delivered and transferred to the
holders of Senior Indebtedness (Section 13.3). By reason of such subordination,
in the event of insolvency of the Company, Holders of the Securities may recover
less, ratably, than holders of Senior Indebtedness.
Events of Default
The Indenture defines an "Event of Default" with respect to Securities of
any series as any one of the following events (whatever the reason and whether
it be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body, and whether or not it be occasioned by
the subordination provisions of the Indenture): (a) failure to pay any interest
on any Security of that series when due and payable, continued for 30 days; (b)
failure to pay principal of or any premium on any Security of that series when
due; (c) failure to perform any other covenants or warranties of the Company in
the Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Securities thereunder other than that series) continued
for 90 days after written notice as provided in the Indenture; (d) the entry of
a decree or order for relief in respect of the Company by a court having
jurisdiction in the premises in an involuntary case, or a decree or order
adjudging the Company bankrupt or insolvent, or approving as properly filed a
petition seeking the reoganization of the Company, under Federal or state
bankruptcy laws and the continuance of any such decree or order unstayed and in
effect for a period of 90 consecutive days; or (e) the commencement by the
Company of a voluntary case under Federal or state bankruptcy laws or the
consent by the Company to the entry of a decree or order for relief in an
involuntary case under any such law (Section 5.1).
If an Event of Default with respect to Securities of a series occurs and is
continuing, then either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series may, or the
Trustee if so directed by such Holders shall, declare the principal amount (or,
if the Securities of that series are Original Issue Discount Securities,
18
<PAGE>
such portion of the principal amount as may be specified in the terms thereof)
of all the Securities of that series to be due and payable immediately. Upon the
occurrence of an Event of Default described in clause (d) or clause (e) of the
first paragraph of this section, the principal of the Securities of such series
will become due and payable immediately, without any action on the part of the
Trustee or any Holder (Section 5.2).
At any time after a declaration of acceleration with respect to Securities
of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in aggregate principal
amount of Outstanding Securities of that series may, under certain
circumstances, rescind and annul such acceleration (Section 5.2).
In the event of a default in the payment of principal, premium, if any, or
interest, if any, or the performance of any covenant or agreement in the
Securities or the Indentures, the Trustee, subject to certain limitations and
conditions, may institute judicial proceedings to enforce payment of such
principal, premium, if any, or interest, if any, or to obtain the performance of
such covenant or agreement or any other proper remedy (Section 5.3). Under
certain circumstances, the Trustee may withhold notice to the Holders of the
Securities in a default if the Trustee in good faith determines that the
withholding of such notice is in the best interest of such Holders, and the
Trustee shall withhold such notice for certain defaults for a period of 30 days
(Section 6.2).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity (Section 6.3). Subject
to such provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of that series (Section 5.12).
No Holder of any series of Securities will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of Default
and unless the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series shall have made
19
<PAGE>
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days (Section 5.7). However,
such limitations do not apply to a suit instituted by a Holder of a Security for
enforcement of payment of the principal of and premium, if any, or interest on
such Security on or after the respective due dates expressed in such Security
(Section 5.8).
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 10.8).
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series issued
under the Indenture and affected by the modification or amendment ; provided,
--------
however, that no such modification or amendment may, without the consent of the
- -------
Holders of each Outstanding Security of the series affected thereby: (a) change
the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security of such series, or reduce the principal amount of or
premium, if any, or interest on, any Security of any series (including in the
case of an Original Issue Discount Security the amount payable upon acceleration
of the maturity thereof), or change the place or currency of payment of
principal of or interest on any Security of such series, or impair the right to
institute suit for the enforcement of any payment on any Security of such series
on or after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date); or (b) reduce the percentage in principal amount of
Outstanding Securities of any series, the consent of whose Holders is required
for modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Applicable Indenture or for waiver of certain defaults
(Section 9.2).
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of any series may, on behalf of all Holders of that
series of Securities, waive compliance by the Company with certain restrictive
provisions of the Applicable Indenture (Section 10.9). The Holders of a majority
in aggregate principal amount of the Outstanding Securities of any series may,
on behalf of all Holders of that series of Securities, waive any past default
under the Indenture, except a default in the payment of principal, premium, if
any, or interest and in respect of certain covenants (Section 5.13).
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Consolidation, Merger and Sale of Assets
Under the Indenture, the Company may not consolidate with or merge into any
other Person or sell, convey, exchange, transfer or lease its properties and
assets substantially as an entirety to any Person, unless: (a) any successor or
purchaser is the Company or another corporation organized under the laws of the
United States, any state thereof or the District of Columbia; (b) any such
successor or purchaser expressly assumes the Company's obligations on such
Securities and under the Indentures; (c) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing; and (d) certain other conditions are met (Section 8.1).
Trustee
Bankers Trust Company is the Trustee under the Indenture. Bankers Trust
Company maintains a deposit account and conducts other banking transactions with
the Company and its subsidiaries in the ordinary course of business, and serves
as trustee with respect to the Existing Subordinated Notes, which were also
issued under the Indenture. The Indenture provides for the indemnification of
the Trustee by the Company under certain circumstances.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters and also may
sell Securities directly to other purchasers or through agents.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by
21
<PAGE>
them and any profit on the resale of Securities by them may be deemed to be
underwriting discounts and commissions, under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received from
the Company will be described, in the applicable Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to delayed delivery contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases
such institutions must be approved by the Company. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Offered Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such other agents will not have any responsibility
in respect of the validity or performance of such contracts.
EXPERTS
The consolidated financial statements incorporated herein by reference from
the Company's Annual Report on Form 10-K for the years ended December 31, 1996
and 1995, except for the year ended December 31, 1994, have been audited by
Coopers & Lybrand L.L.P., independent auditors, as indicated in their report,
which is incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing. The
consolidated financial statements of the Company for the year ended December 31,
1994, incorporated herein by reference, have been audited by KPMG Peat Marwick
LLP, independent auditors, as indicated in their report, which is incorporated
herein by reference, and are incorporated herein in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Dauphin Deposit Company for the
year ended December 31, 1996 incorporated herein by reference from the Company's
Current Report on Form 8-K dated May 21, 1997, incorporated herein by
reference, have been
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<PAGE>
audited by KPMG Peat Marwick LLP, independent auditors, as indicated in their
report, which is incorporated herein by reference, and are incorporated herein
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing. Such report contains an explanatory paragraph that
states that Dauphin changed its method of accounting for mortgage servicing
rights and long-lived assets to adopt the provisions of the Financial Accounting
Standard Board's Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights, an amendment of FASB Statement
No.65," on January 1, 1995, and No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of," on January 1, 1996.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Gregory K. Thoreson, Senior Vice President and General Counsel of the
Company, and for any underwriters or agents by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York. As to
matters of Maryland law, Simpson Thacher & Bartlett will rely on the opinion of
Mr. Thoreson.
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<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting compensation, are as
follows:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee $106,061
Blue Sky fees and expenses 12,000*
Attorney's fees and expenses 75,000*
Accounting fees and expenses 30,000
Printing and engraving expenses 30,000*
Fees of Indenture Trustee and
Paying Agent 5,000*
Rating agency fees 75,000*
Miscellaneous 11,939*
--------
Total $345,000*
========
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*Estimated
</TABLE>
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
Section 2-418 of the Maryland General Corporation Law contains detailed
provisions for indemnification of directors and officers of Maryland
corporations against expenses, judgments, fines and settlements in connection
with litigation. Article Seventh, Section 7 of the Company's Articles of
Incorporation, as amended (the "Articles"), provides that the officers and
directors of the Company and certain others shall be indemnified to the full
extent permitted by Maryland law.
Article Seventh, Section 7 of the Articles provides that a director or
officer shall not be personally liable to the Company or its stockholders for
monetary damages to the fullest extent permitted under Maryland statutory and
decisional law. Such indemnification would not, among other things, cover
liability for any breach of the director's duty of loyalty to the Company or
its stockholders, (i) for material acts or omissions taken or made with active
dishonesty, or (ii) for any transaction which the director or officer actually
received an improper personal benefit of money, property or services.
The Company maintains a standard policy of officers' and directors'
insurance.
Item 16. Exhibits
--------
1.1 Form of Underwriting Agreement*
2.1 Agreement and Plan of Merger, dated as of January 21, 1997, among the
Company, Allied Irish Banks, p.l.c., and Dauphin Deposit Corporation
II-1
<PAGE>
4.1 Indenture, dated as of May 15, 1992, between the Company and Bankers
Trust Company, as Trustee (incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-1, Registration No. 33-46277)
4.2 Form of Subordinated Debt Security (included in Exhibit 4.1)
5.1 Opinion and consent of Gregory K. Thoreson, Senior Vice President and
General Counsel of the Company, as to legality of the Securities
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Gregory K. Thoreson (included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of KPMG Peat Marwick LLP
23.4 Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company to act as
trustee under the Indenture
- -------------------
* To be filed on a Current Report on Form 8-K pursuant to Regulation S-K,
Item 601(b)
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) To include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
To reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; (iii) To include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a
II-2
<PAGE>
post-effective amendment by those paragraphs is contained in periodic reports
filed with or provided to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnifica-
II-3
<PAGE>
tion against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First Maryland
Bancorp certifies that it has reasonable grounds to believe that it meets all
the requirements for filing this Registration Statement on Form S-3 (including
that the securities registered hereby will satisfy the rating requirement of
General Instruction I.B.2) and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Baltimore, Maryland on June 4, 1997.
FIRST MARYLAND BANCORP
By: /s/ JEROME W. EVANS
------------------------------
Jerome W. Evans, Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on June 4, 1997.
SIGNATURE
TITLE
<TABLE>
<CAPTION>
<S> <C>
/s/ FRANK P. BRAMBLE* President, Chief Executive Officer
------------------------- and Director (Principal Executive
Frank P. Bramble Officer)
/s/ JEROME W. EVANS Executive Vice President and Chief
------------------------- Financial Officer (Principal Financial
Jerome W. Evans Officer)
/s/ ROBERT L. CARPENTER, JR. Senior Vice President and
- ---------------------------- Controller (Principal Accounting
Robert L. Carpenter, Jr. Officer)
*By: /s/ JEROME W. EVANS
----------------------
Jerome W. Evans, as
Attorney-in-Fact
</TABLE>
A Majority of the Board of Directors:
Benjamin L. Brown, Jeremiah E. Casey, J. Owen Cole, Edward A. Crooke, John F.
Dealy, Mathias J. DeVito, Rhoda M. Dorsey, Jerome W. Geckle, Frank A. Gunther,
Jr., Curran W. Harvey, Jr., Henry J. Knott, William M. Passano, Jr.
By: /s/ JEROME W. EVANS
-------------------------
Jerome W. Evans, as
Attorney-in-Fact
II-5
<PAGE>
Exhibit 2.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ALLIED IRISH BANKS, P.L.C.
("ACQUIROR")
FIRST MARYLAND BANCORP
("ACQUIROR SUB")
AND
DAUPHIN DEPOSIT CORPORATION
("THE COMPANY")
JANUARY 21, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I--THE MERGER................................................... A-5
1.1. Structure of the Merger....................................... A-5
1.2. Conversion of Stock........................................... A-5
1.3. Exchange Procedures........................................... A-8
1.4. Options....................................................... A-9
1.5. Other Rights.................................................. A-10
1.6. Convertible Debentures........................................ A-10
1.7. Closing....................................................... A-10
ARTICLE II--REPRESENTATIONS AND WARRANTIES.............................. A-11
2.1. Organization and Capitalization of Acquiror and Acquiror Sub.. A-11
2.2. Organization and Capitalization of the Company................ A-11
2.3. Rights, etc................................................... A-11
2.4. Capital Stock................................................. A-11
2.5. Authority..................................................... A-12
2.6. Subsidiaries.................................................. A-12
2.7. Authorization and Validity of Agreement....................... A-12
2.8. No Violations................................................. A-12
2.9. Securities Exchange Act Reports............................... A-12
2.10. Absence of Certain Changes or Events.......................... A-13
2.11. Taxes......................................................... A-13
2.12. Absence of Claims............................................. A-13
2.13. Absence of Regulatory Actions................................. A-13
2.14. Labor Matters................................................. A-13
2.15. Employee Benefit Plans........................................ A-14
2.16. Material Contracts............................................ A-14
2.17. Title to Assets............................................... A-15
2.18. Knowledge as to Conditions.................................... A-15
2.19. Compliance With Laws.......................................... A-15
2.20. Acquiror Common Stock......................................... A-15
2.21. Fees.......................................................... A-15
2.22. Registration Statement; Proxy Statement....................... A-15
2.23. Environmental Matters......................................... A-15
2.24. Takeover Laws; Rights Plans................................... A-16
2.25. Vote Required................................................. A-16
ARTICLE III--CONDUCT PRIOR TO CLOSING................................... A-17
3.1. Access to Information; Notice of Changes; Confidentiality..... A-17
3.2. Conduct of the Business of the Company Pending the Closing
Date......................................................... A-17
3.3. Conduct of the Business of Acquiror Pending the Closing Date.. A-18
3.4. Dividends..................................................... A-19
3.5. No Solicitation of Other Offers............................... A-19
3.6. Certain Filings, Consents and Arrangements.................... A-19
3.7. Best Efforts.................................................. A-19
3.8. Publicity..................................................... A-19
3.9. Shareholder Approvals......................................... A-19
3.10. Registration Statement........................................ A-20
3.11. The Company Rights Agreement.................................. A-20
3.12. Securities Act................................................ A-20
3.13. Additional Agreements......................................... A-21
3.14. Listing....................................................... A-21
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE IV--CONDITIONS PRECEDENT TO MERGER................................ A-21
4.1. Conditions Precedent to Obligations of All Parties.............. A-21
4.2. Conditions Precedent to Obligations of Acquiror................. A-22
4.3. Conditions Precedent to Obligation of the Company............... A-23
ARTICLE V--COVENANTS...................................................... A-23
5.1. Tax-Free Reorganization Treatment............................... A-23
5.2. Certain Contracts............................................... A-23
5.3. Employee Benefits............................................... A-23
5.4. Indemnification; Directors' and Officers' Insurance............. A-24
5.5. Certain Director and Officer Positions.......................... A-25
ARTICLE VI--TERMINATION................................................... A-25
6.1. Termination..................................................... A-25
6.2. Effect of Termination........................................... A-26
ARTICLE VII--MISCELLANEOUS................................................ A-26
7.1. Certain Definitions; Interpretation............................. A-26
7.2. Fees and Expenses............................................... A-27
7.3. Survival........................................................ A-27
7.4. Public Announcements............................................ A-27
7.5. Notices......................................................... A-27
7.6. Entire Agreement................................................ A-28
7.7. Binding Effect; Benefit; Assignment............................. A-28
7.8. Waiver.......................................................... A-28
7.9. Further Actions................................................. A-28
7.10. Counterparts.................................................... A-28
7.11. Applicable Law.................................................. A-28
7.12. Severability.................................................... A-28
EXHIBITS*
Exhibit A: Stock Option Agreement
Exhibit B: Employment Agreement and Change in Control Retention Payments
Exhibit C: Additional Benefits Provisions
</TABLE>
- --------
* Not included in this Appendix A.
A-2
<PAGE>
INDEX TO DEFINITIONS
<TABLE>
<CAPTION>
TERM LOCATION OF DEFINITION
- ---- ----------------------
<S> <C>
Acquiror................................................. Preamble
Acquiror ADS............................................. 1.2(a)
Acquiror Meeting......................................... 2.22
Acquiror Ordinary Shares................................. 1.2(a)
Acquiror Sub............................................. Preamble
Acquiror Sub Common Stock................................ 2.1
Acquiror Sub Meeting..................................... 2.22
Acquiror Sub Preferred Stock............................. 2.1
Acquisition Proposal..................................... 3.5
ADR...................................................... 1.3
Affiliate................................................ 3.12(a)
Agreement................................................ Preamble
Bank Regulators.......................................... 2.13
Benefit Plans............................................ 2.15
Blue Sky................................................. 2.8
Business Day............................................. 7.1
Cash Election Shares..................................... 1.2(b)
Cash Out................................................. 1.4(a)
Closing Date............................................. 1.7
Closing Market Price..................................... 1.2(a)
Company.................................................. Preamble
Company Common Stock..................................... 1.2(a)
Company Meeting.......................................... 2.22
Company Right............................................ 1.2(a)
Company Rights Agreement................................. 1.2(a)
Contractual Consents..................................... 2.16
Control.................................................. 7.1
Converted Cash Election Shares........................... 1.2(c)
Costs.................................................... 5.4(a)
Debentures............................................... 1.6
Deposit Agreement........................................ 1.2(a)
Depositary............................................... 1.2(a)
Dissenters' Shares....................................... 1.2(a)
Dollar................................................... 7.1
Effective Date........................................... 1.7
Effective Time........................................... 1.7
Election................................................. 1.2(b)
Election Deadline........................................ 1.2(d)
Election Form............................................ 1.2(b)
Environmental Law........................................ 2.23
ERISA.................................................... 2.15
Exchange Agent........................................... 1.2(b)
Exchange Fund............................................ 1.3(a)
Exchange Option.......................................... 1.4(a)
Exchange Ratio........................................... 1.2(a)
Federal Reserve Board.................................... 4.1(b)
Indemnified Parties...................................... 5.4(a)
IRS...................................................... 2.15
Mailing Date............................................. 1.2(d)
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
TERM LOCATION OF DEFINITION
- ---- ----------------------
<S> <C>
Market Price............................................. 7.1
Material................................................. 7.1
Material Adverse Effect.................................. 7.1
Maximum Amount........................................... 5.4(c)
Merger................................................... 1.1
MGCL..................................................... 1.1
No-Election Shares....................................... 1.2(b)
Old Certificates......................................... 1.2(d)
Option Plans............................................. 1.4(a)
Outstanding Option....................................... 1.4(a)
Outstanding Rights....................................... 1.5
Outstanding Shares....................................... 1.2(a)
PBCL..................................................... 1.1
Pension Plan............................................. 2.15
Per Share Cash Consideration............................. 1.2(a)
Per Share Stock Consideration............................ 1.2(a)
Person................................................... 7.1
Previously Disclosed..................................... Art. 2
Proxy Statement.......................................... 2.22
Proxy Statement/Prospectus............................... 2.22
Registration Statement................................... 2.22
Reports.................................................. 2.9
Rights................................................... 2.3
SEC...................................................... 2.9
SEC Documents............................................ Art. 2
Securities Exchange Act.................................. Art. 2
Securities Act........................................... Art. 2
Shareholder Meeting...................................... 3.9
Stock Election Shares.................................... 1.2(b)
Stock Number............................................. 1.2(a)
Stock Option Agreement................................... Preamble
Stock-Selected No-Election Shares........................ 1.2(c)
Subsidiary............................................... 7.1
Surviving Institution.................................... 1.1
Takeover Laws............................................ 2.24
Termination Right Determination Date..................... 6.1(f)
$........................................................ 7.1
</TABLE>
A-4
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made this 21st day of
January, 1997, by and among ALLIED IRISH BANKS, plc, an Irish company
("Acquiror"), FIRST MARYLAND BANCORP, a Maryland corporation and a subsidiary
of Acquiror ("Acquiror Sub"), and DAUPHIN DEPOSIT CORPORATION, a Pennsylvania
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Acquiror, Acquiror Sub and
the Company have approved the acquisition of the Company by Acquiror and
Acquiror Sub, subject to the terms and conditions of this Agreement;
WHEREAS, as a condition and inducement to Acquiror's willingness to enter
into this Agreement, concurrently with the execution and delivery of this
Agreement, the Company has executed and delivered a Stock Option Agreement
with Acquiror (the "Stock Option Agreement") in substantially the form
attached hereto as Exhibit A, pursuant to which the Company is granting to
Acquiror an option to purchase, under certain circumstances, shares of Company
Common Stock.
NOW THEREFORE, in consideration of the foregoing premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties, intending to be legally bound hereby, agree as follows:
ARTICLE I
The Merger
1.1. Structure of the Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.7 hereof), the
Company will merge with and into Acquiror Sub (the "Merger"), with Acquiror
Sub being the surviving institution (the "Surviving Institution") pursuant to
the provisions of, and with the effects provided in, the Pennsylvania Business
Corporation Law ("PBCL") and the Maryland General Corporation Law (the
"MGCL"). At the Effective Time, the separate corporate existence of the
Company shall cease, and Acquiror Sub shall continue as the Surviving
Institution. The Articles of Incorporation of Acquiror Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Institution until thereafter amended as
provided by law.
1.2. Conversion of Stock.
(a)(i) At the Effective Time, each share of common stock of the Company, par
value $5.00 per share (the "Company Common Stock"), including each attached
right (a "Company Right") issued pursuant to the Rights Agreement dated as of
January 22, 1990 between the Company and Dauphin Deposit Bank and Trust
Company as Rights Agent (the "Company Rights Agreement"), then issued and
outstanding (other than (i) shares which have not been voted in favor of the
approval of the Merger and with respect to which dissenter's rights shall have
been perfected in accordance with applicable provisions of the PBCL (the
"Dissenters' Shares") and (ii) shares held directly or indirectly by Acquiror,
excluding shares held in a fiduciary or custodial capacity or in satisfaction
of a debt previously contracted) (the "Outstanding Shares") shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and represent the right to receive, at the election of each
record holder thereof as provided herein, but subject to the election and
allocation procedures set forth herein:
(A) cash in the amount of Forty-Three Dollars ($43) (the "Per Share
Cash Consideration"); or
(B) that number (the "Exchange Ratio") of Acquiror ADSs (as defined
below) having a Closing Market Price (as defined below) as of the
Election Deadline (as defined below) equal to Forty-Three Dollars
($43); provided, however, that (A) if the Closing Market Price of an
Acquiror ADS is less than Thirty-Seven Dollars ($37) per Acquiror ADS
then the Exchange Ratio shall be 1.162, and (B) if the Closing Market
Price of an Acquiror ADS is greater than Forty-Three Dollars ($43) per
Acquiror ADS then the Exchange Ratio shall be 1.0000 (the "Per Share
Stock Consideration");
A-5
<PAGE>
provided, that not less than fifty-one percent (51%) of the shares of the
Company Common Stock issued as of the Effective Time (such number, the "Stock
Number") shall be converted into the right to receive the Per Share Stock
Consideration.
(ii) References herein to "Acquiror ADSs" shall mean American Depository
Shares each representing six (6) ordinary shares of Acquiror, IR 25p each
("Acquiror Ordinary Shares") deposited with The Bank of New York, as
Depositary (the "Depositary"), pursuant to the Deposit Agreement dated as
of November 8, 1990 (the "Deposit Agreement"). The "Closing Market Price"
shall mean the Market Price (as defined in Section 7.1 hereof) of an
Acquiror ADS as of the second Business Day immediately preceding the
Election Deadline. Acquiror will promptly calculate and make public
disclosure of the Closing Market Price.
(iii) If the Acquiror effects a stock dividend (which shall not include
the issuance of shares pursuant to a dividend reinvestment plan),
reclassification, recapitalization, split-up, combination, exchange of
shares or similar transaction, after the date hereof and prior to the
Effective Time, the references in clause (B) of Section 1.2(a)(i) to the
figures $37 and $43, and the references in Section 6.1(f) to the figure
$32, shall be appropriately adjusted.
(iv) No fractional Acquiror ADSs will be issued pursuant hereto, and
Acquiror shall pay cash in lieu of any fractional Acquiror ADS which
otherwise would be issuable. Any such cash payments shall be made on the
basis of the Market Price of Acquiror ADSs as of the Effective Time.
(v) As of the Effective Time, each share of the Company Common Stock held
directly or indirectly by Acquiror, excluding shares held in a fiduciary or
custodial capacity or in satisfaction of a debt previously contracted, and
each share held as treasury stock of the Company, shall be canceled,
retired and cease to exist, and no exchange or payment shall be made with
respect thereto. Each issued and outstanding share of common stock of
Acquiror Sub shall continue to be an issued and outstanding share of common
stock of the Surviving Institution.
(vi) Dissenters' Shares shall be paid for in accordance with applicable
provisions of the PBCL and thereupon shall be canceled, retired and cease
to exist.
(vii) The exchange of Company Common Stock and attached Company Rights
for the merger consideration as provided herein shall constitute a
redemption of such Company Rights pursuant to Section 23 of the Rights
Agreement. To the extent that any shares of Company Common Stock are
Dissenters' Shares or are otherwise not so exchanged, then the Company
shall redeem or otherwise extinguish the Company Rights attached to such
unexchanged shares of Company Common Stock as of the Effective Time.
(b) Subject to the allocation procedures set forth in Section 1.2(c), each
record holder of outstanding Shares will be entitled (i) to elect to receive
Acquiror ADSs for all or some of the shares of Company Common Stock ("Stock
Election Shares") held by such record holder, (ii) to elect to receive cash
for all or some of the shares of Company Common Stock ("Cash Election Shares")
held by such record holder or (iii) to indicate that such holder makes no such
election for all or some of the shares of Company Common Stock ("No-Election
Shares") held by such record holder. All such elections (each, an "Election")
shall be made on a form designed for that purpose by Acquiror and reasonably
acceptable to the Company (an "Election Form"). Any Outstanding Shares with
respect to which the record holder thereof shall not, as of the Election
Deadline (as defined in Section 1.2(d)), have properly submitted to the
Exchange Agent (as hereinafter defined) a properly completed Election Form
shall be deemed to be No-Election Shares. A record holder acting in different
capacities shall be entitled to submit an Election Form for each capacity in
which such record holder so acts with respect to each Person for which it so
acts. The exchange agent (the "Exchange Agent") shall be a United States
financial institution selected by Acquiror and reasonably acceptable to the
Company.
A-6
<PAGE>
(c) Not later than the Effective Date, Acquiror shall cause the Exchange
Agent to effect the allocation among the holders of Company Common Stock of
rights to receive the Per Share Stock Consideration or the Per Share Cash
Consideration in the Merger as follows:
(i) Number of Stock Elections Less Than Stock Number. If the number of
Stock Election Shares is less than the Stock Number, then
(A) all Stock Election Shares shall be converted into the right to
receive the Per Share Stock Consideration,
(B) the Exchange Agent shall select (by random selection) from among
the No-Election Shares a sufficient number of No-Election Shares such
that the sum of such number and the number of Stock Election Shares
shall equal as closely as practicable but be not less than the Stock
Number, and all such selected shares ("Stock-Selected No-Election
Shares") shall be converted into the right to receive the Per Share
Stock Consideration, provided that if the sum of all No-Election Shares
and Stock Election Shares is less than the Stock Number, all No-
Election Shares shall be converted into the right to receive the Per
Share Stock Consideration, and thereby become Stock-Selected No-
Election Shares,
(C) if the sum of Stock Election Shares and No-Election Shares is
less than the Stock Number, the Exchange Agent shall convert (by random
selection) a sufficient number of Cash Election Shares into Stock
Election Shares ("Converted Cash Election Shares") such that the sum of
Stock Election Shares, No-Election Shares and Converted Cash Election
Shares equals as closely as practicable but be not less than the Stock
Number, and all Converted Cash Election Shares shall be converted into
the right to receive the Per Share Stock Consideration,
(D) any Cash Election Shares that are not Converted Cash Election
Shares shall be converted into the right to receive the Per Share Cash
Consideration, and
(E) if there are No-Election Shares that are not Stock-Selected No-
Election Shares, Acquiror shall instruct the Exchange Agent what number
of such shares shall be converted into the right to receive the Per
Share Cash Consideration and what number of such shares shall be
converted into the right to receive the Per Share Stock Consideration,
and if Acquiror shall instruct the Exchange Agent that certain of such
shares shall be converted into the right to receive the Per Share Cash
Consideration and that the remainder of such shares shall be converted
into the right to receive the Per Share Stock Consideration, the
Exchange Agent shall select among such shares by random selection; or
(ii) Number of Stock Elections Greater Than or Equal to Stock Number. If
the number of Stock Election Shares is greater than or equal to the Stock
Number, then
(A) all Stock Election Shares shall be converted into the right to
receive the Per Share Stock Consideration,
(B) all Cash Election Shares shall be converted into the right to
receive the Per Share Cash Consideration, and
(C) Acquiror shall instruct the Exchange Agent what number of No-
Election Shares shall be converted into the right to receive the Per
Share Cash Consideration and what number of No-Election Shares shall be
converted into the right to receive the Per Share Stock Consideration,
and if Acquiror shall instruct the Exchange Agent that certain of such
shares shall be converted into the right to receive the Per Share Cash
Consideration and that the remainder of such shares shall be converted
into the right to receive the Per Share Stock Consideration, the
Exchange Agent shall select among such shares by random selection.
(iii) Notwithstanding the foregoing, a Person who immediately prior to
the Effective Time owned (for purposes of the Internal Revenue Code) 5% or
more of the outstanding shares of Company Common Stock and who does not
elect to receive Per Share Cash Consideration for all his shares, shall
deliver a written agreement, in a form reasonably acceptable to Acquiror,
containing customary representations to the effect that such holder has no
present intention to sell, exchange or otherwise dispose of such shares of
Acquiror Common Stock to be received in exchange for such shares of Company
Common Stock, and if such holder
A-7
<PAGE>
shall not deliver such a written agreement, in a form reasonably acceptable
to Acquiror, at the election of Acquiror such Person shall instead receive
the Per Share Cash Consideration with respect to such shares, regardless of
the election (or lack thereof) made by such Person in its Election Form.
(d) Not later than the 25th Business Day prior to the anticipated Effective
Date or such other date as the parties may agree in writing (the "Mailing
Date"), Acquiror shall mail an Election Form and a letter of transmittal to
each Person that was a holder of record of Company Common Stock immediately
prior to the Mailing Date. To be effective, an Election Form must be properly
completed, signed and actually received by the Exchange Agent not later than
5:00 p.m., Eastern Time, on the second Business Day preceding the Effective
Date (which will be not earlier than the 20th day after the Mailing Date) (the
"Election Deadline") and accompanied by the certificates formerly representing
all of the Outstanding Shares ("Old Certificates") as to which the Election is
being made (or an appropriate guarantee of delivery by an eligible
organization). Acquiror shall have reasonable discretion, which it may
delegate in whole or in part to the Exchange Agent, to determine whether
Election Forms have been properly completed, signed and timely submitted or to
disregard defects in Election Forms; such decisions of Acquiror (or of the
Exchange Agent) shall be conclusive and binding. Neither Acquiror nor the
Exchange Agent shall be under any obligation to notify any Person of any
defect in an Election Form submitted to the Exchange Agent. The Exchange Agent
and Acquiror shall also make all computations contemplated by Section 1.2
hereof. For purposes hereof, all calculations of the Acquiror Market Price and
the Exchange Ratio shall be rounded to the nearest one thousandth.
1.3. Exchange Procedures. Old Certificates previously representing shares of
Company Common Stock shall be exchanged for cash and/or receipts ("ADRs")
representing whole Acquiror ADSs (and cash in lieu of fractional Acquiror
ADSs) issued in consideration therefor in accordance with this Section 1.3.
(a) As of the Effective Time, Acquiror or Acquiror Sub shall deposit, or
shall cause to be deposited, with the Exchange Agent for the benefit of the
holders of shares of Company Common Stock for exchange in accordance with this
Section 1.3, ADRs representing the Acquiror ADSs (and the cash in lieu of
fractional Acquiror ADSs) in the amount of the merger consideration (such
cash, and ADRs, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "Exchange Fund") to be issued
and paid pursuant to Section 1.2 in exchange for Outstanding Shares.
(b) Promptly after the Effective Time, Acquiror shall cause the Exchange
Agent to mail to each holder of record of Company Common Stock who has not
previously delivered such holders Old Certificates pursuant to the election
procedures set forth in Section 1.2: (i) a letter of transmittal specifying
that delivery shall be effected, and risk of loss and title to the Old
Certificates shall pass, only upon delivery of the Old Certificates to the
Exchange Agent, which shall be in a form and contain any other provisions as
Acquiror and Company may reasonably agree; and (ii) instructions for use in
effecting the surrender of the Old Certificates in exchange for the merger
consideration. Upon the proper surrender of an Old Certificate to the Exchange
Agent, together with a properly completed and duly executed letter of
transmittal, the holder of such Old Certificate shall be entitled to receive
in exchange therefor (x) a check in the amount of that amount of cash, (y) an
ADR representing that number of whole Acquiror ADSs, and (z) a check
representing the amount of cash in lieu of any fractional Acquiror ADSs and
unpaid dividends and distributions, if any, which such holder has the right to
receive in respect of the Old Certificate surrendered pursuant to the
provisions of Section 1.2, and the Old Certificate so surrendered shall
forthwith be canceled. No interest will be paid or accrued on the cash payable
pursuant to Section 1.2, or the cash in lieu of fractional Acquiror ADSs and
unpaid dividends and distributions, if any, payable to holders of Old
Certificates. If, after the Effective Time, Old Certificates are presented to
Acquiror or Acquiror Sub, they shall be canceled and exchanged for the cash
Acquiror ADSs and cash in lieu of fractional shares, if any, deliverable in
respect thereof pursuant to this Agreement in accordance with the procedures
set forth in this Section 1.3.
(c) Whenever a dividend or other distribution is declared by Acquiror on the
Acquiror Ordinary Shares, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all Acquiror ADSs issuable pursuant to this Agreement; provided that after
the 90th day
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following the Effective Date no dividend or other distribution declared or
made on the Acquiror Ordinary Shares shall be paid to the holder of any
unsurrendered Old Certificate with respect to the Acquiror ADSs represented
thereby until the holder of such Old Certificate shall have duly surrendered
such Old Certificate in accordance with Section 1.2 or this Section 1.3.
(d) From and after the Effective Time, there shall be no transfers on the
stock transfer records of the Company of any shares of Company Common Stock
that were outstanding immediately prior to the Effective Time. In the event of
a transfer of ownership of any Company Common Stock not registered in the
transfer records of Company, a certificate representing the proper number of
Acquiror ADSs, together with a check for the cash to be paid in lieu of
fractional Acquiror ADSs and the proper amount of Per Share Cash
Consideration, may be issued to the transferee if the Old Certificate
representing such Company Common Stock is presented to the Exchange Agent,
accompanied by documents sufficient (1) to evidence and effect such transfer
and (2) to evidence that all applicable stock transfer taxes have been paid.
(e) Any portion of the Exchange Fund (including the proceeds of any
investments thereof and any Acquiror ADSs) that remains unclaimed by the
shareholders of the Company six months after the Effective Time shall, at the
Acquiror's request, be repaid to Acquiror or to the Depositary, as applicable.
Any shareholders of the Company who have not theretofore surrendered their old
Certificates in accordance with Section 1.2 or this Section 1.3 shall
thereafter look only to Acquiror for payment of the cash, Acquiror ADSs, and
cash in lieu of fractional Acquiror ADSs deliverable in respect thereof, and
any unpaid dividends and distributions on the Acquiror ADSs deliverable in
respect of each share of Company Common Stock such shareholder holds as
determined pursuant to this Agreement, in each case, without any interest
thereon. None of Acquiror, the Exchange Agent or any other Person shall be
liable to any former holder of Company Common Stock for any amount delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(f) In the event any Old Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Old Certificate to be lost, stolen or destroyed and, if required by
Acquiror, the posting by such Person of a bond in such amount as Acquiror may
direct as indemnity against any claim that may be made against it with respect
to such Old Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Old Certificate the cash, Acquiror ADSs and cash in
lieu of fractional shares deliverable (and unpaid dividends and distributions)
in respect thereof pursuant to this Agreement.
(g) Former shareholders of the Company shall be entitled to direct the
voting at any meeting of Acquiror shareholders the number of Acquiror Ordinary
Shares represented by the number of Acquiror ADSs into which their shares of
Company Common Stock are converted in accordance with Section 1.2 (to the
extent provided in and subject to the conditions of the Deposit Agreement),
regardless of whether such holders have exchanged their Old Certificate
representing Company Common Stock for ADRs representing Acquiror ADSs in
accordance with the provisions of this Agreement.
1.4. Options.
(a) Each option to purchase shares of Company Common Stock pursuant to the
Company's 1986 Option Plan, 1995 Stock Incentive Plan, 1996 Non-Officer
Directors' Stock Plan and [AB&C] Option Plan (collectively, the "Option
Plans"), which is outstanding and unexercised immediately prior thereto (each,
an "Outstanding Option"), shall be converted as to each whole share subject to
such Outstanding Option at the holder's election (made at least 5 days prior
to the Closing Date) into:
(i) at the Effective Time, an option (each, an "Exchange Option") to
purchase such number of Acquiror ADSs at such exercise price as is
determined as provided below (and otherwise having the same duration and
other terms as the original option):
(A) the number of Acquiror ADSs to be subject to the Exchange Option
shall be equal to the product of (A) the number of shares of the
Company Common Stock subject to the original option as to which the
holder thereof has elected to receive an Exchange Option, multiplied by
(B) the Exchange
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Ratio (as may be adjusted pursuant to Section 1.2(b) above), the
product being rounded, if necessary, up or down, to the nearest whole
share;
(B) the exercise price per Acquiror ADS under the new option shall be
equal to (I) the aggregate exercise price for the shares of Company
Common Stock subject to the Outstanding Option as to which the holder
has elected to receive an Exchange Option, divided by (II) the number
of Acquiror ADSs for which the Exchange Option is exercisable as
determined pursuant to clause (A) above, the result being rounded, if
necessary, up or down, to the nearest cent.
OR:
(ii) immediately prior to the Effective Time, cash (the "Cash Out") in an
amount equal to the Per Share Cash Consideration multiplied by the number
of shares subject to such Outstanding Options as to which the holder
thereof has elected to receive the Cash Out, less the amount which would
have been required to exercise such Outstanding Options as to such shares.
(b) Holders of Outstanding Options shall have no rights to receive the "Cash
Out", and no other modification of such Outstanding Options hereunder shall be
effective, unless and until the Closing Date occurs. The adjustments provided
herein with respect to any options which are "incentive stock options" (as
defined in Section 422 of the Code) shall be effected in a manner consistent
with Section 424(a) of the Code.
(c) The Exchange Options with respect to Outstanding Options shall be
delivered by Acquiror at the Effective Time, and checks in the amounts of the
respective Cash outs shall be delivered by the Company immediately prior to
the Effective Time with all amount paid to be reimbursed by Acquiror or
Acquiror Sub. As of the Effective Time, Acquiror shall have reserved for
issuance a sufficient number of Acquiror Ordinary Shares to cover the issuance
of the Acquiror ADSs subject to such Exchange Options.
1.5. Other Rights. Rights to receive shares of the Company's Common Stock
pursuant to (i) Performance Share Agreements under the Company's 1995 Stock
Incentive Plan, (ii) a deferral account pursuant to the Company's 1996 Non-
Officer Directors' Stock Plan, and (iii) accrued rights under the Company's
Employee Stock Purchase Plan, which are outstanding as of the Effective Time
(collectively, the "Outstanding Rights") shall be converted into rights to
receive or purchase, as applicable, that number of Acquiror ADSs equal to the
number of shares to which such Outstanding Rights relate multiplied by the
Exchange Ratio.
1.6. Convertible Debentures. The Company's 9% Convertible Subordinated
Debentures Due June 1999 (the "Debentures") outstanding at the Effective Time
shall be assumed by Acquiror or Acquiror Sub and remain outstanding thereafter
as an obligation of the Acquiror or Acquiror Sub, as the case may be, and,
from and after the Effective Time, the holders of the Debentures shall have
the right to convert such Debentures into the Per Share Stock Consideration
receivable upon the Merger by a holder of the number of shares of Company
Common Stock into which such Debentures could have been converted immediately
prior to the Merger. Acquiror or Acquiror Sub, as the case may be, shall enter
into a supplemental indenture with respect to such obligations in accordance
with the terms of the indenture pursuant to which the Debentures were issued.
1.7. Closing. On the first Business Day to occur which is at least three (3)
Business Days after the expiration of all applicable waiting periods in
connection with approvals of governmental authorities occurs and all
conditions to the consummation of this Agreement are satisfied or waived and
which is the last Business Day of a month, or on such earlier or later date as
may be agreed by the parties (the "Closing Date"), articles of merger shall be
executed in accordance with all appropriate legal requirements and shall be
filed as required by law, and the Merger provided for herein shall become
effective upon such filing or on such date and at such time as may be
specified in such articles of merger by agreement of the parties hereto. The
date and time of such filing or such later effective date and time are herein
called the "Effective Time." The date on which the Effective Time occurs is
herein referred to as the "Effective Date."
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ARTICLE II
Representations and Warranties
Acquiror represents and warrants to the Company, and the Company represents
and warrants to Acquiror, to the extent applicable as indicated below, that
except as Previously Disclosed, the following representations and warranties
are true and correct in all Material respects. For purposes of this Agreement,
"Previously Disclosed" means disclosed prior to the execution hereof in (i) an
SEC Document filed with the SEC prior to the date hereof, (ii) this Agreement,
(iii) written materials provided to the other party prior to or as of the date
hereof as specified in a letter dated of even date herewith from the party
making such disclosure and delivered to the other party prior to the execution
hereof (its "Disclosure Letter"). Any information disclosed by one party to
the other for any purpose hereunder shall be deemed to be disclosed for all
purposes hereunder, except for purposes of Section 2.10 hereof. The inclusion
of any matter in information Previously Disclosed shall not be deemed an
admission or otherwise to imply that any such matter is Material for purposes
of this Agreement. "SEC Documents" means all publicly available documents
filed by the Company or its predecessors with the SEC, including all such
documents filed under the Securities Act of 1933, as amended (the "Securities
Act") or the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act").
2.1. Organization and Capitalization of Acquiror and Acquiror Sub. In the
case of Acquiror, it is a corporation duly organized, validly existing and in
good standing under the laws of Ireland and it is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended; and its
authorized capital stock as of the date hereof consists of (a)
IR(Pounds)450,000,000 of authorized capital divided into 1,000,000,000
Acquiror Ordinary Shares (of which 680,172,595 shares were issued and
outstanding as of December 31, 1996) and 250,000,000 non-cumulative preference
shares of IR(Pounds)1 each (of which no shares are issued and outstanding as
of the date hereof), (b) US$400,000,000 of authorized capital divided into
16,000,000 non-cumulative preference shares of US$25 each (of which 7,200,000
shares were issued and outstanding as of December 31, 1996), and (c)
Stg(Pounds)125,000,000 of authorized capital divided into 125,000,000 non-
cumulative preference shares of Stg(Pounds)1 each (of which no shares are
issued and outstanding as of the date hereof). Approximately 10,800,000 of the
issued and outstanding Acquiror Ordinary Shares are represented by outstanding
Acquiror ADSs as of the date hereof. Acquiror Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Maryland; and its authorized capital consists of 600,000,000 shares of
common stock, par value $1/7 per share (the "Acquiror Sub Common Stock"), of
which 594,480,215 shares are issued and outstanding as of the date hereof (all
of which are held by Acquiror), and 9,000,000 shares of preferred stock par
value $5.00 per share (the "Acquiror Sub Preferred Stock"), of which 6,090,000
shares are issued and outstanding as of the date hereof.
2.2. Organization and Capitalization of the Company. In the case of the
Company it is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania; and its
authorized capital stock as of the date hereof consists of 200,000,000
authorized shares of the Company Common Stock, of which 30,666,729 shares were
issued and outstanding as of December 31, 1996, and 10,000,000 authorized
shares of preferred stock, par value $25.00 per share, of which no shares are
issued and outstanding.
2.3. Rights, etc. In the case of Acquiror, as of the date hereof, and in the
case of the Company in each case, except as Previously Disclosed, there are
not any shares of its capital stock reserved for issuance, or any outstanding
or authorized options, warrants, rights, subscriptions, claims of any
character, agreements, obligations, convertible or exchangeable securities, or
other commitments, contingent or otherwise, relating to its capital stock,
pursuant to which it is or may become obligated to issue shares of capital
stock or any securities convertible into, exchangeable for, or evidencing the
issued and outstanding right to subscribe for, any shares of its capital stock
(collectively, "Rights").
2.4. Capital Stock. In the case of Acquiror, all outstanding shares of
capital stock of it and its Significant Subsidiaries (as defined in Rule 1-02
of Regulation S-X) and in the case of the Company, all outstanding shares of
capital stock of it and its Subsidiaries, are duly authorized, validly issued
and outstanding, fully paid and
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nonassessable, and subject to no preemptive rights; and the shares of capital
stock of such Subsidiaries are owned by it (except for director's qualifying
shares) free and clear of all liens, claims, encumbrances and restrictions on
transfer and there are no Rights with respect to such capital stock.
2.5. Authority. In the case of Acquiror, each of it and its Significant
Subsidiaries and in the case of the Company each of it and its Subsidiaries,
has the power and authority, and is duly qualified in all jurisdictions where
such qualification is required, to carry on its business as it is now being
conducted and to own all its Material properties and assets (except for such
qualifications the absence of which, individually or in the aggregate, would
not have a Material Adverse Effect (as defined in Section 7.1)), and it has
all federal, state, local, and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its business
as it is now being conducted, except for such powers and authorizations the
absence of which, either individually or in the aggregate, would not have a
Material Adverse Effect.
2.6. Subsidiaries. In the case of Acquiror, a list of its Significant
Subsidiaries has been Previously Disclosed and in the case of the Company a
list of its Subsidiaries has been Previously Disclosed.
2.7. Authorization and Validity of Agreement. In the case of Acquiror, it
and Acquiror Sub each has, and in the case of the Company, it has, full power
and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
In the case of Acquiror and Acquiror Sub and in the case of the Company,
respectively, subject in each case to the receipt of the required shareholder
approvals referred to in Section 4.1(a), this Agreement has been authorized by
all necessary corporate action of it. In the case of Acquiror and Acquiror Sub
and in the case of the Company, respectively, this Agreement is a valid and
binding agreement of it enforceable against it in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
2.8. No Violations. In the case of Acquiror and Acquiror Sub and in the case
of the Company, respectively, the execution, delivery and performance of this
Agreement by it does not, and the consummation of the transactions
contemplated hereby by it will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument
of it or its Subsidiaries or to which it or its Subsidiaries (or any of their
respective properties) is subject, which breach, violation or default would
have a Material Adverse Effect, or enable any Person to enjoin the Merger or
(ii) a breach or violation of, or a default under, the articles of
incorporation or by-laws (or similar corporate documents) of it or any of its
Subsidiaries; and the consummation of the transactions contemplated hereby
will not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (w) the required approvals, consents and
waivers of governmental authorities referred to in Section 4.1(b), (x) the
approval of the shareholders of the Company referred to in Section 4.1(a), (y)
such approvals, consents or waivers as are required under the federal and
state securities or "Blue Sky" laws in connection with the transactions
contemplated by this Agreement, and (z) any other approvals, consents or
waivers the absence of which, individually or in the aggregate, would not
result in a Material Adverse Effect or enable any Person to enjoin the Merger.
2.9. Securities Exchange Act Reports. In the case of Acquiror and the
Company, respectively, it has filed with the Securities and Exchange
Commission ("SEC") all required forms, reports and documents required under
the Securities Exchange Act. In the case of Acquiror and the Company,
respectively, as of their respective dates, neither its Annual Report on Form
20-F and 10-K, respectively, for the fiscal year ended December 31, 1995, nor
any other document filed subsequent to December 31, 1995 under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act, each in the form (including
exhibits) filed with the SEC (collectively, its "Reports"), contained, as of
the date thereof, any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. In the case of Acquiror and the Company, respectively,
each of the balance sheets contained or incorporated by reference in its
Reports (including any
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related notes and schedules) fairly present the financial position of the
entity or entities to which it relates as of its date and each of the
statements of income, cash flows or equivalent statements contained or
incorporated by reference in its Reports (including any related notes and
schedules) fairly present the cash flows of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments that are not Material
in amount or effect), in each case in accordance with generally accepted
accounting principles applicable to bank holding companies consistently
applied during the periods involved, except as may be noted in the Reports.
2.10. Absence of Certain Changes or Events. Except as Previously Disclosed
in Section 2.10 of its Disclosure Letter, in the case of Acquiror and its
Subsidiaries and the Company and its Subsidiaries, respectively, since
December 31, 1995, it has not incurred any Material liability except in the
ordinary course of its business consistent with past practice, and there has
not been any change in the financial condition, business or results of
operations of it or any of its Subsidiaries which, individually or in the
aggregate, has had a Material Adverse Effect (other than as a result of
changes in banking laws or regulations of general applicability or
interpretations thereof).
2.11. Taxes. In the case of the Company, except as Previously Disclosed, or
as otherwise would not have a Material Adverse Effect, all federal, state,
local and foreign tax returns required to be filed by or on behalf of it or
any of its Subsidiaries have been timely filed or requests for extensions have
been timely filed and any such extensions have been granted and not expired.
In the case of the Company, all taxes shown on returns filed by or on behalf
of it or any of its Subsidiaries have been paid in full or adequate provision
has been made for any such taxes on its balance sheet (in accordance with
generally accepted accounting principles). In the case of the Company, as of
the date of this Agreement, there are no assessments or notices of deficiency
or proposed assessments with respect to any taxes of it or any of its
Subsidiaries that, if resolved in a manner adverse to it, would have a
Material Adverse Effect. In the case of the Company, except as otherwise would
not have a Material Adverse Effect, it has not executed an extension or waiver
of any statute of limitations on the assessment or collection of any tax due
that is currently in effect.
2.12. Absence of Claims. In the case of Acquiror and the Company,
respectively, except as Previously Disclosed no Material litigation,
proceeding or controversy before any court or governmental agency is pending,
and there is no pending claim, action or proceeding against it or any of its
Subsidiaries, which is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect or to materially hinder or delay consummation
of the transactions contemplated hereby.
2.13. Absence of Regulatory Actions. In the case of Acquiror and the
Company, respectively, except for matters arising in the ordinary course of
business, neither it nor any of its Subsidiaries is a party to any cease and
desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of, federal
or state governmental authorities charged with the supervision or regulation
of banks, savings associations, or bank or savings association holding
companies, or engaged in the insurance of bank or savings association deposits
("Bank Regulators"), nor has it been advised by any Bank Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolutions or similar undertaking.
2.14. Labor Matters. In the case of the Company, except as Previously
Disclosed neither it nor any of its Subsidiaries is a party to, or is bound
by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is it or any of
its Subsidiaries the subject of any proceeding asserting that it or any such
Subsidiary has committed an unfair labor practice or seeking to compel it or
such Subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its Subsidiaries pending or threatened.
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2.15. Employee Benefit Plans. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, all "employee benefit plans," as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), that cover any of its or its Subsidiaries'
employees, comply in all Material respects with all applicable requirements of
ERISA, the Code and other applicable laws; neither it nor any of its
Subsidiaries has engaged in a "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) with respect to any such plan which
is likely to result in any Material penalties or taxes under Section 502(i) of
ERISA or Section 4975 of the Code; no Material liability to the Pension
Benefit Guaranty Corporation has been or is expected by it or them to be
incurred with respect to any such plan which is subject to Title IV of ERISA
("Pension Plan"), or with respect to any "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) currently or formerly maintained by it, them or
any entity which is considered one employer with it under Section 4001 of
ERISA or Section 414 of the Code; no Pension Plan had an "accumulated funding
deficiency" (as defined in Section 302 of ERISA (whether or not waived) as of
the last day of the end of the most recent plan year ending prior to the date
hereof; the fair market value of the assets of each Pension Plan exceeds the
present value of the "benefit liabilities" (as defined in Section 4001(a)(16)
of ERISA) under such Pension Plan as of the end of the most recent plan year
with respect to the respective Pension Plan ending prior to the date hereof,
calculated on the basis of the actuarial assumptions used in the most recent
actuarial valuation for such Pension Plan as of the date hereof; no notice of
a "reportable event" (as defined in Section 4043 of ERISA) for which the 30-
day reporting requirement has not been waived has been required to be filed
for any Pension Plan within the 12-month period ending on the date hereof;
neither it nor any of its Subsidiaries has provided, or is required to
provide, security to any Pension Plan pursuant to Section 401(a)(29) of the
Code; it and its Subsidiaries have not contributed to any "multiemployer
plan", as defined in Section 3(37) of ERISA, on or after September 26, 1980.
In the case of the Company, with respect to each benefit plan for employees
that is maintained or contributed to by the Company or any of its
Subsidiaries, including, but not limited to, "employee benefit plans" within
the meaning of Section 3(3) of ERISA (the "Benefit Plans"), it has made
available to Acquiror a true and correct copy of (i) the most recent annual
report on Form 5500 filed with the Internal Revenue Service (the "IRS"), (ii)
such Benefit Plan, (iii) each trust agreement and insurance contract relating
to such Benefit Plan, (iv) the most recent summary plan description for such
Benefit Plan, (v) the most recent actuarial report or valuation if such
Benefit Plan is subject to Title IV of ERISA, (vi) the most recent
determination letter issued by the IRS if such Benefit Plan is intended to be
qualified under Section 401(a) of the Code, and (vii) all outstanding
employment contracts or agreements. With respect to Acquiror and the Company,
a list of its Benefit Plans, and, in the case of the Company, all outstanding
employment contracts or agreements, has been Previously Disclosed.
2.16. Material Contracts. In the case of the Company, all Material contracts
have been Previously Disclosed, including: (i) all Material written employment
or consulting agreements, contracts or commitments with, between or among the
Company or any of its Subsidiaries and any Person; (ii) all Material
agreements of guaranty or indemnification, other than by-laws provisions and
bank items presented for collection in the ordinary course of business,
running from the Company or any Subsidiary to any Person; (iii) all Material
agreements, contracts or commitments relating to the acquisition of assets or
capital stock of any Person other than assets acquired in the ordinary course
of business by the Company; (iv) all Material agreements, except for
employment agreements and other agreements listed pursuant to clause (i)
above, for loans or the provision, purchase or sale of goods, services or
property between the Company or any of its Subsidiaries and any director,
officer, employee, agent or representative of the Company or any Subsidiary,
or any relative or affiliate of any of the foregoing; (v) all Material
agreements, contracts or commitments to which the Company is a party or by
which the Company is bound and which require consent ("Contractual Consents")
by any other Person in connection with the consummation of the transactions
contemplated hereby, either to prevent a breach or to continue the
effectiveness thereof; and (vi) all other Material agreements (other than this
Agreement, agreements to be executed with respect to this Agreement and
agreements with respect to deposits received and loans granted) of the Company
or any of its Subsidiaries. The Company is not in default in any respect
Material to the Company under any of the contracts, agreements or other
instruments described above. No event has occurred which, with notice or lapse
of time or both, would constitute a default by the Company under any of such
contracts, agreements or instruments, and all such contracts, agreements and
instruments are in full force and effect, except for such defaults or failures
to be in full force and effect as would not have a Material Adverse Effect.
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2.17. Title to Assets. In the case of the Company, a list of all Material
real estate owned or leased by the Company or any of its Subsidiaries (other
than OREO) has been Previously Disclosed. In the case of the Company, each of
it and its Subsidiaries has good and marketable title to its properties and
assets (other than (i) property as to which it is lessee and (ii) real estate
owned as a result of foreclosure, transfer in lieu of foreclosure or other
transfer in satisfaction of a debtor's obligation previously contracted),
except for such defects in title which would not, individually or in the
aggregate, have a Material Adverse Effect.
2.18. Knowledge as to Conditions. In the case of Acquiror and the Company,
respectively, it knows of no reason why the approvals, consents and waivers of
governmental authorities referred to in Section 4.1(b) should not be obtained
without the imposition of any condition of the type referred to in the
provisos to such Section.
2.19. Compliance With Laws. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, it and each of its Significant
Subsidiaries has all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and registrations with,
federal, state, local and foreign governmental or regulatory bodies that are
required in order to permit it to carry on its business as it is presently
conducted and the absence of which could, individually or in the aggregate,
have a Material Adverse Effect.
2.20. Acquiror Common Stock. In the case of Acquiror, the Acquiror ADSs and
underlying Acquiror Ordinary Shares to be issued pursuant to this Agreement,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable and subject to no
preemptive rights.
2.21. Fees. In the case of Acquiror and the Company, respectively, other
than financial advisory services performed for Acquiror by Merrill Lynch & Co.
and for the Company by Morgan Stanley & Co. and FMCG Capital Strategies (on
terms disclosed to Acquiror), neither it nor any of its Subsidiaries, nor any
of their respective officers, directors, employees or agents has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or finder has
acted directly or indirectly for it or any of its Subsidiaries, in connection
with this Agreement or the transactions contemplated hereby.
2.22. Registration Statement; Proxy Statement. In the case of Acquiror and
the Company, respectively, the information to be supplied by it for inclusion
in (i) the Registration Statement on Form F-4 and/or such other form(s) as may
be appropriate to be filed under the Securities Act with the SEC by Acquiror
for the purpose of, among other things, registering the Acquiror ADSs and
underlying Acquiror Ordinary Shares to be issued to the shareholders of the
Company in the Merger (the "Registration Statement") will not, at the time
such Registration Statement becomes effective, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading,
or (ii) the proxy statement or proxy statements and other materials (as
amended or supplemented from time to time, collectively the "Proxy Statement,"
and together with the prospectus included in the Registration Statement, as
amended or supplemented from time to time, the "Proxy Statement/Prospectus")
to be filed with the SEC by the Company under the Securities Exchange Act and
distributed in connection with the Company's meeting of its shareholders to
vote upon this Agreement (the "Company Meeting") and to be distributed by
Acquiror Sub in connection with Acquiror Sub's meeting of its Shareholders to
vote upon this Agreement (the "Acquiror Sub Meeting"), and the offering
circular required under the rules and regulation of the London and Irish stock
exchanges (the "Offering Circular") to be distributed by Acquiror in
connection with Acquiror's meeting of the Shareholders to vote upon this
Agreement (the "Acquiror Meeting") will not, at the time the Proxy
Statement/Prospectus and the Offering Circular, respectively, are mailed and
at the time of the Company Meeting, the Acquiror Sub Meeting, or the Acquiror
Meeting, respectively, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
2.23. Environmental Matters. Except as Previously Disclosed, in the case of
Acquiror and the Company, respectively, except for such matters that, alone or
in the aggregate, are not reasonably likely to have a Material Adverse Effect,
to the best of its knowledge, (i) it and its Subsidiaries have complied with
all applicable
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Environmental Laws (as hereinafter defined) and (ii) neither it nor any of its
Subsidiaries has received any notices, demand letters or requests for
information from any governmental entity or any third party indicating that it
or any of its Subsidiaries may be in violation of, or liable under, any
Environmental Law and none of it, its Subsidiaries or the properties owned or
leased by any of them are subject to any court order, administrative order or
decree arising under any Environmental Law.
"Environmental Law" means any Federal, state, foreign or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, common law, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, relating to (x) the
protection, preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (y) the exposure to, or
the use, storage, recycling, treatment, generation, transformation,
processing, handling, labeling, production, release or disposal of any
substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, including any substance containing any such
substance as a component, in each case as amended and as now in effect.
2.24. Takeover Laws; Rights Plans.
(a) In the case of the Company, it has taken all action required to be taken
by it in order to opt out or exempt this Agreement and the Stock Option
Agreement, and the transactions contemplated hereby and thereby, from, and
this Agreement and the Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
"business combination," "moratorium," "disgorgement," "control share," or
other applicable antitakeover laws and regulations (collectively, "Takeover
Laws") of the Commonwealth of Pennsylvania, including Chapter 25 of the PBCL.
(b) In the case of the Company, it has duly entered into an amendment to the
Company Rights Agreement in form and substance satisfactory to Acquiror and
the Company, and taken all other action necessary or appropriate, so that the
entering into of this Agreement and the Stock Option Agreement and the
completion of the transactions contemplated hereby and thereby (including
without limitation the Merger and the exercise of the option (as defined in
the Stock Option Agreement)) do not and will not result in the ability of any
Person to exercise any rights under the Company Rights Agreement, or enable or
require the Company Rights to separate from the shares of common stock to
which they are attached or to be triggered or become exercisable.
(c) In the case of the Company, no "Distribution Date," "Stock Acquisition
Date," "Section 11(a)(ii) Trigger Date," or "Triggering Event" (as such terms
are defined in the Company Rights Agreement) has occurred.
(d) In the case of the Acquiror, Acquiror has not entered into any agreement
of similar effect as the Company Rights Agreement.
2.25. Vote Required. In the case of the Company, the affirmative vote of the
holders of a majority of the shares of its Common Stock present and voting at
the Company Meeting is the only vote of the holders of any class or series of
its capital stock necessary to approve this Agreement and the transactions
contemplated hereby; in the case of Acquiror, the affirmative vote of holders
of a majority of the outstanding Acquiror Ordinary Shares present and voting
at the Acquiror Meeting is the only vote of the holders of any class or series
of its capital stock necessary to approve this Agreement and the transactions
contemplated hereby; and in the case of Acquiror Sub, the affirmative vote of
holders of a majority of the outstanding voting power of the Acquiror Sub
Common Stock and Acquiror Sub Preferred Stock, voting as a single class, is
the only vote of the holders of any class or series of its capital stock
necessary to approve this Agreement and the transactions contemplated hereby.
The Acquiror Sub Common Stock and Acquiror Sub Preferred Stock each are
entitled to one vote per share with respect to approval of this Agreement and
the transactions contemplated hereby.
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ARTICLE III
Conduct Prior to Closing
3.1. Access to Information; Notice of Changes; Confidentiality.
(a) During the period commencing on the date hereof and ending on the
Closing Date, each of the parties shall (and shall cause each of its
Subsidiaries to) upon reasonable notice, afford the other parties, and their
respective counsel, accountants and other authorized representatives,
reasonable access during normal business hours to the properties, books and
records of such party and its Subsidiaries in order that they may have the
opportunity to make such investigations as they shall desire of the affairs of
such party and its Subsidiaries; such investigation shall not, however, affect
or be deemed to modify the representations and warranties made by such party
in this Agreement.
(b) During the period commencing on the date hereof and ending on the
Closing Date, each party shall promptly notify the other parties hereto in
writing of any and all occurrences which, if they had occurred prior to
execution of this Agreement, would have caused the representations and
warranties of such party contained in Article 2 and the disclosures delivered
in conjunction therewith to be incorrect in any Material respect.
(c) Each party will not, and will cause its representatives not to, use any
information obtained pursuant to this Section 3.1 for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement. Subject
to the requirements of law, each party will keep confidential, and will cause
its representatives to keep confidential, all information and documents
obtained pursuant to this Section 3.1 unless such information (i) was already
known to such party, (ii) becomes available to such party from other sources
not known by such party to be bound by a confidentiality obligation, (iii) is
disclosed with the prior written approval of the party to which such
information pertains, or (iv) is or becomes readily ascertainable from
published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
to be returned to the party which furnished the same.
3.2. Conduct of the Business of the Company Pending the Closing Date. The
Company agrees that, except as express permitted by this Agreement or
otherwise consented to or approved in writing by Acquiror, during the period
from the date hereof to the Effective Time:
(a) The Company will and will cause each of its Subsidiaries to conduct
their respective operations only in the ordinary course of business consistent
with past practice (subject, in any event, to the provisions of paragraph (c)
below) and will use its best efforts to preserve intact their respective
business organizations, keep available the services of their officers and
employees and maintain satisfactory relationships with licensors, suppliers,
distributors, customers, clients and others having business relationships with
them.
(b) The Company shall not, and shall not permit any of its Subsidiaries to,
take any action, engage in any transactions or enter into any agreement which
would adversely affect or delay in any Material respect the ability of
Acquiror or the Company to obtain any necessary approvals, consents or waivers
of any governmental authority required for the transactions contemplated
hereby or to perform its covenants and agreements on a timely basis under this
Agreement.
(c) The Company will not and will not permit any of its Subsidiaries to:
(i) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any other Person, or make any loan or advance;
(ii) (A) adjust, split, combine or reclassify any capital stock; (B)
subject to Section 3.4 hereof, make, declare or pay any dividend (other
than (x) regular quarterly cash dividends not exceeding $0.30 per share on
the Company Common Stock and (y) dividends paid by any of the wholly-owned
Subsidiaries of the
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Company to the Company or any of its wholly-owned Subsidiaries), or make
any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock, (C) grant any stock appreciation rights or grant any Person any
right to acquire any shares of its capital stock, except for options issued
to employees and directors (not to exceed 315,000 shares) and rights
arising under the Company's Employee Stock Purchase Plan in the ordinary
course of business consistent with past practice; or (D) issue any
additional shares of capital stock except pursuant to (x) Rights
outstanding as of the date hereof, (y) Rights issued or arising after the
date hereof as permitted by clause (C) above (z) the Company's Dividend
Reinvestment Plan;
(iii) other than in the ordinary course of business consistent with past
practice, sell, transfer, mortgage, encumber or otherwise dispose of any of
its Material properties or assets to any Person other than a direct or
indirect wholly-owned Subsidiary of the Company, or cancel, release or
assign any indebtedness of any such Person or any claims held by any such
Person, except in the ordinary course of business consistent with past
practice or pursuant to contracts or agreements in force at the date of
this Agreement as Previously Disclosed;
(iv) other than in the ordinary course of business consistent with past
practice, make any Material investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of
any property or assets of any other individual, corporation or other entity
other than a wholly-owned Subsidiary of the Company;
(v) other than in the ordinary course of business consistent with past
practice, enter into or terminate any Material contract or agreement, or
make any change in any of its Material leases or contracts, other than
renewals of contracts and leases without Material adverse changes of terms;
(vi) increase in any manner the compensation or fringe benefits of any of
its employees or pay any pension or retirement allowance not required by
any existing plan or agreement to any such employees, or except as
Previously Disclosed become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, in each case
other than in the ordinary course of business consistent with past
practice, or voluntarily accelerate the vesting of any stock options or
other stock-based compensation, provided that extensions of employment
contracts in existence on the date hereof pursuant to the terms thereof
shall be deemed to be made in the ordinary course of business consistent
with past practice; provided, however, that nothing herein shall prevent
the Company from establishing a bonus pool in the aggregate amount of Three
Million Dollars ($3,000,000) to be paid to certain officers and employees
upon Closing. The Chief Executive Officer of the Company will consult with
the senior executives of Acquiror and Acquiror Sub in connection with the
bonus pool.
(vii) other than in the ordinary course of business consistent with past
practice, settle any claim, action or proceeding involving any liability of
the Company or any of its Subsidiaries for Material money damages or
restrictions upon the operations of the Company or any of its Subsidiaries;
(viii) modify in any Material respect the manner in which it and its
Subsidiaries have heretofore conducted or accounted for their business;
(ix) except as contemplated by this Agreement, amend its articles of
incorporation or its by-laws; or
(x) agree to, or make any commitment to, take any of the actions
prohibited by this Section 3.2.
3.3. Conduct of the Business of Acquiror Pending the Closing Date. Acquiror
agrees that, except as expressly permitted by this Agreement or otherwise
consented to or approved in writing by the Company, during the period from the
date of this Agreement to the Effective Time, Acquiror will not (a) subject to
Section 3.4 hereof, declare or pay any extraordinary or special dividend on
the Acquiror Ordinary Shares, or (b) take any action that would adversely
affect or delay in any material respect the ability of the Company or Acquiror
to obtain any necessary approvals, consents or waivers of any governmental
authority required for the transactions contemplated hereby or to perform its
covenants and agreements on a timely basis under this Agreement.
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3.4. Dividends. Notwithstanding Sections 3.2 and 3.3 hereof, in all events
Acquiror and the Company agree to coordinate (on a mutually agreeable basis)
the declaration of dividends (and the record and payment dates therefor)
payable during the period preceding and including the quarter in which the
Effective Time occurs so that shareholders of the Company and Acquiror will
receive fair dividends and in no event shall shareholders of the Company and
Acquiror fail to receive a fair dividend during any quarter or semi-annual
period up to and including the quarter or semi-annual period, as the case may
be, immediately following the Effective Time.
3.5. No Solicitation of Other Offers. The Company agrees that neither it nor
any of its Subsidiaries nor any of their respective officers and directors
shall, and the Company shall direct and use its best efforts to cause its
employees, agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, take any action to solicit or
initiate any inquiries or the making of any offer or proposal with respect to
a merger, consolidation, business combination, liquidation, reorganization,
sale or other disposition of any significant portion of assets, sale of shares
of capital stock, or similar transactions involving the Company or any
Subsidiary of the Company (any such inquiry, offer or proposal, an
"Acquisition Proposal"), or, except as may be legally required for the
discharge by the board of directors of its fiduciary duties, engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any Person relating to an Acquisition Proposal.
The Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any other parties conducted
heretofore with respect to any of the foregoing. The Company will promptly
notify Acquiror of its receipt of any Acquisition Proposal.
3.6. Certain Filings, Consents and Arrangements. Acquiror and the Company
shall (a) as soon as practicable make any filings and applications required to
be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby (including without limitation all
applications for required approvals as set forth in Section 4.1(b) hereof),
(b) cooperate with one another (i) in promptly determining what filings are
required to be made and what approvals, consents or waivers are required to be
obtained under any relevant federal, state or foreign law or regulation and
(ii) in promptly making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such approvals, consents
or waivers, and (c) deliver to the other copies of the publicly available
portions of all such filings and applications promptly after they are filed.
3.7. Best Efforts. Acquiror and the Company each will (i) use its best
efforts to take all action necessary to render accurate as of the Closing Date
the representations and warranties of it contained herein, and (ii) use its
best efforts to perform or cause to be satisfied each covenant or condition to
be performed or satisfied by it as contemplated by this Agreement.
3.8. Publicity. The initial press release announcing this Agreement shall be
a joint press release and thereafter the Company and Acquiror shall consult
with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any governmental entity or with any national securities
exchange with respect thereto.
3.9. Shareholder Approvals. Each of Acquiror, Acquiror Sub and the Company
shall take, in accordance with applicable law, the rules of any applicable
securities exchange or quotation system, and its respective articles of
incorporation and by-laws (or similar corporate documents), all action
necessary to convene an appropriate meeting of its shareholders to consider
and vote upon the approval of this Agreement (the Company Meeting, Acquiror
Meeting and Acquiror Sub Meeting each referenced to herein as a "Shareholder
Meeting"), as promptly as practicable after the Registration Statement is
declared effective. The Board of Directors of each such party will recommend
approval of such matters, and each such party will take all reasonable lawful
action to solicit such approval by its shareholders, except, in the case of
the Company, as may be legally required for the discharge by the board of
directors of its fiduciary duties. Acquiror will vote all of the shares of the
capital stock of Acquiror Sub held by it in favor of such matters.
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3.10. Registration Statement.
(a) Each of Acquiror and the Company agrees to cooperate in the preparation
of the Registration Statement to be filed by Acquiror with the SEC in
connection with the issuance of Acquiror ADSs and the underlying Acquiror
Ordinary Shares in the Merger, including the Proxy Statement/Prospectus and
the Offering Circular. Each of Acquiror and the Company agrees to use all
reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. Acquiror also agrees to use all reasonable efforts to obtain
all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the transactions contemplated by this Agreement. The
Company and Acquiror each agree to furnish all information concerning
themselves and their Subsidiaries, officers, directors and shareholders as may
be reasonably requested in connection with the foregoing.
(b) Each of Acquiror and the Company agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement and each amendment thereto, if
any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
Proxy Statement/Prospectus and any amendment or supplement thereto, and (iii)
the Offering Circular, will, at the date of mailing to shareholders and at the
times of each of the Shareholder Meetings, contain any statement which, in the
light of the circumstances under which such statement is made, is false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the same meeting. Each of
the Company and Acquiror agrees that the Proxy Statement (except, in the case
of the Company, with respect to portions thereof prepared by Acquiror, and
except, in the case of Acquiror, with respect to portions thereof prepared by
the Company) will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
thereunder, and the Registration Statement (except, in the case of the
Company, with respect to portions thereof prepared by Acquiror, and except, in
the case of Acquiror, with respect to portions thereof prepared by the
Company) will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations of the SEC thereunder.
(c) In the case of Acquiror, Acquiror will advise the Company, promptly
after Acquiror receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has been filed,
of the issuance of any stop order or the suspension of the qualification of
the Acquiror ADSs and the underlying Acquiror Ordinary Shares for offering or
sale in any jurisdiction, of the initiation or threat of any proceeding for
any such purpose, or of any request by the SEC for the amendment or supplement
of the Registration Statement or for additional information.
3.11. The Company Rights Agreement. The Board of Directors of the Company
shall take all further action (in addition to that referred to in Section
2.24) reasonably requested in writing by Acquiror (including redeeming the
Company Rights immediately prior to the Effective Time or amending the Company
Rights Agreement) in order to render the Company Rights inapplicable to the
Merger and the other transactions contemplated by this Agreement and the Stock
Option Agreement. Except as provided above with respect to the Merger and the
other transactions contemplated by this Agreement and the Stock Option
Agreement and except as may be legally required for the discharge by the Board
of Directors of the Company of its fiduciary duties, the Board of Directors of
the Company shall not (a) amend the Company Rights Agreement or (b) take any
action with respect to, or make any determination under, the Company Rights
Agreement, including a redemption of the Company Rights or any action to
facilitate an Acquisition Proposal in respect of the Company.
3.12. Securities Act.
(a) Not later than the 15th day prior to mailing of the Proxy
Statement/Prospectus, Acquiror shall deliver to the Company, and the Company
shall deliver to Acquiror, a schedule of each Person that, to the best of its
knowledge, is or is reasonably likely to be, as of the date of the Company
Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as that term
is used in Rule 145 under the Securities Act.
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(b) The Company shall use its reasonable best efforts to cause each Person
who may be deemed to be an Affiliate of the Company to execute and deliver to
the Acquiror prior to the Effective Time an agreement relating to the above-
referenced Rule 145 in form and substance satisfactory to Acquiror.
3.13. Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly,
or cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable,
including using efforts to obtain all necessary actions or non-actions,
extensions, waivers, consents and approvals from all applicable governmental
entities, effecting all necessary registrations, applications and filings
(including, without limitation, filings under any applicable state securities
laws) and obtaining any required contractual consents and regulatory
approvals.
3.14. Listing. Acquiror shall use its best efforts to list on the New York
Stock Exchange upon official notice of issuance the Acquiror ADSs to be issued
in the Merger.
ARTICLE IV
Conditions Precedent to Merger
4.1. Conditions Precedent to Obligations of All Parties. The respective
obligations of Acquiror and the Company to effect the Merger are subject to
the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:
(a) Shareholder Approvals. This Agreement and the transactions contemplated
hereby shall have been approved by the requisite vote of the shareholders of
the Company, Acquiror and Acquiror Sub in accordance with applicable law.
(b) Regulatory Approval. Acquiror shall have procured the required approval,
consent, waiver or other administrative action with respect to this Agreement
and the transactions contemplated hereby (i) by the Pennsylvania Department of
Banking pursuant to Pennsylvania law, and (ii) by the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board") under the Bank
Holding Company Act of 1956, (iii) by the Minister for Employment and
Enterprise for Ireland, and (iv) by the Central Bank of Ireland, and all
applicable statutory waiting periods shall have expired; and the parties shall
have procured all other regulatory approvals, consents, waivers or
administrative actions of governmental authorities or other Person that are
necessary or appropriate to the consummation of the transactions contemplated
by this Agreement; provided, however, that no approval, consent, waiver or
administrative action referred to in this Section 4.1(b) shall be deemed to
have been received if it shall include any condition or requirement (other
than a condition or requirement requiring divestitures or other actions in
order to comply with or avoid challenge under the antitrust laws) that would
so materially and adversely affect the economic or business benefits of the
Merger that the Acquiror would not have entered into this Agreement had such
conditions or requirements been known at the date hereof;
(c) Other Legal Requirements. All other requirements prescribed by law which
are necessary to the consummation of the transactions contemplated by this
Agreement shall have been satisfied.
(d) Injunction. No preliminary or permanent injunction or other order shall
have been issued by any court or by any governmental or regulatory agency,
body or authority which prohibits the consummation of the Merger and the
transactions contemplated by this Agreement and which is in effect at the
Effective Time.
(e) Statutes. No statute, rule, regulation, executive order, decree or order
of any kind shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which prohibits the consummation of the
Merger.
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(f) Registration Statement. The Registration Statement shall have become
effective and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
(g) Tax Opinion. Acquiror and the Company each shall have received the
opinion of counsel to Acquiror acceptable to the Company, substantially to the
effect that, on the basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts existing at the
Effective Time, the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code and that,
accordingly: (i) no gain or loss will be recognized by Acquiror or the Company
as a result of the Merger; (ii) no gain or loss will be recognized by the
shareholders of the Company who exchange their shares of Company Common Stock
solely for Acquiror ADSs pursuant to the Merger (except with respect to cash
received in lieu of fractional Acquiror ADSs); (iii) the tax basis of the
shares of Acquiror ADSs received by shareholders who exchange all of their
shares of the Company Common Stock solely for shares of Acquiror ADSs in the
merger will be the same as the tax basis of the shares of the Company Common
Stock surrendered in exchange therefor (reduced by any amount allocable to a
fractional interest for which cash is received); and (iv) the holding period
of the Acquiror ADSs received in the Merger will include the period during
which the shares of the Company Common Stock surrendered in exchange therefor
were held, provided such shares of the Company Common Stock were held as
capital assets at the Effective Time. In rendering their opinion, such counsel
may require and rely upon representations contained in certificates of
officers of Acquiror, the Company and others.
(h) Rights Agreements. There shall exist no "Acquiring Person" and no "Stock
Acquisition Date" or "Triggering Event" (as each of such terms are defined in
the Company Rights Agreement) shall have occurred.
4.2. Conditions Precedent to Obligations of Acquiror. The obligations of
Acquiror to effect the Merger are also subject to the satisfaction or waiver,
at or prior to the Effective Time, of each of the following conditions unless
waived by Acquiror:
(a) Accuracy of Representations and Warranties. All representations and
warranties of the Company contained herein shall be true and correct in all
Material respects as of the date hereof and at and as of the Closing Date,
with the same force and effect as though made on and as of the Closing Date.
(b) The Company's Performance. The Company shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to the Closing Date.
(c) Officer's Certificate. Acquiror shall have received a certificate signed
by the Chief Executive Officer and the Chief Financial Officer of the Company,
dated the Closing Date, certifying as to the matters set forth in
subparagraphs 4.2(a) and (b).
(d) Opinion of Counsel. Acquiror shall have received an opinion, dated the
Closing Date, of counsel for the Company, in form and substance satisfactory
to Acquiror and its counsel.
(e) Blue Sky. Acquiror shall have received all state securities laws and
"Blue Sky" permits and other authorizations necessary to consummate the
transactions contemplated hereby.
(f) Accountants' Comfort Letters. Acquiror and its directors and officers
who sign the Registration Statement shall have received letters from the
Company's independent certified public accountants, dated (i) the date of the
mailing of the Proxy Statement/Prospectus to the Company's shareholders and
(ii) shortly prior to the Closing Date, with respect to certain financial
information regarding the Company in the form customarily issued by such
accountants at such time in transactions of this type.
A-22
<PAGE>
4.3. Conditions Precedent to Obligation of the Company. The obligation of
the Company to effect the Merger is also subject to the satisfaction or
waiver, at or prior to the Effective Time, of each of the following conditions
unless waived by the Company:
(a) Accuracy of Representations and Warranties. All representations and
warranties of Acquiror contained herein shall be true and correct in all
Material respects as of the date hereof and at and as of the Closing, with the
same force and effect as though made on and as of the Closing Date.
(b) Acquiror's Performance. Acquiror shall have performed in all material
respects all obligations and agreements, and complied in all material respects
with all covenants and conditions, contained in this Agreement to be performed
or complied with by it prior to the Closing Date.
(c) Officer's Certificate. The Company shall have received a certificate
signed by the Chief Executive Officer and the Chief Financial Officer of
Acquiror and Acquiror Sub, dated the Closing Date, certifying as to the
matters set forth in subparagraphs 4.3(a) and (b).
(d) Opinion of Counsel. The Company shall have received an opinion, dated
the Closing Date, of counsel for Acquiror and Acquiror Sub, in form and
substance satisfactory to the Company and its counsel.
(e) Stock Listing. The Acquiror ADSs to be issued in the Merger have been
approved for listing on the New York Stock Exchange, subject to official
notice of issuance.
(f) Accountants' Comfort Letters. The Company and its directors shall have
received letters from Acquiror's independent certified public accountants,
dated (i) the date of the mailing of the Proxy Statement/Prospectus to the
Company's shareholders and (ii) shortly prior to the Closing Date, with
respect to certain financial information regarding Acquiror in the form
customarily issued by such accountants at such time in transactions of this
type.
(g) Employment Agreements. Acquiror Sub shall have entered into an agreement
with Christopher R. Jennings in the form attached hereto as part of Exhibit B
attached hereto, effective as of the Effective Time, and shall have made the
Change of Control Retention Payments specified on Exhibit B.
ARTICLE V
Covenants
5.1. Tax-Free Reorganization Treatment. Neither Acquiror nor the Company
shall take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a "reorganization" within
the meaning of Section 368 of the Code.
5.2. Certain Contracts. Acquiror Sub hereby unconditionally agrees to, and
agrees to cause its Subsidiaries to, honor, without modification, offset or
counterclaim, all Previously Disclosed contracts, agreements and commitments
of the Company or any of its Subsidiaries authorized by the Company or any of
its Subsidiaries prior to the date of this Agreement which apply to any
current or former employee or current or former director of the Company or any
of its Subsidiaries, including without limitation the Change in Control
Agreements and Indemnification Agreements with certain directors, officers and
employees as Previously Disclosed in accordance with Section 2.16 hereof. In
accordance with the terms of such contracts, agreements and commitments,
Acquiror Sub hereby assumes, subject to the consummation of the Merger, all of
the Company's and its Subsidiaries' obligations under such contracts,
agreements and commitments.
5.3. Employee Benefits. Acquiror Sub hereby unconditionally agrees to, and
to cause its Subsidiaries to, provide to officers and employees of the Company
and its Subsidiaries who become or remain regular (full time) employees of
Acquiror Sub or any of its Subsidiaries employee benefits, including, without
limitations pension benefits, health and welfare benefits, life insurance and
vacation, which are no less favorable in the aggregate than those provided
from time to time by the Acquiror Sub and its Subsidiaries to their similarly
situated officers
A-23
<PAGE>
and employees. Any employee of the Company or any of its Subsidiaries who
becomes a participant in any employee benefit plan, program, policy, or
arrangement of the Acquiror Sub or any of its Subsidiaries shall be given
credit under such plan, program, policy, or arrangement for all service with
the Company or any of its Subsidiaries prior to becoming such a participant
for purposes of eligibility and vesting. Employees of the Company or any of
its Subsidiaries who are terminated within two years after the Effective Time
shall be entitled to severance benefits equal to the greater of those provided
by the Company on the date hereof or those provided by the Acquiror Sub as of
the Effective Time, and shall be provided outplacement assistance and
counselling by Acquiror Sub. In addition, (i) employees of the Company or its
Subsidiaries who continue as employees of Acquiror Sub or its Subsidiaries
after the Effective Time ("Affected Employees") shall be provided with the
greater of the weeks of annual vacation to which they were entitled on the day
before the Effective Date or the weeks of annual vacation to which similarly
situated employees of Acquiror Sub and its Subsidiaries are then entitled,
(ii) Affected Employees shall be entitled to preserve days of vacation that
have been carried over from 1996 to 1997, and Affected Employees who are not
able to take all the vacation days to which they are entitled for calendar
year 1997 shall be permitted to carry over unused days into calendar 1998;
(ii) Affected Employees shall be entitled to preserve occasional days that
have been carried over from 1996 into 1997 in addition to any occasional days
to which they may otherwise be entitled, and Affected Employees who are not
able to take all the occasional days to which they are entitled for calendar
year 1997 shall be permitted to carry over unused days into calendar 1998; and
(iii) Acquiror Sub shall coordinate any transition of Affected Employees to
benefit plans of Acquiror Sub such that credit is given as to deductibles, co-
payments and other similar items, and the flexible spending accounts
maintained for employees of the Company and its Subsidiaries shall be
maintained through the end of calendar year 1997. Additional provisions
regarding benefits of Affected Employees are set forth on Exhibit C attached
hereto.
5.4. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Acquiror Sub agrees to indemnify and
hold harmless each present and former director and officer of the Company or
its Subsidiaries and each officer or employee of the Company or its
Subsidiaries that is serving or has served as a director or trustee of another
entity expressly at the Company's request or direction (the "Indemnified
Parties"), against any and all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any and all claims,
actions, suits, proceedings or investigations, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
arising out of or in connection with such party's position as, or actions
taken as, a director or officer of the Company or a Subsidiary or director or
trustee of another entity at the request or direction of the Company, at or
prior to the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent permitted by applicable law (and
also advance expenses incurred to the fullest extent permitted by applicable
law); provided, however, that Acquiror Sub shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that the indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable law. If
such indemnity is determined not to be available as a matter of law with
respect to any Indemnified Party, then the Acquiror Sub and the Indemnified
Party shall contribute to the amount payable in such proportion as is
appropriate to reflect relative faults and benefits and other relevant
equitable considerations.
(b) Any Indemnified Party wishing to claim indemnification under Section
5.4(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Acquiror Sub thereof, but the failure to
so notify shall not relieve Acquiror Sub of any liability it may have to such
Indemnified Party if such failure does not materially prejudice Acquiror. In
the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time): (i) Acquiror Sub shall
have the right to assume the defense thereof and Acquiror Sub shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof, except that if Acquiror elects not to
assume such defense, or counsel for the Indemnified Parties advises that there
are issues which raise conflicts of interest between Acquiror Sub and the
Indemnified Parties, the
A-24
<PAGE>
Indemnified Parties may retain counsel satisfactory to them, and Acquiror Sub
shall pay the reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; (ii) the Indemnified
Parties will cooperate in the defense of any such matter; and (iii) Acquiror
Sub shall not be liable for any settlement effected without its prior written
consent which shall not be unreasonably withheld.
(c) For a period of six years after the Effective Time, Acquiror Sub shall
use all reasonable efforts to cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by the
Company (provided that Acquiror Sub may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions which are
substantially no less advantageous to such directors and officers) with
respect to claims arising from facts or events which occurred before the
Effective Time; provided, however, that in no event shall Acquiror Sub be
obligated to expend, in order to maintain or provide insurance coverage
pursuant to this Subsection 5.4(c), any amount per annum in excess of 200% of
the amount of the annual premiums paid as of the date hereof by the Company
for such insurance (the "Maximum Amount"). If the amount of the annual
premiums necessary to maintain or procure such insurance coverage exceeds the
Maximum Amount, Acquiror shall use all reasonable efforts to maintain the most
advantageous policies of directors' and officers' insurance obtainable for an
annual premium equal to the Maximum Amount.
5.5. Certain Director and Officer Positions.
(a) As of the Effective Date, Acquiror and Acquiror Sub shall fix the size
of the Board of Directors of Acquiror Sub at 21 members and shall cause five
members of the Company's Board of Directors (consisting of Christopher R.
Jennings and four other current directors selected by the Company and willing
to so serve) to be appointed or elected to the Board of Directors of Acquiror
Sub. As of the Effective Time Acquiror and Acquiror Sub agree to cause
Christopher R. Jennings to be named as Vice Chairman of the Board of Directors
of Acquiror Sub, and Vice Chairman of the Steering Committee of Acquiror Sub.
(b) As of the Effective Time, Acquiror Sub shall enter into the employment
agreements referred to in Section 4.3(g) hereof.
ARTICLE VI
Termination
6.1. Termination. This Agreement may be terminated, and the Merger
abandoned, prior to the Effective Time, either before or after its approval by
the shareholders of the Company:
(a) by the mutual consent of the Acquiror and the Company, if the board of
directors of each so determines by vote of a majority of the members of its
entire board;
(b) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event of the
failure of the shareholders of the Company or Acquiror to approve this
Agreement at its meeting called to consider such approval;
(c) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event of a
Material breach by the other party hereto of any representation, warranty,
covenant or agreement contained herein which is not cured or not curable
within 60 days after written notice of such breach is given to the party
committing such breach by the other party;
(d) by Acquiror or the Company by written notice to the other party if
either (i) any approval, consent or waiver of a governmental authority
required to permit consummation of the transactions contemplated hereby shall
have been denied or (ii) any governmental authority of competent jurisdiction
shall have issued a final, unappealable order enjoining or otherwise
prohibiting consummation of the transactions contemplated by this Agreement;
(e) by Acquiror or the Company, if its board of directors so determines by
vote of a majority of the members of its entire board, in the event that the
Merger is not consummated by December 31, 1997, unless the failure to so
consummate by such time is due to the breach of any representation, warranty
or covenant contained in this Agreement by the party seeking to terminate; or
A-25
<PAGE>
(f) by the Company, if its board of directors so determines by a majority
vote of the members of its entire board, at any time during the ten-day period
commencing with the Termination Right Determination Date (as defined below) if
the Market Price on the Termination Right Determination Date of an Acquiror
ADS is less than Thirty-Two Dollars ($32); subject, however, to the following
three sentences. If the Company elects to exercise its termination right
pursuant to the immediately preceding sentence, it shall give prompt written
notice to Acquiror, provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned ten-day period. During the
five-day period commencing with its receipt of such notice, Acquiror shall
have the option of adjusting the Per Share Stock Consideration to the value
thereof that would have resulted if the Market Price of an Acquiror ADS as of
the Termination Right Determination Date were equal to Thirty-Two Dollars
($32). If Acquiror makes an election contemplated by the preceding sentence,
within such five-day period, it shall give prompt written notice to the
Company of such election and the revised Exchange Ratio and Per Share Stock
Consideration, whereupon no termination shall have occurred pursuant to this
Section 6.1(f) and this Agreement shall remain in effect in accordance with
its terms (except as to the Exchange Ratio and Per Share Stock Consideration),
and any references in this Agreement to the "Exchange Ratio" and "Per Share
Stock Consideration" shall thereinafter be deemed to refer to such numbers as
adjusted pursuant to this Section 6.1(f). The figure $32 appearing in the
foregoing paragraph shall be adjusted as provided in Section 1.2(a)(iii)
hereof, in the circumstances indicated therein.
For purposes of this Section 6.1(f), the "Termination Right Determination
Date" shall mean the sixteenth (16th) day preceding the Closing Date
(determined, upon receipt of approval of the Merger from the Federal Reserve
Board, as provided in Section 1.7 hereof assuming all other conditions to
closing are satisfied or waived and without regard to any possible agreement
of the parties to change such Closing Date).
6.2. Effect of Termination. In the event of the termination of this
Agreement by either Acquiror or the Company, as provided above, except as
otherwise provided in Section 8.3 hereof, this Agreement shall thereafter
become void and there shall be no liability on the part of any party hereto or
their respective officers or directors, except that any such termination shall
be without prejudice to the rights of any party hereto arising out of the
willful breach of any covenant or willful misrepresentation by any other party
under this Agreement.
ARTICLE VII
Miscellaneous
7.1. Certain Definitions; Interpretation. As used in this Agreement, the
following terms shall have the meanings indicated:
"Business Day" shall mean any day on which depository institutions are
generally open for business in the Commonwealth of Pennsylvania and the New
York Stock Exchange is generally open for trading.
"Control" shall have the meaning ascribed thereto in the Bank Holding
Company Act of 1956, as amended.
"Dollar" and "$" shall mean United States Dollars.
"Market Price" as of any date of determination means the average closing
price of one Acquiror ADS on the New York Stock Exchange (as reported by The
Wall Street Journal, or, if not reported thereby, another authoritative
source), for the ten (10) New York Stock Exchange trading days ending on the
Business Day immediately preceding the date of determination.
"Material" means material to Acquiror or the Company (as the case may be)
and its respective Subsidiaries, taken as a whole.
"Material Adverse Effect," with respect to a Person, means any condition,
event, change or occurrence that is reasonably likely to have a material
adverse effect upon (A) the financial condition, business or results of
A-26
<PAGE>
operations of such Person and its Subsidiaries, taken as a whole, or (B) the
ability of such Person to perform its obligations under, and to consummate the
transactions contemplated by, this Agreement.
"Person" includes an individual, corporation, partnership, association,
trust, limited liability company, unincorporated organization or other legal
entity.
"Subsidiary," with respect to a Person, means any other Person controlled by
such Person.
When a reference is made in this Agreement to Articles, Sections, or
Schedules, such reference shall be to a Section or Article of, or Schedule to,
this Agreement unless otherwise indicated. The table of contents, tie sheet
and headings contained in this Agreement are for ease of reference only and
shall not affect the meaning or interpretation of this Agreement. Whenever the
words "include," "includes," or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation." Any singular term
in this Agreement shall be deemed to include the plural, and any plural term
the singular.
7.2. Fees and Expenses. All costs and expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby
shall, if incurred by Acquiror, be paid by Acquiror and shall, if incurred by
the Company, be paid by the Company.
7.3. Survival. Only those agreements and covenants of the parties that are
applicable in whole or in part after the Effective Time shall survive the
Effective Time. All other representations, warranties, agreements and
covenants shall be deemed to be conditions of this Agreement and shall not
survive the Effective Time. If this Agreement shall be terminated, the
agreements of the parties in Sections 3.1(c) and 7.2 shall survive such
termination.
7.4. Public Announcements. Unless required by applicable law, the Company
and Acquiror will not issue any press release or otherwise make any public
statement with respect to the transactions contemplated hereby without the
prior written consent of the other party.
7.5. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in Person
or mailed, certified or registered mail with postage prepaid, or sent by
telex, telegram or telecopier, as follows:
(a) if to the Company, to it at:
Dauphin Deposit Corporation
213 Market Street
Harrisburg, PA 17105
Attention: George W. King, Esq.
Telecopier: (717) 231-2632
with a copy to:
Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Attention: L. Garrett Dutton, Esq.
Telecopier: (215) 981-4750
(b) if to Acquiror, to it at:
Allied Irish Banks, plc
Bankcentre, Ballsbridge
Dublin 4, Ireland
Attention: Secretary
Telecopier: 011 35 31 660 3063
A-27
<PAGE>
and if to Acquiror Sub, to it at:
First Maryland Bancorp
25 South Charles Street
Baltimore, MD 21201
Attention: Chairman of the Board
Telecopier: (410) 244-4459
in each case, with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Craig M. Wasserman, Esq.
Telecopier: (212) 403-2000
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date
of delivery unless if mailed in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.6. Entire Agreement. This Agreement and the Schedules, Exhibits and other
documents referred to herein or delivered pursuant hereto collectively contain
the entire understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior and contemporaneous agreements
and understandings, oral and written, with respect thereto.
7.7. Binding Effect; Benefit; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, heirs and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Nothing
in this Agreement, expressed or implied, is intended to confer on any Person,
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
7.8. Waiver. Prior to the Effective Time, any provision of this Agreement
may be (i) waived by the party benefitted by the provision or by both parties,
by a writing executed by an executive officer or officers, or (ii) amended or
modified at any time (including the structure of the transaction) by an
agreement in writing between the parties hereto approved by their respective
boards of directors, except that, after the vote by the shareholders of the
Company no such amendment or modification may be made which reduces or changes
the form and amount of consideration payable pursuant to this Agreement
without further shareholder approval.
7.9. Further Actions. Each of the parties hereto agrees that, subject to its
legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.10. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, and all of which together
shall be deemed to be one and the same instrument.
7.11. Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, without regard to the conflict of laws
rules thereof.
7.12. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
A-28
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ALLIED IRISH BANKS, plc
By: /s/ Thomas P. Mulcahy
---------------------------------------
Name:Thomas P. Mulcahy
Title:Chief Executive
FIRST MARYLAND BANCORP
By: /s/ Jeremiah E. Casey
---------------------------------------
Name:Jeremiah E. Casey
Title:Chairman
DAUPHIN DEPOSIT CORPORATION
By: /s/ Christopher R. Jennings
---------------------------------------
Name:Christopher R. Jennings
Title:Chief Executive Officer
A-29
<PAGE>
Exhibits 5.1 and 23.1
[First Maryland Bancorp letterhead]
June 4, 1997
First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
Re: Subordinated Debt Securities
----------------------------
Ladies and Gentlemen:
I am a Senior Vice President and the General Counsel of First Maryland
Bancorp (the "Company"), and in such capacity have represented the Company in
connection with the registration under the Securities Act of 1933, as amended,
and Rule 415 thereunder, on a Registration Statement on Form S-3 (the
"Registration Statement") of $350,000,0000 aggregate principal amount of the
Company's Subordinated Debt Securities (the "Securities"). The Securities will
be issued under an Indenture, dated as of May 15, 1992 (the "Indenture"),
between the Company and Bankers Trust Company, as Trustee. The Indenture has
been qualified under the Trust Indenture Act of 1939, as amended.
In connection with the opinions contained herein, I have examined the
charter and bylaws of the Company, the corporate action taken by the Company
relating to the Securities and their issuance under the Indenture, and such
other documents as I have deemed appropriate as a basis for the opinions
hereinafter expressed.
Based upon the foregoing I am of the opinion that the Securities to be
issued by the Company from time to time have been duly and validly authorized
and, upon the final action of the pricing committee appointed by the Board of
Directors and proper execution, authentication and delivery thereof in
accordance with the Indenture against payment therefor, will be legally issued
and will constitute binding obligations of the Company entitled to the benefits
of the Indenture.
<PAGE>
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to me and this opinion in the
Registration Statement and the related prospectus and any prospectus supplement.
Very truly yours,
/s/ Gregory K. Thoreson
Gregory K. Thoreson
Senior Vice President
and General Counsel
<PAGE>
EXHIBIT 12.1
FIRST MARYLAND BANCORP
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED YEARS ENDED DECEMBER 31,
MARCH 31, -------------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on deposits
Fixed Charges:
Interest on long-term debt and short-term
borrowings (a).............................. $ 29,736 $110,149 $108,982 $ 71,908 $ 62,916 $ 57,104
Portion of rent deemed representative
of the interest factor (b).................. 1,692 6,564 6,873 7,058 6,400 6,665
-------- -------- -------- -------- -------- --------
Total Fixed Charges..................... $ 31,428 $116,713 $115,855 $ 78,966 $ 69,316 $ 63,769
======== ======== ======== ======== ======== ========
Earnings:
Net Income................................... $ 34,103 $132,337 $120,187 $111,140 $113,868 $ 92,473
Income Taxes................................. 19,193 74,850 63,992 59,288 62,832 49,205
Fixed Charges................................. 31,428 116,713 115,855 78,966 69,316 63,769
-------- -------- -------- -------- -------- --------
Total Earnings.......................... $ 84,724 $323,900 $300,034 $249,394 $246,016 $205,447
======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges............ 2.70x 2.78x 2.59x 3.16x 3.55x 3.22x
======== ======== ======== ======== ======== ========
Including interest on deposits
Fixed Charges:
Interest on long-term debt and short-term
borrowings and deposits (a).................. $ 80,212 $315,318 $314,548 $241,099 $234,038 $284,657
Portion of rent deemed representative
of the interest factor (b).................. 1,692 6,564 6,873 7,058 6,400 6,665
-------- -------- -------- -------- -------- --------
Total Fixed Charges.................... $ 81,904 $321,882 $321,421 $248,157 $240,438 $291,322
======== ======== ======== ======== ======== ========
Earnings:
Net Income................................... $ 34,103 $132,337 $120,187 $111,140 $113,868 $ 92,473
Income Taxes................................. 19,193 74,850 63,992 59,288 62,832 49,205
Fixed Charges................................. 81,904 321,882 321,421 248,157 240,438 291,322
-------- -------- -------- -------- -------- --------
Total Earnings.......................... $135,200 $529,069 $505,600 $418,585 $417,138 $433,000
======== ======== ======== ======== ======== ========
Radio of Earnings to Fixed Charges............ 1.65x 1.64x 1.57x 1.69x 1.73x 1.49x
======== ======== ======== ======== ======== ========
</TABLE>
- ------------
(a) Includes the amortization of deferred note issue expenses.
(b) One third of rents is deemed representative of the interest factor.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 of First Maryland Bancorp, of our report dated January 24, 1997,
on our audits of the consolidated statements of condition of First Maryland
Bancorp and Subsidiaries as of December 31, 1996 and 1995 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the years then ended, which report is included in First Maryland
Bancorp's Annual Report on Form 10-K for the year ended December 31, 1996.
We also consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
June 2, 1997
<PAGE>
Exhibit 23.3
The Board of Directors
First Maryland Bancorp:
We consent to incorporation by reference in this registration statement on Form
S-3 of First Maryland Bancorp of our report dated February 13, 1995, relating to
the consolidated statements of income, changes in stockholders' equity, and cash
flows of First Maryland Bancorp and subsidiaries for the year ended December 31,
1994, which report appears in the December 31, 1996 annual report on Form 10-K
of First Maryland Bancorp, and to the reference to our firm under the heading
"Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
Baltimore, Maryland
June 2, 1997
<PAGE>
Exhibit 23.4
The Board of Directors
Dauphin Deposit Corporation
We consent to the incorporation by reference in the registration statement on
Form S-3 of First Maryland Bancorp of our report dated January 21, 1997, with
respect to the consolidated balance sheets of Dauphin Deposit Corporation and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1996. Our report dated January 21,
1997 contains an explantory paragraph that states that the Company changed its
method of accounting for mortgage servicing rights and long-lived assets to
adopt the provisions of the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 122, Accounting for Mortgage Servicing
Rights, an amendment of FASB Statement No. 65, on January 1, 1995, and No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of, on January 1, 1996.
KPMG PEAT MARWICK LLP
Harrisburg, Pennsylvania
June 4, 1997
<PAGE>
Exhibit 24.1
------------
FIRST MARYLAND BANCORP
Power of Attorney
-----------------
Each of the undersigned persons, in his or her capacity as an officer or
director, or both, of First Maryland Bancorp (the "Company"), hereby appoints
Jeremiah E. Casey, Frank P. Bramble, Jerome W. Evans, David M. Cronin and Robert
F. Ray, and each of them, with full power of substitution and resubstitution and
with full power in each to act without the others, his or her attorney-in-fact
and agent for the following purposes:
1. To sign for him or her, in his or her name and in his or her capacity
as an officer or director, or both, of the Company, a Registration Statement on
Form S-3, and any amendments and post-effective amendments thereto
(collectively, the "Registration Statement"), for the registration under the
Securities Act of 1933, as amended (the "Act") and Rule 415 thereunder (if
applicable), of up to $350,000,000 in aggregate principal amount of subordinated
debt securities ("Debt Securities"), to be offered in one or more public
offerings;
2. To file or cause to be filed any such Registration Statement with the
Securities and Exchange Commission;
3. To take all such other action as any such attorney-in-fact, or his
substitute, may deem necessary or desirable in order to effect and maintain the
registration of the Debt Securities under the Act; and
4. To sign for him or her, in his or her name and in his or her capacity
as an officer or director, or both, of the Company, all such documents and
instruments as any such attorney-in-fact, or his substitute, may deem necessary
or advisable in connection with the registration, qualification or exemption of
the Debt Securities under the securities laws of any state or other
jurisdiction.
<PAGE>
This power of attorney shall be effective as of the date written opposite
the signature of each of the undersigned and shall continue in full force and
effect until revoked by the undersigned in a writing filed with the Secretary of
the Company.
/s/ JEREMIAH E. CASEY May 13, 1997
- ------------------------------
Jeremiah E. Casey
Chairman of the Board and
Director
/s/ FRANK P. BRAMBLE May 13, 1997
- ------------------------------
Frank P. Bramble
President, Chief Executive
Officer and Director
/s/ JEROME W. EVANS May 13, 1997
- ------------------------------
Jerome W. Evans
Executive Vice President and
Chief Financial Officer
/s/ ROBERT L. CARPENTER, JR. May 13, 1997
- ------------------------------
Robert L. Carpenter
Senior Vice President and
Controller
/s/ BENJAMIN L. BROWN May 13, 1997
- ------------------------------
Benjamin L. Brown
Director
/s/ J. OWEN COLE May 13, 1997
- ------------------------------
J. Owen Cole
Director
/s/ EDWARD A. CROOKE May 13, 1997
- ------------------------------
Edward A. Crooke
Director
/s/ JOHN F. DEALY May 13, 1997
- ------------------------------
John F. Dealy
Director
/s/ MATHIAS J. DEVITO May 13, 1997
- ------------------------------
Mathias J. DeVito
<PAGE>
Director
<TABLE>
<S> <C>
/s/ RHODA M. DORSEY May 13, 1997
- ------------------------------
Rhoda M. Dorsey
Director
/s/ JEROME W. GECKLE May 13, 1997
- ------------------------------
Jerome W. Geckle
Director
/s/ FRANK A. GUNTHER, JR. May 13, 1997
- ------------------------------
Frank A. Gunther, Jr.
Director
/s/ CURRAN W. HARVEY, JR. May 13, 1997
- ------------------------------
Curran W. Harvey, Jr.
Director
______________________________ May ___, 1997
Margaret M. Heckler
Director
/s/ HENRY J. KNOTT May 13, 1997
- ------------------------------
Henry J. Knott
Director
______________________________ May ___, 1997
Thomas P. Mulcahy
Director
/s/ WILLIAM J. PASSANO May 13, 1997
- ------------------------------
William M. Passano, Jr.
Director
</TABLE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
FIRST MARYLAND BANCORP
(Exact name of obligor as specified in its charter)
MARYLAND 52-0981378
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
25 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of principal executive offices) (Zip Code)
SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of Amendment
of the Organization Certificate of Bankers Trust
Company dated June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1 Statement,
Registration No. 33-65171, and Certificate of Amendment
of the Organization Certificate of Bankers Trust
Company dated March 20, 1996, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended
on February 18, 1997, Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 333-24509-01.
-2-
<PAGE>
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference
to Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - A copy of the latest report of condition of Bankers
Trust Company dated as of March 31, 1997, copy
attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 21st day
of May, 1997.
BANKERS TRUST COMPANY
By: Susan Johnson
------------------------
Susan Johnson
Assistant Vice President
-4-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Call Date: 3/31/97 ST-BK: 36-4840 FFIEC 031
Company
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
RCFD BIL MIL THOU
---------------------------
DOLLAR AMOUNTS IN THOUSANDS
ASSETS
<S> <C> <C>
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1).................. 0081 1,589,000
b. Interest-bearing balances(2)........................................... 0071 2,734,000
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)............. 1754 0
b. Available-for-sale securities (from Schedule RC-B, column D)........... 1773 4,433,000
3. Federal funds sold and securities purchased under
agreements to resell..................................................... 1350 26,490,000
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C)........... 2122 15,941,000
b. LESS: Allowance for loan and lease losses............................... 3123 708,000
c. LESS: Allocated transfer risk reserve................................... 3128 0
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)................................... 2125 15,233,000
5. Assets held in trading accounts............................................ 3545 38,115,000
6. Premises and fixed assets (including capitalized leases)................... 2145 924,000
7. Other real estate owned (from Schedule RC-M)............................... 2150 188,000
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)............................................ 2130 175,000
9. Customers' liability to this bank on acceptances outstanding............... 2155 618,000
10. Intangible assets (from Schedule RC-M)..................................... 2143 17,000
11. Other assets (from Schedule RC-F).......................................... 2160 4,424,000
12. Total assets (sum of items 1 through 11)................................... 2170 94,940,000
</TABLE>
__________________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Call Date: 3/31/97 ST-BK: 36-4840 FFIEC 031
Company
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State ZIP: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
RCON RCFD RCFN BIL MIL THOU
----------------------------------------
DOLLAR AMOUNTS IN THOUSANDS
LIABILITIES
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic (offices sum of totals of columns A
and C from Schedule RC-E, part I)....................................... 2200 14,450,000
(1) Noninterest-bearing(1)............................................... 6631 2,917,000
(2) Interest-bearing..................................................... 6636 11,533,000
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E part II)....................................... 2200 23,456,000
(1) Noninterest-bearing.................................................. 6631 1,062,000
(2) Interest-bearing..................................................... 6636 22,394,000
14. Federal funds purchased and securities sold under agreements
to repurchase.............................................................. 2800 15,195,000
15. a. Demand notes issued to the U.S. Treasury................................. 2840 0
b. Trading liabilities (from Schedule RC-D)................................. 3548 18,911,000
16. Other borrowed money: (includes mortgage indebtedness
and obligations under capitalized leases):
a. With original maturity of one year or less............................... 2332 7,701,000
b. With original maturity of more than one year............................. 2333 4,438,000
17. Not applicable
18. Bank's liability on acceptances executed and outstanding.................... 2920 618,000
19. Subordinated notes and debentures........................................... 3200 1,226,000
20. Other liabilities (from Schedule RC-G)...................................... 2930 3,971,000
21. Total liabilities (sum of items 13 through 20).............................. 2948 89,966,000
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 600,000
24. Common stock................................................................ 3230 1,002,000
25. Surplus (exclude all surplus related to preferred stock).................... 3839 540,000
26. a. Undivided profits and capital reserves................................... 3632 3,241,000
b. Net unrealized holding gains (losses) on available-for-sale
seurities............................................................... 8434 ( 31,000)
27. Cumulative foreign currency translation adjustments......................... 3284 ( 378,000)
28. Total equity capital (sum of items 23 through 27)........................... 3210 4,974,000
29. Total liabilities, limited-life preferred stock, and equity capital
(sum of items 21, 22, and 28).............................................. 3300 94,940,000
</TABLE>
<TABLE>
<CAPTION>
- ---------------------
Memorandum
RCFD NUMBER
<S> <C> <C>
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 1996........... 6724 1
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state
chartering authority)
</TABLE>
______________________
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
-6-
<PAGE>
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York,
this 21ST day of MARCH in the Year of our Lord
---- -----
one thousand nine hundred and ninety-six.
Peter M. Philbin
------------------------------
Deputy Superintendent of Banks
-7-
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
_____________________________
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Three Hundred Fifty One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,351,666,670), divided into
Eighty-Five Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-
Seven (85,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Five Hundred One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 500 shares with a par value of One Million Dollars ($1,000,000)
each designated as Series Preferred Stock."
-8-
<PAGE>
6. The foregoing amendment of the organization certificate was authorized
by unanimous written consent signed by the holder of all outstanding shares
entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th
day of March, 1996.
James T. Byrne, Jr.
---------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
--------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.
Lea Lahtinen
----------------
Lea Lahtinen
Sworn to before me this 20th day
of March, 1996.
Sandra L. West
-----------------
Notary Public
<TABLE>
<CAPTION>
<S> <C>
SANDRA L. WEST Counterpart filed in the
Notary Public State of New York Office of the Superintendent of
No. 31-4942101 Banks, State of New York,
Qualified in New York County This 21st day of March, 1996
Commission Expires September 19, 1996
</TABLE>
-9-
