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 1, 1996
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FLEET FINANCIAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
RHODE ISLAND
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(State or other jurisdiction of incorporation)
1-6366 05-0341324
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(Commission File Number) (IRS Employer Identification No.)
One Federal Street, Boston, MA 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-292-2000
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
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On May 1, 1996, Fleet Financial Group, Inc. ("Fleet")
consummated the merger of Fleet Bank of New York, National
Association ("FBNY") with and into NatWest Bank, National
Association ("NatWest Bank"), pursuant to an Agreement and Plan of
Merger (the "NatWest Merger Agreement") between Fleet and National
Westminster Bank Plc ("NatWest Plc") dated December 19, 1995, as
amended by an Amendment No. 1 to Agreement and Plan of Merger
between Fleet and NatWest Plc dated April 30, 1996. NatWest Bank
continues its existence under the name "Fleet Bank, National
Association" (the "Surviving Bank"). In accordance with the NatWest
Merger Agreement, Fleet may pay a purchase price of up to $3.26
billion consisting of an immediate payment of $2.7 billion, subject
to adjustment based on the tangible net worth of NatWest Bank, and
an earnout payment (the "Earnout") of up to $560 million over the
next eight years. The Earnout, which will be based on the level of
earnings of the Surviving Bank during such period, may be prepaid by
Fleet at any time at a price to be negotiated, and is subject to
accelerated prepayment under certain circumstances.
The Merger was accounted for as a purchase.
Item 7. Financial Statements and Exhibits
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The following exhibits are filed as part of this report:
2 Agreement and Plan of Merger dated as of December 19, 1995 between
Fleet and NatWest Plc (incorporated by reference to Exhibit 2(a) of
the Registrant's report on Form 8-K dated December 19, 1996), as
amended by an Amendment No. 1 to Agreement and Plan of Merger
between Fleet and NatWest Plc dated April 30, 1996.
99(a) Amended and Restated Unaudited Pro Forma Combined Financial
Statements and Notes Thereto (incorporated by reference to Exhibit
99(a) of the Registrant's reports on Form 8-K dated March 15, 1996
(as amended by Form 8 K/A dated April 5, 1996)).
99(b) Consolidated Statements of Condition of NatWest Bancorp ("Bancorp"),
a wholly-owned, indirect subsidiary of NatWest Plc, as of December
31, 1995 and 1994; Bancorp's Consolidated Statements of Operations,
Consolidated Statements of Changes in Equity Capital and
Consolidated Statements of Cash Flows for the years ended December
31, 1995, 1994 and 1993 and Notes thereto (incorporated by reference
to Exhibit 99(a) of the Registrant's report on Form 8-K dated March
25, 1996).
99(c) Press Release, Fleet Financial Group, Inc., dated May 1, 1996.
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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.
By: /s/ William C. Mutterperl
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William C. Mutterperl
Senior Vice President,Secretary
and General Counsel
Date: May 1, 1996
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EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
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2 Agreement and Plan of Merger dated as of December 19, 1995 between
Fleet and NatWest Plc (incorporated by reference to Exhibit 2(a) of
the Registrant's report on Form 8-K dated December 19, 1996), as
amended by an Amendment No. 1 to Agreement and Plan of Merger
between Fleet and NatWest Plc dated April 30, 1996.
99(a) Amended and Restated Unaudited Pro Forma Combined Financial
Statements and Notes Thereto (incorporated by reference to Exhibit
99(a) of the Registrant's reports on Form 8-K dated March 15, 1996
(as amended by Form 8 K/A dated April 5, 1996)).
99(b) Consolidated Statements of Condition of NatWest Bancorp ("Bancorp"),
a wholly-owned, indirect subsidiary of NatWest Plc, as of December
31, 1995 and 1994; Bancorp's Consolidated Statements of Operations,
Consolidated Statements of Changes in Equity Capital and
Consolidated Statements of Cash Flows for the years ended December
31, 1995, 1994 and 1993 and Notes thereto (incorporated by reference
to Exhibit 99(a) of the Registrant's report on Form 8-K dated March
25, 1996).
99(c) Press Release, Fleet Financial Group, Inc., dated May 1, 1996.
Exhibit 2
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT No. 1 dated as of April 30, 1996 between Fleet Financial
Group, Inc., a Rhode Island corporation ("FFG"), and National Westminster Bank
Plc, an English public limited company ("NatWest Plc").
WHEREAS, the parties hereto have previously entered into an Agreement
and Plan of Merger dated as of December 19, 1995 (as amended and supplemented,
the "Merger Agreement"); and
WHEREAS, the parties hereto desire to supplement and amend the
provisions of the Merger Agreement in the manner set forth in this Amendment.
NOW THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. (a) Terms used herein and not otherwise defined
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herein shall have the meanings set forth in the Merger Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Agreement" and each other similar
reference contained in the Merger Agreement shall from and after the effective
date hereof refer to the Merger Agreement as amended and supplemented hereby.
(b) The following terms, as used herein, have the following meanings:
"NatWest Advisory Director" shall have the meaning set forth in Section
3.1(a) hereof.
"Phantom Stock Plan" shall have the meaning set forth in Section 3.3
hereof.
"Restricted Stock Plan" shall have the meaning set forth in Section 3.3
hereof.
"Stock Plans" shall have the meaning set forth in Section 3.3 hereof.
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ARTICLE 2
AMENDMENT
2.1 Schedules; Exhibits. (a) Schedule 4.7 of the Merger Agreement is
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hereby amended by:
(i) adding the following:
Fleet (Delaware) Servicing Corp. Delaware
NatWest Insurance Agency Services, Inc. Delaware
(ii) changing "Tilden of New Jersey, Inc." to "NW Vehicle Funding Corp
of NJ", "Tilden Management Corporation" to "NW Vehicle Management Corp." and
"Tilden Commercial Alliance Incorporated" to "NW Vehicle Funding Corp."; and
(iii) deleting the following:
NatWest USA Capital Corp. New York
Brycon Development #2, Inc. New York
South Bronx Development Corp. New York
First Jersey Shareholder Services Inc. New Jersey
FJN-Cragwood Inc. New Jersey
FNB Investment Company, Inc. New Jersey
C.F.-600 Hudson, Inc. New Jersey
Crossroad Caters, Inc. New Jersey
(b) The Schedules to the Merger Agreement are hereby amended by (i)
deleting Schedule 6.7 in its entirety and substituting therefor Schedule 6.7
attached to this Amendment, (ii) deleting Schedule 6.9 in its entirety and
substituting therefor Schedule 6.9 attached to this Amendment thereto, (iii)
inserting Schedule 6.10 attached to this Amendment as Schedule 6.10 to the
Merger Agreement and (iv) inserting Schedule 6.15 attached to this Amendment as
Schedule 6.15 to the Merger Agreement.
(c) The Exhibits to the Merger Agreement are hereby amended by (i)
deleting Exhibit G in its entirety and substituting therefor Exhibit G attached
to this Amendment and (ii) inserting Exhibit H attached to this Amendment as
Exhibit H to the Merger Agreement.
2.2 Section 1.1. (a) Section 1.1 of the Merger Agreement is hereby
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amended by:
(a) deleting the definition of and "OCC 30-mile Approval" in its
entirety;
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(b) in the definition of "Dividend Excluded Transactions", deleting all
of the text beginning after the words "shall mean" and substituting therefor
the phrase "a cash dividend of approximately $200 million from NBNA to
Bancorp NJ.";
(c) inserting "NatWest Insurance," in the definition of "Included
Subsidiaries" after "Delaware Bank,";
(d) inserting in alphabetical order the following definition:
"Adjusted Closing Balance Sheet" shall have the meaning specified
in Section 3.3(a) hereof.
"Commitment Letter" shall mean the commitment letter dated April
30, 1996 between NatWest Plc and NBNA relating to the Residential Mortgage
Loans, a copy of which is attached as Exhibit H hereto.
"Deemed Adjustments" shall mean (i) all items identified by either
NatWest Plc or FFG during the course of the audit of the Closing Balance
Sheet, and which are considered by KPMG Peat Marwick LLP to be in conformity
with NBNA's accounting policies, as in effect on the date hereof, and past
practices, that meet either of the following two criteria: (x) items the
treatment of which on the books and records of the Included Subsidiaries used
in connection with the preparation of the Closing Balance Sheet do not
conform to NBNA's accounting policies, as in effect on the date hereof, and
past practices, and that individually affect equity by an amount greater than
$2 million; or (y) items of the type referred to in clause (x) that
individually affect equity by an amount less than $2 million, but in the
aggregate affect equity by an amount greater than $5 million, (ii) an
adjustment, whether positive or negative, such that, as of the Closing Date,
the allowance for loans and leases is $333 million, (iii) an adjustment
reflecting the final settlement of the sale to Household Finance of
approximately $470 million of credit card receivables and (iv) an adjustment
reflecting the difference between the general ledger and subledger accounts
at the Delaware Bank reconciled by the staff of the Delaware Bank as of the
Closing Date, in the case of (iii) and (iv), considered by KPMG Peat Marwick
LLP to be in conformity with NBNA's accounting policies, as in effect on the
date hereof, and past practices.
"NatWest Brokerage Earnings shall have the meaning specified in
Section 3.6(g)(vi) hereof.
"NatWest Specialized Industry Earnings" shall have the meaning
specified in Section 3.6(g)(vi) hereof.
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"NatWest Swap Portfolio Adjustment" shall have the meaning
specified in Section 6.10(iii) hereof.
"NatWest Upstate Customer Earnings shall have the meaning specified
in Section 3.6(g)(vi) hereof.
"Servicer" shall have the meaning specified in Section 6.10(vi)
hereof.
2.3 Section 2.1. Section 2.1 of the Merger Agreement is hereby amended
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by deleting the words "Fleet Bank of New York, National Association" and
substituting therefor the words "Fleet Bank, National Association".
2.4 Section 2.2(b). Section 2.2(b) of the Merger Agreement is amended
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by deleting the phrase "Edwards & Angell, 2700 Hospital Trust Tower, Providence,
Rhode Island" and substituting therefor the phrase "Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York".
2.5 Section 3.3. (a) Section 3.3(a) of the Merger Agreement is hereby
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amended by deleting it in its entirety and substituting therefor the following:
(a) As promptly as practicable, but not later than 60 days after the
Closing Date, NatWest Plc will cause to be prepared and delivered to FFG (i)
the Closing Balance Sheet (the "Closing Balance Sheet"), which shall fairly
present the consolidated financial position of NBNA and its Subsidiaries as
at the time on the Closing Date immediately prior to the Effective Time in
accordance with generally accepted accounting principles applied on a
consistent basis, except in respect of the allowance for loans and leases,
together with a report of KPMG Peat Marwick LLP thereon, provided that such
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report may contain a qualification in respect of the adequacy or absolute
level of the allowance for loans and leases, (ii) an adjusted Closing Balance
Sheet (the "Adjusted Closing Balance Sheet"), which shall be the Closing
Balance Sheet adjusted to (A) include the Deemed Adjustments, (B) have been
prepared as if the Merger had not yet become effective, (C) disregard any
specific accruals relating solely to phantom or restricted stock which
accelerate by reason of the probability of the Merger, (D) not include any
reserve for Taxes for which NatWest Plc is responsible under this Agreement,
(E) take into account all overnight positions, (F) exclude any adjustment for
unrealized holding gains or losses with respect to available-for-sale
securities pursuant to Financial Accounting Standards Board Statement No.
115, (G) exclude the post-tax cost of the severance and other Merger-related
costs incurred by the Included Subsidiaries in respect of Continuing
Employees from December 19, 1995 to the Closing Date, (H) exclude the loss,
which is not to exceed $1,200,000 on a pre-tax basis, realized on the sale of
the outstanding loan balance of Clipper Receivables Corporation (taking into
account all out-of-
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pocket expenses incurred in connection with such sale), (I) exclude the
$1,050,000 pre-tax loss realized on the sale of certain cross-collateralized
loans to be sold to NatWest Plc as part of the NBNA Asset Sale and (J)
include, to the extent not otherwise reflected on the Closing Balance Sheet,
$22,786,000 in respect of the contract receivable relating to an office
building owned by South Bronx Development Corp., and (iii) a certificate
based on such Adjusted Closing Balance Sheet setting forth NatWest Plc's
calculation of Closing Tangible Equity. "Closing Tangible Equity" shall mean
the consolidated stockholders' equity as shown on the Adjusted Closing
Balance Sheet (as adjusted pursuant to clauses (A) through (J) above) less
goodwill and core deposit intangibles of NBNA and its Subsidiaries as shown
on the Adjusted Closing Balance Sheet (as adjusted pursuant to clauses (A)
through (J) above), and after making the following additional adjustments:
(x) the Rate Sensitive Portfolio Adjustment, (y) plus an amount equal to the
NatWest Swap Portfolio Adjustment and (z) plus the adjustments provided for
in the Commitment Letter in respect of the Residential Mortgage Loans that
are the subject of the Commitment Letter and in respect of the Hedging
Transactions (as defined in the Commitment Letter).
(b) Section 3.3(b)(i)(B) of the Merger Agreement is hereby amended by:
(i) in paragraph (1), inserting immediately before the ";" at the end
of the first proviso the phrase "or such pools of Residential Mortgage Loans
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must be the subject of the Commitment Letter"; and
(ii) in paragraph (2), deleting the first four sentences and deleting
the phrase "at such auction no later than 50 days following the Closing Date"
and substituting therefor the phrase "pursuant to the terms of the Commitment
Letter".
(c) Section 3.3(b)(iii) of the Merger Agreement is hereby amended by:
(i) in paragraph (A), deleting the phrases "the sum of (1)" and "and
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(2) the Adjusted Mortgage Loan Value";
(ii) deleting in its entirety paragraph (C) thereof and redesignating
paragraphs (D) through (H) as (C) through (G) (and any related cross-
references thereto); and
(iii) in paragraph (H), deleting the phrase "Subsections (B)(1) and
(C)(2)" and substituting therefor "Subsection (B)(1)".
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(d) Section 3.3(d) of the Merger Agreement is hereby amended by
inserting the phrase ", the Adjusted Closing Balance Sheet" immediately after
the words "Closing Balance Sheet" in the third sentence.
(e) Section 3.3(e) of the Merger Agreement is hereby amended by
inserting the phrase ", the Adjusted Closing Balance Sheet" immediately after
the words "Closing Balance Sheet".
2.6 Section 3.6. Section 3.6 of the Merger Agreement is hereby amended
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by:
(a) deleting the words "NatWest Plc" in paragraph (a) (other than in
the proviso at the end of such paragraph) and substituting therefor the words
"Bancorp NJ or its designee" and deleting the words "NatWest Plc" in the
proviso of paragraph (a) and substituting therefor the words "Bancorp NJ or
such designee";
(b) inserting immediately preceding the period at the end of the first
sentence of paragraph (b)(i) the following phrase:
; provided that FFG will use its best efforts to provide NatWest Plc
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with a draft calculation of Adjusted Net Income for each Earnout Year
within 30 days after the last day of such Earnout Year
(c) deleting the words "NatWest Plc" in the first sentence of paragraph
(c) and substituting therefor the words "Bancorp NJ";
(d) deleting the words "NatWest Plc" the second time they appear in the
first sentence of paragraph (d) and substituting therefor the words "Bancorp
NJ or its designee" and deleting the words "NatWest Plc" in the second
sentence of paragraph (d) and substituting therefor the words "Bancorp NJ";
(e) deleting the words "NatWest Plc" in clause (ii) of paragraph (e)
and substituting therefor the words "Bancorp NJ or its designee";
(f) in the text immediately following clause (ix) of paragraph (e), (A)
deleting the words "NatWest Plc" the first time and the fourth time they
appear and substituting therefor the words "Bancorp NJ or its designee", (B)
deleting the words "NatWest Plc" the third time they appear and substituting
therefor the words "Bancorp NJ" and (C) deleting the word "receipt" in the
last sentence and substituting therefor the words "payment to Bancorp NJ or
its designee";
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(g) deleting the proviso in clause (i) of paragraph (f) in its entirety
and substituting therefor the following phrase:
provided that the Fleet Downstate Assets shall be recorded on the books
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of the Surviving Bank no later than July 1, 1996 or as soon as
practicable thereafter and shall be maintained on such books until
repaid, sold or otherwise disposed of in the ordinary course of
business;
(h) inserting immediately preceding the ";" at the end of clause (ii)
of paragraph (f) the following phrase:
; provided that the Fleet Downstate Liabilities shall be recorded on the
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books of the Surviving Bank no later than July 1, 1996 or as soon as
practicable thereafter and shall be maintained on such books until
repaid or otherwise extinguished in the ordinary course of business
(i) in the definition of "Fleet Downstate Assets" in clause (ii) of
paragraph (g), deleting the words "loans and leases" and substituting
therefor the phrase "loans, leases and other assets" and deleting the word
"on" and substituting therefor the phrase "no later than 120 days after";
(j) inserting immediately after the "," in the first sentence of clause
(iv) of paragraph (g) the following phrase:
(A) the Fleet Downstate Assets and the Fleet Downstate Liabilities shall
be deemed to have been recorded on the books of the Surviving Bank from
and after July 1, 1996 and (B)
(k) in the first sentence of the third paragraph of clause (iv) of
paragraph (g), deleting "60" and substituting therefor "120" and in the
second and fourth sentences of such paragraph, deleting "10" and substituting
therefor "20";
(l) in the fourth paragraph of clause (iv) of paragraph (g), deleting
the word "on" and substituting therefor the phrase "no later than 120 days
after";
(m) in the definition of "Downstate Growth Factor" in clause (iv) of
paragraph (g), inserting immediately after the words "Earnout Year" the last
time they appear and before the "," the phrase "(for this purpose treating
the first Earnout Year in the Earnout Period as beginning on July 1, 1996)";
(n) in the definition of "NatWest Mortgage Earnings" in clause (v) of
paragraph (g), deleting "4,400,000" and substituting therefor "5,100,000";
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(o) inserting immediately preceding clause (vi) of paragraph (g) the
following clause and redesignating clauses (vi) and (vii) as (vii) and
(viii):
(vi) For purposes of calculating Adjusted Net Income for any
Earnout Year, NatWest Upstate Customer Earnings, NatWest Brokerage
Earnings and NatWest Specialized Industry Earnings for such Earnout Year
shall be added to the consolidated net income of the Surviving Bank and
its consolidated Subsidiaries for such Earnout Year. In consideration
of the credit for NatWest Specialized Industry Earnings, NatWest Plc
agrees that FFG may book at any Affiliate of FFG new loans, leases and
extensions of credit to borrowers in the industry groups of corporate
finance, financial services and media.
"NatWest Upstate Customer Earnings" means, for any Earnout Year set
forth below, the amount set forth opposite such Earnout Year:
Earnout Year Amount
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ending in 1997 $2,900,000
ending in 1998 $3,000,000
ending in 1999 $3,200,000
ending in 2000 $3,400,000
ending in 2001 $3,600,000
ending in 2002 $3,800,000
ending in 2003 $4,000,000
ending in 2004 $4,200,000
"NatWest Brokerage Earnings" means, for any Earnout Year set forth
below, the amount set forth opposite such Earnout Year:
Earnout Year Amount
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ending in 1997 $ 825,000
ending in 1998 $ 866,000
ending in 1999 $ 910,000
ending in 2000 $ 955,000
ending in 2001 $1,003,000
ending in 2002 $1,053,000
ending in 2003 $1,106,000
ending in 2004 $1,161,000
"NatWest Specialized Industry Earnings" means, for any Earnout Year
set forth below, the amount set forth opposite such Earnout Year:
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Earnout Year Amount
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ending in 1997 $2,600,000
ending in 1998 $2,730,000
ending in 1999 $2,866,000
ending in 2000 $3,009,000
ending in 2001 $3,159,000
ending in 2002 $3,317,000
ending in 2003 $3,483,000
ending in 2004 $3,657,000
(p) in clause (vi) of paragraph (g) (as so designated prior to the
redesignation referred to in paragraph (o) above, deleting "320,000,000" and
substituting therefor "383,000,000";
(q) in clause (vii) of paragraph (g) (as so designated prior to the
redesignation referred to in paragraph (o) above, deleting "3,000,000,000"
and substituting therefor "3,500,000,000";
(r) inserting immediately preceding clause (viii) of paragraph (g)
(prior to the redesignation referred to in paragraph (o) above) the following
clause and redesignating such clause (viii) and clauses (ix) and (x) as (x),
(xi) and (xii):
(ix) For purposes of calculating Adjusted Net Income for any
Earnout Year, (A) an amount shall be added to the consolidated net
income of the Surviving Bank and its consolidated Subsidiaries equal to
1.00% of the monthly (or, if reasonably practicable, daily) average
aggregate outstanding balance for such Earnout Year of all credit card
accounts opened by FFG and its Subsidiaries (other than the Surviving
Bank and its consolidated Subsidiaries) on or after the Closing Date and
having a billing address in the Market Area, (B) if the outstanding
balances of any credit card accounts opened by NBNA or the
Delaware Bank prior to the Closing Date or any credit card accounts
opened by the Surviving Bank or its consolidated Subsidiaries on or
after the Closing Date are transferred to FFG or any of its Subsidiaries
(other than the Surviving Bank and its consolidated Subsidiaries), an
amount shall be added to the consolidated net income of the Surviving
Bank and its consolidated Subsidiaries equal to 1.00% of the monthly
(or, if reasonably practicable, daily) average aggregate outstanding
balance for such Earnout Year of such credit card accounts following
such transfer and (C) if any credit card accounts referred to in clause
(A) of this sentence are sold to any Person that is not an Affiliate of
FFG or if, following any transfer of the outstanding balances of any
credit card accounts referred to in clause (B) of this sentence, such
credit card
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accounts are sold to any Person that is not an Affiliate of FFG, the
amount of any post-tax gain (or loss) attributable to such sale in such
Earnout Year shall be added to (or subtracted from) the consolidated net
income of the Surviving Bank and its consolidated Subsidiaries for such
Earnout Year.
If the outstanding balances of any credit card accounts opened by
FFG and its Subsidiaries (other than the Surviving Bank and its
consolidated Subsidiaries) are transferred to the Surviving Bank or its
consolidated Subsidiaries, NatWest Plc and FFG agree to negotiate in
good faith appropriate changes to this Section 3.6(g).
(s) in clause (viii) of paragraph (g) (prior to the redesignations
referred to in paragraphs (o) and (r) above), (i) inserting the phrase "or
those described in (B) below" immediately preceding the second ")" in the
first sentence, and (ii) inserting "(A)" immediately after the first comma
and inserting immediately preceding the period at the end of such clause the
following phrase:
and (B) the amount of any post-tax gain (or loss) or items of
extraordinary income or expense of the Surviving Bank and its
consolidated Subsidiaries for such Earnout Year attributable to any real
property, other than real property acquired upon foreclosure, by deed in
lieu of foreclosure or otherwise upon realization upon collateral
securing a loan, lease or other extension of credit, constituting part
of the Fleet Downstate Assets shall be reversed and subtracted from (or
added to) the consolidated net income of the Surviving Bank and its
consolidated Subsidiaries for such Earnout Year
(t) in clause (x) of paragraph (g) (prior to the redesignations
referred to in paragraphs (o) and (r) above), deleting "(i) through (iii) and
(vi) through (ix)" and substituting therefor "(i), (ii), (iii), (vii),
(viii), (ix)(C), (x) and (xi)";
(u) in paragraph (h), (A) in the definition of "Earnout Period",
deleting all of the text beginning after the words "means" and substituting
therefor the phrase "the period beginning on the Closing Date and ending on
June 30, 2004." and (B) in the definition of "Earnout Year", deleting all of
the text beginning after the words "means" and substituting therefor the
following phrase:
any period of four consecutive fiscal quarters ending on June 30;
provided that the first Earnout Year in the Earnout Period shall be the
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period beginning on the Closing Date and ending on June 30, 1997.
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2.7 Certain Financial Information. (a) The first sentence of Section
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4.8(b) of the Merger Agreement is hereby amended by deleting the words
"statements of income and cash flows for" and substituting therefor the words
"statement of income for the".
(b) The first sentence of Section 6.13 of the Merger Agreement is
hereby amended by deleting the words "statements of income and cash flows" and
substituting therefor the words "statement of income".
2.8 Section 6.5. Section 6.5 of the Merger Agreement is hereby amended
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by (i) deleting paragraph (a) thereto in its entirety and redesignating the
succeeding paragraphs (b), (c) and (d) as (a), (b) and (c) (and any related
cross-references thereto) and (ii) deleting the words "the OCC 30-mile
Approval," from clause (ii) of Section 6.5(c) (as so designated prior to the
redesignation referred to in clause (i) above).
2.9 Section 6.9. Section 6.9 of the Merger Agreement is hereby amended
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by inserting immediately before the period at the end of such Section the phrase
"; provided that the gross or net book value of South Bronx Development Corp.
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shall be $52,173,000".
2.10 Section 6.10. Section 6.10 of the Merger Agreement is hereby
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amended as follows:
(a) by inserting the phrase "Except as disclosed in item 1 of
Schedule 6.10," at the beginning of the first sentence of paragraph (iv) of
Section 6.10;
(b) by (i) deleting the words "other than the Identified
Transactions" in paragraph (v) of Section 6.10 and substituting therefor the
words "other than the Identified Transactions and the derivative transactions
disclosed in item 2 of Schedule 6.10" and (ii) deleting the last sentence of
paragraph (v) of Section 6.10;
(c) Paragraph (vi) of Section 6.10 is amended by deleting it in
its entirety and substituting therefor the following:
(vi) The derivative transactions in respect of which NatWest
Plc is unable to obtain the consent of the counterparty to the
assignment thereof to NatWest Plc and the derivative transactions
disclosed in item 2 of Schedule 6.10 shall constitute the "Ongoing Swap
Pool". Following the Closing Date, FFG shall cause the Surviving Bank
or one of its Affiliates (the "Servicer") to service for NatWest Plc the
Ongoing Swap Pool, in accordance with the servicing standards and
procedures customary in the industry and in compliance with the
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OCC's regulations and requirements with respect thereto. For servicing
the transactions in the Ongoing Swap Pool other than those disclosed in
item 2 of Schedule 6.10, NatWest Plc shall pay to the Servicer a
servicing fee to be mutually agreed between NatWest Plc and FFG, which
fee shall be in an amount reasonable and customary in the industry. FFG
shall cause the Servicer to promptly provide NatWest Plc with all
information reasonably requested by NatWest Plc relating to the
servicing of the Ongoing Swap Pool, in any event including but not
limited to (A) quarterly reports concerning the transactions comprising
the Ongoing Swap Pool, (B) notice of any event of default or event or
condition which, with the passage of time, would constitute an event of
default or otherwise give rise to a right of termination under any of
the operative documents or agreements governing such transactions, (C)
notice of any event requiring the counterparty or an affiliate thereof
to provide collateral or guarantees or similar credit support (or
additional collateral or guarantees or similar credit support) under any
of the operative documents or agreements governing such transactions,
and (D) notice of any material increase in indebtedness to the Surviving
Bank or any of its Affiliates of any counterparty to the transactions
disclosed in item 2 of Schedule 6.10 to FFG or any of its Subsidiaries;
provided that any failure to provide reports pursuant to clause (A) or
--------
give notice pursuant to clause (B), (C) or (D) shall not relieve NatWest
Plc of any liability which it may have pursuant to Section 12.1(v)
hereof.
(d) Paragraph (vii) of Section 6.10 is amended by deleting it in
its entirety and substituting therefor the following:
(vii) At any time while any transaction which comprises part
of the Ongoing Swap Pool shall remain outstanding, NatWest Plc may, for
Cause and without payment of any fee or expense, transfer the servicing
of the Ongoing Swap Pool to NatWest Plc or any of its Affiliates or to a
third party servicer chosen by NatWest Plc. FFG, on behalf of the
Surviving Bank and its Affiliates, agrees to cooperate with NatWest Plc
in effecting any such transfer of servicing of the Ongoing Swap Pool.
(e) Paragraph (viii) of Section 6.10 is amended by deleting it in
its entirety and substituting therefor the following:
(viii) For purposes of this Section 6.10, (A) the "NatWest
Swap Portfolio" shall mean all interest rate swaps, options, swaptions
and over-the-counter cap and floor positions of NBNA and the Delaware
Bank and (B) "Cause" shall mean (I) the commencement by FFG, the
Surviving Bank or such Affiliate of the Surviving Bank as
12
<PAGE>
may be servicing the Ongoing Swap Pool, as the case may be, of a case in
bankruptcy under applicable law naming such Person as the debtor, (II)
the commencement by a party other than FFG, the Surviving Bank or such
Affiliate of the Surviving Bank as may be servicing the Ongoing Swap
Pool, as the case may be, of a case in bankruptcy under applicable law
naming such Person as the debtor and which is not dismissed within 60
days of the commencement thereof, (III) the making by FFG, the Surviving
Bank or such Affiliate of the Surviving Bank as may be servicing the
Ongoing Swap Pool, as the case may be, of an assignment or any other
arrangement for the benefit of creditors under any applicable law, and
(IV) a material failure by the Servicer to service the Ongoing Swap Pool
in accordance with applicable servicing standards, which failure is not
cured within 10 days of receipt of notice from NatWest Plc thereof.
(f) The following paragraphs are hereby added to Section 6.10:
(ix) FFG hereby agrees that the standard of care to be
exercised by the Servicer in servicing the Ongoing Swap Pool, and by FFG
and its Affiliates in dealing with counterparties thereto, shall be the
same standard of care that the Servicer exercises in servicing and
managing derivative transactions to which it is a party, or that FFG and
its Affiliates exercise in dealing with counterparties generally, as the
case may be, and in respect of which it does not have an indemnity of
the kind provided by NatWest Plc pursuant to Section 12.1(v) hereof
(hereinafter referred to, solely for purposes of this Section 6.10, as
"reasonable care"). Without limiting the foregoing, FFG shall cause the
Servicer to use reasonable care in (A) exercising or refraining from
exercising its right to terminate any transaction in the Ongoing Swap
Pool and (B) requiring the counterparty (or any Affiliate thereof) to
any transaction in the Ongoing Swap Pool to provide collateral or
guarantees or similar credit support (or additional collateral or
guarantees or similar credit support) under any of the operative
documents or agreements relating to such transaction. In addition, FFG
shall, and shall cause the Surviving Bank and its Affiliates to, use
reasonable care in extending additional credit (other than pursuant to
commitments in effect as of the Closing Date) to any counterparty of any
transaction disclosed in item 2 of Schedule 6.10. Notwithstanding the
provisions of Section 12.1, Buyer Indemnifiable Damages shall not
include any loss, damage, Liabilities, costs and expenses in respect of
suits, claims, proceedings, demands, judgments, deficiencies, losses,
damages, expenses and costs (including without limitation, interest,
penalties, reasonable counsel fees and costs and expenses incurred in
the investigation, defense or settlement of any claims covered by
13
<PAGE>
Article XII) resulting from the failure of the Service to use
reasonable care in servicing the Ongoing Swap Pool.
(x) If any transaction in the Ongoing Swap Pool is terminated
as a result of any event of default or other event or condition giving
rise to a right of termination under the operative documents or
agreements governing such transaction, NatWest Plc shall have the right
to participate in any action, suit or proceeding, or any
recapitalization, workout or restructuring, arising out of or relating
thereto and no such action, suit or proceeding may be settled, and no
such recapitalization, workout or restructuring may be agreed to,
without the prior written consent of NatWest Plc, which consent shall
not be unreasonably be withheld or delayed. If, in the reasonable
judgment of NatWest Plc, there is a conflict of interest between the
Servicer and NatWest Plc in connection with any such action, suit,
proceeding, recapitalization, workout or restructuring, NatWest Plc
shall have the right to assume, in the name and on behalf of the
Surviving Bank and its Subsidiaries, the pursuit or negotiation of such
action, suit, proceeding, recapitalization, workout or restructuring,
and FFG shall cause the Surviving Bank and its Subsidiaries to promptly
execute and deliver any document, certificate, agreement or other
writing and to take such other actions as may be necessary or desirable
in connection therewith.
(xi) If (A) any transaction in the Ongoing Swap Pool is
terminated as a result of any event of default or other event or
condition giving rise to a right of termination under the operative
documents or agreements governing such transaction and (B) the
counterparty to such transaction has other indebtedness outstanding to
the Surviving Bank or any of its Affiliates, FFG shall cause the
Servicer to apply any amounts recovered from such counterparty or any
guarantor (through foreclosure on collateral or property, to the extent
such transaction is secured thereby, or setoff or otherwise) ratably,
according to amounts due and payable, to (I) payment of such
counterparty's obligations under such transaction and (II) such
counterparty's other indebtedness to the Surviving Bank or any of its
Affiliates, but only to the extent any such indebtedness is then due and
payable.
(xii) FFG will cause the Surviving Bank and each of its
Affiliates, on and after the Effective Time, to promptly deliver to
NatWest Plc or its designee copies of its credit evaluations and any
other credit assessments or reviews of any of the counterparties of the
transactions that are part of the Ongoing Swap Pool.
14
<PAGE>
2.11 Section 6.11. Section 6.11 of the Merger Agreement is hereby
------------
amended by inserting immediately before the period at the end of such Section
the following phrase:
"and provided further that, if a required consent in respect of any of the
-------- -------
Transferred Assets and Liabilities is not obtained prior to the Closing Date,
FFG and NatWest Plc shall use commercially reasonable efforts to implement
any lawful arrangement designed to provide the Surviving Bank with the
benefit of the relevant Transferred Assets and Liabilities and to otherwise
effect the intent of the parties under this Section 6.11 until such time as
such required consent has been obtained"
2.12 Section 6.12. Section 6.12 of the Merger Agreement is hereby
------------
amended by deleting the word "loan" and substituting therefor the word "loans".
2.13 Section 6.15. Section 6.15 of the Merger Agreement is hereby
------------
amended by inserting immediately before the period at the end of such Section
the phrase "; provided that NatWest Plc or any of its Affiliates may solicit for
--------
employment any of the individuals set forth on Schedule 6.15".
2.14 Section 7.8. Section 7.8 of the Merger Agreement is hereby
-----------
amended by (i) deleting the phrase "and (ii)" and substituting therefor the
phrase "(ii)" and (ii) inserting immediately preceding the ";" the phrase "and
(iii) a commitment letter dated June 9, 1994 relating to obligations of Bancorp
to provide a guarantee in respect of a loan of $2,000,000 thereunder".
2.15 Section 8.1. Section 8.1 of the Merger Agreement is hereby
-----------
amended by deleting the "(a)" at the beginning of the first sentence thereof.
2.16 Section 8.5. Section 8.5 of the Merger Agreement is hereby
-----------
amended by:
(a) inserting immediately preceding the period at the end of the first
sentence of Section 8.5(a) the following phrase:
"; provided that, to the extent reasonably required by FFG and the
--------
Surviving Bank, the Surviving Bank may (i) leave in place existing
signage bearing the Seller Trademarks and Tradenames and (ii) continue
to use stationery bearing the Seller Trademarks and Tradenames, in each
case, until the opening of business on May 6, 1996; and provided further
-------- -------
that FFG shall indemnify NatWest Plc and its Affiliates against any
Seller Indemnifiable Damages that NatWest Plc and its Affiliates may
suffer or incur arising out of or resulting from any such use of signage
or stationery bearing the Seller Trademarks and Tradenames. FFG hereby
agrees that, to the extent
15
<PAGE>
practicable, it shall use reasonable commercial efforts prior to the
Closing Date to provide the Included Subsidiaries with stationery
bearing the FFG marks or names";
(b) (i) inserting the phrase "(i)" before the words "the Surviving
Bank" in the second sentence of Section 8.5(a) and (ii) inserting immediately
preceding the period at the end of such sentence the following phrase:
"and (ii) the Surviving Bank and its Subsidiaries shall not be precluded
from using existing stocks of stationery and other similar materials
containing any of the Seller Trademarks and Tradenames solely for
internal purposes; provided that FFG shall indemnify NatWest Plc and its
--------
Affiliates against any Seller Indemnifiable Damages that NatWest Plc and
its Affiliates may suffer or incur arising out of or resulting from the
use of any such materials by the Surviving Bank or any of its
Subsidiaries"; and
(c) inserting immediately preceding the period at the end of Section
8.5(b) the following phrase:
"; provided that, to the extent any such filings are not made as of the
--------
Effective Time, FFG shall indemnify NatWest Plc and its Affiliates
against any Seller Indemnifiable Damages that NatWest Plc and its
Affiliates may suffer or incur arising out of or resulting from any
delay in making, or failure to make, such filings".
2.17 Section 8.6. Section 8.6 of the Merger Agreement is hereby
-----------
amended by:
(a) deleting the phrase "At least five business days prior" in the
second sentence of paragraph (a) and substituting therefor the word "Prior";
and
(b) deleting the phrase ", together with an unqualified report of KPMG
Peat Marwick LLP thereon" in the first sentence of paragraph (b).
2.18 Section 9.5. Section 9.5 of the Merger Agreement is hereby
-----------
amended by:
(i) inserting the words "and Carryforwards" after the word "Carrybacks"
----------------- ----------
in the heading thereof;
(ii) redesignating the first sentence thereof as paragraph (a); and
(iii) adding the following paragraph thereto:
16
<PAGE>
(b) FFG will, and will cause its Affiliates to immediately
pay to NatWest Plc any Tax refund (or reduction in Tax Liability)
resulting from a carryforward of a pre-acquisition Tax attribute of any
of the Included Subsidiaries into the FFG consolidated Tax Return, when
such refund or reduction is realized by the FFG group. FFG will, and
will cause its Affiliates to cooperate with NatWest Plc in obtaining
such refunds (or reduction in Tax Liability), including through the
filing of amended Tax Returns or refund claims; provided that no payment
--------
shall be due to the extent that such carryforward increases any Tax
Liability of FFG or its Affiliates. NatWest Plc agrees to indemnify FFG
for any Taxes resulting from the disallowance of such pre-acquisition
Tax attribute on audit or otherwise, but only to the extent such Taxes
relate to a Tax refund (or reduction in Tax Liability) previously paid
to NatWest Plc pursuant to this Section 9.5.
2.19 Section 9.8. Section 9.8 of the Merger Agreement is hereby
-----------
amended by (i) redesignating the first sentence of Section 9.8 as paragraph (a)
(and any related cross-references thereto) and (ii) adding the following
paragraphs thereto:
(b) Upon the reasonable request of NatWest Plc, and at the
expense of NatWest Plc, FFG will cause the Surviving Bank and its
Subsidiaries to use reasonable efforts to provide NatWest Plc with
access to (i) information (including access to books and records)
maintained by Pierce Leahy and located near New Brunswick, New Jersey,
maintained by Diversified and located near Scranton, Pennsylvania, or
maintained by any other similar or successor storage facility and (ii)
any other information pertinent to NBNA and the Included Subsidiaries as
of the Closing Date that may be relevant to the pursuit of or defense
against any claim, suit or proceeding, or the response to any inquiry by
any governmental agency, in respect of any Tax or regulatory matters.
(c) FFG agrees to cause the Surviving Bank and its
Subsidiaries to retain or cause to be retained all books and
records pertinent to NBNA and the Included Subsidiaries in
accordance with FFG's standard record retention policy, and to send
notice to its employees requesting that any documents in their
possession covering the tax years 1977 to 1988 be retained in
accordance with such policy. FFG agrees to cause the Surviving
Bank and its Subsidiaries to give NatWest Plc reasonable notice
prior to transferring, discarding or destroying any such
information and, if NatWest Plc reasonably requests, FFG will cause
the Surviving Bank and its Subsidiaries to allow NatWest Plc to
take possession of such books and records.
(d) From the Closing Date until March 15, 1997, FFG agrees to
cause the Surviving Bank to provide office space, free of charge, at 10
Exchange Place, Jersey City, New Jersey, for certain employees or
consultants
17
<PAGE>
of NatWest Plc and its Affiliates engaged in the preparation of the Tax
Returns of Holdings and the Included Subsidiaries for periods through
the Closing Date in return for certain assistance to be provided to the
Surviving Bank by such employees or consultants as previously agreed
between FFG and NatWest Plc. NatWest Plc agrees to use its best efforts
to file such Tax Returns on or prior to March 15, 1997.
2.20 Section 9.10. The first sentence of Section 9.10 of the
------------
Merger Agreement is hereby amended by inserting the phrase "New York Real
Property Transfer Gains Tax," after the phrase "sales," and inserting "(other
than Taxes incurred as a result of transactions consummated between the Included
Subsidiaries and NatWest Plc, Affiliates of NatWest Plc or third parties that
are not Affiliates of FFG or the Included Subsidiaries, including the transfer
of the properties located at 175 Water Street and 163 Front Street, New York,
New York)" after the phrase "this Agreement".
2.21 Certain Closing Conditions. (a) Section 11.2 of the Merger
--------------------------
Agreement is hereby amended by (i) deleting paragraph (g) thereof in its
entirety and redesignating the succeeding paragraphs (h) through (o) as (g)
through (n) (and any related cross-references thereto) and (ii) inserting the
phrase "Assuming issuance of the FFG Common Stock Consideration or the FFG
Preferred Stock Consideration," at the beginning of paragraph (k) thereof (as so
designated prior to the redesignation referred to in clause (i) above).
(b) Section 11.3 of the Merger Agreement is hereby amended by:
(i) in paragraph (d), inserting the phrase ", Chief Executive --
Group Operations" immediately after the phrase "Group Chief Executive
Officer"; and
(ii) deleting paragraph (e) thereof in its entirety and
substituting the following:
(e) NatWest Plc shall have received a duly executed copy of
the Services Agreement and, assuming issuance of the FFG Common Stock
Consideration or the FFG Preferred Stock Consideration, the Registration
Rights Agreement.
2.22 Section 12.1. Clause (v) of Section 12.1 is hereby amended
------------
by inserting the phrase "subject to Section 6.10(ix)," immediately preceding the
word "the".
ARTICLE 3
SUPPLEMENTAL PROVISIONS
18
<PAGE>
3.1 Advisory Directors. (a) FFG acknowledges its obligation,
------------------
under Section 7.7 of the Merger Agreement, from the Effective Time and until
such time as all amounts payable under Section 3.6 of the Merger Agreement have
been paid in full, to cause the board of directors of the Surviving Bank to
include up to two persons designated by NatWest Plc and reasonably acceptable to
FFG. To the extent that any person so designated by NatWest Plc would be
prohibited by applicable law from serving as a director of the Surviving Bank,
FFG shall cause the Surviving Bank to appoint such person as an advisory
director (a "NatWest Advisory Director").
(b) FFG and NatWest Plc agree that each NatWest Advisory Director
shall act solely in an advisory capacity to the board of directors of the
Surviving Bank and shall not be authorized to vote on matters before the board
of directors or otherwise to exercise the power of final decision in matters
concerning the business of the Surviving Bank. FFG agrees that any listing of
any NatWest Advisory Directors shall distinguish between such NatWest Advisory
Director and the Surviving Bank's board of directors or indicate such NatWest
Advisory Director's advisory status.
(c) FFG agrees to cause the Surviving Bank to notify each NatWest
Advisory Director of all meetings and actions by written consent of the
Surviving Bank's board of directors and each committee thereof at the same time
and in the same manner as notice of any meetings of such board or committee is
required to be given to the Surviving Bank's directors who do not waive such
notice (or, if such action requires no notice, then 10 days written notice
thereof describing the matters upon which action is to be taken). Each NatWest
Advisory Director shall be permitted to attend each such meeting and any
adjournment thereof.
(d) FFG agrees that each NatWest Advisory Director shall have the
same rights as a member of the Surviving Bank's board of directors to receive
information relating to the Surviving Bank. Without limiting the generality of
the foregoing, FFG shall cause the Surviving Bank to furnish each NatWest
Advisory Director with copies of all documents, reports (whether or not prepared
by the Surviving Bank) and other information provided to members of the
Surviving Bank's board of directors who do not waive their right to receive such
documents, reports and other information, at the same time and in the same
manner as such documents, reports and other information are furnished to such
directors. NatWest Plc hereby agrees to use its best efforts to cause each
NatWest Advisory Director to hold, in confidence, unless compelled to disclose
by judicial or administrative process or by other requirements of law, all such
documents, reports and other information, except to the extent that such
documents, reports and other information can be shown to have been
(i) previously known on a nonconfidential basis by such NatWest Advisory
Director, (ii) in the public domain through no fault of such NatWest Advisory
Director or (iii) later lawfully acquired by such NatWest Advisory Director from
sources other than the Surviving Bank or any of its Affiliates who, to the
knowledge of such NatWest Advisory Director, had such documents, reports and
other information without any breach of any obligation of confidentiality;
provided that any
- --------
19
<PAGE>
NatWest Advisory Director may disclose such documents, reports and other
information to NatWest Plc's officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with such NatWest
Advisory Director's service as an advisory director of the Surviving Bank so
long as such Persons are informed by NatWest Plc of the confidential nature of
such documents, reports and other information and are directed by NatWest Plc to
treat such information confidentially and not to use any of such documents,
reports and other information for any reason or purpose other than in connection
with such NatWest Advisory Director's service as an advisory director of the
Surviving Bank. Subject to the foregoing, NatWest Plc shall cause each NatWest
Advisory Director to enter into an appropriate agreement with the Surviving Bank
to keep in confidence all such documents, reports and other information as if
such NatWest Advisory Director were a director of the Surviving Bank.
(e) FFG agrees that each NatWest Advisory Director shall have the same
rights as a member of the Surviving Bank's board of directors to receive
director fees and reimbursements for expenses. Without limiting the generality
of the foregoing, FFG shall cause the Surviving Bank to pay director fees and
reimbursements for expenses to each NatWest Advisory Director at the same time
and in the same manner as such fees and reimbursements are paid to members of
the Surviving Bank's board of directors who do not waive their right to receive
such fees and reimbursements.
3.2 Certain Cooperative Loans and Credit Card Receivables Charge-offs.
-----------------------------------------------------------------
Prior to the Closing Date, NatWest Plc shall cause NBNA to sell or otherwise
dispose of (i) a portfolio of cooperative loans with a principal amount of
approximately $210 million and (ii) certain credit card receivables charge-offs
of the Delaware Bank with a principal amount of approximately $140 million. FFG
and NatWest Plc agree that NBNA shall establish a general reserve (which shall
not be a loan loss reserve) equal to the pre-tax gain or loss (net of all
expenses attributable thereto). Any such gain or loss, but not such reserve,
shall be deemed recorded on the books of the Surviving Bank for purposes of
calculating Adjusted Net Income under Section 3.6 of the Merger Agreement.
3.3 Certain Stock Plans. Within 30 days of the Closing Date, FFG shall
-------------------
cause the Surviving Bank to pay to the participants in the National Westminster
Bancorp Restricted Stock Plan (the "Restricted Stock Plan") and National
Westminster Bancorp Phantom Stock Appreciation Plan (the "Phantom Stock Plan"
and, together with the Restricted Stock Plan, the "Stock Plans") in respect of
any Units (as defined in the Stock Plans) owned by such participants as of the
Closing Date an amount equal to $37.00 per Unit less, in the case any Unit
awarded under the Phantom Stock Plan, the initial Fair Market Value (as defined
in such plan) of any such Unit. NatWest Plc shall, within 10 days after receipt
of written notice from FFG or the Surviving Bank that such amounts have been
paid (which notice shall include reasonable evidence thereof), cause Bancorp NJ
or its designee, as an adjustment to
20
<PAGE>
the Purchase Price, to pay in cash to the Surviving Bank an amount equal to
$1.45 per Unit in respect of which payment was made by the Surviving Bank in
accordance with this Section 3.3.
3.4 Certain Environmental Matters. In connection with all properties
-----------------------------
owned, leased or operated by any of the Included Subsidiaries and located in New
Jersey, NatWest Plc has provided FFG (through its counsel) with certain
materials and information, including but not limited to letters of non-
applicability received from the New Jersey Department of Environmental
Protection, and the parties agree that NatWest Plc has complied with the
provisions of Section 6.5(d) of the Merger Agreement in all respects and shall
have no further obligations under such Section.
3.5 Concourse Plaza Office Building. FFG and NatWest Plc hereby
-------------------------------
acknowledge that, in connection with the NBNA Asset Sale, the capital stock of
South Bronx Development Corp. has been sold to NatWest Vista, LLC and that
NatWest Vista, LLC is the legal owner, and NBNA the beneficial owner, of the
contract receivable in the amount of $22,786,000 relating to the Concourse Plaza
Office Building owned by South Bronx Development Corp. (as more fully described
in the NBNA Asset Sale agreement). FFG and NatWest Plc hereby agree that
NatWest Plc shall cause NatWest Vista, LLC and South Bronx Development Corp. to
promptly remit any and all monies paid to them in respect of such contract
receivable to the Surviving Bank or its designee. FFG hereby agrees to
indemnify NatWest Plc and its Affiliates against any Seller Indemnifiable
Damages that NatWest Plc or its Affiliates may suffer or incur arising out of
the Sale and Purchase Agreement dated October 5, 1994 between The City of New
York, Brycon Development #2, Inc. and National Westminster Bank USA relating to
the sale of the Concourse Plaza Office Building, Bronx, New York or relating to
such office building; provided that, to the extent that (i) the amount of such
--------
contract receivable referred to above is not paid in full by December 31, 1997,
or such earlier time as such contract receivable is deemed to be uncollectible
in the reasonable good faith judgment of NBNA, and (ii) the unpaid balance
exceeds $500,000, NatWest Plc hereby agrees to pay to the Surviving Bank an
amount equal to the lesser of $500,000 and the amount of such excess; and
provided further, to the extent that at least $21,786,000 of such amount is
- -------- -------
subsequently paid, FFG shall cause the Surviving Bank to pay to NatWest Plc or
its designee an amount equal to the lesser of $500,000 and the amount of such
payment in excess of $21,786,000. NatWest Plc agrees that, to the extent
required as a condition precedent to receipt of the consent of The City of New
York for the transfer of the capital stock of South Bronx Development Corp. and
subject to the indemnity of FFG provided above, NatWest Plc hereby assumes the
obligations of NBNA under such Sale and Purchase Agreement. NatWest Plc agrees
that, until the contract receivable is paid, (i) it shall cause one of its
Affiliates to continue to employ Eric Cook to manage the Concourse Plaza Office
Building project and (ii) with respect to the management of such contract
receivable, the Surviving Bank shall have the right to reasonably direct the
actions of such individual, so long as such directions are not inconsistent or
in conflict with the reasonable directions given such individual by
21
<PAGE>
NatWest Plc or such other Person employing such individual. NatWest Plc agrees
that it shall not sell, assign, transfer, encumber, grant a Lien or interest in
or otherwise dispose of such contract receivable.
3.6 PEFCO Stock. On or prior to the Closing Date, NatWest Plc shall
-----------
have the right to cause NBNA to sell to an Affiliate of NatWest Plc 300 shares
of the common stock of the Private Export Finance Company held by NBNA at a
price of $2,750 per share.
3.7 Water Street Transaction. (a) In order to accomplish the Water
------------------------
Street Transaction prior to the Effective Time, FFG acknowledges that (i)
NatWest Plc has undertaken for the transferee of the properties included in the
Water Street Transaction certain post-Closing obligations, including without
limitation the clearing of violations and removal of liens and judgments and
(ii) the deed to such properties, although delivered prior to the Effective
Time, may not be recorded prior to the Effective Time. FFG hereby agrees, from
and after the Effective Time, to cause the Surviving Bank to (i) provide
reasonable access to NatWest Plc, its counsel and other authorized
representatives during normal business hours to the employees, offices,
properties, books and records of the Surviving Bank reasonably related to the
matters referred to in clause (i) of the preceding sentence and (ii) instruct
its employees to cooperate with and assist NatWest Plc, its counsel and other
authorized representatives in connection with such matters. FFG hereby
disclaims any interest in the properties included in the Water Street
Transaction and agrees not to create or file any Lien or to take any other
action which could reasonably be expected to interfere with the title to, or the
interest of the transferee in, such properties.
(b) Notwithstanding the provisions of Section 6.8 of the Merger
Agreement, FFG hereby agrees that NatWest Plc may elect to delay the payment of
the proceeds payable to NBNA pursuant to the Water Street Transaction until the
close of business on May 3, 1996; provided that such proceeds are held in escrow
--------
by a reputable title company and NatWest Plc agrees to indemnify FFG for any
Seller Indemnifiable Damages which FFG or any of its Affiliates may suffer or
incur as a result of the failure to remit such proceeds to the Surviving Bank by
the close of business on such date, including without limitation the Surviving
Bank's cost of funds with respect to any unremitted portion of such proceeds
from and after May 3, 1996 until paid in full.
(c) NatWest Plc hereby agrees to indemnify FFG and its Affiliates
against any Buyer Indemnifiable Damages that FFG and its Affiliates may suffer
or incur (i) relating to the properties included in the Water Street Transaction
arising out of any event or condition occurring or existing prior to the
consummation of the Water Street Transaction or (ii) under the Purchase and Sale
Agreement among NatWest Plc, NBNA and American International Realty Corp., or
any documents, deeds, instruments or agreements executed in connection therewith
(other than any
22
<PAGE>
lease or agreement regarding the use or occupancy of space at 175 Water Street
or 163 Front Street to which NBNA is a party).
3.8 Loan or Lease Assets. FFG and NatWest Plc hereby agree that, in
--------------------
connection with the preparation of the Closing Balance Sheet and the calculation
of Closing Tangible Equity, except as otherwise provided by Section 6.12 of the
Merger Agreement, neither FFG nor NatWest Plc will disagree with any provision,
reserve or charge-off in respect of any of the loan or lease assets of the
Included Subsidiaries.
3.9 Identified Assets. NatWest Plc hereby agrees to indemnify FFG and
-----------------
its Affiliates against any Buyer Indemnifiable Damages that FFG and its
Affiliates may suffer or incur relating to the Identified Assets arising out of
any event or condition occurring on or after December 19, 1995. FFG hereby
agrees to indemnify NatWest Plc and its Affiliates against any Seller
Indemnifiable Damages that NatWest Plc and its Affiliates may suffer or incur
relating to the Identified Assets arising out of any event or condition
occurring or existing prior to December 19, 1995.
3.10 NatWest USA Capital Corp. On or prior to the Closing Date,
------------------------
NatWest Plc shall cause NBNA to sell or otherwise transfer to NatWest Plc or one
of its Affiliates at fair market value all of the capital stock of NatWest USA
Capital Corp.
3.11 MessageBeam; Internet Address. (a) FFG and NatWest Plc hereby
-----------------------------
agree that NatWest Plc and its Affiliates shall have a non-exclusive, paid up
and royalty-free license under copyrights, or other similar rights for computer
programs, to use, execute, reproduce, modify, and prepare derivative works based
upon, the computer program known as "MessageBeam". To the extent that the
consent of any other Person is required in connection with the granting of such
license, FFG and NatWest Plc shall use commercially reasonable efforts to obtain
such consent and, if such consent cannot be obtained, FFG and NatWest Plc shall
use commercially reasonable efforts to implement any lawful arrangement designed
to provide NatWest Plc and its Affiliates with the benefit of such license and
to otherwise effect the intent of the parties under this Section 3.11.
(b) FFG and NatWest Plc acknowledge that the Internet address
"natwest.com" is presently assigned to NatWest Home Mortgage Corp. and that,
pursuant to Section 8.5 of the Merger Agreement, after the Closing Date, FFG and
its Affiliates are not permitted to use such Internet address. To the extent
that such Internet address is not assigned or otherwise transferred to NatWest
Plc or one of its Affiliates on or prior to the Closing Date, FFG hereby agrees
to cause NatWest Home Mortgage Corp. to assign or otherwise transfer such
Internet address to NatWest Plc or one of its Affiliates as soon as practicable
after the Closing Date.
3.12 Certain Offices and Office Space. (a) FFG and NatWest Plc hereby
--------------------------------
agree that, from the Closing Date until December 31, 1996, the U.K.
23
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representative office of the Surviving Bank shall be permitted to use and occupy
certain space presently occupied by NBNA at 27 Leadenhall, London, England, and
to receive certain support services in connection therewith. Such use and
occupancy and receipt of support services shall be on substantially the same
terms and conditions as the present use and occupancy and receipt of such
support services.
(b) FFG and NatWest Plc hereby further agree that, from the Closing
Date until no later than June 30, 1996, FFG shall cause the Surviving Bank to
make available office space, free of charge, at 10 Exchange Place, Jersey City,
New Jersey, to certain employees of NatWest Plc and its Affiliates who are
involved in the disposition of the Residential Mortgage Loan Portfolio and the
removal of the books and records of NatWest Plc and its Affiliates from the
offices of the Surviving Bank.
3.13 Certain Wire Transfer Services. FFG and NatWest Plc acknowledge
------------------------------
that NBNA and its Subsidiaries are presently providing services to NatWest Plc
and its Affiliates in connection with the wire transfer of funds over the
Federal Reserve's wire transfer network. As soon as practicable after the
Closing Date, FFG shall cause the Surviving Bank and its Subsidiaries, as the
provider of such services to NatWest Plc and its Affiliates, (i) to execute such
documents or agreements as may reasonably be required to comply with Appendix C
of Operating Circular No. 8 of the Federal Reserve Bank of New York and (ii) to
provide encryption of the communication line between the Surviving Bank and its
Subsidiaries, on the one hand, and NatWest Plc and its Affiliates, on the other
hand, used in connection with the provision of such services.
3.14 Interest Sensitive Securities. FFG and NatWest Plc hereby agree,
-----------------------------
that for purposes of Section 3.3(b)(ii) of the Merger Agreement, certain
municipal securities of approximately $3 million in book value shall be deemed
to have an Adjusted Interest Rate Securities Value of book value less $250,000.
ARTICLE 4
MISCELLANEOUS
4.1 Incorporation by Reference. (a) The provisions of Article XII of
--------------------------
the Merger Agreement shall apply to the covenants, obligations and agreements of
Article 3 of this Amendment.
(b) The provisions of Article XIV (other than the proviso of Section
14.3) of the Merger Agreement shall be incorporated by reference herein and each
reference therein to the Merger Agreement shall apply to this Amendment as if
this Amendment were referred to therein.
4.2 Effect on Merger Agreement. (a) Except to the extent amended or
--------------------------
supplemented as set forth in this Amendment, all provisions of the Merger
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Agreement are and shall remain in full force and effect and are hereby ratified
and confirmed in all respects, and the execution, delivery and effectiveness of
this Agreement shall not operate as a waiver or amendment of any provision of
the Merger Agreement not specifically amended or supplemented by this Amendment.
25
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date and year
first above written.
FLEET FINANCIAL GROUP, INC.
By /s/
-------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK PLC
By /s/
-------------------------
Name:
Title:
Exhibit 99(c)
FOR IMMEDIATE RELEASE CONTACT: James Mahoney
617-346-5472
FLEET FINANCIAL GROUP COMPLETES
PURCHASE OF NATWEST BANK N.A.
TRANSACTION CREATES PREEMINENT NORTHEASTERN REGIONAL BANK
Boston, Mass., May 1, 1996: Fleet Financial Group, the nation's 11th
largest bank holding company, announced the completion, effective today, of the
acquisition of NatWest Bank N.A., the New Jersey-based bank subsidiary of
National Westminster Bank Plc of London. The transaction was announced on
December 19, 1995.
"This transaction greatly enhances Fleet's presence in the metropolitan
New York market and extends our franchise into New Jersey," said Terrence
Murray, president and chief executive officer of Fleet Financial Group. "It
unites two complementary organizations and will be good for the customers and
communities we serve."
"We knew when we announced the acquisition that NatWest had an excellent
franchise. As we've moved forward with the integration, we've become even more
convinced that the Fleet/NatWest combination will create one of the premier
banking franchises in the Northeast," Murray said.
Fleet Financial Group, which now serves nearly 6.2 million households and
has some $70 billion in deposits, maintains the largest branch banking franchise
in the Northeast, operating more than 1,200 branches and 2,000 ATMs throughout
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York and Rhode
Island. In addition, Fleet conducts business with more than 40,000 commercial
customers and is the largest lender to commercial firms in the
<PAGE>
Northeast. With 455 branches in New York, Fleet has the state's third largest
bank branch franchise. In New Jersey, where Fleet previously had no branch
presence, it ranks fourth.
With the close of the transaction, Fleet Financial Group is a $90-billion
diversified financial services company listed on the New York Stock Exchange
(NYSE: FLT). Fleet's lines of business include commercial and consumer banking,
mortgage banking, government banking, asset-based lending, equipment leasing,
investment management services and student loan processing.
