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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 1994
FLEET FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
RHODE ISLAND
(State or other jurisdiction of incorporation)
1-6366 05-0341324
(Commission File Number) (IRS Employer Identification No.)
50 Kennedy Plaza, Providence, Rhode Island 02903
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 401-278-5800
<PAGE>
Item 5. Other Events.
On May 9, 1994, Fleet Financial Group, Inc. ("Fleet") and
NBB Bancorp, Inc. ("NBB") entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which (a) NBB will
be merged with and into Fleet (the "Merger") and (b) New
Bedford Institution for Savings (the "Bank"), a wholly-owned
subsidiary of NBB, will enter into a Bank Agreement and Plan of
Merger with Fleet Bank of Massachusetts, National Association
(the "Surviving Bank"), a wholly-owned indirect subsidiary of
Fleet, providing for the merger of the Bank with and into the
Surviving Bank (the "Bank Merger").
In accordance with the terms of the Merger Agreement, each
outstanding share of NBB common stock, $0.10 par value per
share (the "NBB Common Stock"), except for treasury shares,
shares held by Fleet or its subsidiaries or by NBB or its
subsidiaries (other than in both cases shares held in a
fiduciary capacity or as a result of debts previously
contracted), and dissenting shares, shall be converted into the
right to receive, at the election of the holder thereof,
either: (a) a number of shares of Fleet common stock, $1.00
par value ("Fleet Common Stock"), determined by dividing the
Merger Consideration (as defined below) by the Average Closing
Price (as defined below), subject to a minimum of 5,700,000 and
a maximum of 6,300,000 shares of Fleet Common Stock being
issued as shall be determined by Fleet, or (b) cash in the
amount of the Merger Consideration; provided that an additional
number of shares of Fleet Common Stock will be issued if
required so that the aggregate portion of the consideration for
the Merger attributable to Fleet Common Stock will be equal to
at least 45% of the total consideration for the Merger.
"Merger Consideration" is defined as $48.50 per share; provided
that if the Merger has not been consummated by March 31, 1995,
the Merger Consideration shall be increased at the rate of
$0.25 per share per month for each full month (prorated on a
daily basis for each partial month) until the Merger is
consummated. The "Average Closing Price" is defined as the
average closing sale price per share of Fleet Common Stock on
the New York Stock Exchange (the "Stock Exchange") (as reported
by The Wall Street Journal or, if not reported thereby, another
authoritative source), for the 10 consecutive Stock Exchange
trading days ending on and including the fifth trading day
immediately preceding (but not including) the date the Merger
is consummated. If the Average Closing Price is equal to or
less than $29.50, then the Merger Consideration must be paid in
cash; provided that Fleet may, at its option, pay part of the
Merger Consideration with Fleet Common Stock previously
repurchased by Fleet for such purpose.
<PAGE>
Each holder of a share of NBB Common Stock will also
receive a number of Warrants equal to the Warrant Amount. Each
Warrant entitles the holder thereof to purchase one share of
Fleet Common Stock for a purchase price of $43.875 per share at
any time during the period beginning one year after the date of
the consummation of the Merger and ending on the sixth
anniversary of such date. "Warrant Amount" is defined as a
fraction, the numerator of which is 2,500,000 and the
denominator of which is the sum of the number of shares of NBB
Common Stock which are outstanding on the date of the
consummation of the Merger, plus the number of shares of NBB
Common Stock which are issuable in connection with options
granted pursuant to the NBB Stock Option Plan. The Executive
Committee of Fleet approved the Merger Agreement and the
transactions contemplated thereby at a meeting on May 5, 1994.
The Board of Directors of NBB approved the Merger Agreement and
the transactions contemplated thereby at a meeting on May 8,
1994.
Completion of the Merger is subject to certain conditions,
including (a) approval by the shareholders of NBB, (b) approval
of all requisite regulatory authorities, and (c) other closing
conditions customary in transactions of this type. In the
event that (x) the Agreement is terminated (i) by NBB prior to
the consummation of the Merger because the Board of Directors
of NBB does not recommend approval of the Merger to its
shareholders or the NBB shareholders do not approve the Merger,
or (ii) by Fleet if there has been a material breach of any
representation, warrant, covenant or other agreement by NBB
which has not been cured; and (y) within 6 months of such
termination NBB shall have entered into an acquisition
transaction with a person other than Fleet or its Subsidiaries
or the Board of Directors of NBB shall have recommended another
acquisition transaction (or if at the time (i) the Board of
Directors did not recommend the Merger, or (ii) the
shareholders of NBB failed to vote in favor of the Merger, any
person other than Fleet or its subsidiaries shall have made a
bona fide proposal by public announcement to engage in an
acquisition transaction), then NBB must make a cash payment to
Fleet in the amount of $8,000,000 in order to reimburse Fleet
for incurring the costs and expenses relating to the Merger
Agreement.
Certain additional information regarding the Merger is
contained in Fleet's press release (the "Press Release") dated
May 9, 1994.
The Merger Agreement and Press Release are attached hereto
as exhibits and incorporated herein by reference. The
foregoing summary of such exhibits is qualified in its entirety
by reference to the complete text of such exhibits.
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) 2.1 Agreement and Plan of Merger dated
as of May 9, 1994 between Fleet
and NBB.
99.1 Press Release of Fleet dated May 9, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this report
to be signed in its behalf by the undersigned hereunto duly
authorized.
FLEET FINANCIAL GROUP, INC.
Registrant
By /s/ William C. Mutterperl
William C. Mutterperl
Senior Vice President,
General Counsel and Secretary
Dated: May 10, 1994
<PAGE>
Exhibit Index
2.1 Agreement and Plan of Merger dated
as of May 9, 1994 between Fleet
and NBB.
99.1 Press Release of Fleet dated May 9, 1994.
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EXHIBIT 2.1
_______________________________
_______________________________
AGREEMENT AND PLAN OF MERGER
By and Between
FLEET FINANCIAL GROUP, INC.
and
NBB BANCORP, INC.
Dated as of May 9, 1994
_______________________________
_______________________________
<PAGE>
Page
ARTICLE I 1
THE MERGER 1
1.01 The Merger 1
1.02 Effective Time 2
1.03 Effects of the Merger 2
1.04 Conversion of Company Common Stock 2
1.05 Dissenters' Rights 4
1.06 Options 5
1.07 Rights 6
1.08 ESOP 6
1.09 Articles of Incorporation 6
1.10 By-Laws 6
1.11 Directors and Officers 6
1.12 Tax Consequences 6
ARTICLE II 6
EXCHANGE OF SHARES 6
2.01 Parent to Make Shares and Cash Available 6
2.02 Election and Exchange Procedures 7
ARTICLE III 10
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 10
3.01 Corporate Organization 10
3.02 Capitalization 11
3.03 Authority; No Violation 12
3.04 Consents and Approvals 13
3.05 Loan Portfolio 14
3.06 Financial Statements 14
3.07 Broker's Fees 15
3.08 Absence of Certain Changes or Events 15
3.09 Legal Proceedings 16
3.10 Taxes and Tax Returns 16
3.11 Employees 17
3.12 SEC Reports 17
3.13 Company Information 18
3.14 Compliance with Applicable Law 18
3.15 Certain Contracts 18
3.16 Agreements with Regulatory Agencies 19
3.17 Investment Securities 19
3.18 Environmental Matters 19
3.19 Assistance Agreements 19
3.20 Properties 20
3.21 Insurance 20
3.22 Material Interests of Certain Persons 20
3.23 Regulatory Approvals 20
<PAGE>
ARTICLE IV 21
REPRESENTATIONS AND WARRANTIES OF PARENT 21
4.01 Corporate Organization 21
4.02 Capitalization 21
4.03 Authority; No Violation 23
4.04 Consents and Approvals 24
4.05 Financial Statements 24
4.06 Broker's Fees 25
4.07 Absence of Certain Changes or Events 25
4.08 Legal Proceedings 25
4.09 SEC Reports 25
4.10 Parent Information 26
4.11 Compliance with Applicable Law 26
4.12 Ownership of Company Common Stock; Affiliates
and Associates 26
4.13 Agreements with Regulatory Agencies 26
4.14 Regulatory Approvals 26
ARTICLE V 26
COVENANTS RELATING TO CONDUCT OF BUSINESS 26
5.01 Covenants of the Company 26
5.02 No Solicitation 29
5.03 Covenants of Parent 30
ARTICLE VI 30
ADDITIONAL AGREEMENTS 30
6.01 Regulatory Matters 30
6.02 Access to Information 31
6.03 Shareholder Meeting 33
6.04 Legal Conditions to Merger 33
6.05 Restrictions on Resale 33
6.06 Stock Exchange Listing 34
6.07 Employee Benefit Plans 34
6.08 Employee Termination And Other Benefits 35
6.09 Indemnification; Directors' and Officers'
Insurance 35
6.10 Subsequent Interim and Annual Financial
Statements 37
6.11 Additional Agreements 37
6.12 Disclosure Supplements 37
6.13 Current Information 38
6.14 ALCO Management 38
6.15 Execution and Authorization of Bank Merger
Agreement 38
ARTICLE VII 38
CONDITIONS PRECEDENT 38
7.01 Conditions to Each Party's Obligation to Effect
the Merger 39
(a) Shareholder Approval 39
<PAGE>
(b) Stock Exchange Listing 39
(c) Other Approvals 39
(d) S-4 39
(e) No Injunctions or Restraints; Illegality 39
7.02 Conditions to Obligations of Parent 39
(a) Representations and Warranties 39
(b) Performance of Obligations of the Company 40
(c) Consents Under Agreements 40
(d) Legal Opinion 40
(e) Accountant's Letter 40
7.03 Conditions to Obligations of the Company 40
(a) Representations and Warranties 40
(b) Performance of Obligations of Parent 41
(c) Consents Under Agreements 41
(d) Federal Tax Opinion 41
(e) Legal Opinion 41
(f) Opinion of Financial Advisor 41
ARTICLE VIII 42
TERMINATION AND AMENDMENT 42
8.01 Termination 42
8.02 Effect of Termination; Expenses 43
8.03 Amendment 45
8.04 Extension; Waiver 45
ARTICLE IX 45
GENERAL PROVISIONS 45
9.01 Closing 45
9.02 Non-Survival of Representations, Warranties and
Agreements 46
9.03 Expenses 46
9.04 Notices 46
9.05 Interpretation 47
9.06 Counterparts 47
9.07 Entire Agreement 47
9.08 Governing Law 47
9.09 Jurisdiction and Venue 47
9.10 Enforcement of Agreement 47
9.11 Severability 48
9.12 Publicity 48
9.13 Assignment 48
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 9, 1994 by
and between NBB BANCORP, INC., a Delaware corporation (the
"Company") and FLEET FINANCIAL GROUP, INC., a Rhode Island
corporation ("Parent"). (The Company and Parent are herein
sometimes collectively referred to herein as the "Constituent
Corporations.")
WHEREAS, the Boards of Directors of Parent and the Company
have determined that it is in the best interests of their
respective companies and their shareholders to consummate the
business combination transaction provided for herein in which
the Company will, subject to the terms and conditions set forth
herein, merge with and into Parent (the "Merger"); and
WHEREAS, as soon as practicable after the execution and
delivery of this Agreement, Fleet Bank of Massachusetts, N.A.,
a national banking association and an indirect wholly-owned
subsidiary of Parent ("Massachusetts Bank," and sometimes
referred to herein as the "Surviving Bank"), and New Bedford
Institution for Savings, a Massachusetts savings bank and a
wholly owned subsidiary of the Company (the "Bank"), will enter
into a Bank Agreement and Plan of Merger (the "Bank Merger
Agreement"), providing for the merger (the "Bank Merger") of
the Bank with and into Massachusetts Bank; and
WHEREAS, promptly following the consummation of the Merger,
Parent intends to cause (i) the transfer of certain assets and
liabilities of the Bank to Fleet National Bank, an indirect
wholly-owned subsidiary of Parent and (ii) the Bank Merger to
be consummated; and
WHEREAS, the parties desire to make certain
representations, warranties and agreements in connection with
the Merger and also to prescribe certain conditions to the
Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein,
and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
THE MERGER
1.01 The Merger. Subject to the terms and conditions of
this Agreement, in accordance with the Delaware General <PAGE>
Corporation Law (the "DGCL") and the Rhode Island Business
Corporation Law (the "RIBCL"), at the Effective Time (as
defined in Section 1.02 hereof), the Company shall merge with
and into Parent. Parent shall be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation") in
the Merger, and shall continue its corporate existence under
the laws of the State of Rhode Island. The name of the
Surviving Corporation shall continue to be Fleet Financial
Group, Inc. Upon consummation of the Merger, the separate
corporate existence of the Company shall terminate.
1.02 Effective Time. The Merger shall become effective as
set forth in the certificate of merger (the "Certificate of
Merger") which shall be filed with the Secretary of State of
the State of Delaware (the "Delaware Secretary") and the
articles of merger (the "Articles of Merger") which shall be
filed with the Secretary of State of the State of Rhode Island
(the "Rhode Island Secretary"), in each case on the Closing
Date (as defined in Section 9.01 hereof). The term "Effective
Time" shall be the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger and the
Articles of Merger.
1.03 Effects of the Merger. At and after the Effective
Time, the Merger shall have the effects set forth in Sections
259 and 261 of the DGCL and Section 7-1.1-69 of the RIBCL.
1.04 Conversion of Company Common Stock. (a) At the
Effective Time, subject to Sections 2.02(b) and (d) hereof,
each share of the common stock, par value $0.10 per share, of
the Company (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time and all rights attached
thereto (other than shares of Company Common Stock held (x) in
the Company's treasury or (y) directly or indirectly by Parent
or the Company or any of their respective Subsidiaries (as
defined below) (except for Dissenting Shares (as such term is
defined in Section 1.05 hereof) and Trust Account Shares and
DPC Shares (as such terms are defined in Section 1.04(d)
hereof)) shall, by virtue of this Agreement and without any
action on the part of the holder thereof, be converted into and
exchangeable for the right to receive at the election of the
holder thereof as provided in Section 2.02, (i) the number of
Warrants (as defined in Section 1.04(d)) determined in
accordance with Section 1.04(d) and (ii) either:
(x) a number of shares of the common stock of Parent,
par value $1.00 per share (the "Parent Common Stock")
(together with the number of Parent Rights (as defined in
Section 4.02(a) hereof) associated therewith), rounded to
the nearest thousandth of a share, determined by dividing <PAGE>
the Merger Consideration, as defined below, by the Average
Closing Price, as defined below (the "Per Share Stock
Consideration"), or
(y) cash in the amount of the Merger Consideration,
as defined below (the "Per Share Cash Consideration"),
provided, that, the aggregate number of shares of Parent Common
Stock that shall be issued in the Merger pursuant to Section
1.04(a)(ii)(x) shall be equal to the "Aggregate Parent Stock
Amount" as defined below. Accordingly, consideration pursuant
to Section 1.04(a)(ii)(y) shall be available to holders of
Company Common Stock only to the extent the consideration
pursuant to Section 1.04(a)(ii)(x) is not sufficient to pay the
entire consideration due under Section 1.04(a)(ii).
Notwithstanding the foregoing, if the Average Closing Price
is equal to or less than $29.50, then, notwithstanding anything
to the contrary in this Agreement, it will not be a condition
to the Company's obligations under this Agreement that the
Merger constitute a reorganization as described in Section 1.12
and the consideration payable pursuant to Section 1.04(a)(ii)
shall consist solely of cash in the amount of the Per Share
Cash Consideration, provided that Parent may, at its option,
pay part of such consideration in the form of Parent Common
Stock valued at the Average Closing Price up to the number of
shares of the Aggregate Parent Stock Amount which consisted of
shares of Parent Common Stock previously repurchased by Parent
to be used in payment of the Merger Consideration under Section
1.04(a)(ii)(x). Upon occurrence of the circumstances described
in the preceding sentence, which shall be referred to herein as
a "Taxable Transaction," all of the obligations of Parent and
the Company under this Agreement will continue in full force
and effect except for those covenants, agreements and
conditions relating to the tax treatment of the transaction
with respect to the Company and its shareholders. In such
event, if shares of Parent Common Stock are being delivered,
then, for purposes of the election procedures in Section 2.02,
the number of shares of Parent Common Stock actually delivered
by Parent will be deemed to be the Aggregate Parent Stock
Amount.
The "Merger Consideration" shall be equal to $48.50, provided,
however, that in the event that the Effective Time has not
occurred on or prior to March 31, 1995, this amount shall be
increased at the rate of $0.25 per share per month for each
full month (prorated on a daily basis for each partial month)
thereafter until the Effective Time. The "Average Closing
Price" shall mean the average closing sale price per share of
Parent Common Stock on the New York Stock Exchange (the "Stock <PAGE>
Exchange") (as reported by the Wall Street Journal or, if not
reported thereby, another authoritative source), for the 10
consecutive Stock Exchange trading days ending on and including
the fifth trading day immediately preceding (but not including)
the Effective Time. The "Aggregate Parent Stock Amount" shall
equal such number of shares of Parent Common Stock not less
than 5,700,000 (or such lesser number of shares that would
enable Parent to pay the total consideration for the Merger
pursuant to Section 1.04(a)(ii)) and not more than 6,300,000 as
shall be determined by Parent prior to the Effective Time, plus
such additional number of shares of Parent Common Stock as may
be required so that the aggregate portion of the consideration
for the Merger attributable to Parent Common Stock is equal to
at least 45% of the total consideration for the Merger, it
being understood that for purposes of calculating the total
consideration for the Merger, Dissenting Shares will be deemed
to have received the Per Share Cash Consideration and the
receipt of the Warrants shall be deemed the receipt of cash.
(b) The Per Share Stock Consideration, the Per Share Cash
Consideration, the Aggregate Parent Stock Amount and the number
of Warrants to be issued pursuant to Section 1.04(d) shall be
subject to appropriate adjustments in the event that,
subsequent to the date of this Agreement but prior to the
Effective Time, the outstanding Parent Common Stock shall have
been increased, decreased, changed into or exchanged for a
different number or kind of shares or securities through
reorganization, recapitalization, reclassification, stock
dividend, stock split, or other like changes in Parent's
capitalization.
(c) At the Effective Time, all shares of Company Common
Stock that are owned by the Company as treasury stock and all
shares of Company Common Stock that are owned directly or
indirectly by Parent or the Company or any of their respective
Subsidiaries (other than shares of Company Common Stock held
directly or indirectly in trust accounts, managed accounts and
the like or otherwise held in a fiduciary capacity that are
beneficially owned by third parties (any such shares, and
shares of Parent Common Stock which are similarly held, whether
held directly or indirectly by Parent or the Company, as the
case may be, being referred to herein as "Trust Account
Shares") and other than any shares of Company Common Stock held
by Parent or the Company or any of their respective
Subsidiaries in respect of a debt previously contracted (any
such shares of Company Common Stock, and shares of Parent
Common Stock which are similarly held, whether held directly or
indirectly by Parent or the Company, being referred to herein
as "DPC Shares")) shall be cancelled and shall cease to exist
and no Parent Common Stock, cash, Warrants or other <PAGE>
consideration shall be delivered in exchange therefor. All
shares of Parent Common Stock and Parent Preferred Stock that
are owned by the Company or any of its Subsidiaries (other than
Trust Account Shares and DPC Shares) shall become treasury
stock of Parent.
(d) At the Effective Time, Parent shall issue and deliver
in accordance with the provisions of Article II a total of
2,500,000 warrants (the "Warrants") as follows:
(i) Each holder of a share of Company Common Stock
which is being converted in accordance with Section 1.04(a)
shall have the right to receive a number of Warrants equal
to the Warrant Amount, and
(ii) Each holder of a stock option issued under the
Company Stock Plan (as defined in Section 1.06) (a "Company
Stock Option") which is converted into a stock option under
the Parent Stock Plan pursuant to Section 1.06 shall have
the right to receive a number of Warrants equal to the
Warrant Amount multiplied by the number of shares of
Company Common Stock underlying such Company Stock Option.
Each Warrant shall entitle the holder thereof to purchase one
share of Parent Common Stock at a price of $43.875 per share at
any time during the period beginning on the first anniversary
of the Effective Time and ending on the sixth anniversary of
the Effective Time. The Warrant Amount means a fraction, the
numerator of which is 2,500,000, and the denominator of which
is the sum of the number of shares of Company Common Stock
which are being converted in accordance with Section 1.04(a)
plus the number of shares of Company Common Stock underlying
the Company Stock Options. For purposes of this Agreement, the
"Warrant Shares" shall mean the shares of Parent Common Stock
issuable upon exercise of the Warrants.
1.05 Dissenters' Rights. Notwithstanding anything in this
Agreement to the contrary and unless otherwise provided by
applicable law, shares of Company Common Stock which are issued
and outstanding immediately prior to the Effective Time and
which are owned by shareholders who, pursuant to applicable
law, (a) deliver to the Company, before the taking of the vote
of the Company's shareholders on the Merger, written demand for
the appraisal of their shares, and (b) whose shares are not
voted in favor of the Merger, nor consented thereto in writing
(the "Dissenting Shares"), shall not be converted into Parent
Common Stock and/or cash and Warrants, unless and until such
holders shall have failed to perfect or shall have effectively
withdrawn or lost their right of appraisal and payment under
applicable law. If any such holder shall have failed to <PAGE>
perfect or shall have effectively withdrawn or lost such right
of appraisal, the Company Common Stock of such holder shall
thereupon be deemed to have been converted into the right to
receive and become exchangeable for, at the Effective Time,
that number of whole shares of Parent Common Stock and/or cash
and Warrants determined pursuant to Section 1.04 and Section
2.02(c) hereof. Holders of Company Common Stock who become
entitled pursuant to the provisions of Section 262 of the DGCL
to payment for their shares of Company Common Stock under the
provisions thereof shall receive payment therefor from the
Surviving Corporation and such shares of Company Common Stock
shall be cancelled.
1.06 Options. Commencing at least 15 days prior to the
Effective Time, each holder of a then outstanding stock option
to purchase shares of Company Common Stock pursuant to the NBB
Bancorp, Inc. Stock Option Plan (the "Company Stock Plan")
shall be entitled to exercise such option (whether or not such
option would otherwise have been exercisable) at the exercise
price therefor, and if such options are not so exercised prior
to the Effective Time, at or immediately prior to the Effective
Time each such holder shall be entitled, upon election, to
receive from the Company in cancellation of such option a cash
payment from the Company in an amount equal to the excess of
the Per Share Cash Consideration over the per share exercise
price of such option, multiplied by the number of shares
covered by such option, subject to any required withholding of
taxes. At the Effective Time, any option which has not been so
exercised or cancelled shall be converted automatically into
(a) the number of Warrants determined in accordance with
Section 1.04(d) and (b) an option under the Fleet Financial
Group, Inc. 1992 Employee Stock Option and Restricted Stock
Plan (the "Parent Stock Plan") to purchase shares of Parent
Common Stock in an amount and at an exercise price determined
as provided below and otherwise subject to the terms of the
Parent Stock Plan and the provisions of the Company Stock Plan
providing for immediate vesting as a result of the Merger:
(a) The number of shares of Parent Common Stock to be
subject to the new option shall be equal to the product of
the number of shares of Company Common Stock subject to the
original option and the Per Share Stock Consideration,
provided, that any fractional shares of Parent Common Stock
resulting from such multiplication shall be rounded to the
nearest share; and
(b) The exercise price per share of Parent Common
Stock under the new option shall be equal to the exercise
price per share of Company Common Stock under the original
option divided by the Per Share Stock Consideration,
provided, that such exercise price shall be rounded up to
the nearest cent.
<PAGE>
The adjustment provided herein with respect to any options
which are "incentive stock options" (as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"))
shall be and is intended to be effected in a manner which is
consistent with Section 424(a) of the Code. The duration and
other terms of the new option shall be the same as the original
option, except that all references to the Company shall be
deemed to be references to Parent.
1.07 Rights. The Board of Directors of the Company has
approved, and shall enter into and keep in effect, an amendment
to the Shareholder Rights Agreement dated as of November 14,
1989, between the Company and The First National Bank of
Boston, as Rights Agent (the "Company Rights Agreement"),
which, among other things, shall provide that a Distribution
Date, as such term is defined in the Company Rights Agreement,
shall not have occurred, and, as a consequence of which the
Company Rights shall not have become nonredeemable and the
Company Rights shall not become exercisable for capital stock
of Parent upon consummation of the Merger (the "Rights
Amendment").
1.08 ESOP. The parties hereto agree that, effective as of
the Effective Time (or as soon thereafter as practicable), the
New Bedford Institution for Savings Employee Stock Ownership
Plan and Trust (the "Bank ESOP") will be terminated in
accordance with applicable law and regulations.
1.09 Articles of Incorporation. At the Effective Time, the
Articles of Incorporation of Parent, as in effect at the
Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation.
1.10 By-Laws. At the Effective Time, the By-Laws of
Parent, as in effect immediately prior to the Effective Time,
shall be the By-Laws of the Surviving Corporation until
thereafter amended in accordance with applicable law.
1.11 Directors and Officers. The directors and officers of
Parent immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation, each to
hold office in accordance with the Articles of Incorporation
and By-Laws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified.
1.12 Tax Consequences. Unless the Merger becomes a Taxable
Transaction pursuant to Section 1.04, it is intended that the
Merger shall constitute a reorganization within the meaning of
Section 368(a) of the Code, and that this Agreement shall
constitute a "plan of reorganization" for the purposes of
Section 368 of the Code.
<PAGE>
ARTICLE II
EXCHANGE OF SHARES
2.01 Parent to Make Shares and Cash Available. At or prior
to the Effective Time, Parent shall deposit, or shall cause to
be deposited, with a bank or trust company selected by Parent
(and reasonably acceptable to the Company) (the "Exchange
Agent"), for the benefit of the holders of certificates of
Company Common Stock (the "Certificates"), for exchange in
accordance with this Article II, certificates representing the
shares of Parent Common Stock and the Warrants and cash which
together constitute the consideration for the Merger (such cash
and certificates for shares of Parent Common Stock and
Warrants, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange
Fund") to be issued and paid, respectively, pursuant to Section
1.04 and Section 2.02 in exchange for outstanding shares of
Company Common Stock.
2.02 Election and Exchange Procedures.
(a) As soon as practicable after the Effective Time,
and in no event later than three business days thereafter
(which date shall be referred to as the "Mailing Date"), Parent
shall cause the Exchange Agent to mail to each holder of record
of a Certificate or Certificates at the Effective Time (1) a
form letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates
to the Exchange Agent) containing instructions for use in
effecting the surrender of the Certificates and (2) an election
form (the "Election Form"). The Company shall have the right
to approve the form of both the letter of transmittal and the
Election Form.
(b) Each Election Form shall permit the holder (or in
the case of nominee record holders, the beneficial owner
through appropriate and customary documentation and
instructions) to elect to receive Parent Common Stock with
respect to each share of such holder's Company Common Stock
("Stock Election Shares"), to elect to receive cash with
respect to each share of such holder's Company Common Stock
("Cash Election Shares") or to indicate that such holder makes
no election ("No Election Shares"). Any shares of Company
Common Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have submitted
to the Exchange Agent, an effective, properly completed
Election Form on or before 5:00 p.m., on the 20th day following
the Mailing Date (or such other time and date as Parent and the
Company may mutually agree) (the "Election Deadline") shall
also be deemed to be "No Election Shares".
<PAGE>
Any such election shall have been properly made only if the
Exchange Agent shall have actually received a properly
completed Election Form by the Election Deadline. An Election
Form shall be deemed properly completed only if accompanied by
one or more Certificates representing all shares of Company
Common Stock covered by such Election Form, together with duly
executed transmittal materials included with the Election
Form. Any Election Form may be revoked or changed by the
person submitting such Election Form at or prior to the
Election Deadline by written notice to the Exchange Agent,
which notice must be received by the Exchange Agent at or prior
to the Election Deadline. In the event an Election Form is
revoked prior to the Election Deadline, the shares of Company
Common Stock represented by such Election Form shall become No
Election Shares. Subject to the terms of this Agreement and of
the Election Form, Parent or the Exchange Agent shall have
reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Forms, and any
good faith decisions of Parent or the Exchange Agent regarding
such matters shall be binding and conclusive. Neither Parent
nor the Exchange Agent shall be under any obligation to notify
any person of any defect in an Election Form.
If the aggregate number of Stock Election Shares does not
equal the Stock Conversion Number (as defined below), within
five business days after the Election Deadline, Parent shall
cause the Exchange Agent to allocate among holders of Company
Common Stock the right to receive, with respect to each such
share, Parent Common Stock or cash in the Merger as follows:
(i) if the number of Stock Election Shares is less
than the Stock Conversion Number, then
(A) all Stock Election Shares shall be converted into
the right to receive Parent Common Stock,
(B) the Exchange Agent will select, on a pro rata
basis, first from among the holders of
No-Election Shares and then (if necessary) from
among the holders of Cash Election Shares, a
sufficient number of such shares ("Stock Designee
Shares") such that the number of Stock Designee
Shares will, when added to the number of Stock
Election Shares, equal as closely as practicable
the Stock Conversion Number, and all Stock
Designee Shares will be converted into the right
to receive Parent Common Stock, and
<PAGE>
(C) any Cash Election Shares and any No-Election
Shares not so selected as Stock Designee Shares
will be converted into the right to receive cash;
or
(ii) if the aggregate number of Stock Election Shares
is greater than the Stock Conversion Number, then
(A) all Cash Election Shares will be converted into
the right to receive cash,
(B) the Exchange Agent will select, on a pro rata
basis, first from among the holders of
No-Election Shares and then (if necessary) from
among the holders of Stock Election Shares, a
sufficient number of such shares ("Cash Designee
Shares") such that the number of Cash Designee
Shares will, when added to the number of Cash
Election Shares, equal as closely as practicable
the Cash Conversion Number (as defined below),
and all Cash Designee Shares will be converted
into the right to receive cash, and
(C) any Stock Election Shares and any No-Election
Shares not so selected as Cash Designee Shares
will be converted into the right to receive
Parent Common Stock.
"Stock Conversion Number" means the Aggregate Parent Stock
Amount divided by the Per Share Stock Consideration. "Cash
Conversion Number" means the difference between the number of
shares of Company Common Stock outstanding as of the Effective
Time and the Stock Conversion Number.
The selection process to be used by the Exchange Agent
shall consist of such processes as shall be mutually determined
by the Company and Parent as shall be further described in the
Election Form.
Upon surrender of a Certificate for exchange and
cancellation to the Exchange Agent, together with the Election
Form, duly executed, the holder of such Certificates shall be
entitled to receive in exchange therefor (x) a certificate
representing that number of whole shares of Parent Common Stock
to which such holder of Company Common Stock shall have become
entitled pursuant to the provisions of Articles I and II
hereof, (y) a check representing the amount of cash, if any,
which such holder has the right to receive in respect of the
Certificate surrendered pursuant to the provisions of Articles
I and II, and (z) a certificate representing the number of <PAGE>
Warrants to which such holder is entitled pursuant to the
provisions of Article I and the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or
accrued on the cash and unpaid dividends and distributions, if
any, payable to holders of Certificates.
(c) After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the
shares of Company Common Stock which were issued and
outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates representing such shares are
presented for transfer to the Exchange Agent, they shall be
cancelled and exchanged for certificates representing shares of
Parent Common Stock and/or cash and certificates representing
Warrants as provided in this Article II.
(d) Notwithstanding anything to the contrary
contained herein, no certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon
the surrender for exchange of Certificates, no dividend or
distribution with respect to Parent Common Stock shall be
payable on or with respect to any fractional share, and such
fractional share interests shall not entitle the owner thereof
to vote or to any other rights of a shareholder of the
Company. In lieu of the issuance of any such fractional share,
Parent shall pay to each former shareholder of the Company who
otherwise would be entitled to receive a fractional share of
Parent Common Stock, an amount in cash determined by
multiplying (i) the Average Closing Price by (ii) the fraction
of a share of Parent Common Stock to which such holder would
otherwise be entitled to receive pursuant to Articles I and II
hereof.
(e) Any portion of the Exchange Fund that remains
unclaimed by the shareholders of the Company for twelve months
after the Effective Time shall be paid to Parent. Any
shareholders of the Company who have not theretofore complied
with this Article II shall thereafter look only to Parent for
payment of their Warrants, shares of Parent Common Stock, cash
and unpaid dividends and distributions of the Parent Common
Stock 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.
Notwithstanding the foregoing, none of Parent, the Company, the
Exchange Agent nor any other person shall be liable to any
former holder of shares of Company Common Stock for any amount
properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of <PAGE>
that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by
such person of a bond in such amount as Parent may direct as
indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate, the
Warrants, shares of Parent Common Stock and cash deliverable in
respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent as
follows:
3.01 Corporate Organization.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. The Company has the corporate power and
authority to own or lease all of its properties and assets and
to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the
character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would
not have a Material Adverse Effect (as defined below) on the
Company and its Subsidiaries taken as a whole. As used in this
Agreement, the term "Material Adverse Effect" means, with
respect to Parent or the Company, as the case may be, a
material adverse change in or effect on the business, financial
condition or results of operations of such party and its
subsidiaries taken as a whole, other than any such effect
attributable to or resulting from changes in interest rates or
general economic conditions. As used in this Agreement, the
word "Subsidiary" when used with respect to any party means any
corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such
party for financial purposes. The Company is duly registered
as a bank holding company under the Bank Holding Company Act of
1956, as amended (the "BHC Act"). The Certificate of
Incorporation and By-laws of the Company, copies of which have
previously been made available to Parent, are true and complete
copies of such documents as in effect as of the date of this
Agreement.
(b) The Bank is a savings bank duly organized,
validly existing and in good standing under the laws of The <PAGE>
Commonwealth of Massachusetts. The deposit accounts of the
Bank are insured by the Federal Deposit Insurance Corporation
(the "FDIC") through the Bank Insurance Fund (the "BIF") or the
Savings Association Insurance Fund (the "SAIF") and by the
Mutual Savings Central Fund, Inc. (the "Central Fund"), through
the Deposit Insurance Fund, to the fullest extent permitted by
law, and all premiums and assessments required in connection
therewith have been paid by the Bank. Each of the Company's
other Subsidiaries that is a "Significant Subsidiary" (defined
for purposes of this Agreement to mean subsidiaries other than
those that are either inactive or have an immaterial amount of
assets) is a corporation, partnership or business trust duly
organized and, in the case of any such corporation, is validly
existing and in good standing under the laws of its
jurisdiction of incorporation. Each Significant Subsidiary of
the Company has the power and authority to own or lease all of
its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the
business conducted by it or the character or the location of
the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure
to be so licensed or qualified would not have a Material
Adverse Effect on the Company and its Subsidiaries taken as a
whole. The Amended and Restated Charter and By-laws of the
Bank and the Articles of Organization and By-laws of each other
Significant Subsidiary of the Company, copies of which have
previously been made available to Parent, are true and complete
copies of such documents as in effect as of the date of this
Agreement.
(c) The minute books of the Company and the Bank
contain true and complete records in all material respects of
all meetings since January 1, 1988 of their respective
shareholders and Boards of Directors.
3.02 Capitalization.
(a) The authorized capital stock of the Company
consists of 40,000,000 shares of Company Common Stock and
10,000,000 shares of preferred stock, par value $0.10 per share
(the "Company Preferred Stock"). As of the date of this
Agreement, there are (x) 8,660,394 shares of Company Common
Stock issued and outstanding and 873,433 shares of Company
Common Stock held in the Company's treasury, (y) no shares of
Company Common Stock reserved for issuance, except for 686,701
shares of Company Common Stock reserved for issuance upon
exercise of stock options (368,701 with respect to outstanding
stock options as of the date hereof) pursuant to the Company
Stock Plan, and (z) no shares of Company Preferred Stock issued
or outstanding, held in the Company's treasury or reserved for <PAGE>
issuance, except for 150,000 shares of Company Series A Junior
Participating Cumulative Preferred Stock reserved for issuance
upon exercise of the rights (the "Company Rights") distributed
to holders of Company Common Stock pursuant to the Company
Rights Agreement. All of the issued and outstanding shares of
Company Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive
rights. Except as referred to above or reflected in Section
3.02 of the Disclosure Schedule which is being delivered to
Parent concurrently herewith (the "Company Disclosure
Schedule"), and except for the Company Stock Plan and the
Company Rights Agreement, the Company does not have and is not
bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for
the purchase or issuance of any shares of Company Common Stock
or Company Preferred Stock or any other equity security of the
Company or any securities representing the right to purchase or
otherwise receive any shares of Company Common Stock, Company
Preferred Stock or any other equity security of the Company.
The names of the optionees, the date of each option to purchase
Company Common Stock granted, the number of shares subject to
each such option, and the price at which each such option may
be exercised under the Company Stock Plan are set forth in
Section 3.02 of the Company Disclosure Schedule.
(b) The authorized capital stock of the Bank consists
of 40,000,000 shares of common stock, par value $0.10 per share
(the "Bank Common Stock") and 10,000,000 shares of preferred
stock, par value $0.10 per share (the "Bank Preferred Stock").
As of the date of this Agreement, there are (x) 10,000 shares
of Bank Common Stock issued and outstanding and no shares of
Bank Common Stock held in the Bank's treasury, (y) no shares of
Bank Common Stock reserved for issuance, and (z) no shares of
Bank Preferred Stock issued or outstanding. Section 3.02 of
the Company Disclosure Schedule sets forth a true and correct
list of all of the Company Subsidiaries as of the date of this
Agreement. Except as set forth in Section 3.02 of the Company
Disclosure Schedule, the Company owns, directly or indirectly,
all of the issued and outstanding shares of capital stock of
each of the Company Subsidiaries (or, in the case of Company
Subsidiaries that are not corporations, all of the outstanding
partnership interests or beneficial interests, as the case may
be), free and clear of all liens, charges, encumbrances and
security interests whatsoever, and all of such shares of
capital stock are duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. No
Company Subsidiary has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity <PAGE>
security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital
stock or any other equity security of such Subsidiary.
Assuming compliance with Sections 1.06 and 1.07 hereof, at the
Effective Time, there will not be any outstanding
subscriptions, options, warrants, calls, commitments or
agreements of any character by which the Company or any of its
Subsidiaries will be bound calling for the purchase or issuance
of any shares of the capital stock of the Company or any of its
Subsidiaries, other than shares reserved for issuance under the
Company Rights.
3.03 Authority; No Violation.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby have been duly and validly approved by the Board of
Directors of the Company. The Board of Directors of the
Company has directed that this Agreement and the transactions
contemplated hereby be submitted to the Company's shareholders
for consideration at a meeting of such shareholders and, except
for the adoption of this Agreement by the requisite vote of the
Company's shareholders, no other corporate proceedings on the
part of the Company are necessary to approve this Agreement and
to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by
the Company and (assuming adoption of the Agreement by the
requisite vote of the Company's shareholders and the due
authorization, execution and delivery by Parent) constitutes a
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) The Bank has all necessary corporate power and
authority to execute and deliver the Bank Merger Agreement and
to consummate the transactions contemplated thereby. Upon the
due and valid approval of the Bank Merger Agreement by the
Board of Directors of the Bank and by the shareholders of the
Bank, no other corporate proceedings on the part of the Bank
will be necessary to consummate the transactions contemplated
thereby. The Bank Merger Agreement, upon execution and
delivery by the Bank, will be duly and validly executed and
delivered by the Bank and will (assuming adoption of the Bank
Merger Agreement by the requisite vote of the shareholders of <PAGE>
the Bank and Massachusetts Bank and the due authorization,
execution and delivery by Massachusetts Bank) constitute a
valid and binding obligation of the Bank, enforceable against
the Bank in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and
remedies generally.
(c) Except as set forth in Section 3.03 of the
Company Disclosure Schedule, neither the execution and delivery
of this Agreement by the Company or the Bank Merger Agreement
by the Bank, nor the consummation by the Company or the Bank,
as the case may be, of the transactions contemplated hereby or
thereby, nor compliance by the Company or the Bank with any of
the terms or provisions hereof or thereof, will (i) violate any
provision of the Certificate of Incorporation or By-Laws of the
Company or the Amended and Restated Charter or By-laws of the
Bank, (ii) assuming that the consents and approvals referred to
in Section 3.04 hereof are duly obtained, (x) violate any
statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to the Company or the
Bank, or (y) violate, result in a breach of any provision of,
constitute a default under, or result in the creation of any
material lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of
the Company or any of its Significant Subsidiaries under any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which the Company or any
of its Significant Subsidiaries is a party, or by which they or
any of their respective properties or assets may be bound or
affected, except with respect to clause ii(x) and (y) above,
for such violations, breaches, defaults or creation of
encumbrances which would not have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole.
3.04 Consents and Approvals. Except for (A) the filing of
applications and notices with, and the consents and approvals
of, as applicable, (i) the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), (ii) the Office
of the Comptroller of the Currency (the "Comptroller"),
(iii) the Board of Bank Incorporation of The Commonwealth of
Massachusetts (the "Massachusetts Board" or the "State Banking
Approval"), (iv) the Central Fund, (v) the Commissioner of
Banks of The Commonwealth of Massachusetts (the
"Commissioner"), and (vi) the Massachusetts Housing Partnership
Fund (the "MHP Consent"), (B) the filing with the Securities
and Exchange Commission (the "SEC") of a registration statement
on Form S-4 (the "S-4") of which the proxy statement in
definitive form relating to the meeting of the Company's <PAGE>
shareholders to be held in connection with this Agreement and
the transactions contemplated hereby (the "Proxy Statement")
will be included as a prospectus, (C) the approval of this
Agreement by the requisite vote of the shareholders of the
Company, (D) the filing of the Certificate of Merger with the
Delaware Secretary pursuant to the DGCL and the Articles of
Merger with the Rhode Island Secretary pursuant to the RIBCL,
and (E) the approval of the Bank Merger Agreement by the
requisite vote of the Board of Directors and the shareholders
of the Bank, and except for such filings, authorizations or
approvals as may be set forth in Section 3.04 of the Company
Disclosure Schedule, no consents or approvals of or filings or
registrations with any court, administrative agency or
commission or other governmental authority or instrumentality
(each a "Governmental Entity") or with any third party are
necessary in connection with (1) the execution and delivery by
the Company of this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated
hereby, and (2) the execution and delivery by the Bank of the
Bank Merger Agreement and the consummation by the Bank of the
transactions contemplated thereby, except where the failure to
obtain such consents or approvals, or to make such filings or
registrations, would not prevent or significantly delay the
Merger or the Bank Merger or otherwise prevent the Company or
the Bank from performing their respective obligations under
this Agreement, or would not have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole.
3.05 Loan Portfolio. Section 3.05 of the Company
Disclosure Schedule sets forth all of the Loans in original
principal amount in excess of $100,000 of the Company or any of
its Subsidiaries that as of the date of this Agreement are
classified by the Bank or any bank regulatory examiner as
"Special Mention", "Substandard", "Doubtful", "Loss" or
"Classified," together with the aggregate principal amount of
and accrued and unpaid interest on such loans by category.
Except for normal examinations conducted by (i) the Federal
Reserve Board, (ii) the FDIC, and (iii) the Commissioner or any
other state bank regulatory authority (collectively,
"Regulatory Agencies"), in the regular course of the business
of the Company and its Subsidiaries, no Regulatory Agency has
initiated any proceeding into the business or operations of the
Company or any of its Subsidiaries during the last two years.
3.06 Financial Statements. The Company has previously made
available to Parent copies of the consolidated balance sheets
of the Company and its Subsidiaries as of December 31 for the
fiscal years 1992 and 1993, and the related consolidated
statements of income, changes in shareholders' equity and cash
flows for the fiscal years 1991 through 1993, inclusive, as
reported in the Company's Annual Report on Form 10-K for the <PAGE>
fiscal year ended December 31, 1993 filed with the SEC under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The December 31, 1993 consolidated balance sheet of the
Company (including the related notes, where applicable) fairly
presents in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the date
thereof, and the other financial statements referred to in this
Section 3.06 (including the related notes, where applicable)
fairly present in all material respects, and the financial
statements referred to in Section 6.10 hereof will fairly
present (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount) in all
material respects, the results of the consolidated operations
and changes in shareholders' equity and consolidated financial
position of the Company and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set forth
and each of such statements (including the related notes, where
applicable) has been, and the financial statements referred to
in Section 6.10 hereof will be, prepared in accordance with
generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except as indicated in the
notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q.
3.07 Broker's Fees. Neither the Company nor any Company
Subsidiary, nor any of their respective officers or directors,
has employed any broker or finder or incurred any liability for
any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement or
the Bank Merger Agreement, except that the Company has engaged,
and will pay a fee or commission to Salomon Brothers Inc in
accordance with the terms of a letter agreement between Salomon
Brothers Inc and the Company.
3.08 Absence of Certain Changes or Events.
(a) Except as may be set forth in Section 3.08 of the
Company Disclosure Schedule or otherwise disclosed herein or in
the Company Reports, since December 31, 1993:
(i) there has not been any Material Adverse
Effect on the Company and its Subsidiaries taken as a whole;
(ii) there has not been any incurrence by the
Company of any liability that has had, or to the knowledge
of the Company any liability that could reasonably be
expected to have, a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole;
(iii) there has not been any agreement, contract
or commitment entered into, or agreed to be entered into, <PAGE>
except for those in the ordinary course of business, none
of which has had a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole;
(iv) there has not been any change in any of the
accounting methods or practices of the Company or any of
its Subsidiaries other than changes required by applicable
law or generally accepted accounting principles.
(b) Except as set forth in Sections 3.08 or 5.01 of
the Company Disclosure Schedule, or as consented to by Parent,
and except for any increase, grant, payment or arrangement
that, if effected after the date hereof, would be permitted
pursuant to Section 5.01, since December 31, 1993, neither the
Company nor any of its Subsidiaries has (i) increased the
wages, salaries, compensation, pension, or other fringe
benefits or perquisites payable to any executive officer,
employee, or director from the amount thereof in effect as of
December 31, 1993 (which amounts have been previously disclosed
to Parent), granted any severance or termination pay, entered
into or amended any contract to make or grant any employment,
severance or termination pay, or paid any bonus or
(ii) suffered any material strike, work stoppage, slow-down, or
other labor disturbance.
3.09 Legal Proceedings. Except as set forth in Section
3.09 of the Company Disclosure Schedule, there are no pending
or to the knowledge of the Company, threatened, legal,
administrative, arbitral or other proceedings, claims, actions
or governmental investigations of any nature against the
Company or any Significant Subsidiary of the Company, as to
which there is a reasonable likelihood of adverse determination
and which if adversely determined, would (i) have a Material
Adverse Effect on the Company and its Subsidiaries taken as a
whole, or (ii) as of the date hereof, prevent or materially and
adversely affect the Company's ability to consummate the
transactions contemplated hereby.
3.10 Taxes and Tax Returns. Each of the Company and its
Subsidiaries has filed all Federal, state and, to the best of
the Company's knowledge, material local, information returns
and tax returns required to be filed by it on or prior to the
date hereof (all such returns being true and complete in all
material respects) and has paid or made provisions for the
payment of all taxes and other governmental charges, except
where the non-filing of which or the non-payment of which would
not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, and which have been incurred or
are due or claimed to be due from it by Federal, state, county
or local taxing authorities on or prior to the date hereof
other than taxes or other charges which (i) are not yet <PAGE>
delinquent or are being contested in good faith and (ii) have
not been finally determined. The amounts set up as reserves
for taxes on the consolidated balance sheet of the Company
included in its Form 10-K for the period ended December 31,
1993 for the payment of all unpaid Federal, state, county and
local taxes (including any interest or penalties thereon),
whether or not disputed, accrued or applicable, for the period
ended December 31, 1993 or for any year or period prior
thereto, and for which the Company or any of its Subsidiaries
may be liable in its own right or as transferee of the assets
of, or successor to, any corporation, person, association,
partnership, joint venture or other entity, are adequate under
GAAP and are sufficient to cover all such taxes due, except
where the failure to so accrue would not have a Material
Adverse Effect on the Company and its Subsidiaries taken as a
whole. The Company has not received any written notice of any
pending tax examinations or audits, material disputes or claims
asserted for taxes or assessments upon the Company or any of
its Subsidiaries, nor has the Company or any of its
Subsidiaries been requested to give any currently effective
waivers extending the statutory period of limitation applicable
to any Federal, state, county or local income tax return for
any period.
3.11 Employees.
(a) Section 3.11 of the Company Disclosure Schedule
sets forth a true and complete list of each employee benefit
plan, arrangement or agreement that is maintained as of the
date of this Agreement (the "Plans") by the Company, any of its
Significant Subsidiaries or by any trade or business, whether
or not incorporated (an "ERISA Affiliate"), all of which
together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
(b) The Company has heretofore made available to
Parent true and complete, in all material respects, copies of
each of the Plans and all related documents, including but not
limited to (i) the most recent actuarial report for such Plan
(if applicable), and (ii) the most recent determination letter
from the Internal Revenue Service (if applicable) for such Plan.
(c) Each of the Plans has been operated and
administered in all material respects in accordance with
applicable laws, including but not limited to ERISA and the
Code, (ii) each of the Plans intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified,
(iii) with respect to each Plan which is subject to Title IV of
ERISA, the present value of accrued benefits under such Plan,
based upon reasonable actuarial assumptions used for funding <PAGE>
purposes, did not, as of its latest valuation date, exceed the
then current value of the assets of such Plan allocable to such
accrued benefits, (iv) no liability under Title IV of ERISA has
been incurred by the Company, its Significant Subsidiaries or
any ERISA Affiliate that has not been satisfied in full, (v) no
Plan is a "multiemployer pension plan," as such term is defined
in Section 3(37) of ERISA, (vi) all contributions or other
amounts payable by the Company or its Significant Subsidiaries
as of the Effective Time with respect to each Plan in respect
of current or prior plan years have been paid or accrued in
accordance with generally accepted accounting practices and
Section 412 of the Code, and (vii) neither the Company, its
Significant Subsidiaries nor any ERISA Affiliate has engaged in
a transaction in connection with which the Company, its
Significant Subsidiaries or any ERISA Affiliate could be
subject to either a civil penalty assessed pursuant to Section
409 or 502(i) of ERISA or a tax imposed pursuant to Section
4975 or 4976 of the Code, except in each case above, where the
failure to do so would not have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole.
3.12 SEC Reports. The Company has previously made
available to Parent a true and complete, in all material
respects, copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement
filed since January 1, 1990 by the Company with the SEC
pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act (the "Company Reports"),
and (b) communication mailed by the Company to its shareholders
since January 1, 1990, and, as of their respective dates, no
such Company Reports contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made,
not misleading.
3.13 Company Information. The information provided in
writing by the Company for inclusion in the Proxy Statement and
the S-4 will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they
are made, not misleading.
3.14 Compliance with Applicable Law. The Company and each
of its Subsidiaries hold, and have at all times held, all
material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses
under and pursuant to all, and have complied with and are not
in default under any, applicable law, statute, order, rule or
regulation of any Governmental Entity relating to the Company
or any of its Subsidiaries, except where the failure to hold <PAGE>
such license, franchise, permit or authorization or such
noncompliance or default would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole,
and neither the Company nor any of its Subsidiaries has
received notice of any material violations of any of the above.
3.15 Certain Contracts.
(a) Except as set forth in Sections 6.07, 6.08, 6.09
of this Agreement or in Sections 3.15 or 5.01 of the Company
Disclosure Schedule or in the Company Reports, neither the
Company nor any of its Subsidiaries is a party to or bound by
any contract, arrangement, commitment or understanding (i) with
respect to the employment of any directors, officers, employees
or consultants, (ii) which, upon the consummation of the
transactions contemplated by this Agreement or the Bank Merger
Agreement will result in any payment becoming due from Parent,
the Company, the Surviving Corporation, the Surviving Bank or
any of their respective Subsidiaries to any officer or employee
thereof, (iii) which is a material contract (as defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed after
the date of this Agreement that has not been filed or
incorporated by reference in the Company Reports, (iv) which is
a consulting or other agreement (including agreements entered
into in the ordinary course and data processing, software
programming and licensing contracts) not terminable on 60 days
or less notice involving the payment of more than $250,000 per
annum, (v) which materially restricts the conduct of any line
of business by the Company or any of its Significant
Subsidiaries, or (vi) with or to a labor union or guild
(including any collective bargaining agreement). Each
contract, arrangement, commitment or understanding of the type
described in this Section 3.15(a), whether or not set forth in
Section 3.15 of the Company Disclosure Schedule, is referred to
herein as a "Company Contract".
(b) Each of the Company and its Subsidiaries has
performed in all material respects all obligations required to
be performed by it to date under each Company Contract, except
where such noncompliance would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole,
and no event or condition exists which constitutes or, after
notice or lapse of time or both, would constitute, a material
default on the part of the Company or any of its Subsidiaries
under any such Company Contract, except where such default
would not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole.
3.16 Agreements with Regulatory Agencies. Except as set
forth in Section 3.16 of the Company Disclosure Schedule, <PAGE>
neither the Company nor any of its Subsidiaries is subject to
any cease-and-desist or other order issued by, or is a party to
any written agreement, consent agreement or memorandum of
understanding (each a "Regulatory Agreement"), with any
Regulatory Agency or other Governmental Entity that restricts
in any material respect the conduct of its business or that
relates to its capital adequacy, its credit policies or its
management, nor has the Company or any of its Subsidiaries been
notified by any Regulatory Agency or other Governmental Entity
that it is considering issuing or requesting any Regulatory
Agreement.
3.17 Investment Securities. Section 3.17 of the Company
Disclosure Schedule sets forth the book and market value as of
April 30, 1994 of the investment securities, mortgage backed
securities and securities held for sale of the Company and its
Subsidiaries.
3.18 Environmental Matters. Except as set forth in Section
3.18 of the Company Disclosure Schedule:
(a) Each of the Company and its Subsidiaries is in
compliance, and for the last three years has been in
compliance, with all applicable laws, rules, regulations,
standards and requirements adopted or enforced by the United
States Environmental Protection Agency (the "EPA") and of state
and local agencies with jurisdiction over pollution or
protection of the environment, except where such noncompliance
or violations would not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole; and
(b) There is no suit, claim, action or proceeding
pending before any court or Governmental Entity in which the
Company or any of its Subsidiaries has been named as a
defendant (x) for alleged noncompliance with any environmental
law, rule or regulation or (y) relating to the release into the
environment of any Hazardous Material (as hereinafter defined)
or oil at or on a site presently or formerly owned, leased or
operated by the Company or any of its Subsidiaries or, to the
knowledge of the senior officers of the Company, on a site with
respect to which the Company has made a commercial real estate
loan and has a mortgage or security interest in, except where
such noncompliance or release would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.
"Hazardous Material" means any pollutant, contaminant, or
hazardous substance under the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et
seq., or any similar state law. With respect to the items
described in Section 3.18 of the Company Disclosure Schedule,
neither the Company nor any Subsidiary has taken any action <PAGE>
which would result in any of them being deemed to be "owners"
or "operators" under any environmental law, rule or regulation,
except where any such action would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.
3.19 Assistance Agreements. Except as set forth in Section
3.19 of the Company Disclosure Schedule or in the Company
Reports, neither the Company nor any of its Subsidiaries is a
party to any agreement or arrangement entered into in
connection with the consummation of a federally assisted
acquisition of a depository institution pursuant to which the
Company or any of its Subsidiaries is entitled to receive
financial assistance or indemnification from any governmental
agency.
3.20 Properties. The Company and each Company Subsidiary
has good and marketable title to all the real property and all
other property owned by it and included in the December 31,
1993 consolidated balance sheet of the Company (the "Balance
Sheet"), other than property disposed of in the ordinary course
of business after December 31, 1993, except where the failure
to so have title would not have a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole, and owns
such property subject to no encumbrances, liens, mortgages,
security interests or pledges, except (a) those items that
secure liabilities that are reflected in the Balance Sheet or
the notes thereto or incurred in the ordinary course of
business after the date of the Balance Sheet, (b) statutory
liens for amounts not yet delinquent or which are being
contested in good faith, (c) those items that secure public or
statutory obligations or any discount with, borrowing from, or
other obligations to, any Federal Reserve Bank or Federal Home
Loan Bank, inter-bank credit facilities, or any transaction by
a subsidiary acting in a fiduciary capacity, and (d) such
encumbrances, liens, mortgages, security interests, and pledges
that do not have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole. Neither the Company nor any
Company Subsidiary has received any notice of violation of any
applicable zoning regulation, ordinance or other law, order,
regulation or requirement relating to its properties, except
such violations which would not have a Material Adverse Effect
on the Company and its Subsidiaries taken as a whole.
3.21 Insurance. To the knowledge of the Company, all of
the policies relating to insurance maintained by the Company or
any Significant Subsidiary with respect to its property and the
conduct of its business (or any comparable policies entered
into as a replacement therefor) are in full force and effect
and neither the Company nor any Significant Subsidiary has
received any notice of cancellation with respect thereto.
<PAGE>
3.22 Material Interests of Certain Persons. Except as
disclosed in the Company's proxy statement for its 1994 annual
meeting of shareholders, no officer or director of the Company,
or any "associate" (as such term is defined in Rule 14a-1 under
the Exchange Act) of any such officer or director, has any
material interest in any material contract or property (real or
personal), tangible or intangible, used in or pertaining to the
business of the Company or any of the Company's Subsidiaries
that would be required to be disclosed in a proxy statement to
shareholders under Regulation 14A of the Exchange Act.
3.23 Regulatory Approvals. The Company is not, as of the
date hereof, aware of any reason why the regulatory approvals
required to be obtained by it or any of its Subsidiaries to
consummate the Merger and the Bank Merger would not be
satisfied within the time frame customary for transactions of
the nature contemplated thereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Company as
follows:
4.01 Corporate Organization.
(a) Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Rhode Island. Parent has the corporate power and authority to
own or lease all of its properties and assets and to carry on
its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or
location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where
the failure to be so licensed or qualified would not have a
Material Adverse Effect on Parent. Parent is duly registered
as a bank holding company under the BHC Act. The Restated
Articles of Incorporation and By-laws of Parent, copies of
which have previously been made available to the Company, are
true and complete copies of such documents as in effect as of
the date of this Agreement.
(b) Massachusetts Bank is a national banking
association duly organized, validly existing and in good
standing under the laws of the United States. The deposit
accounts of the Bank are insured by the FDIC through the BIF to
the fullest extent permitted by law, and all premiums and <PAGE>
assessments required in connection therewith have been paid by
Massachusetts Bank. Massachusetts Bank has the power and
authority to own or lease all of its properties and assets and
to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the
character or the location of the properties and assets owned or
leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would
not have a Material Adverse Effect on Massachusetts Bank. The
Articles of Association and By-laws of Massachusetts Bank,
copies of which have previously been made available to the
Company, are true and complete copies of such documents as in
effect as of the date of this Agreement.
4.02 Capitalization.
(a) The authorized capitalized stock of Parent
consists of: (i) 300,000,000 shares of Parent Common Stock, of
which at March 31, 1994, 137,617,952 shares were issued and
outstanding, (ii) 16,000,000 shares of Preferred Stock, par
value $1.00 per share, ("Parent Preferred Stock"), of which at
March 31, 1994, (A) with respect to Cumulative and Adjustable
Dividends, 1,000,000 shares were designated and no shares were
issued and outstanding, (B) 12,553 shares were designated and
2,155 shares were issued and outstanding as Series I 12%
Cumulative Convertible Preferred Stock, (C) 96,000 shares were
designated and no shares were issued and outstanding as Series
II 6 1/2% Cumulative Convertible Preferred Stock, (D) 1,100,000
shares were designated and 519,758 shares were issued and
outstanding as Series III 10.12% Perpetual Preferred Stock,
(E) 1,000,000 shares were designated and 478,838 shares were
issued and outstanding as Series IV 9.375% Preferred Stock,
(F) 1,500,000 shares were designated and no shares were issued
and outstanding as Cumulative Participating Junior Preferred
Stock pursuant to the Parent's Shareholder Rights Agreement
("Parent Rights"), and (G) 1,415,000 shares were designated and
outstanding as Dual Convertible Preferred Stock and
(iii) 1,500,000 shares of Preferred Stock, par value $20.00
(the "Parent $20 Par Value Preferred Stock"), with Cumulative
and Adjustable Dividends, of which at such date, no shares were
issued and outstanding. As of March 31, 1994, there were
32,522,975 shares reserved for issuance in connection with
employee benefit, stock option, dividend reinvestment, and
stock purchase plans, warrants, the 6 1/2 Cumulative
Convertible Preferred Stock, the 12% Convertible Preferred
Stock and the Dual Convertible Preferred Stock. All of the
issued and outstanding shares of Parent Common Stock and Parent
Preferred Stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive <PAGE>
rights. As of the date of this Agreement, except as referred
to above or reflected in Parent's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 filed with the SEC
under the Exchange Act (the "Parent 1993 10-K"), Parent does
not have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of
Parent Common Stock, Parent Preferred Stock or Parent $20 Par
Value Preferred Stock or any other equity security of Parent or
any securities representing the right to purchase or otherwise
receive any shares of Parent Common Stock, Parent Preferred
Stock or Parent $20 Par Value Preferred Stock or any other
equity security of Parent. The shares of Parent Common Stock
to be issued pursuant to the Merger will be duly authorized and
validly issued and, at the Effective Time, all such shares will
be fully paid, nonassessable and free of preemptive rights.
The Warrants and Warrant Shares have been duly authorized and
when issued will be fully paid, nonassessable and free of
preemptive rights. As of the Effective Time, Parent will have
reserved 2,500,000 authorized but unissued shares of Parent
Common Stock for issuance upon exercise of the Warrants.
(b) The authorized capital stock of Massachusetts
Bank consists of 1,000,000 shares of common stock, par value
$15.00 per share, 1,000,000 of which are issued and
outstanding. Fleet Banking Group, Inc., a wholly-owned
subsidiary of Parent, owns all of the issued and outstanding
shares of capital stock of Massachusetts Bank, free and clear
of all liens, charges, encumbrances and security interests
whatsoever, and all of such shares of capital stock are duly
authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. Massachusetts Bank does not
have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any
character with any party that is not a direct or indirect
Subsidiary of Parent calling for the purchase or issuance of
any shares of capital stock or any other equity security of
Massachusetts Bank or any securities representing the right to
purchase or otherwise receive any shares of capital stock or
any other equity security of Massachusetts Bank.
4.03 Authority; No Violation.
(a) Parent has all necessary corporate power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Parent and the consummation
by Parent of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of Parent,
and no other corporate proceedings on the part of Parent are <PAGE>
necessary to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered
by Parent and (assuming adoption of the Agreement by the
requisite vote of the Company's shareholders and the due
authorization, execution and delivery by the Company)
constitutes a valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except
as enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) Massachusetts Bank has all necessary corporate
power and authority to execute and deliver the Bank Merger
Agreement and to consummate the transactions contemplated
thereby. Upon the due and valid approval of the Bank Merger
Agreement by Parent as the sole shareholder of Massachusetts
Bank, and by the Board of Directors of Massachusetts Bank, no
other corporate proceedings on the part of Massachusetts Bank
will be necessary to consummate the transactions contemplated
thereby. The Bank Merger Agreement, upon execution and
delivery by Massachusetts Bank, will be duly and validly
executed and delivered by Massachusetts Bank and will (assuming
adoption of the Bank Merger Agreement by the requisite vote of
the shareholders of the Bank and Massachusetts Bank and the due
authorization, execution and delivery by the Bank) constitute a
valid and binding obligation of Massachusetts Bank, enforceable
against Massachusetts Bank in accordance with its terms, except
as enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(c) Neither the execution and delivery of this
Agreement by Parent or the Bank Merger Agreement by
Massachusetts Bank, nor the consummation by Parent or
Massachusetts Bank, as the case may be, of the transactions
contemplated hereby or thereby, nor compliance by Parent or
Massachusetts Bank with any of the terms or provisions hereof
or thereof, will (i) violate any provision of the Restated
Articles of Incorporation or By-Laws of Parent or the Articles
of Association or By-laws or similar governing documents of
Massachusetts Bank, as the case may be, or (ii) assuming that
the consents and approvals referred to in Section 4.04 are duly
obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to Parent or Massachusetts Bank or any of Parent's
Significant Subsidiaries, or (y) violate, result in a breach of
any provision of, constitute a default under, or result in the
creation of any material lien, pledge, security interest, <PAGE>
charge or other encumbrance upon any of the respective
properties or assets of Parent or Massachusetts Bank or any of
Parent's Significant Subsidiaries under any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Parent or Massachusetts Bank
or any of Parent's Significant Subsidiaries is a party, or by
which they or any of their respective properties or assets may
be bound or affected, except with respect to clause ii(x) and
(y) above, for such violations, breaches or defaults which
would not have a Material Adverse Effect on Parent.
4.04 Consents and Approvals. Except for (A) the filing of
applications and notices with, and the consents and approvals
of, as applicable (i) the Federal Reserve Board, (ii) the
Comptroller, (iii) the State Banking Approval, (iv) the
Commissioner, (v) the Central Fund, (vi) the MHP Consent,
(B) the filing with the SEC of the S-4 of which the Proxy
Statement will be included as a prospectus, (C) the filing of
the Certificate of Merger with the Delaware Secretary and the
filing of Articles of Merger with the Rhode Island Secretary,
(D) the approval of the Bank Merger Agreement by the requisite
vote of the Board of Directors and sole shareholder of
Massachusetts Bank, and except for such filings and approvals
as are required to be made or obtained under the securities or
"Blue Sky" laws of various states in connection with the
issuance of the shares of Parent Common Stock, Warrants and
Warrant Shares pursuant to this Agreement and such filings,
authorizations or approvals as may be set forth in Section 4.04
of the Disclosure Schedule which is being delivered by Parent
to the Company herewith (the "Parent Disclosure Schedule"), no
consents or approvals of or filings or registrations with any
Governmental Entity or with any third party are necessary in
connection with (1) the execution and delivery by Parent of
this Agreement and the consummation by Parent of the Merger and
the other transactions contemplated hereby, and (2) the
execution and delivery by Massachusetts Bank of the Bank Merger
Agreement and the consummation by Massachusetts Bank of the
transactions contemplated thereby, except where the failure to
obtain such consents or approvals, or to make such filings or
registrations, would not prevent or delay the Merger or the
Bank Merger or otherwise prevent Parent or Massachusetts Bank
from performing their respective obligations under this
Agreement, or would not have a Material Adverse Effect on
Parent. The vote of the holders of the outstanding shares of
Parent Common Stock is not required to approve this Agreement
or the transactions contemplated hereby.
4.05 Financial Statements. Parent has previously made
available to the Company copies of the consolidated balance <PAGE>
sheets of Parent and its Subsidiaries as of December 31 for the
fiscal years 1992 and 1993 and the related consolidated
statements of income, changes in shareholders' equity and cash
flows for the fiscal years 1991 through 1993, inclusive, as
reported in the Parent 1993 10-K. The December 31, 1993
consolidated balance sheet of Parent (including the related
notes, where applicable) fairly presents in all material
respects the consolidated financial position of Parent and its
Subsidiaries as of the date thereof, and the other financial
statements referred to in this Section 4.05 (including the
related notes where applicable) fairly present in all material
respects, and the financial statements referred to in Section
6.10 hereof will fairly present (subject, in the case of the
unaudited statements, to recurring audit adjustments normal in
nature and amount) in all material respects, the results of the
consolidated operations and changes in shareholders' equity and
consolidated financial position of Parent and its Subsidiaries
for the respective fiscal periods or as of the respective dates
therein set forth and each of such statements (including the
related notes, where applicable) has been, and the financial
statements referred to in Section 6.10 hereof will be, prepared
in accordance with GAAP consistently applied during the periods
involved, except as indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q.
4.06 Broker's Fees. Neither Parent, Massachusetts Bank or
any Parent Subsidiary, nor any of their respective officers or
directors, has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees
in connection with any of the transactions contemplated by this
Agreement or the Bank Merger Agreement.
4.07 Absence of Certain Changes or Events.
(a) Since December 31, 1993:
(i) there has not been any Material Adverse
Effect on Parent and its Subsidiaries taken as a whole;
(ii) there has not been any incurrence by Parent
of any liability that has had, or to the knowledge of
Parent could reasonably be expected to have, a Material
Adverse Effect on Parent and its Subsidiaries taken as a
whole;
(iii) there has not been any agreement, contract
or commitment entered into, or agreed to be entered into,
except for those in the ordinary course of business none of
which has had a Material Adverse Effect on Parent and its
Subsidiaries taken as a whole;
<PAGE>
(iv) there has not been any change in any of the
accounting methods or practices of Parent or any of its
Subsidiaries other than changes required by applicable law
or generally accepted accounting principles.
4.08 Legal Proceedings. There are no pending or to the
knowledge of Parent, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental
investigations of any nature against Parent or any Significant
Subsidiary of Parent, as to which there is a reasonable
likelihood of adverse determination and which if adversely
determined, would (i) have a Material Adverse Effect on Parent
and its Subsidiaries taken as a whole, or (ii) as of the date
hereof, prevent or materially and adversely affect Parent's
ability to consummate the transactions contemplated hereby.
4.09 SEC Reports. Parent has previously made available to
the Company a true and complete, in all material respects, copy
of each (a) final registration statement, prospectus, report,
schedule and definitive proxy statement filed since January 1,
1990 by Parent with the SEC pursuant to the Securities Act or
the Exchange Act (the "Parent Reports") and (b) communication
mailed by Parent to its shareholders since January 1, 1990,
and, as of their respective dates, no such Parent Reports
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances in which they were made, not misleading.
4.10 Parent Information. The information provided in
writing by Parent for inclusion in the Proxy Statement and the
S-4 will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are made,
not misleading.
4.11 Compliance with Applicable Law. Parent and each of
its Subsidiaries holds, and have at all times held, all
material licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses
under and pursuant to all, and have complied with and are not
in default under any, applicable law, statute, order, rule or
regulation of any Governmental Entity relating to Parent or any
of its Subsidiaries, except where the failure to hold such
license, franchise, permit or authorization or such
noncompliance or default would not have a Material Adverse
Effect on Parent, and neither Parent nor any of its
Subsidiaries has received notice of any material violations of
any of the above.
<PAGE>
4.12 Ownership of Company Common Stock; Affiliates and
Associates. Neither Parent nor any of its affiliates or
associates (as such terms are defined under the Exchange Act),
(i) beneficially own, directly or indirectly, or (ii) is a
party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, in each
case, any shares of capital stock of the Company (other than
Trust Account Shares and DPC Shares). Neither Parent nor any
of its Subsidiaries is an "affiliate" (as such term is defined
in DGCL Section 202(c)(1)) or an "associate" (as such term is defined
in DGCL Section 203(C)(2)) of the Company.
4.13 Agreements with Regulatory Agencies. Except as set
forth in Section 4.13 of the Parent Disclosure Schedule or as
disclosed in Parent's Annual Report on Form 10-K for the year
ended December 31, 1993, neither Parent nor any of its
Subsidiaries is subject to any cease-and-desist or other order
issued by, or is a party to any Regulatory Agreement with any
Regulatory Agency or other Governmental Entity that restricts
in any material respect the conduct of its business or that
relates in any manner to its capital adequacy, its credit
policies or its management, nor has Parent or any of its
Subsidiaries been notified by any Regulatory Agency or other
Governmental Entity that it is considering issuing or
requesting any Regulatory Agreement.
4.14 Regulatory Approvals. Parent is not, as of the date
hereof, aware of any reason why the regulatory approvals
required to be obtained by it or any of its Subsidiaries to
consummate the Merger and the Bank Merger would not be
satisfied within the time frame customary for transactions of
the nature contemplated thereby.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01 Covenants of the Company. During the period from the
date of this Agreement and continuing until the Effective Time,
except as expressly contemplated or permitted by this Agreement
or the Bank Merger Agreement or with the prior written consent
of Parent, the Company and its Subsidiaries shall carry on
their respective businesses in the ordinary course consistent
with past practice. The Company will use all reasonable
efforts to (x) preserve its business organization and that of
its Significant Subsidiaries intact, (y) keep available to
itself and Parent the present services of the employees of the
Company and its Significant Subsidiaries and (z) preserve for
itself and Parent the goodwill of the customers of the Company <PAGE>
and its Significant Subsidiaries and others with whom business
relationships exist. Without limiting the generality of the
foregoing, and except as set forth in Section 5.01 of the
Company Disclosure Schedule or as otherwise contemplated by
this Agreement or consented to in writing by Parent, the
Company shall not, and shall not permit any of its Subsidiaries
to:
(a) solely in the case of the Company, declare or pay
any dividends on, or make other distributions in respect
of, any of its capital stock, except (i) for the
declaration and payment of regular quarterly cash dividends
in an amount not to exceed $0.30 per share of Company
Common Stock, provided, however, that the Company's regular
quarterly cash dividend may be increased by up to ten
percent per share beginning in the first quarter of 1995,
and (ii) that the parties agree (x) to consult with respect
to the amount of the last Company quarterly dividend
payable prior to the Effective Time with the objective of
assuring that the shareholders of the Company do not
experience a shortfall based on the record and payment
dates of their last dividend prior to the Merger and
(y) that the Company may pay a special dividend to holders
of record of Company Common Stock immediately prior to the
Effective Time consistent with the objective described in
clause (x) above;
(b) (i) split, combine or reclassify any shares of
its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock except
upon the exercise or fulfillment of rights or options
issued or existing pursuant to employee benefit plans,
programs or arrangements, all to the extent outstanding and
in existence on the date of this Agreement, or
(ii) repurchase, redeem or otherwise acquire (except for
the acquisition of shares pursuant to the Bank ESOP or of
Trust Account Shares and DPC Shares), any shares of the
capital stock of the Company or any Company Subsidiary, or
any securities convertible into or exercisable for any
shares of the capital stock of the Company or any Company
Subsidiary;
(c) issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its
capital stock or any securities convertible into or
exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter into any agreement with
respect to any of the foregoing, other than (i) the
issuance of Company Common Stock pursuant to stock options <PAGE>
or similar rights to acquire Company Common Stock granted
pursuant to the Company Stock Plan and outstanding prior to
the date of this Agreement, or (ii) the sale of Company
Common Stock under the Bank ESOP, in accordance with their
present terms;
(d) amend its Certificate of Incorporation or By-laws;
(e) enter into any real property lease for a term
longer than one year;
(f) make any capital expenditures in excess of
$500,000 in the aggregate;
(g) enter into any new line of business;
(h) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or
by any other manner, any business or any corporation,
partnership, association or other business organization or
division thereof or otherwise acquire any assets, other
than in connection with foreclosures, settlements in lieu
of foreclosure or troubled loan or debt restructurings in
the ordinary course of business, which would be material to
the Company;
(i) take any action that is intended or would result
in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set
forth in Article VII not being satisfied, or in a violation
of any provision of this Agreement or the Bank Merger
Agreement, except, in every case, as may be required by
applicable law;
(j) change its methods of accounting in effect at
December 31, 1993, except as required by changes in GAAP or
regulatory accounting principles as concurred to by the
Company's independent auditors;
(k) except as required by applicable law or to
maintain qualification pursuant to the Code, (i) adopt,
amend, renew or terminate any Plan or any agreement,
arrangement, plan or policy between the Company or any
Company Subsidiary and one or more of its current or former
directors, officers or employees or (ii) except for normal
increases in the ordinary course of business consistent
with past practice or as set forth in Section 5.01 of the
Company Disclosure Schedule, increase in any manner the <PAGE>
compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any plan or
agreement as in effect as of the date hereof (including,
without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock
units or performance units or shares);
(l) except in the case that the Merger becomes a
Taxable Transaction pursuant to Section 1.04, knowingly
take or cause to be taken any action which would disqualify
the Merger as a tax free reorganization under Section 368
of the Code;
(m) other than activities in the ordinary course of
business consistent with prior practice, sell, lease,
encumber, assign or otherwise dispose of, or agree to sell,
lease, encumber, assign or otherwise dispose of, any of its
material assets, properties or other rights or agreements;
(n) 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 individual, corporation or other entity;
(o) file any application to open, relocate or
terminate the operations of any banking office of the Bank;
(p) make any equity investment or commitment to make
such an investment in real estate or in any real estate
development project, other than in connection with
foreclosures, settlements in lieu of foreclosure or
troubled loan or debt restructurings in the ordinary course
of business;
(q) purchase or sell loans in bulk;
(r) foreclose upon or take deed or title to any
commercial real estate without first conducting a Phase I
environmental assessment of the property; or foreclose upon
such commercial real estate if such environmental
assessment indicates the presence of hazardous material in
amounts which, if such foreclosure were to occur, would be
reasonably likely to result in a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole;
(s) subject to Section 6.14, change the Company's
policies and practices with respect to asset liability
management in any material respect; or
(t) agree to do any of the foregoing.
<PAGE>
5.02 No Solicitation. Neither the Company nor any Company
Subsidiary nor any of the directors, officers, employees,
representatives or agents of the Company or other persons
controlled by the Company shall, except to the extent required
by applicable law relating to fiduciary obligations of
directors, upon advice of counsel, solicit or hold discussions
or negotiations with, or assist or provide any information to,
any person, entity, or group (other than Parent) concerning any
merger, disposition of a significant portion of its assets, or
acquisition of a significant portion of its capital stock or
similar transactions involving the Company or any Company
Subsidiary. Nothing contained in this Section 5.02 shall
prohibit the Company or its Board of Directors from taking and
disclosing to the Company's shareholders a position with
respect to a tender offer by a third party pursuant to Rules
14d-9 and 14e-2 promulgated under the Exchange Act or making
such other disclosure to the Company's shareholders which, in
the judgment of the Board of Directors, based upon the advice
of counsel, may be required under applicable law. The Company
will promptly communicate to Parent the terms of any proposal,
discussion, negotiation, or inquiry relating to a merger or
disposition of a significant portion of its capital stock or
similar transaction involving the Company or any Company
Subsidiary and the identity of the party making such proposal
or inquiry, which it receives with respect to any such
transaction.
5.03 Covenants of Parent. During the period from the date
of this Agreement and continuing until the Effective Time,
except as expressly contemplated or permitted by this Agreement
or with the prior written consent of the Company, Parent and
its Subsidiaries shall carry on their respective businesses in
the ordinary course consistent with past practice and use all
reasonable efforts to preserve intact their present business
organizations and relationships. Without limiting the
generality of the foregoing and as otherwise contemplated by
this Agreement or consented to in writing by the Company,
Parent shall not, and shall not permit any of its Subsidiaries
to:
(a) take any action that is intended or would result
in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set
forth in Article VII not being satisfied, or in a violation
of any provision of this Agreement or the Bank Merger
Agreement, except, in every case, as may be required by
applicable law;
(b) change its methods of accounting in effect at
December 31, 1993, except in accordance with changes in <PAGE>
GAAP or regulatory accounting principles as concurred to by
Parent's independent auditors;
(c) except in the case that the Merger becomes a
Taxable Transaction pursuant to Section 1.04 knowingly take
or cause to be taken any action which would disqualify the
Merger as a tax free reorganization under Section 368 of
the Code;
(d) take or cause to be taken any action which would,
or may reasonably be expected to, significantly delay or
otherwise adversely affect the regulatory approvals
required to consummate the Merger; or
(e) agree to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Regulatory Matters.
(a) The Company shall promptly prepare the Proxy
Statement and Parent shall promptly prepare and file with the
SEC the S-4, in which the Proxy Statement will be included as a
prospectus. The S-4 will constitute the Registration Statement
registering the issuance of the Warrants and Parent Common
Stock pursuant to this Agreement and the issuance of the
Warrant Shares upon exercise of the Warrants. Each of the
Parent and the Company shall use their best efforts to have the
S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and the Company shall thereafter
promptly mail the Proxy Statement to its shareholders. Parent
shall also use its best efforts to obtain all necessary state
securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement and
the Bank Merger Agreement, and the Company shall furnish all
information concerning the Company and the holders of the
Company Common Stock as may be reasonably requested in
connection with any such action.
(b) The parties hereto shall cooperate with each
other and use their best efforts to promptly prepare and file
all necessary documentation, to effect all applications,
notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations
of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions
contemplated by this Agreement (including without limitation
the Merger and the Bank Merger). The Company and Parent shall <PAGE>
have the right to review in advance, and to the extent
practicable each will consult with the other on, in each case
subject to applicable laws relating to the exchange of
information, all the information relating to the Company or
Parent, as the case may be, and any of their respective
Subsidiaries, which appear in any filing made with or written
materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the
parties hereto shall act reasonably and as promptly as
practicable. The parties hereto agree that they will consult
with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will
keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) Parent and the Company shall, upon request,
furnish each other with all information concerning themselves,
their respective Subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Proxy Statement,
the S-4 or any other statement, filing, notice or application
made by or on behalf of Parent, the Company or any of their
respective Subsidiaries to any Governmental Entity in
connection with the Merger and the other transactions
contemplated hereby.
(d) Parent and the Company shall promptly furnish
each other with copies of written communications received by
Parent or the Company, as the case may be, or any of their
respective Subsidiaries from, or delivered by any of the
foregoing to, any Governmental Entity in respect of the
transactions contemplated hereby.
6.02 Access to Information.
(a) Upon reasonable notice and subject to applicable
laws relating to the exchange of information, the Company
shall, and shall cause each of its Subsidiaries to, afford to
the officers, employees, accountants, counsel and other
representatives of Parent, access, during normal business hours
during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and,
during such period, the Company shall, and shall cause its
Subsidiaries to, make available to Parent (i) a copy of each
report, schedule, registration statement and other document
filed or received by it during such period pursuant to the
requirements of Federal securities laws or Federal or state <PAGE>
banking laws (other than reports or documents which the Company
is not permitted to disclose under applicable law) and (ii) all
other information concerning its business, properties and
personnel as Parent may reasonably request (other than
information which the Company is not permitted to disclose
under applicable law). Neither the Company nor any of its
Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would
violate or prejudice the rights of the Company's customers,
jeopardize the attorney-client privilege of the institution in
possession or control of such information or contravene any
law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply. Parent will hold
all such information in confidence to the extent required by,
and in accordance with, the provisions of the confidentiality
agreement, dated April 11, 1994, between Parent and the Company
(the "Confidentiality Agreement").
(b) Upon reasonable notice and subject to applicable
laws relating to the exchange of information, Parent shall, and
shall cause its Subsidiaries to, afford to the officers,
employees, accountants, counsel and other representatives of
the Company and the Bank, access, during normal business hours
during the period prior to the Effective Time, to such
information regarding Parent and its Subsidiaries as shall be
reasonably necessary for the Company to fulfill its obligations
pursuant to this Agreement to prepare the Proxy Statement or
which may be reasonably necessary for the Company to confirm
that the representations and warranties of Parent contained
herein are true and correct and that the covenants of Parent
contained herein have been performed in all material respects.
Neither Parent nor any of its Subsidiaries shall be required to
provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of Parent's
customers, jeopardize the attorney-client privilege of the
institution in possession or control of such information or
contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make
appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding
sentence apply. During the period from the date of this
Agreement to the Effective Time, Parent will cause one or more
of its designated representatives to confer on a regular and
frequent basis (not less than monthly) with representatives of
the Company and the Bank and to report the general status of
the ongoing operations of Parent and its Subsidiaries.
<PAGE>
(c) All information furnished by Parent to the
Company or its representatives pursuant hereto shall be treated
as the sole property of Parent and, if the Merger shall not
occur, the Company and its representatives shall return to
Parent or destroy all of such written information and all
documents, notes, summaries or other materials containing,
reflecting or referring to, or derived from, such information.
The Company shall, and shall use its reasonable efforts to
cause its representatives to, keep confidential all such
information, and shall not directly or indirectly use such
information for any competitive or other commercial purpose.
The obligation to keep such information confidential shall
continue from the date the proposed Merger is abandoned and
shall not apply to (i) any information which (x) was already in
the Company's possession prior to the disclosure thereof by
Parent; (y) was then generally known to the public; or (z) was
disclosed to the Company by a third party not bound by an
obligation of confidentiality or (ii) disclosures made as
required by law. It is further agreed that, if in the absence
of a protective order or the receipt of a waiver hereunder the
Company is nonetheless, in the opinion of its counsel,
compelled to disclose information concerning Parent to any
tribunal or governmental body or agency or else stand liable
for contempt or suffer other censure or penalty, the Company
may disclose such information to such tribunal or governmental
body or agency without liability hereunder.
6.03 Shareholder Meeting. The Company shall take all steps
necessary to duly call, give notice of, convene and hold a
meeting of its shareholders to be held as soon as is reasonably
practicable after the date on which the S-4 becomes effective
for the purpose of voting upon the approval of this Agreement.
The Company will, through its Board of Directors, recommend to
its shareholders approval of this Agreement and the
transactions contemplated hereby and such other matters as may
be submitted to its shareholders in connection with this
Agreement; provided, however, that nothing contained in this
Section 6.03 or elsewhere in this Agreement shall prohibit the
Company's Board of Directors from failing to make such
recommendation or modifying or withdrawing its recommendation,
if such Board shall have concluded in good faith with the
advice of counsel that such action is required to prevent such
Board from breaching its fiduciary duties to the shareholders
of the Company, and no such action shall constitute a breach of
this Agreement.
6.04 Legal Conditions to Merger. Each of Parent and the
Company shall, and shall cause each of its Subsidiaries to, use
its best efforts (a) to take, or cause to be taken, all actions
necessary, proper or advisable to comply promptly with all
legal requirements which may be imposed on such party or its <PAGE>
Subsidiaries with respect to the Merger or the Bank Merger and,
subject to the conditions set forth in Article VII hereof, to
consummate the transactions contemplated by this Agreement and
(b) to obtain (and to cooperate with the other party to obtain)
any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity and any other third party
which is required to be obtained by the Company or Parent or
any of their respective Subsidiaries in connection with the
Merger and the Bank Merger and the other transactions
contemplated by this Agreement. Parent also agrees to accept
any conditions related to savings bank life insurance, the
discontinuation of impermissible activities or the divestiture
of the Company's or the Bank's direct or indirect interests in
real estate or other investments which are required by any
Regulatory Agency in connection with procuring the regulatory
approvals required to consummate the Merger and the Bank Merger.
6.05 Restrictions on Resale. The Company shall use all
reasonable efforts to cause each director, executive officer
and other person of the Company who, at the time of the
shareholder's meeting called by the Company to approve this
Agreement, is an "affiliate" of the Company (for purposes of
Rule 145 under the Securities Act) and who has indicated to the
Company that such person intends to elect to receive Parent
Common Stock pursuant to the Merger, to execute "affiliate
letters" prior to the Effective Time providing that such person
will not sell, pledge, transfer or otherwise dispose of any
shares of Parent Common Stock received by such person in the
Merger except in compliance with the applicable provisions of
the Securities Act and the rules and regulations thereunder.
Parent shall use all reasonable efforts to comply with Rule
144(c) under the Securities Act in order that all such persons
may resell such Parent Common Stock pursuant to Rule 145(d)
under the Securities Act.
6.06 Stock Exchange Listing. Parent shall cause the
Warrants and the shares of Parent Common Stock to be issued in
the Merger and the Warrant Shares to be approved for listing on
the Stock Exchange, subject to official notice of insurance,
prior to the Effective Time.
6.07 Employee Benefit Plans.
(a) From and after the Effective Time and subject to
applicable law, the Surviving Corporation and the Surviving
Bank shall provide the employees of the Company ("Company
Employees") with the same benefits provided to its own
employees; provided, that Parent shall not treat any such
employee as a "new" employee for purposes of any exclusion for
an existing condition under any health, dental or similar plan <PAGE>
of Parent, the Surviving Corporation, or the Surviving Bank.
Notwithstanding anything to the contrary herein, with respect
to benefits payable to employees who shall have retired from
the Company and its Subsidiaries, whether before or after the
Effective Time, the Surviving Corporation and the Surviving
Bank shall in no event take any action to reduce such benefits
and shall take such action as it deems appropriate from time to
time with respect to possible increases in the level of such
benefits, taking into consideration among other factors any
similar increases which Parent shall have effected with respect
to its retired employees.
(b) With respect to the provision of benefits to the
Company's employees pursuant to Section 6.07(a) hereof, to the
extent that Company Employees become participants in any
employee benefit plans maintained by the Surviving Corporation,
the Surviving Bank, Parent or any of its Subsidiaries ("Parent
Plans"), Company Employees shall be credited under the Parent
Plans for all prior years of service with the Company and any
Subsidiary of the Company (and any entities acquired by the
Company or the Bank to the same extent as the Company or the
Bank recognize such service) for all purposes, including but
not limited to eligibility and vesting, vacation time and
401(k) plans, but excluding benefit accrual under the qualified
defined benefit pension plan of the Surviving Corporation, the
Surviving Bank, Parent or any of its Subsidiaries, to the
extent of any duplication in benefits, to the extent such
service was recognized by the Company or any Subsidiary of the
Company under any of its plans.
(c) The provisions of this Section 6.07 are expressly
intended to be for the irrevocable benefit of, and shall be
enforceable by, each officer and employee covered hereby and
his or her heirs and representatives.
6.08 Employee Termination And Other Benefits.
(a) Following the Effective Time, Parent shall honor
and shall cause the Company and the Bank, or any of their
respective successors, including without limitation, the
Surviving Corporation and the Surviving Bank, to honor in
accordance with their terms all employment, severance and other
compensation agreements and arrangements which are between the
Company or the Bank and any director, officer or employee
thereof and which have been disclosed in Section 5.01 of the
Company Disclosure Schedule, and to assume all duties,
liabilities and obligations under such agreements. Parent
agrees for itself and its Subsidiaries that the consummation of
the transactions contemplated hereby is a "Change in Control"
as defined in the Special Termination Agreements between the <PAGE>
Company and/or the Bank and certain officers as disclosed in
the Company Disclosure Schedule.
(b) Parent agrees to offer, or cause the Surviving
Bank to offer, continued comparable employment on and after the
Effective Time to all employees of the Company or the Company
Subsidiaries who were such immediately prior to the Effective
Time. Employees of the Company or the Company Subsidiaries who
are terminated on or within two years after the Effective Time
shall be provided, in addition to all other applicable
benefits, severance and other benefits set forth in Section
5.01 of the Company Disclosure Schedule, with the following:
(i) the greater or more favorable of the
severance and other benefits set forth in (x) Fleet
Financial Group, Inc.'s Severance Pay and Benefits Plan
appended to Section 6.08 of the Parent Disclosure Schedule,
or (y) Parent's severance pay and benefits plan policy
existing on the date of termination; and
(ii) continuation of health benefits for one
year after termination on the same terms and conditions as
though they had remained active employees of Parent or the
Surviving Corporation or the Surviving Bank (provided, that
such employees shall not be treated as "new" employees for
purposes of any exclusion for an existing condition under
any health or similar plan), and thereafter shall be
entitled to continuation benefits (such as COBRA) for an
additional eighteen month period determined as though their
employment had terminated at the end of such one-year
period.
(c) The provisions of this Section 6.08 are expressly
intended to be for the irrevocable benefit of, and shall be
enforceable by, each officer and employee covered hereby and
his or her heirs and representatives.
6.09 Indemnification; Directors' and Officers' Insurance.
(a) In the event of any threatened or actual claim,
action, suit, proceeding or investigation, whether civil,
criminal or administrative, including, without limitation, any
such claim, action, suit, proceeding or investigation in which
any person who is now, or has been at any time prior to the
date of this Agreement, or who becomes prior to the Effective
Time, a director or officer or employee of the Company or any
of its Subsidiaries (the "Indemnified Parties") is, or is
threatened to be, made a party based in whole or in part on, or
arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director, officer or employee of the <PAGE>
Company, any of the Company Subsidiaries or any of their
respective predecessors or (ii) this Agreement or any of the
transactions contemplated hereby, whether in any case asserted
or arising before or after the Effective Time, the parties
hereto agree to cooperate and use their best efforts to defend
against and respond thereto. It is understood and agreed that
the Company shall indemnify and hold harmless and that after
the Effective Time, the Surviving Corporation and Parent shall
indemnify and hold harmless, as and to the fullest extent
permitted by applicable law, each such Indemnified Party
against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses),
judgments, fines and amounts paid in settlement in connection
with any such threatened or actual claim, action, suit,
proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after the
Effective Time), (i) the Company, and the Surviving Corporation
and Parent after the Effective Time, shall promptly pay
expenses in advance of the final disposition of any claim,
action, suit, proceeding or investigation to each Indemnified
Party to the full extent permitted by law, (ii) the Indemnified
Parties may retain counsel satisfactory to them, and the
Company, and the Surviving Corporation and Parent after the
Effective Time, shall pay all fees and expenses of such counsel
for the Indemnified Parties within thirty days after statements
therefor are received, and (iii) the Company, the Surviving
Corporation and Parent will use their respective best efforts
to assist in the vigorous defense of any such matter; provided,
that none of the Company, the Surviving Corporation or Parent
shall be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably
withheld); and provided further, that the Surviving Corporation
and Parent shall have no 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 non-appealable, that indemnification of such
Indemnified Party in the manner contemplated hereby is
prohibited by applicable law. Any Indemnified Party wishing to
claim indemnification under this Section 6.09, upon learning of
any such claim, action, suit, proceeding or investigation,
shall notify the Company and, after the Effective Time, the
Surviving Corporation and Parent, thereof, provided, that the
failure to so notify shall not affect the obligations of the
Company, the Surviving Corporation and Parent, except to the
extent such failure to notify materially prejudices such party.
(b) Parent agrees that all rights to indemnification
existing in favor, and all limitations on the personal
liability, of the Indemnified Parties provided for in the <PAGE>
Company's Certificate of Incorporation or By-laws or the
Charter or By-laws or similar organizational documents of any
of its Subsidiaries as in effect as of the date hereof with
respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect
for a period of not less than six (6) years from the Effective
Time; provided, however, that all rights to indemnification in
respect of any claim (a "Claim") asserted or made within such
period shall continue until the disposition of such Claim.
(c) Parent shall cause the persons serving as
officers and directors of the Company immediately prior to the
Effective Time to be covered for a period of three (3) years
from the Effective Time by the directors' and officers'
liability insurance policy maintained by the Company (provided,
that Parent may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which
are not less advantageous than such policy) with respect to
acts or omissions occurring at or prior to the Effective Time
which were committed by such officers and directors in their
capacity as such; provided, however, that in no event shall
Parent be required to expend more than the amount (the
"Insurance Amount") equal to 200% of the current amount
expended by the Company and the Bank to maintain or procure
insurance coverage pursuant hereto.
(d) In the event Parent or the Surviving Corporation
or any of its successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each
such case proper provision shall be made so that the successors
and assigns of Parent or the Surviving Corporation, as the case
may be, assume the obligations set forth in this section.
(e) The provisions of this Section 6.09 are expressly
intended to be for the irrevocable benefit of, and shall be
enforceable by, each Indemnified Party and his or her heirs and
representatives.
6.10 Subsequent Interim and Annual Financial Statements.
As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter ending after December
31, 1993, Parent will deliver to the Company and the Company
will deliver to Parent their respective Quarterly Reports on
Form 10-Q, as filed with the SEC under the Exchange Act. As
soon as reasonably available, but in no event later than April
1, 1995, Parent will deliver to the Company and the Company
will deliver to Parent their respective Annual Reports on Form <PAGE>
10-K for the fiscal year ended December 31, 1994, as filed with
the SEC under the Exchange Act.
6.11 Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purpose of this Agreement, or the Bank Merger
Agreement, or to vest the Surviving Corporation or the
Surviving Bank with full title to all properties, assets,
rights, approvals, immunities and franchises of any of the
parties to the Merger or the Bank Merger, the proper officers
and directors of each party to this Agreement and their
respective Subsidiaries shall take all such necessary action as
may be reasonably requested by, and at the sole expense of,
Parent.
6.12 Disclosure Supplements. From time to time prior to
the Effective Time, each party will promptly supplement or
amend the Disclosure Schedules delivered in connection with the
execution of this Agreement to reflect any matter which, if
existing, occurring or known at the date of this Agreement,
would have been required to be set forth or described in such
Disclosure Schedules or which is necessary to correct any
information in such Disclosure Schedules which has been
rendered inaccurate thereby. No supplement or amendment to
such Disclosure Schedules shall have any effect for the
purposes of determining satisfaction of the conditions set
forth in Sections 7.02(a) or 7.03(a) hereof, as the case may
be, or the compliance by the Company or Parent, as the case may
be, with the respective covenants set forth in Sections 5.01
and 5.03 hereof.
6.13 Current Information.
(a) During the period from the date of this Agreement
to the Effective Time, the Company will cause one or more of
its designated representatives to be available to confer on a
regular and frequent basis (not less than monthly) with
representatives of Parent and to report the general status of
the ongoing operations of the Company and its Subsidiaries.
The Company will promptly notify Parent of any material change
in the normal course of business of the Company or any of its
Subsidiaries and of any governmental complaints, investigations
or hearings or the institution of significant litigation
involving the Company or any of its Subsidiaries and will keep
Parent reasonably informed of such events.
(b) Parent will promptly notify the Company of any
material change in the normal course of business of Parent or
any of its Subsidiaries and of any governmental complaints,
investigations or hearings, or the institution of significant <PAGE>
litigation involving Parent or any of its Subsidiaries, and
will keep the Company reasonably informed of such events.
6.14 ALCO Management. The Company agrees that during the
period from the date of this Agreement to the Effective Time,
the Company will consult and cooperate with Parent in the
development and implementation of a program to manage the
Company's interest rate sensitive assets and liabilities.
6.15 Execution and Authorization of Bank Merger Agreement.
As soon as reasonably practicable after the date of this
Agreement, (a) Parent shall (i) cause the Board of Directors of
Massachusetts Bank to approve the Bank Merger Agreement,
(ii) cause Massachusetts Bank to execute and deliver the Bank
Merger Agreement, and (iii) approve the Bank Merger Agreement
as the sole shareholder of Massachusetts Bank, and (b) the
Company shall (i) cause the Board of Directors of the Bank to
approve the Bank Merger Agreement, and (ii) cause the Bank to
execute and deliver the Bank Merger Agreement. The Bank Merger
Agreement shall contain terms that are normal and customary in
light of the transactions contemplated hereby and necessary to
carry out the purposes of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the
Merger shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) Shareholder Approval. This Agreement shall have
been approved and adopted by the affirmative vote of the
holders of at least a majority of the outstanding shares of
Company Common Stock entitled to vote thereon.
(b) Stock Exchange Listing. The Warrants, shares of
Parent Common Stock which shall be issued to the shareholders
of the Company upon consummation of the Merger and the Warrant
Shares shall have been authorized for listing on the Stock
Exchange, subject to official notice of issuance.
(c) Other Approvals. All regulatory approvals
required to consummate the Merger and the Bank Merger shall
have been obtained and shall remain in full force and effect
and all statutory waiting periods in respect thereof shall have
expired.
<PAGE>
(d) S-4. The S-4 shall have become effective under
the Securities Act and no stop order suspending the
effectiveness of the S-4 shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No
order, injunction or decree issued by any court or agency of
competent jurisdiction (an "Injunction") preventing the
consummation of the Merger or the other transactions
contemplated by this Agreement shall be in effect. No statute,
rule, regulation, order, injunction or decree shall have been
enacted or enforced by any Governmental Entity which prohibits
or makes illegal consummation of the Merger.
7.02 Conditions to Obligations of Parent. The obligation
of Parent to effect the Merger is also subject to the
satisfaction or waiver by Parent at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. The
representations and warranties of the Company set forth in this
Agreement shall be true and correct in all material respects as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing
Date; provided, however, that, for purposes hereof, such
representations and warranties shall be deemed to be true and
correct in all material respects unless the failure or failures
of such representations and warranties to be so true and
correct represent, in the aggregate, a Material Adverse Effect
(as defined in Section 3.01 hereof). Parent shall have
received a certificate signed on behalf of the Company by the
Chief Executive Officer and the Chief Financial Officer of the
Company to the foregoing effect.
(b) Performance of Obligations of the Company. The
Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement
at or prior to the Closing Date, and Parent shall have received
a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the
Company to such effect.
(c) Consents Under Agreements. The consent, approval
or waiver of each person (other than of the Governmental
Entities with responsibility for the regulatory approvals
referred to in Section 7.01(c)) whose consent or approval shall
be required in order to permit the succession by the Surviving
Corporation pursuant to the Merger to any obligation, right or <PAGE>
interest of the Company or any Company Subsidiary of the
Company under any loan or credit agreement, note, mortgage,
indenture, lease, license or other agreement or instrument
shall have been obtained, except where the failure to obtain
such consent, approval or waiver would not have a Material
Adverse Effect on the Company or its Subsidiaries taken as a
whole.
(d) Legal Opinion. Parent shall have received the
opinion of Goodwin, Procter & Hoar, counsel to the Company,
dated the Closing Date, in a form that is customary for
transactions of this type. As to any matter in such opinion
which involves matters of fact or matters relating to laws
other than Federal securities law, such counsel may rely upon
the certificates of officers and directors of the Company and
its Subsidiaries and of public officials and opinions of local
counsel, reasonably acceptable to Parent.
(e) Accountant's Letter. The Company shall have
caused to be delivered to Parent letters from KPMG Peat
Marwick, independent public accountants with respect to the
Company, dated the date on which the Registration Statement or
last amendment thereto shall become effective, and dated the
date of the Closing, and addressed to Parent and the Company,
with respect to the Company's consolidated financial position
and results of operations, which letters shall be based upon
agreed upon procedures to be specified by Parent, which
procedures shall be consistent with applicable professional
standards for letters delivered by independent accountants in
connection with comparable transactions.
7.03 Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject
to the satisfaction or waiver by the Company at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Parent set forth in this
Agreement shall be true and correct in all material respects as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing
Date; provided, however, that, for purposes hereof, such
representations and warranties shall be deemed to be true and
correct in all material respects unless the failure or failures
of such representations and warranties to be so true and
correct represent, in the aggregate, a Material Adverse Effect
(as defined in Section 3.01 hereof). The Company shall have
received a certificate signed on behalf of Parent by the Chief
Executive Officer and the Chief Financial Officer of Parent to
the foregoing effect.
<PAGE>
(b) Performance of Obligations of Parent. Parent
shall have each performed in all material respects all
obligations required to be performed by it under this Agreement
at or prior to the Closing Date, and the Company shall have
received a certificate signed on behalf of Parent by the Chief
Executive Officer and the Chief Financial Officer of Parent to
such effect.
(c) Consents Under Agreements. The consent or
approval of each person (other than of the Governmental
Entities with responsibility for the regulatory approvals
referred to in Section 7.01(c)) whose consent or approval shall
be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage,
indenture, lease, license or other agreement or instrument to
which Parent or any of its Subsidiaries is a party or is
otherwise bound, except those for which failure to obtain such
consents and approvals would not have a Material Adverse Effect
on Parent and its Subsidiaries taken as a whole (after giving
effect to the transactions contemplated hereby).
(d) Federal Tax Opinion. Except in the case the
Merger becomes a Taxable Transaction pursuant to Section 1.04,
the Company shall have received from its counsel, an opinion
dated as of the Effective Time, in form and substance
reasonably satisfactory to the Company, rendered on the basis
of facts, representations, and assumptions set forth in such
opinion or in writing elsewhere and referred to therein,
substantially to the effect that for federal income tax
purposes (i) the Merger constitutes a reorganization within the
meaning of Section 368(a) of the Code, and (ii) Parent and the
Company each will be a party to the reorganization within the
meaning of Section 368(b) of the Code (noting, however, that
the nontaxability of the shareholders of the Company resulting
from such reorganization does not extend to cash received as
Per Share Cash Consideration, cash in lieu of a fractional
shares interest in Parent Common Stock, cash received by the
holders of Dissenting Shares or the Warrants, if any). In
rendering any such opinion, such counsel may require and, to
the extent they deem necessary or appropriate may rely upon,
opinions of other counsel and upon representations made in
certificates of officers of the Company, Parent, affiliates of
the foregoing, and others.
(e) Legal Opinion. The Company shall have received
the opinion of Edwards & Angell, counsel to Parent, dated the
Closing Date, in a form that is customary for transactions of
this type. As to any matter in such opinion which involves
matters of fact or matters relating to laws other than Federal
securities law, Rhode Island law or Delaware corporate law, <PAGE>
such counsel may rely upon the certificates of officers and
directors of Parent and of public officials and opinions of
local counsel, reasonably acceptable to the Company.
(f) Opinion of Financial Advisor. The Company shall
have received an opinion, dated as of the date of the Proxy
Statement, from Salomon Brothers Inc to the effect that as of
the date thereof the consideration to be received by the
shareholders of the Company pursuant to the Merger is fair to
such shareholders from a financial point of view.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.01 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger
by the shareholders of the Company:
(a) by mutual consent of Parent and the Company in a
written instrument, if the Board of Directors of each so
determines by a vote of a majority of the members of its
entire Board;
(b) by either Parent or the Company upon written
notice to the other party (i) ninety days after the date on
which any request or application for a regulatory approval
required to consummate the Merger shall have been denied or
withdrawn at the request or recommendation of the
Governmental Entity which must grant such requisite
regulatory approval, unless within the ninety day period
following such denial or withdrawal a petition for
rehearing or an amended application has been filed with the
applicable Governmental Entity, provided, however, that no
party shall have the right to terminate this Agreement
pursuant to this Section 8.01(b)(i) if such denial or
request or recommendation for withdrawal shall be due to
the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and
agreements of such party set forth herein, or (ii) if any
Governmental Entity of competent jurisdiction shall have
issued a final nonappealable order enjoining or otherwise
prohibiting the consummation of any of the transactions
contemplated by this Agreement;
(c) by either Parent or the Company if the Merger
shall not have been consummated on or before May 31, 1995,
unless the failure of the Closing to occur by such date <PAGE>
shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe in any
material respect the covenants and agreements of such party
set forth herein;
(d) by either Parent or the Company if (i) any
approval of the shareholders of the Company required for
the consummation of the Merger shall not have been obtained
by reason of the failure to obtain the required vote at a
duly held meeting of shareholders or at any adjournment or
postponement thereof, or (ii) the Company's Board of
Directors determines that it will not recommend to its
shareholders approval, or modifies or withdraws its
recommendation, of this Agreement and the transactions
contemplated hereby and such other matters as may be
submitted to its shareholders in connection with this
Agreement, if such Board shall have concluded with the
advice of counsel that such action is required to prevent
such Board from breaching its fiduciary obligations to the
shareholders of the Company;
(e) by either Parent or the Company (provided, that
the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement
contained herein) if there shall have been a material
breach of any of the representations or warranties set
forth in this Agreement on the part of the other party,
which breach shall not have been cured within forty-five
days following receipt by the breaching party of written
notice of such breach from the other party hereto, or which
breach, by its nature, cannot be cured prior to the
Closing; or
(f) by either Parent or the Company (provided, that
the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement
contained herein) if there shall have been a material
breach of any of the covenants or agreements set forth in
this Agreement on the part of the other party, which breach
shall not have been cured within forty-five days following
receipt by the breaching party of written notice of such
breach from the other party hereto.
8.02 Effect of Termination; Expenses.
(a) In the event of termination of this Agreement by
either Parent or the Company as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect except
(i) Sections 6.02(c), 8.02 and 9.03 and the last sentence of
Section 6.02(a) (except as noted in Section 8.02(c)), shall <PAGE>
survive any termination of this Agreement, and (ii) no party
shall be relieved or released from any liabilities or damages
arising out of its willful breach of any provision of this
Agreement.
(b) If this Agreement is terminated, expenses of the
parties hereto shall be determined as follows:
(i) Any termination of this Agreement pursuant
to Section 8.01(a) or Section 8.01(d) hereof shall be
without cost, expense or liability on the part of any party
to the other. Any termination of this Agreement pursuant
to Section 8.01(e) or Section 8.01(f) hereof shall also be
without cost, liability or expense on the part of any party
to the others, unless the breach of a representation or
warranty or the breach of a covenant or agreement is caused
by the willful conduct or gross negligence of a party in
which event said party shall be liable to the other party
for all out-of-pocket costs and expenses, including,
without limitation, reasonable legal, accounting and
investment banking fees and expenses, incurred by such
other party in connection with the entering into of this
Agreement and the carrying out of any and all acts
contemplated hereunder ("Expenses").
(ii) If this Agreement is terminated pursuant to
Section 8.01(b) or Section 8.01(c) or the transactions
contemplated hereby otherwise fail to be consummated, in
any such case because of the failure to receive any
required regulatory approval, Parent shall reimburse the
Company for all Expenses up to a maximum of $1,500,000.
(iii) The payment of Expenses is not an
exclusive remedy, but is in addition to any other rights or
remedies available to the parties hereto at law or in
equity and no party shall be relieved or released from any
liabilities or damages arising out of its willful breach of
any provisions of this Agreement.
(c) In order to induce Parent to enter into this
Agreement and to reimburse Parent for incurring the costs and
expenses related to entering into this Agreement and
consummating the transactions contemplated by this Agreement,
the Company will make a cash payment to Parent of $8,000,000
(the "Expense Fee") if and only if:
(i) (x) the Company has terminated this Agreement
pursuant to Section 8.01(d) or (y) Parent has terminated
this Agreement pursuant to Sections 8.01(e) or 8.01(f) and
the breach of the representation, warranty, covenant or
agreement was caused by the willful conduct or gross
negligence of the Company, and
<PAGE>
(ii) (x) within six (6) months of any such
termination, (A) the Company shall have entered into an
agreement to engage in an Acquisition Transaction with any
person other than Parent or any subsidiary or affiliate of
Parent or (B) the Board of Directors of the Company shall
have approved an Acquisition Transaction or recommended
that shareholders of the Company approve or accept any
Acquisition Transaction with any person other than Parent
or any subsidiary or affiliate of Parent, or (y) in the
case of a termination pursuant to Section 8.01(d), at the
time of such termination any person other than Parent or
any subsidiary or affiliate of Parent, shall have made a
bona fide proposal to the Company or its shareholders to
engage in an Acquisition Transaction by public announcement
or written communication that shall be or become the
subject of public disclosure.
Any payment required by the previous sentence will be
(i) payable by the Company to Parent (by wire transfer of
immediately available funds to an account designated by Parent)
within five business days after demand by Parent and (ii) net
of any other payments made by the Company to Parent pursuant to
the provisions of Section 8.02(b)(i). In the event of a
termination under circumstances that would trigger a payment
under this Section 8.02(c), the standstill provisions contained
in the Confidentiality Agreement shall terminate.
Notwithstanding anything to the contrary set forth in this
Agreement, if the Company pays Parent the Expense Fee, the
Company will have no further obligations or liabilities to
Parent with respect to this Agreement or the transactions
contemplated by this Agreement.
For purposes of this Agreement, "Acquisition Transaction"
shall mean (i) a merger, consolidation or other similar
transaction with the Company, (ii) any sale, lease or other
disposition of 25% or more of the assets of the Company and its
subsidiaries, taken as a whole, in a single transaction or
series of transaction, or (iii) any tender or exchange offer
for 25% or more of the outstanding shares of Company Common
Stock.
8.03 Amendment. Subject to compliance with applicable law,
this Agreement may be amended by the parties hereto, by action
taken or authorized by their respective Boards of Directors, at
any time before or after approval of the matters presented in
connection with the Merger by the shareholders of the Company;
provided, however, that after any approval of the transactions
contemplated by this Agreement by the Company's shareholders,
there may not be, without further approval of such <PAGE>
shareholders, any amendment of this Agreement which reduces the
amount or changes the form of the consideration to be delivered
to the Company's shareholders hereunder other than as
contemplated by this Agreement. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties hereto.
8.04 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by
their respective Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein; provided, however,
that after any approval of the transactions contemplated by
this Agreement by the Company's shareholders, there may not be,
without further approval of such shareholders, any extension or
waiver of this Agreement or any portion thereof which reduces
the amount or changes the form of the consideration to be
delivered to the Company's shareholders hereunder other than as
contemplated by this Agreement. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid
only if set forth in a written instrument signed on behalf of
such party, but such extension or waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE IX
GENERAL PROVISIONS
9.01 Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") will take
place at the offices of Goodwin, Procter & Hoar, One Exchange
Place, Boston, Massachusetts 02109, at 10:00 a.m. on a date
selected by Parent, which shall be not more than five business
days after the satisfaction of the conditions set forth in
Section 7.01 hereof or at such other date, time and place as is
mutually agreed upon by the Company and Parent. The date on
which such Closing takes place is referred to herein as the
"Closing Date". Parent shall provide the Company written
notice of the date selected by it as the Closing Date at least
five business days prior to such date.
9.02 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants
and agreements in this Agreement or in any instrument delivered <PAGE>
pursuant to this Agreement shall survive the Effective Time,
except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after
the Effective Time.
9.03 Expenses. Except as provided by Section 8.02(b)
hereof, whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expense, provided, however, that the costs and
expenses of printing and mailing the Proxy Statement, and all
filing and other fees paid to the SEC or any other Governmental
Entity in connection with the Merger, the Bank Merger and the
other transactions contemplated hereby, shall be borne by
Parent, provided, however, that nothing contained herein shall
limit either party's rights under Section 8.02 hereof,
including, but not limited to, the right to recover any
liabilities or damages arising out of the other party's willful
breach of any provision of this Agreement.
9.04 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopies (with confirmation), mailed by
registered or certified mail (return receipt requested) or
delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Parent, to:
Fleet Financial Group, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903-2305
Attn: William C. Mutterperl, General Counsel
with a copy to:
Edwards & Angell
2700 Hospital Trust Plaza
Providence, Rhode Island 02903-2305
Attn: Duncan Johnson, Esq.
(b) if to the Company, to:
NBB Bancorp, Inc.
174 Union Street
New Bedford, MA 02740
Attn: Robert McCarter, Chairman
<PAGE>
with a copy to:
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Paul W. Lee, P.C.
Regina M. Pisa, P.C.
9.05 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference
shall be to a Section of or Exhibit or Schedule to this
Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation." The phrases "the date of this
Agreement," "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to be
May 9, 1994.
9.06 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have
been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the
same counterpart.
9.07 Entire Agreement. This Agreement (including the
documents and the instruments referred to herein) constitutes
the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof, other than the
Confidentiality Agreement.
9.08 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware,
without regard to any applicable conflicts of law.
9.09 Jurisdiction and Venue. The parties consent to the
jurisdiction of all federal and state courts in Massachusetts,
and agree that venue shall lie exclusively in Boston, Suffolk
County, Massachusetts.
9.10 Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that the
provisions contained in the last sentence of Section 6.02(a)
and in Section 6.02(c) of this Agreement were not performed in
accordance with their specific terms or were otherwise <PAGE>
breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of
the last sentence of Section 6.02(a) and Section 6.02(c) of
this Agreement and to enforce specifically the terms and
provisions thereof in any court of the United States or any
state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.11 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as
to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to
be only so broad as is enforceable.
9.12 Publicity. Except as otherwise required by law or the
rules of the Stock Exchange, so long as this Agreement is in
effect, neither Parent nor the Company shall, or shall permit
any of its Subsidiaries to, issue or cause the publication of
any press release or other public announcement with respect to,
or otherwise make any public statement concerning, the
transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably
withheld.
9.13 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to
herein) is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
<PAGE>
IN WITNESS WHEREOF, the Company and Parent have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the date first above written.
NBB BANCORP, INC.
By: /s/ Robert McCarter
Title: Chairman and President
Attest:
By: /s/ Carol E. Correia
Title: Secretary
FLEET FINANCIAL GROUP, INC.
By: /s/ H. Jay Sarles
Title: Vice Chairman
Attest:
By: /s/ Brian T. Moynihan
Title: Vice President
##
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EXHIBIT 99.1
Robert W. Lougee, Jr. Media:
Vice President and Director, Thomas L. Lavelle
Corporate Communications (401) 278-3003
(401) 278-5879
Bruce P. Crooks Investor:
(401) 278-6241 Jodi Kennedy
(401) 278-6444
Fleet Financial Group Agrees to Acquire
$2.5-Billion NBB Bancorp, Parent of
New Bedford Institution for Savings
Providence, R.I., May 9, 1994: Fleet Financial Group
(NYSE-FLT) today agreed to acquire the $2.5-billion NBB Bancorp
(NYSE-NBB), New Bedford, Mass., parent company of the New
Bedford Institution for Savings (NBIS), for $420 million in
stock and cash, plus 2.5 million warrants.
The proposed merger, which is subject to approval by NBB's
stockholders and various federal and state regulatory agencies,
was announced by Terrence Murray, Fleet's chairman and chief
executive officer, and Robert McCarter, NBB's chairman and
chief executive officer. They said the transaction is expected
to be closed by early 1995.
"We are extremely pleased to add to our franchise the
communities served by NBB," Murray said. "Our franchise will
be extended east from Providence to Cape Cod, adding more than
200,000 households and small businesses to our customer base.
This will make Fleet the banking leader in Bristol County,
which includes the greater New Bedford area, Fall River,
Taunton, the Attleboros and Seekonk. It also will augment our
existing franchises in Rhode Island and on Cape Cod."
McCarter said, "I am very pleased that we have completed
negotiations with Fleet to become a part of their fine
organization. We believe that the terms of the transaction are
very favorable to our stockholders. We view this merger as
another positive accomplishment in our effort to provide our
communities with a quality financial organization that can make
a valuable contribution to the economy and the area."
Under terms of the agreement, consideration is in the form
of approximately 50% stock at $48.50 per NBB share and 50% cash <PAGE>
at $48.50 per NBB share. The transaction will be tax-free to
those NBB shareholders who elect to tender their shares for
Fleet stock.
In addition, NBB shareholders will receive .277 warrants to
purchase Fleet stock for each share of NBB common stock with a
strike price of $43 7/8 per share and a term of six years,
which is exercisable beginning one year after closing.
Fleet will repurchase approximately six million common
shares for issuance to NBB shareholders. The value of the
stock portion of the purchase price is subject to a floating
exchange ratio based on a 10-day trading average prior to
closing. Funding for the repurchase of Fleet stock and the
cash portion of consideration at the closing will be provided
through the issuance of term debt.
NBIS's consumer and small business banking franchise of 52
offices extends throughout Cape Cod, southeastern Massachusetts
and into Rhode Island. NBIS, the largest savings bank in
Massachusetts and the dominant bank in Bristol County with a
23% deposit share, also is a leading mortgage originator in
southeastern Massachusetts. Following the acquisition, Fleet
will be the market leader in Bristol County and will
substantially expand its presence on Cape Cod.
"We look forward to providing Fleet's expanded consumer and
small business products throughout these markets. Current New
Bedford Institution customers, and prospective customers, will
discover that Fleet offers an outstanding array of services,
many of which they have not been able to access easily," Murray
said.
"Consumers will benefit form Fleet's network of more than
800 branches and 850 ATMs throughout the Northeast, our Galaxy
family of mutual funds, discount brokerage services, home
equity credit, our debit card and proprietary credit card, and
a broad range of other services that distinguish Fleet from our
competitors," Murray said.
"Small businesses will find that Fleet has both the
resources and the willingness to lend," Murray added. "We
expect our new Easy Business Banking program to be particularly
welcome and advantageous for entrepreneurs trying to grow their
businesses. We also offer a complete line of business services
ranging from cash management and deposit products to investment
and trade services."
For the first quarter of 1994, NBB reported record net
income of $7.8 million, or $.90 per share. The company's 1993
net income was $28 million, or $3.26 per share.
<PAGE>
The $420 million purchase price represents 15 times NBB's
1993 earnings, and 168% of the company's book value as of March
31, 1994.
Fleet Financial Group is $46-billion diversified financial
services company listed on the New York Stock Exchange, with
approximately 1,200 offices nationwide. Its lines of business
include commercial and consumer banking, mortgage banking,
consumer finance, asset-based lending, equipment leasing,
investment management, and student loan processing.
