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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) October 23, 1997
HUBCO, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-10699 22-2405746
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(Commission File Number) (IRS Employer Identification No.)
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(Address of principal executive offices)
(201) 236-2600
(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events
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HUBCO, Inc. ("HUBCO") announced on October 23, 1997 the signing of a
definitive agreement (the "Merger Agreement") among HUBCO, Poughkeepsie
Financial Corp. ("Poughkeepsie") and Bank of the Hudson ("BTH") under which
HUBCO will acquire Poughkeepsie Financial Corp. in a stock for stock exchange
which is intended to qualify as a pooling of interests. A copy of the Press
Release is attached as an Exhibit to this Form 8-K.
Under the terms of the agreement each share of Poughkeepsie Common
Stock will be exchanged for .30 shares of HUBCO Common Stock, so long as the
median closing price for HUBCO Common Stock during a pre-closing period is at or
above $33.33. Based upon HUBCO's October 22, 1997 closing price of $35.375 for
HUBCO Common Stock, .30 shares of HUBCO Common Stock would have a value of
$10.61. This $10.61 value equates to the $136 million, or 184% of Poughkeepsie's
book value, and 30 times Poughkeepsie's annualized six months' earnings, and
represents a deposit premium of 10.25%. If the median HUBCO price during the
pre-closing period is below $33.33 but above $31.25, each share of Poughkeepsie
Common Stock would be exchanged for shares of HUBCO Common Stock with a value of
$10.00. If HUBCO's median pre-closing price is $31.25 or below, a maximum
exchange ratio of .32 would apply. In addition, the agreement provides that
Poughkeepsie will be able to increase its quarterly cash dividends to an amount
substantially equivalent to HUBCO's cash dividend as adjusted for the exchange
ratio. The Merger Agreement contains customary anti-dilution measures; however,
no anti-dilution adjustments will be made with respect to HUBCO's 3% stock
dividend to be paid on December 1, 1997 to shareholders of record on November
13, 1997.
In connection with the execution of the merger agreement, Poughkeepsie
has issued an option to HUBCO which, under certain defined circumstances, would
enable HUBCO to purchase up to 2,000,000 shares of Poughkeepsie Common Stock.
The transaction, which is expected to close in the first quarter of 1998, is
expected to be treated as a tax-free exchange to holders of Poughkeepsie stock.
On October 23, 1997, HUBCO, Inc. will hold a conference call with
Banking Industry Analysts and others to discuss the acquisition. The following
information will be provided to participants during the Investor Presentation.
HUBCO, Inc. estimates cost savings to be in the range of 35% to 40% of
Poughkeepsie's total overhead expenses. In past acquisitions HUBCO has achieved
cost savings ranging from 35% to 60% of overhead. Because Poughkeepsie brings
HUBCO into a new, but contiguous market, cost saves are projected to be at the
low end of the historical range. This estimate is based on past experience,
industry averages, specific information obtained during the due diligence
process and input from the Poughkeepsie senior management team.
Based on HUBCO's track record in seventeen prior acquisitions the
computer conversion and cost savings are anticipated to be completed and
achieved within 90 days of closing.
Earnings accretion is anticipated based on the cost savings to be
achieved and HUBCO expects earnings to be enhanced by a strong effort at
developing a small business lending niche along with associated deposit benefits
and a slight widening of the net interest margin. While HUBCO anticipates some
positive effect from the revenue enhancement aspect of this transaction it is
unable to specify such benefits with sufficient assurance to take them into
account in the estimates.(1)(2)
Merger related and restructuring charges will be taken and are
estimated to be approximately $7 million on an after tax basis. These charges
include employment contract payouts, severance payments, investment banking
fees, service contract terminations, disposal of equipment and fixtures no
longer necessary for the operation of the institution and with certain
reserves utilized to bring the reserve levels in line with HUBCO's policies.
These charges are all factored into the net book value accretion arising from
this acquisition. (3)
HUBCO estimates book value accretion, of a net of restructuring
charges, of over $1.00 per share. This figure was arrived at by combining the
capital accounts of Poughkeepsie and HUBCO and using the anticipated .3 exchange
ratio to convert Poughkeepsie's outstanding shares to HUBCO shares. HUBCO's
estimate of net book value accretion factors in the tax adjusted merger related
and restructuring charges associated with this acquisition.(2)
(1) The statements concerning cost savings are forward looking
statements under the Private Securities Litigation Reform Act of 1995. The
correctness of the estimate depends upon a number of factors including but not
limited to the ability to effectively centralize loan, credit, finance and data
processing functions without substantial cost increases, the ability to
terminate certain leases, economic conditions and other factors. The amount of
the cost savings may vary from the estimates.
(2) The estimates of book value accretion and earnings accretion for
HUBCO are forward looking statements under the Private Securities Reform Act of
1995. The ability of HUBCO to realize accretive book value is subject to a
number of factors, including but not limited to restructuring costs and the
impact of other transactions, and as a result, the actual results of HUBCO could
differ materially. The ability of HUBCO to realize accretive earnings is subject
to a number of factors, including but not limited to those set forth in the
text, and the impact of other acquisitions, general conditions, interest rates
and costs savings and as a result, the actual results of HUBCO could differ
materially. The correctness of the estimate depends upon a number of factors
including but not limited to the ability to effectively centralize loan, credit,
finance and data processing functions without substantial cost increases, the
ability to terminate certain leases, economic conditions and other factors. The
amount of the cost savings may vary from the estimates.
(3) The statements concerning one-time charges are forward looking
statements under the Private Securities Litigation Reform Act of 1995. The
correctness of the estimate depends upon a number of factors and the amount of
the actual charge incurred may vary from the estimate. While HUBCO has developed
this anticipated charge after considering what it believes to be all relevant
factors and including all currently known amounts, the actual amount of the
restructuring charge may vary, depending upon a number of factors, including but
not limited to the timing of the closing, HUBCO's ability to retain officers of
Poughkeepsie who have employment or severance contracts, as well as those who do
not, economic conditions, the resolution of various contractual contingencies
with third parties and other factors.
Item 7. Exhibits
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99.1 Press Release dated October 23, 1997.
99.2 Agreement and Plan of Merger dated October 22, 1997 among HUBCO,
Inc., Poughkeepsie Financial Corp. and Bank of the Hudson.
99.3 Stock Option Agreement dated October 22, 1997 among HUBCO, Inc.
and Poughkeepsie Savings Bank.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUBCO, INC.
Dated: October 22, 1997 By: D. LYNN VAN BORKULO-NUZZO
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D. Lynn Van Borkulo-Nuzzo,
Executive Vice President
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INDEX TO EXHIBIT
Exhibit No. Description
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99.1 Press Release dated October 23, 1997.
99.2 Agreement and Plan of Merger dated October 22, 1997 among HUBCO,
Inc., Poughkeepsie Financial Corp. and Bank of the Hudson.
99.3 Stock Option Agreement dated October 22, 1997 among HUBCO, Inc.
and Poughkeepsie Savings Bank.
HUBCO, INC.
1000 MacArthur Blvd.
Mahwah, NJ 07430
(NASDAQ: HUBC)
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD, INC.
Kenneth T. Neilson, Chairman, Kerry Thalheim
Chief Executive Officer & 675 Third Avenue
President (201) 236-2631 New York, NY 10017
Joseph Hurley, Chief Financial (212) 661-8030
Officer & Executive Vice President
(201) 236-6141
FOR IMMEDIATE RELEASE
October 23, 1997
HUBCO, Inc. and Poughkeepsie Financial Corp
Sign a Definitive Agreement
Mahwah, New Jersey, October 23, 1997--HUBCO, Inc. (NASDAQ:HUBC), and
Poughkeepsie Financial Corp. (NASDAQ:PKPS) today announced the signing of a
definitive merger agreement. Under the terms of the agreement each share of
Poughkeepsie Common Stock will be exchanged for .30 shares of HUBCO Common
Stock, so long as the median closing price for HUBCO Common Stock during a
pre-closing period is at or above $33.33. Based upon HUBCO's October 22, 1997
closing price of $35.375 for HUBCO Common Stock, .30 shares of HUBCO Common
Stock would have a value of $10.61. This $10.61 value equates to $136 million,
or 184% of Poughkeepsie Financial's book value, and 30 times Poughkeepsie
Financial's annualized six months' earnings, and represents a deposit premium of
10.25%. If the median HUBCO price during the pre-closing period is below $33.33
but above $31.25, each share of Poughkeepsie Financial's Common Stock would be
exchanged for shares of HUBCO Common Stock with a value of $10.00. If HUBCO's
median pre-closing price is $31.25 or below, a maximum exchange ratio of .32
would apply. In addition, the agreement provides that Poughkeepsie Financial
will be able to increase its quarterly cash dividends to an amount substantially
equivalent to HUBCO's cash dividend as adjusted for the exchange ratio.
In connection with the execution of the merger agreement, Poughkeepsie
Financial has issued an option to HUBCO which, under certain defined
circumstances, would enable HUBCO to purchase up to 2,000,000 shares of
Poughkeepsie Financial Common Stock. The transaction, which is expected to close
in the first quarter of 1998, is expected to be treated as a tax-free exchange
to holders of Poughkeepsie Financial stock and be accounted for as a pooling of
interests.
This will be HUBCO's twentieth acquisition in seven years and
represents HUBCO's first entry into New York State. Poughkeepsie Financial has
offices in Rockland, Orange and Dutchess Counties of New York. Rockland County
is contiguous to Bergen County, New Jersey, where HUBCO's headquarters is
located.
"This merger expands HUBCO's market into New York State. It is
another step in developing a chain of competitive community banking institutions
which provide local services to their customers and communities while achieving
efficiencies through technology, centralized processing and strong incentive
programs," stated Kenneth T. Neilson, HUBCO's Chairman, President and Chief
Executive Officer.
Joseph B. Tockarshewsky, Chairman, President and Chief Executive
Officer of Poughkeepsie Financial, stated "The directors and management are
proud of the value that this merger creates for our stockholders. The resources
and strength of HUBCO will provide Bank of the Hudson with the ability to
continue its longstanding commitment of excellence in products and service to
the communities of the Hudson Valley."
Poughkeepsie Financial Corp. is the holding company for Bank of the
Hudson, an $880 million asset institution headquartered in Poughkeepsie, New
York, formerly known as Poughkeepsie Savings Bank, FSB. The bank celebrated its
165th anniversary last year. It operates fifteen branches in three counties of
New York. The name Bank of the Hudson will be maintained by HUBCO for its New
York subsidiary, and Joseph B. Tockarshewsky will remain the Chairman and CEO of
Bank of the Hudson.
Consummation of the merger is subject to approval by bank
regulatory authorities and the shareholders of Poughkeepsie Financial, as well
as other customary conditions.
HUBCO, Inc. is a $3 billion bank holding company which
currently owns commercial banks in New Jersey and Connecticut. HUBCO's principal
subsidiaries are Hudson United Bank, a $1.7 billion asset institution with 57
banking offices in New Jersey, and Lafayette American Bank, a $1.3 billion asset
institution with 27 banking offices in Connecticut. Acquisitions of The Bank of
Southington in Connecticut and Security National Bank in New Jersey are in
process and are anticipated to close this quarter. HUBCO, Inc. offers a full
array of innovative products and services for the retail and commercial market,
including imaged checking accounts, 24 hour telephone banking, loans by phone,
international services, alternative investments, insurance products, trust
services and a wide variety of deposit and loan products.
# # #
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated October 22, 1997
(this "Agreement"), is among HUBCO, Inc. ("HUBCO"), a New Jersey corporation and
registered bank holding company, Poughkeepsie Financial Corp. a Delaware
corporation and registered savings and loan holding company ("PFC"), and Bank of
the Hudson, a Federal savings bank wholly owned by PFC ("BTH").
WHEREAS, the respective Boards of Directors of HUBCO and PFC
have each determined that it is in the best interests of HUBCO and PFC and their
respective stockholders for HUBCO to acquire PFC by merging PFC with and into
HUBCO with HUBCO surviving and PFC shareholders receiving the consideration
hereinafter set forth; and
WHEREAS, the respective Boards of Directors of PFC, HUBCO and
BTH have each duly adopted and approved this Agreement and the Board of
Directors of PFC has directed that it be submitted to PFC's shareholders for
approval; and
WHEREAS, As a condition for HUBCO to enter into this
Agreement, HUBCO has required that it receive an option on certain authorized
but unissued shares of PFC Common Stock (as hereinafter defined) and,
simultaneously with the execution of this Agreement, PFC is issuing an option to
HUBCO (the "HUBCO Stock Option") to purchase 2,000,000 shares of the authorized
and unissued PFC Common Stock at an option price of $7.875 per share, subject to
adjustment and subject to the terms and conditions set forth in the agreement
governing the HUBCO Stock Option;
NOW, THEREFORE, intending to be legally bound, the parties
hereto hereby agree as follows:
ARTICLE I - THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as hereafter defined), PFC shall be merged
with and into HUBCO (the "Merger") in accordance with the Delaware General
Corporation Law (the "DGCL") and the New Jersey Business Corporation Act (the
"NJBCA"), and HUBCO shall be the surviving corporation (the "Surviving
Corporation").
1.2 Effect of the Merger. At the Effective Time, the Surviving
Corporation shall be considered the same business and corporate entity as each
of HUBCO and PFC and thereupon and thereafter, all the property, rights,
privileges, powers and franchises of each of HUBCO and PFC shall vest in the
Surviving Corporation and the Surviving Corporation shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and duties of
each of HUBCO and PFC and shall have succeeded to all of each of their
relationships, as fully and to the same extent as if such property, rights,
privileges, powers, franchises, debts, liabilities, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Corporation. In addition, any reference to either of HUBCO and PFC in
any contract or document, whether executed or taking effect before or after the
Effective Time, shall be considered a reference to the Surviving Corporation if
not inconsistent with the other provisions of the contract or document; and any
pending action or other judicial proceeding to which either of HUBCO or PFC is a
party shall not be deemed to have abated or to have discontinued by reason of
the Merger, but may be prosecuted to final judgment, order or decree in the same
manner as if the Merger had not been made; or the Surviving Corporation may be
substituted as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been rendered for or
against either of HUBCO or PFC if the Merger had not occurred.
1.3 Certificate of Incorporation. As of the Effective Time,
the certificate of incorporation of HUBCO shall be the certificate of
incorporation of the Surviving Corporation until otherwise amended as provided
by law.
1.4 By-laws. As of the Effective Time, the By-laws of HUBCO
shall be the By-laws of the Surviving Corporation until otherwise amended as
provided by law.
1.5 Directors and Officers. As of the Effective Time, the
directors of HUBCO (including the directors appointed pursuant to Section 5.18
hereof) shall be the directors of the Surviving Corporation. As of the Effective
Time, the officers of HUBCO shall be the officers of the Surviving Corporation.
1.6 Closing Date, Closing and Effective Time. Unless a
different date, time and/or place are agreed to by the parties hereto, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m., at the
offices of Pitney, Hardin, Kipp & Szuch, 200 Campus Drive, Florham Park, New
Jersey, on a date determined by HUBCO on at least seven business days notice
(the "Closing Notice") given to PFC, which date (the "Closing Date") shall be
not later than 15 business days following the receipt of all necessary
regulatory and governmental approvals and consents and the expiration of all
statutory waiting periods in respect thereof and the satisfaction or waiver of
all of the conditions to the consummation of the Merger specified in Article VI
hereof (other than the delivery of certificates, opinions and other instruments
and documents to be delivered at the Closing). In the Closing Notice, HUBCO
shall specify the "Determination Date" for purposes of determining the Median
Pre-Closing Price (as hereinafter defined), which date shall be not less than
seven business days nor more than ten business days prior to the Closing Date
set forth in the Closing Notice. The Merger shall become effective (and be
consummated) upon the later of the filing of certificates of merger, in form and
substance satisfactory to HUBCO and PFC, with the Secretary of State of the
State of New Jersey (the "New Jersey Certificate of Merger") and with the
Secretary of State of the State of Delaware (the "Delaware Certificate of
Merger"). The term "Effective Time" shall mean the close of business on the
first day when the certificates of merger in both New Jersey and Delaware have
been so filed. Immediately following the Closing, the New Jersey Certificate of
Merger shall be filed with the New Jersey Secretary of State and the Delaware
Certificate of Merger shall be filed with the Delaware Secretary of State.
ARTICLE II - CONVERSION OF PFC SHARES AND OPTIONS
2.1 Conversion of PFC Common Stock. Each share of common
stock, $.01 par value, of PFC ("PFC Common Stock"), issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted as follows:
(a) Exchange Ratio. Subject to the provisions of this
Section 2.1, each share of PFC Common Stock issued and outstanding immediately
prior to the Effective Time (excluding shares to be cancelled pursuant to
Section 2.1(d)) shall be converted at the Effective Time into the number of
shares of Common Stock, no par value, of HUBCO ("HUBCO Common Stock") equal to
the exchange ratio (the "Exchange Ratio") determined as follows:
(i) If the Median Pre-Closing Price (as hereinafter
defined) is equal to or greater than $33.33, the
Exchange Ratio shall be 0.300;
(ii) If the Median Pre-Closing Price is less than
$33.33 but greater than $31.25, the Exchange Ratio
shall be equal to the quotient obtained by dividing
$10.00 by the Median Pre-Closing Price and rounding
the result to the nearest one-thousandth; and
(iii) If the Median Pre-Closing Price is equal to or
less than $31.25, the Exchange Ratio shall be 0.320;
provided, however, that if the Median Pre-Closing
Price is less than $25.75, the Board of Directors of
PFC shall have the right, exercisable only until
11:59 p.m. on the third business day following the
Determination Date (or the third business day
following receipt by PFC of the Closing Notice, if
later), to terminate this Agreement by giving HUBCO
notice of such termination, referring to this Section
2.1, and this Agreement shall be terminated pursuant
to such notice and Section 7.1(i), effective as of
11:59 p.m. on the third business day following
receipt of such notice by HUBCO, unless prior to
11:59 p.m. on the third business day following
receipt of such termination notice, HUBCO sends
notice to PFC agreeing that the Exchange Ratio shall
be equal to the quotient obtained by dividing $8.24
by the Median Pre-Closing Price.
The "Median Pre-Closing Price" of HUBCO Common Stock
shall mean the Median Price (as hereinafter defined) calculated based upon the
Closing Price (as hereinafter defined) of HUBCO Common Stock during the 10
trading days ending on and including the Determination Date. The "Closing Price"
shall mean the closing price of HUBCO Common Stock as supplied by the Nasdaq
Stock Market ("NASDAQ") and published in The Wall Street Journal with respect to
a trading day. The "Median Price" shall be determined by taking the price
half-way between the Closing Prices left after discarding the 4 lowest and 4
highest Closing Prices in the 10 day period. A trading day shall mean a day for
which a Closing Price is so supplied and published.
(b) Conversion of PFC Certificates. At the Effective
Time, all shares of PFC Common Stock (other than those cancelled pursuant to
Section 2.1(d)) shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each certificate previously
evidencing any such shares (other than those cancelled pursuant to Section
2.1(d)) shall thereafter represent the right to receive the Merger Consideration
(as defined in Section 2.2(b)). The holders of such certificates previously
evidencing such shares of PFC Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares of PFC
Common Stock except as otherwise provided herein or by law. Such certificates
previously evidencing such shares of PFC Common Stock (other than those
cancelled pursuant to Section 2.1(d)) shall be exchanged for certificates
evidencing shares of HUBCO Common Stock issued pursuant to this Article II, upon
the surrender of such certificates in accordance with this Article II. No
fractional shares of HUBCO Common Stock shall be issued, and, in lieu thereof, a
cash payment shall be made pursuant to Section 2.2(e).
(c) Capital Changes. If between the date hereof and
the Effective Time the presently outstanding shares of HUBCO Common Stock shall
have been changed into a different number of shares or a different class, by
reason of any stock dividend, stock split, reclassification, recapitalization,
merger, combination or exchange of shares, the Exchange Ratio and the definition
of Closing Price shall be correspondingly adjusted to reflect such stock
dividend, stock split, reclassification, recapitalization, merger, combination
or exchange of shares; provided, however, that no adjustment shall be made to
reflect the 3% stock dividend which has been declared by HUBCO and is payable to
HUBCO shareholders of record on November 14, 1997.
(d) Treasury Shares. All shares of PFC Common Stock
held by PFC in its treasury or owned by HUBCO or by any of HUBCO's wholly-owned
subsidiaries, including Hudson United Bank ("HUBank") (other than shares held as
trustee or in a fiduciary capacity and shares held as collateral on or in lieu
of a debt previously contracted) immediately prior to the Effective Time shall
be cancelled.
2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, HUBCO
shall deposit, or shall cause to be deposited, with HUBank, Trust Department, or
another bank or trust company designated by HUBCO and reasonably acceptable to
PFC (the "Exchange Agent"), for the benefit of the holders of shares of PFC
Common Stock, for exchange in accordance with this Article II, through the
Exchange Agent, certificates evidencing shares of HUBCO Common Stock and cash in
such amount such that the Exchange Agent possesses such number of shares of
HUBCO Common Stock and such amount of cash as are required to provide all of the
consideration required to be exchanged by HUBCO pursuant to the provisions of
this Article II (such certificates for shares of HUBCO Common Stock, together
with any dividends or distributions with respect thereto, and cash being
hereinafter referred to as the "Exchange Fund"). The Exchange Agent shall,
pursuant to irrevocable instructions, deliver the HUBCO Common Stock and cash
out of the Exchange Fund in accordance with Section 2.1. Except as contemplated
by Section 2.2(f) hereof, the Exchange Fund shall not be used for any other
purpose.
(b) Exchange Procedures. As soon as reasonably
practicable either before or after the Effective Time but in no event more than
five (5) business days after the Effective Time, HUBCO will instruct the
Exchange Agent to mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time evidenced outstanding shares of
PFC Common Stock (the "Certificates"), (i) a letter of transmittal (the form and
substance of which is reasonably agreed to by HUBCO and PFC prior to the
Effective Time and which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Exchange Agent and which shall have such other
provisions as HUBCO may reasonably specify) and (ii) instructions for effecting
the surrender of the Certificates in exchange for certificates evidencing shares
of HUBCO Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor (x)
certificates evidencing that number of whole shares of HUBCO Common Stock which
such holder has the right to receive in respect of the shares of PFC Common
Stock formerly evidenced by such Certificate in accordance with Section 2.1 and
(y) cash in lieu of fractional shares of HUBCO Common Stock to which such holder
may be entitled pursuant to Section 2.2(e) (the shares of HUBCO Common Stock and
cash described in clauses (x) and (y) being collectively referred to as the
"Merger Consideration") and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of shares of PFC Common Stock
which is not registered in the transfer records of PFC, a certificate evidencing
the proper number of shares of HUBCO Common Stock and/or cash may be issued
and/or paid in accordance with this Article II to a transferee if the
Certificate evidencing such shares of PFC Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time to evidence only the right
to receive upon such surrender the Merger Consideration. HUBCO shall establish
appropriate procedures that will enable holders of unexchanged stock
certificates of PFC's predecessors (which certificates represent shares of, or
the right to receive shares of, PFC Common Stock) to directly exchange such
certificates for the Merger Consideration.
(c) Distributions with Respect to Unexchanged Shares
of HUBCO Common Stock. No dividends or other distributions declared or made
after the Effective Time with respect to HUBCO Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of HUBCO Common Stock evidenced thereby,
and no other part of the Merger Consideration shall be paid to any such holder,
until the holder of such Certificate shall surrender such Certificate (or a
suitable affidavit of loss and customary bond). Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates evidencing shares of HUBCO Common Stock
issued in exchange therefor, without interest, (i) promptly, the amount of any
cash payable with respect to a fractional share of HUBCO Common Stock to which
such holder may have been entitled pursuant to Section 2.2(e) and the amount of
dividends or other distributions with a record date on or after the Effective
Time theretofore paid with respect to such shares of HUBCO Common Stock, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date on or after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such shares of HUBCO Common Stock.
(d) No Further Rights in PFC Common Stock. All shares
of HUBCO Common Stock issued and cash paid upon conversion of the shares of PFC
Common Stock in accordance with the terms hereof shall be deemed to have been
issued or paid in full satisfaction of all rights pertaining to such shares of
PFC Common Stock.
(e) No Fractional Shares of HUBCO Common Stock. No
certificates or scrip evidencing fractional shares of HUBCO Common Stock shall
be issued upon the surrender for exchange of Certificates and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a
stockholder of HUBCO. Cash shall be paid in lieu of fractional shares of HUBCO
Common Stock, based upon the Median Pre-Closing Price of HUBCO Common Stock.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of PFC Common Stock for
two years after the Effective Time shall be delivered to HUBCO, upon demand, and
any holders of PFC Common Stock who have not theretofore complied with this
Article II shall thereafter look only to HUBCO for the Merger Consideration,
dividends and distributions to which they are entitled.
(g) No Liability. Neither HUBCO nor the Exchange
Agent shall be liable to any holder of shares of PFC Common Stock for any such
shares of HUBCO Common Stock or cash (or dividends or distributions with respect
thereto) delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(h) Withholding Rights. HUBCO shall be entitled to
deduct and withhold, or cause the Exchange Agent to deduct and withhold, from
funds provided by the holder or from the consideration otherwise payable
pursuant to this Agreement to any holder of PFC Common Stock, the minimum
amounts (if any) that HUBCO is required to deduct and withhold with respect to
the making of such payment under the Code (as defined in Section 3.8), or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by HUBCO, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the PFC Common Stock in
respect of which such deduction and withholding was made by HUBCO.
2.3 Stock Transfer Books. At the Effective Time, the stock
transfer books of PFC shall be closed and there shall be no further registration
of transfers of shares of PFC Common Stock thereafter on the records of PFC. On
or after the Effective Time, any Certificates presented to the Exchange Agent or
HUBCO for transfer shall be converted into the Merger Consideration.
2.4 PFC Stock Options. Each Stock Option (as defined in
Section 3.2) outstanding at the Effective Time shall be converted into an option
to purchase HUBCO Common Stock, wherein (i) the right to purchase shares of PFC
Common Stock pursuant to the Stock Option shall be converted into the right to
purchase that same number of shares of HUBCO Common Stock multiplied by the
Exchange Ratio, (ii) the option exercise price per share of HUBCO Common Stock
shall be the previous option exercise price per share of the PFC Common Stock
divided by the Exchange Ratio, and (iii) in all other material respects the
option shall be subject to the same terms and conditions as governed the Stock
Option on which it was based, including the length of time within which the
option may be exercised. Shares of HUBCO Common Stock issuable upon exercise of
Stock Options shall be covered by an effective registration statement on Form
S-8, and HUBCO shall file a registration statement on Form S-8 covering such
shares as soon as possible after the Effective Time.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PFC
References herein to "PFC Disclosure Schedule" shall mean all
of the disclosure schedules required by this Article III, dated as of the date
hereof and referenced to the specific sections and subsections of Article III of
this Agreement, which have been delivered on the date hereof by PFC to HUBCO.
PFC hereby represents and warrants to HUBCO as follows:
3.1 Corporate Organization.
(a) PFC is a corporation duly organized and validly
existing under the laws of the State of Delaware. PFC 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 and qualified would not have a material adverse effect on the
business, operations, assets or financial condition of PFC and the PFC
Subsidiaries (as defined below), taken as a whole. PFC is registered as a
savings and loan holding company under the Home Owners' Loan Act, as amended
(the "HOLA").
(b) Each PFC Subsidiary and its jurisdiction of
incorporation is listed in the PFC Disclosure Schedule. For purposes of this
Agreement, the term "PFC Subsidiary" means any corporation, partnership, joint
venture or other legal entity in which PFC, directly or indirectly, owns at
least a 50% stock or other equity interest or for which PFC, directly or
indirectly, acts as a general partner, provided that to the extent that any
representation or warranty set forth herein covers a period of time prior to the
date of this Agreement, the term "PFC Subsidiary" shall include any entity which
was a PFC Subsidiary at any time during such period. BTH is a savings bank duly
organized and validly existing in stock form under the laws of the United States
of America. All eligible accounts of depositors issued by BTH are insured by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation (the "FDIC") to the fullest extent permitted by law. PSB Associates,
Inc. ("PSB Associates") is a corporation duly organized and in active status
under the laws of the State of New York. PSB Associates is duly licensed to sell
life insurance, mutual funds, variable annuities and unit investment trusts.
Each PFC Subsidiary 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 and
qualified would not have a material adverse effect on the business, operations,
assets or financial condition of PFC and the PFC Subsidiaries, taken as a whole.
(c) The PFC Disclosure Schedule sets forth true and
complete copies of the Certificate of Incorporation and By-laws, as in effect on
the date hereof, of PFC, BTH and PSB Associates.
3.2 Capitalization. The authorized capital stock of PFC
consists of 40,000,000 shares of PFC Common Stock and 2,000,000 shares of serial
preferred stock, $.01 par value per share ("PFC Preferred Stock"). As of
September 19, 1997, there were 12,700,325, shares of PFC Common Stock issued and
outstanding, including 105,000 shares of treasury stock, and no shares of PFC
Preferred Stock issued and outstanding. As of September 19, 1997, there were
1,275,394 shares of PFC Common Stock issuable upon exercise of outstanding stock
options. The PFC Disclosure Schedule sets forth (i) all options which may be
exercised for issuance of PFC Common Stock (collectively, the "Stock Options")
and the terms upon which the options may be exercised and (ii) true and complete
copies of each plan and a specimen of each form of agreement pursuant to which
any outstanding Stock Option was granted, including a list of each outstanding
Stock Option issued pursuant thereto. All issued and outstanding shares of PFC
Common Stock, and all issued and outstanding shares of capital stock of each PFC
Subsidiary, have been duly authorized and validly issued, and are fully paid and
nonassessable. The authorized capital stock of BTH and of PSB Associates is as
set forth in the charter documents of BTH and PSB Associates, respectively
contained in the PFC Disclosure Schedule. All of the outstanding shares of
capital stock of each PFC Subsidiary are owned (directly in the case of BTH, and
indirectly in the case of each other PFC Subsidiary) by PFC and are free and
clear of any liens, encumbrances, charges, restrictions or rights of third
parties. Except for the Stock Options issued and disclosed herein, the HUBCO
Stock Option and any rights (the "PFC Rights") pursuant to the BTH Rights
Agreement dated as of May 1, 1988 (the "Rights Plan"), neither PFC nor any PFC
Subsidiary has granted or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
transfer, purchase, subscription or issuance of any shares of capital stock of
PFC or any PFC Subsidiary or any securities representing the right to purchase,
subscribe or otherwise receive any shares of such capital stock or any
securities convertible into any such shares, and there are no agreements or
understandings with respect to voting of any such shares.
3.3 Authority; No Violation.
(a) Subject to the approval of this Agreement and the
transactions contemplated hereby by all applicable regulatory authorities and by
the stockholders of PFC, and except as set forth in the PFC Disclosure Schedule,
PFC and BTH have the full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the directors of PFC and BTH in accordance with their
respective Certificate of Incorporation and Charter and applicable laws and
regulations. Except for such approvals, no other corporate proceedings not
otherwise contemplated hereby on the part of PFC or BTH are necessary to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by PFC and BTH, and constitutes the valid and
binding obligation of each of PFC and BTH, enforceable against PFC and BTH in
accordance with its terms, except to the extent that enforcement may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of federal savings associations or their holding companies, (ii)
general equitable principles, and (iii) laws relating to the safety and
soundness of insured depository institutions and except that no representation
is made as to the effect or availability of equitable remedies or injunctive
relief.
(b) Neither the execution and delivery of this
Agreement by PFC or BTH, nor the consummation by PFC or BTH of the transactions
contemplated hereby in accordance with the terms hereof, or compliance by PFC or
BTH with any of the terms or provisions hereof, will (i) violate any provision
of PFC's or BTH's Certificate of Incorporation, Charter or By-laws, (ii)
assuming that the consents and approvals set forth below are duly obtained,
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to PFC, BTH or any of their respective
properties or assets, or (iii) except as set forth in the PFC Disclosure
Schedule, violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the respective properties or
assets of PFC or BTH 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 PFC or BTH is a party, or by which they
or any of their respective properties or assets may be bound or affected except,
with respect to (ii) and (iii) above, such as individually or in the aggregate
will not have a material adverse effect on the business, operations, assets or
financial condition of PFC and the PFC Subsidiaries, taken as a whole, and which
will not prevent or materially delay the consummation of the transactions
contemplated hereby. Except for consents and approvals of or filings or
registrations with or notices to the Board of Governors of the Federal Reserve
System (the "FRB"), the Office of Thrift Supervision (the "OTS"), the Securities
and Exchange Commission (the "SEC"), and the stockholders of PFC, no consents or
approvals of or filings or registrations with or notices to any third party or
any public body or authority are necessary on behalf of PFC or BTH in connection
with (x) the execution and delivery by PFC and BTH of this Agreement and (y) the
consummation by PFC of the Merger, and the consummation by PFC and BTH of the
other transactions contemplated hereby, except (i) such as are listed in the PFC
Disclosure Schedule and (ii) such as individually or in the aggregate will not
(if not obtained) have a material adverse effect on the business, operations,
assets or financial condition of PFC and the PFC Subsidiaries taken as a whole
or prevent or materially delay the consummation of the transactions contemplated
hereby. To the best of PFC's knowledge, no fact or condition exists which PFC
has reason to believe will prevent it and BTH from obtaining the aforementioned
consents and approvals.
3.4 Financial Statements.
(a) The PFC Disclosure Schedule sets forth copies of
the consolidated balance sheets of BTH as of December 31, 1995 and 1996, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the periods ended December 31, in each of the three years 1994
through 1996, in each case accompanied by the audit report of Deloitte & Touche
LLP ("Deloitte & Touche"), independent certified public accountants with respect
to BTH, and the unaudited consolidated statement of condition of PFC as of June
30, 1997 and the related unaudited statements of income and cash flows for the
six months ended June 30, 1997 and 1996, as reported in PFC's Quarterly Report
on Form 10-Q, filed with the SEC (collectively, the "PFC Financial Statements").
The PFC Financial Statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved (except as may be indicated therein or in
the notes thereto and except for the omission of notes from interim financial
statements), and fairly present the consolidated financial condition of BTH or
PFC, as the case may be, as of the respective dates set forth therein, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows fairly present the results of the consolidated operations, changes in
stockholders' equity and cash flows of PFC for the respective periods set forth
therein.
(b) The books and records of PFC and each of its
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements.
(c) Except as and to the extent reflected, disclosed
or reserved against in the PFC Financial Statements (including the notes
thereto), as of June 30, 1997, neither PFC nor any PFC Subsidiary had any
liabilities, whether absolute, accrued, contingent or otherwise, material to the
business, operations, assets or financial condition of PFC and the PFC
Subsidiaries, taken as a whole, which were required by GAAP (consistently
applied) to be disclosed in PFC's consolidated statement of condition as of June
30, 1997 or the notes thereto. Since June 30, 1997, neither PFC nor any PFC
Subsidiary has incurred any liabilities except in the ordinary course of
business and consistent with prudent business practice, except as related to the
transactions contemplated by this Agreement or except as set forth in the PFC
Disclosure Schedule.
3.5 Broker's and Other Fees. Except for Advest, Inc.
("Advest"), neither PFC nor any of its Subsidiaries nor any of their respective
directors or officers has employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement. The agreement with
Advest is set forth in the PFC Disclosure Schedule. Other than pursuant to the
agreement with Advest, there are no fees (other than time charges billed at
usual and customary rates) payable to any consultants, including lawyers and
accountants, in connection with this transaction or which would be triggered by
consummation of this transaction or the termination of the services of such
consultants by PFC or any of its Subsidiaries.
3.6 Absence of Certain Changes or Events.
(a) Except as disclosed in the PFC Disclosure
Schedule, there has not been any material adverse change in the business,
operations, assets or financial condition of PFC and the PFC Subsidiaries, taken
as a whole, since June 30, 1997, and to the best of PFC's knowledge, no fact or
condition exists which PFC believes will cause such a material adverse change in
the future; provided, however, that a material adverse change shall not be
deemed to include (i) any change in the value of the respective investment and
loan portfolios of PFC and the PFC Subsidiaries as the result of a change in
interest rates generally, (ii) any change occurring after the date hereof in any
federal or state law, rule or regulation or in GAAP, which change affects
banking institutions generally, (iii) reasonable expenses incurred in connection
with this Agreement and the transactions contemplated hereby, or (iv) actions or
omissions of PFC or any PFC Subsidiary taken with the prior written consent of
HUBCO in contemplation of the transactions contemplated hereby (including
without limitation any actions taken by PFC or BTH pursuant to Section 5.13 of
this Agreement).
(b) Except as set forth in the PFC Disclosure
Schedule, neither PFC nor any of its Subsidiaries has taken or permitted any of
the actions set forth in Section 5.2 hereof between June 30, 1997 and the date
hereof and, except for execution of this Agreement and the other documents
contemplated hereby, PFC and its Subsidiaries have conducted their respective
businesses only in the ordinary course, consistent with past practice.
3.7 Legal Proceedings. Except as disclosed in the PFC
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of PFC and the PFC Subsidiaries, neither PFC nor any PFC Subsidiary
is a party to any, and there are no pending or, to the best of PFC's knowledge,
threatened legal, administrative, arbitral or other proceedings, claims, actions
or governmental investigations of any nature against PFC or any PFC Subsidiary
which, if decided adversely to PFC or an PFC Subsidiary, are reasonably likely
to have a material adverse effect on the business, operations, assets or
financial condition of PFC and the PFC Subsidiaries taken as a whole. Except as
disclosed in the PFC Disclosure Schedule, neither PFC nor any PFC Subsidiary is
a party to any order, judgment or decree entered in any lawsuit or proceeding
which is material to PFC or such PFC Subsidiary.
3.8 Taxes and Tax Returns. Except as disclosed in the PFC
Disclosure Schedule:
(a) PFC and each PFC Subsidiary has duly filed (and
until the Effective Time will so file) all returns, declarations, reports,
information returns and statements ("Returns") required to be filed by it on or
before the Effective Time in respect of any federal, state and local taxes
(including withholding taxes, penalties or other payments required) and has duly
paid (and until the Effective Time will so pay) all such taxes due and payable,
other than taxes or other charges which are being contested in good faith (and
disclosed to HUBCO in writing) or against which reserves have been established.
PFC and each PFC Subsidiary has established (and until the Effective Time will
establish) on its books and records reserves that are adequate for the payment
of all federal, state and local taxes not yet due and payable, but are incurred
in respect of PFC or such PFC Subsidiary through such date. None of the federal
or state income tax returns of PFC or any PFC Subsidiary have been examined by
the Internal Revenue Service (the "IRS") or the New York Division of Taxation
within the past six years. To the best knowledge of PFC, there are no audits or
other administrative or court proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, taxes or assessments
upon PFC or any PFC Subsidiary, nor has PFC or any PFC Subsidiary given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Neither PFC nor any PFC Subsidiary (i) has
requested any extension of time within which to file any Return, which Return
has not since been filed, (ii) is a party to any agreement providing for the
allocation or sharing of taxes, (iii) is required to include in income any
adjustment pursuant to Section 481(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of a voluntary change in accounting method
initiated by PFC or such PFC Subsidiary (nor does PFC have any knowledge that
the IRS has proposed any such adjustment or change of accounting method), or
(iv) has filed a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply.
(c) From January 1, 1992 until the date hereof, to
the best of PFC's knowledge, there has been no "ownership change" of PFC as
defined in Section 382(g) of the Code.
3.9 Employee, Director and Officer Benefit Plans.
(a) Except as set forth on the PFC Disclosure
Schedule, neither PFC nor any PFC Subsidiary maintains or contributes to any
"employee pension benefit plan" (the "PFC Pension Plans") within the meaning of
Section 3 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), "employee welfare benefit plan" (the "PFC Welfare Plans") within the
meaning of Section 3 of ERISA, stock option plan, stock purchase plan, deferred
compensation plan, severance plan, bonus plan, employment agreement, director
retirement program or other similar plan, program or arrangement. Neither PFC
nor any PFC Subsidiary has, since September 2, 1974, contributed to any
"Multiemployer Plan," as such term is defined in Section 3(37) of ERISA.
(b) PFC has delivered to HUBCO in the PFC Disclosure
Schedules (or previously made available to HUBCO) a complete and accurate copy
of each of the following with respect to each of the PFC Pension Plans and PFC
Welfare Plans, if any: (i) plan document, summary plan description, and summary
of material modifications (if not available, a detailed description of the
foregoing); (ii) trust agreement or insurance contract, if any; (iii) most
recent IRS determination letter, if any; (iv) most recent actuarial report, if
any; and (v) most recent annual report on Form 5500.
(c) The present value of all accrued benefits, both
vested and non-vested, under each of the PFC Pension Plans subject to Title IV
of ERISA, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial valuation prepared by such PFC Pension Plan's actuary, did
not exceed the then current value of the assets of such plans allocable to such
accrued benefits. To the best of PFC's knowledge, the actuarial assumptions then
utilized for such plans were reasonable and appropriate as of the last valuation
date and reflect then current market conditions.
(d) During the last six years, the Pension Benefit
Guaranty Corporation ("PBGC") has not asserted any claim for liability against
PFC or any PFC Subsidiary which has not been paid in full.
(e) All premiums (and interest charges and penalties
for late payment, if applicable) due to the PBGC with respect to each PFC
Pension Plan have been paid. All contributions required to be made to each PFC
Pension Plan under the terms thereof, ERISA or other applicable law have been
timely made, and all amounts properly accrued to date as liabilities of PFC
which have not been paid have been properly recorded on the books of PFC.
(f) Except as disclosed in the PFC Disclosure
Schedule, each of the PFC Pension Plans, PFC Welfare Plans and each other
employee benefit plan and arrangement identified on the PFC Disclosure Schedule
has been operated in compliance in all material respects with the provisions of
ERISA, the Code, all regulations, rulings and announcements promulgated or
issued thereunder, and all other applicable governmental laws and regulations.
Furthermore, except as disclosed in the PFC Disclosure Schedule, if PFC
maintains any PFC Pension Plan, PFC has received or applied for a favorable
determination letter from the IRS which takes into account the Tax Reform Act of
1986 and (to the extent it mandates currently applicable requirements)
subsequent legislation, and PFC is not aware of any fact or circumstance which
would disqualify any plan.
(g) To the best knowledge of PFC, no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any PFC Welfare Plan or PFC
Pension Plan that would result in any material tax or penalty for PFC or any PFC
Subsidiary.
(h) No PFC Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events"
(notice of which has not been waived by the PBGC), within the meaning of Section
4034(b) of ERISA, with respect to any PFC Pension Plan.
(i) No "accumulated funding deficiency," within the
meaning of Section 412 of the Code, has been incurred with respect to any PFC
Pension Plan.
(j) There are no material pending or, to the best
knowledge of PFC, material threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of, or against any of the PFC Pension Plans
or the PFC Welfare Plans, any trusts created thereunder or any other plan or
arrangement identified in the PFC Disclosure Schedule.
(k) Except as disclosed in the PFC Disclosure
Schedule, no PFC Pension Plan or PFC Welfare Plan provides medical or death
benefits (whether or not insured) beyond an employee's retirement or other
termination of service, other than (i) coverage mandated by law or pursuant to
conversion or continuation rights set out in such Plan or an insurance policy
providing benefits thereunder, or (ii) death benefits under any PFC Pension
Plan.
(l) Except with respect to customary health, life and
disability benefits, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the PFC Financial Statements and established
in accordance with GAAP.
(m) With respect to each PFC Pension Plan and PFC
Welfare Plan that is funded wholly or partially through an insurance policy,
there will be no liability of PFC or any PFC Subsidiary as of the Effective Time
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except (i) for payments and other benefits due
pursuant to the employment agreements included within the PFC Disclosure
Schedule, and (ii) as set forth in the PFC Disclosure Schedule, or as expressly
agreed to by HUBCO in writing either pursuant to this Agreement or otherwise,
the consummation of the transactions contemplated by this Agreement will not (x)
entitle any current or former employee of PFC or any PFC Subsidiary to severance
pay, unemployment compensation or any similar payment, or (y) accelerate the
time of payment or vesting, or increase the amount of any compensation or
benefits due to any current or former employee under any PFC Pension Plan or PFC
Welfare Plan.
(o) Except for the PFC Pension Plans and the PFC
Welfare Plans, and except as set forth on the PFC Disclosure Schedule, PFC has
no deferred compensation agreements, understandings or obligations for payments
or benefits to any current or former director, officer or employee of PFC or any
PFC Subsidiary or any predecessor of any thereof. The PFC Disclosure Schedule
sets forth (or lists, if previously delivered to HUBCO): (i) true and complete
copies of the agreements, understandings or obligations with respect to each
such current or former director, officer or employee, and (ii) the most recent
actuarial or other calculation of the present value of such payments or
benefits.
(p) Except as set forth in the PFC Disclosure
Schedule, PFC does not maintain or otherwise pay for life insurance policies
(other than group term life policies on employees) with respect to any director,
officer or employee. The PFC Disclosure Schedule lists each such insurance
policy and any agreement with a party other than the insurer with respect to the
payment, funding or assignment of such policy. To the best of PFC's knowledge,
neither PFC nor any PFC Pension Plan or PFC Welfare Plan owns any individual or
group insurance policies issued by an insurer which has been found to be
insolvent or is in rehabilitation pursuant to a state proceeding.
3.10 Reports.
(a) The PFC Disclosure Schedule lists, and as to item
(i) below PFC has previously delivered to HUBCO a complete copy of, each (i)
final registration statement, prospectus, annual, quarterly or current report
and definitive proxy statement filed by PFC since January 1, 1996 pursuant to
the Securities Act of 1933, as amended (the "1933 Act"), or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and (ii) communication (other
than general advertising materials and press releases) mailed by PFC to its
stockholders as a class since January 1, 1996, and each such communication, as
of its date, complied in all material respects with all applicable statutes,
rules and regulations and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information as of a later date shall be deemed to modify information as of an
earlier date.
(b) Since January 1, 1996, (i) each of PFC and BTH
has filed all reports that it was required to file under the 1934 Act, and (ii)
each of PFC, BTH and PSB Associates has duly filed all material forms, reports
and documents which it was required to file with each agency charged with
regulating any aspect of its business, in each case in form which was correct in
all material respects, and, subject to permission from such regulatory
authorities, PFC promptly will deliver or make available to HUBCO accurate and
complete copies of such reports. As of their respective dates, each such form,
report, or document, and each such final registration statement, prospectus,
annual, quarterly or current report, definitive proxy statement or
communication, complied in all material respects with all applicable statutes,
rules and regulations and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information contained in any such document as of a later date shall be deemed to
modify information as of an earlier date. The PFC Disclosure Schedule lists the
dates of all examinations of PFC, BTH or PSB Associates conducted by the OTS
since January 1, 1996 and the dates of any responses thereto submitted by PFC,
BTH or PSB Associates.
3.11 PFC and BTH Information. The information relating to PFC
and BTH, this Agreement, and the transactions contemplated hereby (except for
information relating solely to HUBCO) to be contained in the Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof) to be delivered to
stockholders of PFC in connection with the solicitation of their approval of the
Merger, as of the date the Proxy Statement-Prospectus is mailed to stockholders
of PFC, and up to and including the date of the meeting of stockholders to which
such Proxy Statement-Prospectus relates, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.12 Compliance with Applicable Law. Except as set forth in
the PFC Disclosure Schedule, PFC and each PFC Subsidiary holds all licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business and has complied with and is not in default in any respect under any
applicable law, statute, order, rule, regulation, policy and/or guideline of any
federal, state or local governmental authority relating to PFC or such PFC
Subsidiary (including, without limitation, consumer, community and fair lending
laws) (other than where the failure to have a license, franchise, permit or
authorization or where such default or noncompliance will not result in a
material adverse effect on the business, operations, assets or financial
condition of PFC and the PFC Subsidiaries taken as a whole), and PFC has not
received notice of violation of, and does not know of any violations of, any of
the above.
3.13 Certain Contracts.
(a) Except for plans referenced in Section 3.9 and as
disclosed in the PFC Disclosure Schedule, (i) neither PFC nor any PFC Subsidiary
is a party to or bound by any written contract or any understanding with respect
to the employment of any officers, employees, directors or consultants, and (ii)
the consummation of the transactions contemplated by this Agreement will not
(either alone or upon the occurrence of any additional acts or events) result in
any payment (whether of severance pay or otherwise) becoming due from PFC or any
PFC Subsidiary to any officer, employee, director or consultant thereof. The PFC
Disclosure Schedule lists, and either the PFC Disclosure Schedule sets forth
true and correct copies of or PFC has previously made available to HUBCO, all
severance or employment agreements with officers, directors, employees, agents
or consultants to which PFC or any PFC Subsidiary is a party.
(b) Except as disclosed in the PFC Disclosure
Schedule and except for loan commitments, loan agreements and loan instruments
entered into or issued by BTH in the ordinary course of business, (i) as of the
date of this Agreement, neither PFC nor any PFC Subsidiary is a party to or
bound by any commitment, agreement or other instrument which is material to the
business, operations, assets or financial condition of PFC and the PFC
Subsidiaries taken as a whole, (ii) no commitment, agreement or other instrument
to which PFC or any PFC Subsidiary is a party or by which any of them is bound
limits the freedom of PFC or any PFC Subsidiary to compete in any line of
business or with any person, and (iii) neither PFC nor any PFC Subsidiary is a
party to any collective bargaining agreement.
(c) Except as disclosed in the PFC Disclosure
Schedule, neither PFC nor any PFC Subsidiary or, to the best knowledge of PFC,
any other party thereto, is in default in any material respect under any
material lease, contract, mortgage, promissory note, deed of trust, loan or
other commitment (except those under which BTH is or will be the creditor) or
arrangement, except for defaults which individually or in the aggregate would
not have a material adverse effect on the business, operations, assets or
financial condition of PFC and the PFC Subsidiaries, taken as a whole.
3.14 Properties and Insurance.
(a) Except as set forth in the PFC Disclosure
Schedule, PFC or a PFC Subsidiary has good and, as to owned real property,
marketable title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in PFC's consolidated balance sheet
as of December 31, 1996, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for fair value in
the ordinary course of business since December 31, 1996), subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i) those
items that secure liabilities that are reflected in said balance sheet or the
notes thereto or that secure liabilities incurred in the ordinary course of
business after the date of such balance sheet, (ii) statutory liens for amounts
not yet delinquent or which are being contested in good faith, (iii) such
encumbrances, liens, mortgages, security interests, pledges and title
imperfections that are not in the aggregate material to the business,
operations, assets, and financial condition of PFC and the PFC Subsidiaries
taken as a whole, and (iv) with respect to owned real property, title
imperfections noted in title reports delivered to HUBCO prior to the date
hereof. Except as affected by the transactions contemplated hereby, PFC or one
or more of its Subsidiaries as lessees have the right under valid and subsisting
leases to occupy, use, possess and control all real property leased by PFC and
such Subsidiaries in all material respects as presently occupied, used,
possessed and controlled by PFC and its Subsidiaries.
(b) The business operations and all insurable
properties and assets of PFC and each PFC Subsidiary are insured for their
benefit against all risks which, in the reasonable judgment of the management of
PFC, should be insured against, in each case under policies or bonds issued by
insurers of recognized responsibility, in such amounts with such deductibles and
against such risks and losses as are in the opinion of the management of PFC
adequate for the business engaged in by PFC and the PFC Subsidiaries. As of the
date hereof, neither PFC nor any PFC Subsidiary has received any notice of
cancellation or notice of a material amendment of any such insurance policy or
bond, and to the best of PFC's knowledge, is not in default under any such
policy or bond, no coverage thereunder is being disputed, and all material
claims thereunder have been filed in a timely fashion. The PFC Disclosure
Schedule sets forth in summary form a list of all insurance policies of PFC and
the PFC Subsidiaries.
3.15 Minute Books. The minute books of PFC, BTH and PSB
Associates contain records of all meetings and other corporate action held of
their respective stockholders and Boards of Directors (including committees of
their respective Boards of Directors) that are complete and accurate in all
material respects.
3.16 Environmental Matters. Except as set forth in the PFC
Disclosure Schedule:
(a) Neither PFC nor any PFC Subsidiary has received
any written notice, citation, claim, assessment, proposed assessment or demand
for abatement alleging that PFC or such PFC Subsidiary (either directly or as a
trustee or fiduciary, or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or cleanup of any
condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters, which correction or
cleanup would be material to the business, operations, assets or financial
condition of PFC and the PFC Subsidiaries taken as a whole. PFC has no knowledge
that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any real property owned or leased by PFC or
any PFC Subsidiary, as OREO or otherwise, or owned or controlled by PFC or any
PFC Subsidiary as a trustee or fiduciary (collectively, "Properties"), in any
manner that violates any presently existing federal, state or local law or
regulation governing or pertaining to such substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of PFC and the PFC Subsidiaries, taken
as a whole. Except as described in the PFC Disclosure Schedule, none of the
Properties is located in the State of New Jersey or the State of Connecticut.
(b) PFC has no knowledge that any of the Properties
has been operated in any manner in the three years prior to the date of this
Agreement that violated any applicable federal, state or local law or regulation
governing or pertaining to toxic or hazardous substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of PFC and the PFC Subsidiaries taken
as a whole.
(c) To the best of PFC's knowledge, PFC, each PFC
Subsidiary and any and all of their tenants or subtenants have all necessary
permits and have filed all necessary registrations material to permit the
operation of the Properties in the manner in which the operations are currently
conducted under all applicable federal, state or local environmental laws,
excepting only those permits and registrations the absence of which would not
have a material adverse effect upon the operations of requiring the permit or
registration.
(d) To the knowledge of PFC, there are no underground
storage tanks on, in or under any of the Properties and no underground storage
tanks have been closed or removed from any of the Properties while the property
was owned, operated or controlled by PFC or any PFC Subsidiary.
3.17 Reserves. As of June 30, 1997, each of the allowance for
loan losses and the reserve for OREO properties in the PFC Financial Statements
was adequate pursuant to GAAP (consistently applied), and the methodology used
to compute each of the loan loss reserve and the reserve for OREO properties
complies in all material respects with GAAP (consistently applied) and all
applicable policies of the OTS.
3.18 No Parachute Payments. Except as set forth on the PFC
Disclosure Schedule, no officer, director, employee or agent (or former officer,
director, employee or agent) of PFC or any PFC Subsidiary is entitled now, or
will or may be entitled to as a consequence of this Agreement or the Merger, to
any payment or benefit from PFC, a PFC Subsidiary, HUBCO or any HUBCO Subsidiary
which if paid or provided would constitute an "excess parachute payment," as
defined in Section 280G of the Code or regulations promulgated thereunder.
3.19 Agreements with Bank Regulators. Neither PFC nor any PFC
Subsidiary is a party to any agreement or memorandum of understanding with, or a
party to any commitment letter, board resolution submitted to a regulatory
authority or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, any court,
governmental authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity") which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies or its management, except for those the
existence of which has been disclosed in writing to HUBCO by PFC prior to the
date of this Agreement, nor has PFC been advised by any Governmental Entity that
it is contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, except as disclosed in writing to HUBCO by PFC prior to the date of
this Agreement. Neither PFC nor any PFC Subsidiary is required by Section 32 of
the Federal Deposit Insurance Act to give prior notice to a Federal banking
agency of the proposed addition of an individual to its board of directors or
the employment of an individual as a senior executive officer, except to the
extent caused by BTH's formation of PFC or the reorganization (the
"Reorganization") by which PFC became the holding company for BTH, or except as
otherwise disclosed in writing to HUBCO by PFC prior to the date of this
Agreement.
3.20 Disclosure. No representation or warranty contained in
Article III of this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF HUBCO
References herein to the "HUBCO Disclosure Schedule" shall
mean all of the disclosure schedules required by this Article IV, dated as of
the date hereof and referenced to the specific sections and subsections of
Article IV of this Agreement, which have been delivered on the date hereof by
HUBCO to PFC. HUBCO hereby represents and warrants to PFC as follows:
4.1 Corporate Organization.
(a) HUBCO is a corporation duly organized and validly
existing under the laws of the State of New Jersey. HUBCO 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 and qualified would not have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO or the HUBCO Subsidiaries (defined below), taken as a whole.
HUBCO is registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHCA").
(b) Each of the HUBCO Subsidiaries is listed in the
HUBCO Disclosure Schedule. For purposes of this Agreement, the term "HUBCO
Subsidiary" means any corporation, partnership, joint venture or other legal
entity in which HUBCO, directly or indirectly, owns at least a 50% stock or
other equity interest or for which HUBCO, directly or indirectly, acts as a
general partner, provided that to the extent that any representation or warranty
set forth herein covers a period of time prior to the date of this Agreement,
the term "HUBCO Subsidiary" shall include any entity which was a HUBCO
Subsidiary at any time during such period. Each HUBCO Subsidiary is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation. HUBank is duly organized and validly existing under the laws of
the State of New Jersey. Lafayette American Bank and Trust Company ("Lafayette")
is duly organized and validly existing under the laws of the State of
Connecticut. All eligible accounts of depositors issued by HUBank and Lafayette
are insured by the Bank Insurance Fund ("BIF") of the FDIC to the fullest extent
permitted by law. Each HUBCO Subsidiary 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 and qualified would not have a material adverse effect on the business,
operations, assets or financial condition of HUBCO and the HUBCO Subsidiaries,
taken as a whole. The HUBCO Disclosure Schedule sets forth true and complete
copies of the Certificate of Incorporation and By-laws of HUBCO as in effect on
the date hereof.
4.2 Capitalization. The authorized capital stock of HUBCO
consists of 51,500,000 shares of HUBCO Common Stock and 10,300,000 shares of
preferred stock ("HUBCO Authorized Preferred Stock"). As of September 30, 1997,
there were 21,624,469 shares of HUBCO Common Stock issued and outstanding,
excluding 0 shares of treasury stock. Since such date, and from time to time
hereafter, HUBCO may sell or repurchase shares of HUBCO Common Stock. As of
September 30, 1997, there were 22,160 shares of HUBCO Authorized Preferred Stock
outstanding, all of which are designated Series B, no par value, Convertible
Preferred Stock.
Except for shares issuable under or arising from the Agreement
and Plan of Merger, dated August 18, 1997 (the "Southington Agreement"), by and
among HUBCO, Lafayette and The Bank of Southington ("Southington"), and except
as otherwise described in the HUBCO Disclosure Schedule, there are no shares of
HUBCO Common Stock issuable upon the exercise of outstanding stock options or
otherwise. All issued and outstanding shares of HUBCO Common Stock and HUBCO
Authorized Preferred Stock, and all issued and outstanding shares of capital
stock of HUBCO's Subsidiaries, have been duly authorized and validly issued, are
fully paid, nonassessable and free of preemptive rights, and are free and clear
of all liens, encumbrances, charges, restrictions or rights of third parties.
All of the outstanding shares of capital stock of the HUBCO Subsidiaries are
owned by HUBCO free and clear of any liens, encumbrances, charges, restrictions
or rights of third parties. Except for the shares issuable under the Southington
Agreement and except as otherwise described in the HUBCO Disclosure Schedule,
neither HUBCO nor any HUBCO Subsidiary has granted or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the transfer, purchase or issuance of any shares of
capital stock of HUBCO or any HUBCO Subsidiary or any securities representing
the right to purchase, subscribe or otherwise receive any shares of such capital
stock or any securities convertible into any such shares, and there are no
agreements or understandings with respect to voting of any such shares.
4.3 Authority; No Violation.
(a) Subject to the receipt of all necessary
governmental approvals, HUBCO has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby in accordance with the terms hereof. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of HUBCO in accordance with
its Certificate of Incorporation and applicable laws and regulations. Except for
such approvals, no other corporate proceedings on the part of HUBCO are
necessary to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by HUBCO and constitutes a valid
and binding obligation of HUBCO, enforceable against HUBCO in accordance with
its terms, except to the extent that enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
creditors of bank holding companies, (ii) general equitable principles, and
(iii) laws relating to the safety and soundness of insured depository
institutions and except that no representation is made as to the effect or
availability of equitable remedies or injunctive relief.
(b) Neither the execution or delivery of this
Agreement by HUBCO, nor the consummation by HUBCO of the transactions
contemplated hereby in accordance with the terms hereof, or compliance by HUBCO
with any of the terms or provisions hereof will (i) violate any provision of the
Certificate of Incorporation or By-laws of HUBCO, (ii) assuming that the
consents and approvals set forth below are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to HUBCO, any HUBCO Subsidiary, or any of their respective properties
or assets, or (iii) violate, conflict with, result in a breach of any provision
of, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of HUBCO or any HUBCO Subsidiary 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 HUBCO is a party, or
by which it or any of their properties or assets may be bound or affected,
except, with respect to (ii) and (iii) above, such as individually or in the
aggregate will not have a material adverse effect on the business, operations,
assets or financial condition of HUBCO and the HUBCO Subsidiaries, taken as a
whole, and which will not prevent or materially delay the consummation of the
transactions contemplated hereby. Except for consents and approvals of or
filings or registrations with or notices to the FRB, the OTS and the SEC, no
consents or approvals of or filings or registrations with or notices to any
third party or any public body or authority are necessary on behalf of HUBCO in
connection with (x) the execution and delivery by HUBCO of this Agreement, and
(y) the consummation by HUBCO of the Merger and the other transactions
contemplated hereby, except such as are listed in the HUBCO Disclosure Schedule
or in the aggregate will not (if not obtained) have a material adverse effect on
the business, operations, assets or financial condition of HUBCO. To the best of
HUBCO's knowledge, no fact or condition exists which HUBCO has reason to believe
will prevent it from obtaining the aforementioned consents and approvals.
4.4 Financial Statements.
(a) The HUBCO Disclosure Schedule sets forth copies
of the consolidated statements of financial condition of HUBCO as of December
31, 1995 and 1996, and the related consolidated statements of income, changes in
stockholders' equity and of cash flows for the periods ended December 31, in
each of the three fiscal years 1994 through 1996, in each case accompanied by
the audit report of Arthur Andersen LLP ("Arthur Andersen"), independent public
accountants with respect to HUBCO, and the unaudited consolidated statement of
condition of HUBCO as of June 30, 1997 and the related unaudited consolidated
statements of income and cash flows for the three and six months ended June 30,
1997 and 1996, as reported in HUBCO's Quarterly Report on Form 10-Q, filed with
the SEC under the 1934 Act (collectively, the "HUBCO Financial Statements"). The
HUBCO Financial Statements (including the related notes) have been prepared in
accordance with GAAP consistently applied during the periods involved (except as
may be indicated therein or in the notes thereto), and fairly present the
consolidated financial position of HUBCO as of the respective dates set forth
therein, and the related consolidated statements of income, changes in
stockholders' equity and of cash flows (including the related notes, where
applicable) fairly present the consolidated results of operations, changes in
stockholders' equity and cash flows of HUBCO for the respective fiscal periods
set forth therein.
(b) The books and records of HUBCO and the HUBCO
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed
or reserved against in the HUBCO Financial Statements (including the notes
thereto), as of June 30, 1997 neither HUBCO nor any of the HUBCO Subsidiaries
had any obligation or liability, whether absolute, accrued, contingent or
otherwise, material to the business, operations, assets or financial condition
of HUBCO or any of the HUBCO Subsidiaries which were required by GAAP
(consistently applied) to be disclosed in HUBCO's consolidated statement of
condition as of June 30, 1997 or the notes thereto. Except for the transactions
contemplated by this Agreement, and other proposed acquisitions by HUBCO since
June 30, 1997 reflected in any Form 8-K filed by HUBCO with the SEC, neither
HUBCO nor any HUBCO Subsidiary has incurred any liabilities since June 30, 1997
except in the ordinary course of business and consistent with past practice.
4.5 Broker's and Other Fees. Neither HUBCO nor any of its
directors or officers has employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement.
4.6 Absence of Certain Changes or Events. There has not been
any material adverse change in the business, operations, assets or financial
condition of HUBCO and HUBCO's Subsidiaries taken as a whole since June 30, 1997
and to the best of HUBCO's knowledge, except for the effects of the transactions
contemplated by the Southington Agreement and the agreements by which HUBCO is
to acquire Security National Bank & Trust Company of New Jersey and its holding
company, Fiduciary Investment Company of New Jersey (the "Effects of Announced
Acquisitions"), no facts or condition exists which HUBCO believes will cause
such a material adverse change in the future.
4.7 Legal Proceedings. Except as disclosed in the HUBCO
Disclosure Schedule, and except for ordinary routine litigation incidental to
the business of HUBCO or its Subsidiaries, neither HUBCO nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
HUBCO's knowledge, threatened legal, administrative, arbitral or other
proceedings, claims, actions or governmental investigations of any nature
against HUBCO or any of its Subsidiaries which, if decided adversely to HUBCO or
its Subsidiaries, are reasonably likely to have a material adverse effect on the
business, operations, assets or financial condition of HUBCO or its
Subsidiaries. Except as disclosed in the HUBCO Disclosure Schedule, neither
HUBCO nor HUBCO's Subsidiaries is a party to any order, judgment or decree
entered in any lawsuit or proceeding which is material to HUBCO or its
Subsidiaries.
4.8 Reports. Since January 1, 1996, HUBCO has filed all
reports that it was required to file with the SEC under the 1934 Act, all of
which complied in all material respects with all applicable requirements of the
1934 Act and the rules and regulations adopted thereunder. As of their
respective dates, each such report and each registration statement, proxy
statement, form or other document filed by HUBCO with the SEC, including without
limitation, any financial statements or schedules included therein, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading,
provided that information as of a later date shall be deemed to modify
information as of an earlier date. Since January 1, 1996, HUBCO and each HUBCO
Subsidiary has duly filed all material forms, reports and documents which they
were required to file with each agency charged with regulating any aspect of
their business.
4.9 HUBCO Information. The information relating to HUBCO and
its Subsidiaries (including, without limitation, information regarding other
transactions which HUBCO is required to disclose), this Agreement and the
transactions contemplated hereby in the Registration Statement and Proxy
Statement-Prospectus (as defined in Section 5.6(a) hereof), as of the date of
the mailing of the Proxy Statement-Prospectus, and up to and including the date
of the meeting of stockholders of PFC to which such Proxy Statement-Prospectus
relates, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Registration Statement shall comply as to form in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
rules and regulations promulgated thereunder.
4.10 Compliance With Applicable Law. Except as set forth in
the HUBCO Disclosure Schedule, each of HUBCO and HUBCO's Subsidiaries holds all
material licenses, franchises, permits and authorizations necessary for the
lawful conduct of its business, and has complied with and is not in default in
any respect under any applicable law, statute, order, rule, regulation, policy
and/or guideline of any federal, state or local governmental authority relating
to HUBCO or HUBCO's Subsidiaries (including without limitation consumer,
community and fair lending laws) (other than where such default or noncompliance
will not result in a material adverse effect on the business, operations, assets
or financial condition of HUBCO and HUBCO's Subsidiaries taken as a whole) and
HUBCO has not received notice of violation of, and does not know of any
violations of, any of the above.
4.11 Funding and Capital Adequacy. At the Effective Time,
after giving pro forma effect to the Merger and any other acquisition which
HUBCO or its Subsidiaries have agreed to consummate, HUBCO will be deemed "well
capitalized" under prompt corrective action regulatory capital requirements.
4.12 HUBCO Common Stock. As of the date hereof, HUBCO has
available and reserved shares of HUBCO Common Stock sufficient for issuance
pursuant to the Merger and upon the exercise of Stock Options subsequent
thereto. The HUBCO Common Stock to be issued hereunder pursuant to the Merger,
and upon exercise of the Stock Options, when so issued, will be duly authorized
and validly issued, fully paid, nonassessable, free of preemptive rights and
free and clear of all liens, encumbrances or restrictions created by or through
HUBCO, with no personal liability attaching to the ownership thereof. The HUBCO
Common Stock to be issued hereunder pursuant to the Merger, and upon exercise of
the Stock Options, when so issued, will be registered under the 1933 Act and
issued in accordance with all applicable state and federal laws, rules and
regulations.
4.13 Agreements with Bank Regulators. Neither HUBCO nor any
HUBCO Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Government Entity which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve policies or
its management, except for those the existence of which has been disclosed in
writing to PFC by HUBCO prior to the date of this Agreement, nor has HUBCO been
advised by any Governmental Entity that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, except as disclosed
in writing to PFC by HUBCO prior to the date of this Agreement. Neither HUBCO
nor any HUBCO Subsidiary is required by Section 32 of the Federal Deposit
Insurance Act to give prior notice to a Federal banking agency of the proposed
addition of an individual to its board of directors or the employment of an
individual as a senior executive officer, except as disclosed in writing to PFC
by HUBCO prior to the date of this Agreement.
4.14 Taxes and Tax Returns.
(a) HUBCO and HUBCO's subsidiaries have duly filed
(and until the Effective Time will so file) all Returns required to be filed by
them in respect of any federal, state and local taxes (including withholding
taxes, penalties or other payments required) and have duly paid (and until the
Effective Time will so pay) all such taxes due and payable, other than taxes or
other charges which are being contested in good faith (and disclosed to PFC in
writing). HUBCO and HUBCO's subsidiaries have established on their books and
records reserves that are adequate for the payment of all federal, state and
local taxes not yet due and payable, but are incurred in respect of HUBCO
through such date. The HUBCO Disclosure Schedule identifies the federal income
tax returns of HUBCO and its Subsidiaries which have been examined by the IRS
within the past six years. No deficiencies were asserted as a result of such
examinations which have not been resolved and paid in full. The HUBCO Disclosure
Schedule identifies the applicable state income tax returns of HUBCO and its
Subsidiaries which have been examined by the applicable authorities. No
deficiencies were asserted as a result of such examinations which have not been
resolved and paid in full. To the best knowledge of HUBCO, there are no audits
or other administrative or court proceedings presently pending nor any other
disputes pending with respect to, or claims asserted for, taxes or assessments
upon HUBCO or its Subsidiaries, nor has HUBCO or its Subsidiaries given any
currently outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to any taxes or Returns.
(b) Except as set forth in the HUBCO Disclosure
Schedule, neither HUBCO nor any Subsidiary of HUBCO (i) has requested any
extension of time within which to file any Return which Return has not since
been filed, (ii) is a party to any agreement providing for the allocation or
sharing of taxes, (iii) is required to include in income any adjustment pursuant
to Section 481(a) of the Code, by reason of a voluntary change in accounting
method initiated by HUBCO or any of its Subsidiaries (nor does HUBCO have any
knowledge that the IRS has proposed any such adjustment or change of accounting
method) or (iv) has filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply.
4.15 Employee Benefit Plans.
(a) HUBCO and its Subsidiaries maintain or contribute
to certain "employee pension benefit plans" (the "HUBCO Pension Plans"), as such
term is defined in Section 3(2)(A) of ERISA, and "employee welfare benefit
plans" (the "HUBCO Welfare Plans"), as such term is defined in Section 3(1) of
ERISA. Since September 2, 1974, neither HUBCO nor its subsidiaries have
contributed to any "Multiemployer Plan", as such term is defined in Section
3(37) of ERISA.
(b) HUBCO is not aware of any fact or circumstance
which would disqualify any HUBCO Pension Plan or HUBCO Welfare Plan that could
not be retroactively corrected (in accordance with the procedures of the IRS).
(c) The present value of all accrued benefits under
each of the HUBCO Pension Plans subject to Title IV of ERISA, based upon the
actuarial assumptions used for purposes of the most recent actuarial valuation
prepared by such HUBCO Pension Plan's actuary, did not exceed the then current
value of the assets of such plans allocable to such accrued benefits.
(d) During the last six years, the PBGC has not
asserted any claim for liability against HUBCO or any of its subsidiaries which
has not been paid in full.
(e) All premiums (and interest charges and penalties
for late payment, if applicable) due to the PBGC with respect to each HUBCO
Pension Plan have been paid. All contributions required to be made to each HUBCO
Pension Plan under the terms thereof, ERISA or other applicable law have been
timely made, and all amounts properly accrued to date as liabilities of HUBCO
which have not been paid have been properly recorded on the books of HUBCO.
(f) No "accumulated funding deficiency", within the
meaning of Section 412 of the Code, has been incurred with respect to any of the
HUBCO Pension Plans.
(g) There are no pending or, to the best knowledge of
HUBCO, threatened or anticipated claims (other than routine claims for benefits)
by, on behalf of or against any of the HUBCO Pension Plans or the HUBCO Welfare
Plans, any trusts created thereunder or any other plan or arrangement identified
in the HUBCO Disclosure Schedule.
(h) Except with respect to customary health, life and
disability benefits or as disclosed in the HUBCO Disclosure Schedule, HUBCO has
no unfunded benefit obligations which are not accounted for by reserves shown on
the financial statements and established under GAAP or otherwise noted on such
financial statements.
4.16 Contracts. Except as disclosed in the HUBCO Disclosure
Schedule, neither HUBCO nor any of its Subsidiaries, or to the best knowledge of
HUBCO, any other party thereto, is in default in any material respect under any
material lease, contract, mortgage, promissory note, deed of trust, loan or
other commitment (except those under which a banking subsidiary of HUBCO is or
will be the creditor) or arrangement, except for defaults which individually or
in the aggregate would not have a material adverse effect on the business,
operations, assets or financial condition of HUBCO and its subsidiaries, taken
as a whole.
4.17 Properties and Insurance.
(a) HUBCO and its Subsidiaries have good and, as to
owned real property, marketable title to all material assets and properties,
whether real or personal, tangible or intangible, reflected in HUBCO's
consolidated balance sheet as of December 31, 1996, or owned and acquired
subsequent thereto (except to the extent that such assets and properties have
been disposed of for fair value in the ordinary course of business since
December 31, 1996), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure liabilities that are
reflected in said balance sheet or the notes thereto or that secure liabilities
incurred in the ordinary course of business after the date of such balance
sheet, (ii) statutory liens for amounts not yet delinquent or which are being
contested in good faith, (iii) such encumbrances, liens, mortgages, security
interests, pledges and title imperfections that are not in the aggregate
material to the business, operations, assets, and financial condition of HUBCO
and its subsidiaries taken as a whole and (iv) with respect to owned real
property, title imperfections noted in title reports. Except as disclosed in the
HUBCO Disclosure Schedule, HUBCO and its Subsidiaries as lessees have the right
under valid and subsisting leases to occupy, use, possess and control all
property leased by HUBCO or its Subsidiaries in all material respects as
presently occupied, used, possessed and controlled by HUBCO and its
Subsidiaries.
(b) The business operations and all insurable
properties and assets of HUBCO and its Subsidiaries are insured for their
benefit against all risks which, in the reasonable judgment of the management of
HUBCO, should be insured against, in each case under policies or bonds issued by
insurers of recognized responsibility, in such amounts with such deductibles and
against such risks and losses as are in the opinion of the management of HUBCO
adequate for the business engaged in by HUBCO and its Subsidiaries. As of the
date hereof, neither HUBCO nor any of its Subsidiaries has received any notice
of cancellation or notice of a material amendment of any such insurance policy
or bond or is in default under any such policy or bond, no coverage thereunder
is being disputed and all material claims thereunder have been filed in a timely
fashion.
4.18. Environmental Matters. Except as disclosed in the HUBCO
Disclosure Schedule, neither HUBCO nor any of its Subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that HUBCO or any of its Subsidiaries (either directly or as
a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or cleanup of any condition resulting from the
violation of any law, ordinance or other governmental regulation regarding
environmental matters which correction or cleanup would be material to the
business, operations, assets or financial condition of HUBCO and its
Subsidiaries taken as a whole. Except as disclosed in the HUBCO Disclosure
Schedule, HUBCO has no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any property
currently owned or leased by HUBCO or any of its subsidiaries in any manner that
violates or, after the lapse of time is reasonably likely to violate, any
presently existing federal, state or local law or regulation governing or
pertaining to such substances and materials, the violation of which would have a
material adverse effect on the business, operations, assets or financial
condition of HUBCO and its Subsidiaries, taken as a whole.
4.19 Reserves. As of June 30, 1997, the allowance for possible
loan losses in the HUBCO Financial Statements was adequate based upon all
factors required to be considered by HUBCO at that time in determining the
amount of such allowance. The methodology used to compute the allowance for
possible loan losses complies in all material respects with all applicable FDIC,
Connecticut Department of Banking and New Jersey Department of Banking policies.
As of June 30, 1997, the valuation allowance for OREO properties in the HUBCO
Financial Statements was adequate based upon all factors required to be
considered by HUBCO at that time in determining the amount of such allowance.
4.20 Disclosure. No representation or warranty contained in
Article IV of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE V - COVENANTS OF THE PARTIES
5.1 Conduct of the Business of PFC and BTH. During the period
from the date of this Agreement to the Effective Time, PFC and BTH shall, and
shall cause each PFC Subsidiary to, conduct their respective businesses only in
the ordinary course and consistent with prudent business practice, except for
transactions permitted hereunder or with the prior written consent of HUBCO,
which consent will not be unreasonably withheld. Each of PFC and BTH also shall
use its reasonable best efforts to (i) preserve its business organization and
that of the PFC Subsidiaries intact, (ii) keep available to itself and the PFC
Subsidiaries the present services of its employees and those of such PFC
Subsidiaries, and (iii) preserve for itself and HUBCO the goodwill of its
customers and those of the PFC Subsidiaries and others with whom business
relationships exist.
5.2 Negative Covenants and Dividend Covenants. From the date
hereof to the Effective Time, except as otherwise approved by HUBCO in writing,
or as set forth in the PFC Disclosure Schedule, or as permitted or required by
this Agreement, neither PFC nor BTH will:
(a) change any provision of its Certificate of
Incorporation or By-laws or any similar governing documents;
(b) change the number of shares of its authorized or
issued capital stock (other than upon exercise of stock options or warrants
described on the PFC Disclosure Schedule in accordance with the terms thereof)
or issue or grant any option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to its authorized or issued
capital stock, or any securities convertible into shares of such stock, or
split, combine or reclassify any shares of its capital stock, or declare, set
aside or pay any dividend, or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock; provided,
however, that from the date hereof to the Effective Time, PFC may declare, set
aside or pay cash dividends per share of PFC Common Stock aggregating (i) the
cash dividends per share declared, set aside or paid by HUBCO during such period
multiplied by 0.320 (the maximum Exchange Ratio) minus (ii) $0.01 (the amount
per share required to redeem the PFC Rights); provided, further, that the amount
of any such dividends shall be adjusted, if and to the extent necessary in the
opinion of Arthur Andersen, independent accountants for HUBCO, so that the
declaration, setting aside and payment of such dividends will not disqualify the
Merger for pooling of interests accounting treatment.
(c) grant any severance or termination pay (other
than pursuant to written policies or contracts of PFC in effect on the date
hereof and disclosed to HUBCO in the PFC Disclosure Schedule) to, or enter into
or amend any employment or severance agreement with, any of its directors,
officers or employees; adopt any new employee benefit plan or arrangement of any
type; or award any increase in compensation or benefits to its directors,
officers or employees, except in each case as specified in Section 5.2 of the
PFC Disclosure Schedule;
(d) sell or dispose of any substantial amount of
assets or voluntarily incur any significant liabilities other than in the
ordinary course of business consistent with past practices and policies or in
response to substantial financial demands upon the business of PFC or BTH;
(e) make any capital expenditures other than pursuant
to binding commitments existing on the date hereof, expenditures necessary to
maintain existing assets in good repair, and expenditures described in business
plans or budgets previously furnished to HUBCO;
(f) file any applications or make any contract with
respect to branching or site location or relocation;
(g) agree to acquire in any manner whatsoever (other
than to realize upon collateral for a defaulted loan) any business or entity or
make any new investments in securities other than investments in government or
agency bonds having a maturity of less than five years;
(h) make any material change in its accounting
methods or practices, other than changes required in accordance with generally
accepted accounting principles or regulatory authorities;
(i) take any action that would result in any of its
representations and warranties contained in Article III of this Agreement not
being true and correct in any material respect at the Effective Time or that
would cause any of its conditions to Closing not to be satisfied;
(j) without first conferring with HUBCO, make or
commit to make any new loan or other extension of credit in an amount of
$3,000,000 or more, renew for a period in excess of one year any existing loan
or other extension of credit in an amount of $3,000,000 or more, or increase by
$3,000,000 or more the aggregate credit outstanding to any borrower or group of
affiliated borrowers, except such loan initiations, renewals or increases that
are committed as of the date of this Agreement and identified on the PFC
Disclosure Schedule and residential mortgage loans made in the ordinary course
of business in accordance with past practice; or
(k) agree to do any of the foregoing.
5.3 No Solicitation. So long as this Agreement remains in
effect, PFC and BTH shall not, directly or indirectly, encourage or solicit or
hold discussions or negotiations with, or provide any information to, any
person, entity or group (other than HUBCO) concerning any merger or sale of
shares of capital stock or sale of substantial assets or liabilities not in the
ordinary course of business, or similar transactions involving PFC or BTH (an
"Acquisition Transaction"). Notwithstanding the foregoing, PFC may enter into
discussions or negotiations or provide information in connection with an
unsolicited possible Acquisition Transaction if the Board of Directors of PFC,
after consulting with counsel, determines in the exercise of its fiduciary
responsibilities that such discussions or negotiations should be commenced or
such information should be furnished. PFC shall promptly communicate to HUBCO
the terms of any proposal, whether written or oral, which it may receive in
respect of any such Acquisition Transaction and the fact that it is having
discussions or negotiations with a third party about an Acquisition Transaction.
5.4 Current Information. During the period from the date of
this Agreement to the Effective Time, each of PFC and HUBCO will cause one or
more of its designated representatives to confer with representatives of the
other party on a monthly or more frequent basis regarding its business,
operations, properties, assets and financial condition and matters relating to
the completion of the transactions contemplated herein. On a monthly basis, PFC
agrees to provide HUBCO, and HUBCO agrees to provide PFC, with internally
prepared profit and loss statements no later than 21 days after the close of
each calendar month. As soon as reasonably available, but in no event more than
45 days after the end of each fiscal quarter (other than the last fiscal quarter
of each fiscal year) ending on or after June 30, 1997, PFC will deliver to HUBCO
and HUBCO will deliver to PFC their respective quarterly reports on Form 10-Q,
as filed under the 1934 Act. As soon as reasonably available, but in no event
more than 90 days after the end of each calendar year, PFC will deliver to HUBCO
and HUBCO will deliver to PFC their respective Annual Reports on Form 10-K as
filed under the 1934 Act.
5.5 Access to Properties and Records; Confidentiality.
(a) PFC and BTH shall permit HUBCO and its
representatives, and HUBCO shall permit, and cause each HUBCO Subsidiary to
permit, PFC and its representatives, reasonable access to their respective
properties, and shall disclose and make available to HUBCO and its
representatives, or PFC and its representatives, as the case may be, all books,
papers and records relating to its assets, stock ownership, properties,
operations, obligations and liabilities, including, but not limited to, all
books of account (including the general ledger), tax records, minute books of
directors' and stockholders' meetings, organizational documents, by-laws,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting employees, and any
other business activities or prospects in which HUBCO and its representatives or
PFC and its representatives may have a reasonable interest. Neither party shall
be required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of any customer, would
contravene any law, rule, regulation, order or judgment or would waive any
privilege. The parties will use their reasonable best efforts to obtain waivers
of any such restriction (other than waivers of the attorney-client privilege)
and in any event make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
Notwithstanding the foregoing, PFC acknowledges that HUBCO may be involved in
discussions concerning other potential acquisitions and HUBCO shall not be
obligated to disclose such information to PFC except as such information is
disclosed to HUBCO's shareholders generally.
(b) All information furnished by the parties hereto
previously in connection with transactions contemplated by this Agreement or
pursuant hereto shall be used solely for the purpose of evaluating the Merger
contemplated hereby and shall be treated as the sole property of the party
delivering the information until consummation of the Merger contemplated hereby,
and if such Merger shall not occur, each party and each party's advisors shall
return to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any copies of such
information, shall use its reasonable best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes. In the event that the Merger
contemplated hereby does not occur, all documents, notes and other writings
prepared by a party hereto or its advisors based on information furnished by the
other party shall be promptly destroyed. The obligation to keep such information
confidential shall continue for five years from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction.
5.6 Regulatory Matters.
(a) For the purposes of holding the Stockholders
Meeting (as such term is defined in Section 5.7 hereof), and qualifying under
applicable federal and state securities laws the HUBCO Common Stock to be issued
to PFC stockholders in connection with the Merger, the parties hereto shall
cooperate in the preparation and filing by HUBCO with the SEC of a Registration
Statement including a combined proxy statement and prospectus satisfying all
applicable requirements of applicable state and federal laws, including the 1933
Act, the 1934 Act and applicable state securities laws and the rules and
regulations thereunder (such proxy statement and prospectus in the form mailed
by PFC and HUBCO to the PFC shareholders together with any and all amendments or
supplements thereto, being herein referred to as the "Proxy
Statement-Prospectus" and the various documents to be filed by HUBCO under the
1933 Act with the SEC to register the HUBCO Common Stock for sale, including the
Proxy Statement-Prospectus, are referred to herein as the "Registration
Statement").
(b) HUBCO shall furnish PFC with such information
concerning HUBCO and its Subsidiaries (including, without limitation,
information regarding other transactions which HUBCO is required to disclose) as
is necessary in order to cause the Proxy Statement-Prospectus, insofar as it
relates to such corporations, to comply with Section 5.6(a) hereof. HUBCO agrees
promptly to advise PFC if at any time prior to the Stockholders Meeting, any
information provided by HUBCO in the Proxy Statement-Prospectus becomes
incorrect or incomplete in any material respect and to provide PFC with the
information needed to correct such inaccuracy or omission. HUBCO shall furnish
PFC with such supplemental information as may be necessary in order to cause the
Proxy Statement-Prospectus, insofar as it relates to HUBCO and its Subsidiaries,
to comply with Section 5.6(a) after the mailing thereof to PFC shareholders.
(c) PFC shall furnish HUBCO with such information
concerning PFC as is necessary in order to cause the Proxy Statement-Prospectus,
insofar as it relates to PFC, to comply with Section 5.6(a) hereof. PFC agrees
promptly to advise HUBCO if at any time prior to the Stockholders Meeting, any
information provided by PFC in the Proxy Statement-Prospectus becomes incorrect
or incomplete in any material respect and to provide HUBCO with the information
needed to correct such inaccuracy or omission. PFC shall furnish HUBCO with such
supplemental information as may be necessary in order to cause the Proxy
Statement-Prospectus, insofar as it relates to PFC, to comply with Section
5.6(a) after the mailing thereof to PFC shareholders.
(d) HUBCO shall as promptly as practicable make such
filings as are necessary in connection with the offering of the HUBCO Common
Stock with applicable state securities agencies and shall use all reasonable
efforts to qualify the offering of such stock under applicable state securities
laws at the earliest practicable date. PFC shall promptly furnish HUBCO with
such information regarding PFC shareholders as HUBCO requires to enable it to
determine what filings are required hereunder. PFC authorizes HUBCO to utilize
in such filings the information concerning PFC provided to HUBCO in connection
with, or contained in, the Proxy Statement-Prospectus. HUBCO shall furnish PFC's
counsel with copies of all such filings and keep PFC advised of the status
thereof. HUBCO shall as promptly as practicable file the Registration Statement
containing the Proxy Statement-Prospectus with the SEC, and each of HUBCO and
PFC shall promptly notify the other of all communications, oral or written, with
the SEC concerning the Registration Statement and the Proxy
Statement-Prospectus.
(e) HUBCO shall cause the HUBCO Common Stock issuable
pursuant to the Merger to be listed on the NASDAQ at the Effective Time. HUBCO
shall cause the HUBCO Common Stock which shall be issuable pursuant to exercise
of Stock Options to be accepted for listing on the NASDAQ when issued.
(f) The parties hereto will cooperate with each other
and use their reasonable best efforts to prepare all necessary documentation, to
effect all necessary filings and to obtain all necessary permits, consents,
approvals and authorizations of all third parties and governmental bodies
necessary to consummate the transactions contemplated by this Agreement as soon
as possible, including, without limitation, those required by the FRB and the
OTS. The parties shall each have the right to review in advance (and shall do so
promptly) all filings with, including all information relating to the other, as
the case may be, and any of their respective subsidiaries, which appears in any
filing made with, or written material submitted to, any third party or
governmental body in connection with the transactions contemplated by this
Agreement.
(g) Each of the parties will promptly furnish each
other with copies of written communications received by them 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.
(h) PFC acknowledges that HUBCO is in or may be in
the process of acquiring other banks and financial institutions and that in
connection with such acquisitions, information concerning PFC may be required to
be included in the registration statements, if any, for the sale of securities
of HUBCO or in SEC reports in connection with such acquisitions. PFC agrees to
provide HUBCO with any information, certificates, documents or other materials
about PFC as are reasonably necessary to be included in such other SEC reports
or registration statements, including registration statements which may be filed
by HUBCO prior to the Effective Time. PFC shall use its reasonable efforts to
cause its attorneys and accountants to provide HUBCO and any underwriters for
HUBCO with any consents, comfort letters, opinion letters, reports or
information which are necessary to complete the registration statements and
applications for any such acquisition or issuance of securities. HUBCO shall
reimburse PFC for reasonable expenses thus incurred by PFC should this
transaction be terminated for any reason other than as described in Section
7.1(f). HUBCO shall not file with the SEC any registration statement or
amendment thereto or supplement thereof containing information regarding PFC
unless PFC shall have consented in writing to such filing, which consent shall
not be unreasonably delayed or withheld.
(i) Between the date of this Agreement and the
Effective Time, PFC shall cooperate with HUBCO to reasonably conform PFC's
policies and procedures regarding applicable regulatory matters, to those of
HUBCO as HUBCO may reasonably identify to PFC from time to time.
5.7 Approval of Stockholders. PFC will (i) take all steps
necessary duly to call, give notice of, convene and hold a meeting of the
stockholders of PFC (the "Stockholders Meeting") for the purpose of securing the
PFC stockholder approval of this Agreement required by law, (ii) recommend to
the stockholders of PFC the approval of this Agreement and the transactions
contemplated hereby and use its reasonable best efforts to obtain, as promptly
as practicable, such approval, subject to the right not to make a recommendation
or to withdraw a recommendation if either (x) PFC's investment banker withdraws
its fairness opinion prior to the Stockholders Meeting, or (y) PFC's Board of
Directors, after consulting with counsel, determines in the exercise of its
fiduciary responsibilities that such recommendation should not be made or should
be withdrawn, and (iii) cooperate and consult with HUBCO with respect to each of
the foregoing matters.
5.8 Further Assurances.
(a) Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
satisfy the conditions to Closing and to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
using reasonable efforts to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated by this Agreement and using its reasonable best
efforts to prevent the breach of any representation, warranty, covenant or
agreement of such party contained or referred to in this Agreement and to
promptly remedy the same. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action. Nothing in this section shall be construed
to require any party to participate in any threatened or actual legal,
administrative or other proceedings (other than proceedings, actions or
investigations to which it is a party or subject or threatened to be made a
party or subject) in connection with consummation of the transactions
contemplated by this Agreement unless such party shall consent in advance and in
writing to such participation and the other party agrees to reimburse and
indemnify such party for and against any and all costs and damages related
thereto if the Merger is not consummated.
(b) HUBCO agrees that from the date hereof to the
Effective Time, except as otherwise approved by PFC in writing or as permitted
or required by this Agreement, HUBCO will not, nor will it permit any HUBCO
Subsidiary to: (i) take any action that would result in any of its
representations and warranties contained in Article IV of this Agreement not
being true and correct in any material respect at the Effective Time, or that
would cause any of its conditions to Closing not to be satisfied; (ii) amend its
Certificate of Incorporation in a manner which would adversely affect in any
manner the terms of the HUBCO Common Stock or the ability of HUBCO to consummate
the Merger; or (iii) make any acquisition that individually or in the aggregate
can reasonably be expected to materially adversely affect the ability of HUBCO
to consummate the Merger on or before October 31, 1998.
(c) HUBCO, PFC and BTH will use reasonable efforts to
cause the Merger to occur on or before March 31, 1998.
5.9 Public Announcements. HUBCO and PFC shall cooperate with
each other in the development and distribution of all news releases and other
public filings and disclosures with respect to this Agreement or the Merger
transactions contemplated hereby, and HUBCO and PFC agree that unless approved
mutually by them in advance, they will not issue any press release or written
statement for general circulation relating primarily to the transactions
contemplated hereby, except as may be otherwise required by law or regulation
upon the advice of counsel.
5.10 Failure to Fulfill Conditions. In the event that HUBCO or
PFC determines that a material condition to its obligation to consummate the
Merger cannot be fulfilled on or prior to July 31, 1998 (as the same may be
extended in accordance with the following sentence, the "Cutoff Date") and that
it will not waive that condition, it will promptly notify the other party. The
"Cutoff Date" shall be extended to October 31, 1998 if subsequent to the date
hereof HUBCO or one of its Subsidiaries enters into an agreement relating to
another acquisition and HUBCO notifies PFC in writing that such other
acquisition can reasonably be expected to delay the Closing beyond July 31, 1998
but not beyond October 31, 1998. Except for any acquisition or merger
discussions HUBCO may enter into with other parties, PFC and HUBCO will promptly
inform the other of any facts applicable to PFC or HUBCO, respectively, or their
respective directors or officers, that would be likely to prevent or materially
delay approval of the Merger by any Governmental Entity or which would otherwise
prevent or materially delay completion of the Merger.
5.11 Disclosure Supplements. From time to time prior to the
Effective Time, each party hereto will promptly supplement or amend (by written
notice to the other) its respective Disclosure Schedules delivered pursuant
hereto with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Schedules or which is necessary to correct any
information in such Schedules which has been rendered materially inaccurate
thereby. For the purpose of determining satisfaction of the conditions set forth
in Article VI and subject to Sections 6.2(a) and 6.3(a), no supplement or
amendment to the parties' respective Disclosure Schedules shall correct or cure
any warranty which was untrue when made, but shall enable the disclosure of
subsequent facts or events to maintain the truthfulness of any warranty.
5.12 Transaction Expenses of PFC.
(a) For planning purposes, PFC shall, within 30 days
from the date hereof, provide HUBCO with its estimated budget of
transaction-related expenses reasonably anticipated to be payable by PFC in
connection with this transaction based on facts and circumstances currently
known, including the fees and expenses of counsel, accountants, investment
bankers and other professionals. PFC shall promptly notify HUBCO if or when it
determines that it will expect to exceed its budget.
(b) Promptly after the execution of this Agreement,
PFC shall ask all of its attorneys and other professionals to render current and
correct invoices for all unbilled time and disbursements. PFC shall accrue
and/or pay all of such amounts as soon as possible.
(c) PFC shall cause its professionals to render
monthly invoices within 15 days after the end of each month. PFC shall notify
HUBCO monthly of all out-of-pocket expenses which PFC has incurred in connection
with this transaction.
(d) HUBCO, in reasonable consultation with PFC, shall
make all arrangements with respect to the printing and mailing of the Proxy
Statement-Prospectus.
5.13 Reserves. Notwithstanding that PFC believes that it has
established all reserves and taken all provisions for possible loan losses
required by GAAP and applicable laws, rules and regulations, PFC recognizes that
HUBCO may have adopted different loan, accrual and reserve policies (including
loan classifications and levels of reserves for possible loan losses). From and
after the date of this Agreement to the Effective Time and in order to formulate
the plan of integration for the Merger, PFC and HUBCO shall consult and
cooperate with each other with respect to (i) conforming, based upon such
consultation, PFC's loan, accrual and reserve policies to those policies of
HUBCO to the extent appropriate, provided that any required change in PFC's
practices in connection with the matters described in this clause (i) need not
be effected until the parties receive all necessary stockholder, third party and
governmental approvals and consents to consummate the transactions contemplated
hereby, (ii) new extensions of credit or material revisions to existing terms of
credits by BTH, in each case where the aggregate exposure exceeds $3,000,000,
and (iii) conforming, based upon such consultation, the composition of the
investment portfolio and overall asset/liability management position of PFC and
BTH to the extent appropriate.
5.14 Indemnification.
(a) For a period of six years after the Effective
Time, HUBCO shall indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date hereof or who becomes prior to the
Effective Time, a director, officer, employee or agent of PFC or BTH or serves
or has served at the request of PFC or BTH in any capacity with any other person
(collectively, the "Indemnitees") against any and all claims, damages,
liabilities, losses, costs, charges, expenses (including, without limitation,
reasonable costs of investigation, and the reasonable fees and disbursements of
legal counsel and other advisers and experts as incurred), judgments, fines,
penalties and amounts paid in settlement, asserted against, incurred by or
imposed upon any Indemnitee by reason of the fact that he or she is or was a
director, officer, employee or agent of PFC or BTH or serves or has served at
the request of PFC or BTH in any capacity with any other person, in connection
with, arising out of or relating to (i) any threatened, pending or completed
claim, action, suit or proceeding (whether civil, criminal, administrative or
investigative), including, without limitation, any and all claims, actions,
suits, proceedings or investigations by or on behalf of or in the right of or
against PFC or BTH or any of their respective affiliates, or by any former or
present shareholder of PFC (each a "Claim" and collectively, "Claims"),
including, without limitation, any Claim which is based upon, arises out of or
in any way relates to the Merger, the Proxy Statement/Prospectus, this
Agreement, any of the transactions contemplated by this Agreement, the
Indemnitee's service as a member of the Board of Directors of PFC or BTH or of
any committee of PFC's or BTH's Board of Directors, the events leading up to the
execution of this Agreement, any statement, recommendation or solicitation made
in connection therewith or related thereto and any breach of any duty in
connection with any of the foregoing, and (ii) the enforcement of the
obligations of HUBCO set forth in this Section 5.14, in each case to the fullest
extent which PFC or BTH would have been permitted under any applicable law and
their respective Certificates of Incorporation and By-Laws had the Merger not
occurred (and HUBCO shall also advance expenses as incurred to the fullest
extent so permitted). Notwithstanding the foregoing, but subject to subsection
(b) below, HUBCO shall not provide any indemnification or advance any expenses
with respect to any Claim which relates to a personal benefit improperly paid or
provided, or alleged to have been improperly paid or provided, to the
Indemnitee, but HUBCO shall reimburse the Indemnitee for costs incurred by the
Indemnitee with respect to such Claim when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that the Indemnitee was not improperly paid or
provided with the personal benefit alleged in the Claim.
(b) From and after the Effective Time, HUBCO shall
assume and honor any obligation of PFC or BTH immediately prior to the Effective
Time with respect to the indemnification of the Indemnitees arising out of the
Certificate of Incorporation, Charter or By-Laws of PFC or BTH, or arising out
of any written indemnification agreements between PFC and/or BTH and such
persons disclosed in the PFC Disclosure Schedule, as if such obligations were
pursuant to a contract or arrangement between HUBCO and such Indemnitees.
(c) In the event HUBCO or any of its successors or
assigns (i) reorganizes or consolidates with or merges into or enters into
another business combination transaction with any other person or entity and is
not the resulting, continuing or surviving corporation or entity of such
consolidation, merger or transaction, or (ii) liquidates, dissolves or transfers
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, proper provision shall be made so that the
successors and assigns of HUBCO assume the obligations set forth in this Section
5.14.
(d) HUBCO shall cause PFC's and BTH's officers and
directors to be covered under HUBCO's then current officers' and directors'
liability insurance policy for a period of six years after the Effective Time,
or, in the alternative, to be covered under an extension of PFC's and BTH's
existing officers' and directors' liability insurance policy. However, HUBCO
shall only be required to insure such persons upon terms and for coverages
substantially similar to PFC's and BTH's existing officers' and directors'
liability insurance.
(e) Any Indemnitee wishing to claim indemnification
under this Section 5.14 shall promptly notify HUBCO upon learning of any Claim,
but the failure to so notify shall not relieve HUBCO of any liability it may
have to such Indemnitee if such failure does not materially prejudice HUBCO. In
the event of any Claim (whether arising before or after the Effective Time) as
to which indemnification under this Section 5.14 is applicable, (x) HUBCO shall
have the right to assume the defense thereof and HUBCO shall not be liable to
such Indemnitees for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof,
except that if HUBCO elects not to assume such defense, or counsel for the
Indemnitees advises that there are issues which raise conflicts of interest
between HUBCO and the Indemnitees, the Indemnitees may retain counsel
satisfactory to them, and HUBCO shall pay the reasonable fees and expenses of
such counsel for the Indemnitees as statements therefor are received; provided,
however, that HUBCO shall be obligated pursuant to this Section 5.14(e) to pay
for only one firm of counsel for all Indemnitees in any jurisdiction with
respect to a matter unless the use of one counsel for multiple Indemnitees would
present such counsel with a conflict of interest that is not waived, and (y) the
Indemnitees will cooperate in the defense of any such matter. HUBCO shall not be
liable for settlement of any claim, action or proceeding hereunder unless such
settlement is effected with its prior written consent. Notwithstanding anything
to the contrary in this Section 5.14, HUBCO shall not have any obligation
hereunder to any Indemnitee when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that the indemnification of such Indemnitee in the manner
contemplated hereby is prohibited by applicable law or public policy.
5.15 Pooling and Tax-Free Reorganization Treatment. Prior to
the date hereof, neither HUBCO or PFC has taken any action or failed to take any
action which would disqualify the Merger for pooling of interests accounting
treatment. Before the Effective Time, neither HUBCO nor PFC shall intentionally
take, fail to take, or cause to be taken or not taken any action within its
control, which would disqualify the Merger as a "pooling-of-interests" for
accounting purposes or as a "reorganization" within the meaning of Section
368(a) of the Code. Subsequent to the Effective Time, HUBCO shall not take and
shall cause the Surviving Corporation not to take any action within their
control that would disqualify the Merger as such a "reorganization" under the
Code.
5.16 Comfort Letters. HUBCO shall cause Arthur Andersen, its
independent public accountants, to deliver to PFC, and PFC shall cause Deloitte
& Touche, its independent public accountants, to deliver to HUBCO and to its
officers and directors who sign the Registration Statement for this transaction,
a short-form "comfort letter" or "agreed upon procedures" letter, dated the date
of the mailing of the Proxy Statement-Prospectus for the Stockholders Meeting of
PFC, in the form customarily issued by such accountants at such time in
transactions of this type (provided that Arthur Andersen and Deloitte & Touche
have been provided with representation letters from HUBCO and PFC in accordance
with Statement on Auditing Standards No. 72).
5.17 Affiliates. Promptly, but in any event within two weeks,
after the execution and delivery of this Agreement, PFC shall deliver to HUBCO
(a) a letter identifying all persons who, to the knowledge of PFC, may be deemed
to be affiliates of PFC under Rule 145 of the 1933 Act and the
pooling-of-interests accounting rules, including, without limitation, all
directors and executive officers of PFC and (b) use its reasonable best efforts
to cause each person who may be deemed to be an affiliate of PFC to execute and
deliver to HUBCO a letter agreement, substantially in the form of Exhibit
5.17-1, agreeing to comply with Rule 145 and to refrain from transferring shares
as required by the pooling-of-interests accounting rules. Within two weeks after
the date hereof, HUBCO shall use its reasonable best efforts to cause its
directors and executive officers to enter into letter agreements in the form of
Exhibit 5.17-2 with HUBCO concerning the pooling-of-interests accounting rules.
HUBCO hereby agrees to publish, or file a Form 8-K, Form 10-K or Form 10-Q
containing financial results covering at least 30 days of post-Merger combined
operations of HUBCO and PFC as soon as practicable (but in no event later than
30 days) following the close of the first calendar month ending 30 days after
the Effective Time, in form and substance sufficient to remove the restrictions
set forth in paragraph "B" of Exhibit 5.17-1.
5.18 Appointment of Directors. HUBCO shall cause Joseph B.
Tockarshewsky and Noel deCordova, Jr. to be appointed at the Effective Time as
directors of HUBCO. The Chairman of the Board of Directors of HUBCO shall
recommend to the HUBCO Board of Directors that Joseph B. Tockarshewsky be
nominated for a three year term as a director of HUBCO and that Noel deCordova,
Jr. be nominated for a two year term as a director of HUBCO at the first HUBCO
shareholders meeting held following the Closing. BTH shall cause such persons as
HUBCO shall designate to be appointed at the Effective Time as directors of BTH.
HUBCO will invite all current directors of BTH to remain as directors of BTH
following the Closing and will ask Joseph B. Tockarshewsky to serve as Chairman
of the Board and Chief Executive Officer of BTH following the Closing.
5.19 Rights Plan. PFC shall cause the PFC Rights to be
redeemed or terminated and, if requested by HUBCO, PFC shall cause the Rights
Plan to be terminated, in each case effective at or prior to the Closing and
without substantial cost to HUBCO.
5.20 Operation of BTH Post-Closing; Employee Matters.
(a) Following consummation of the Merger, HUBCO shall
operate BTH as a separate bank subsidiary under the name "Bank of the Hudson."
It is HUBCO's current intention that BTH's current main office in Poughkeepsie,
New York, will be maintained as the main office of HUBCO's New York State
banking operations indefinitely following the Closing. Following the Closing,
HUBCO will use reasonable efforts to preserve the historical artifacts currently
located at such Poughkeepsie, New York office. At such time as HUBCO may
relocate the main office of its New York State banking operations HUBCO will
cause such artifacts to be donated to a museum serving the Poughkeepsie, New
York community. HUBCO agrees that it will support PFC's and BTH's efforts to
have such main office listed on the National Registry of Historic Properties.
(b) PFC and BTH acknowledge that HUBCO may choose to
cause BTH to be operated as a New York State-chartered commercial bank as soon
as practicable after the Effective Time, whether by means of conversion, merger
with a phantom bank or otherwise. PFC and BTH shall use reasonable efforts prior
to the Closing to cooperate with and assist HUBCO in accomplishing that result;
provided, that nothing in this Section 5.20(b) shall require BTH to convert from
a federal savings bank to another form of bank prior to the Closing.
(c) Following consummation of the Merger, HUBCO shall
honor the existing written contracts with officers and employees of PFC and BTH
that are included in the PFC Disclosure Schedule.
(d) Following consummation of the Merger, HUBCO shall
continue to provide the level of post-retirement benefits currently provided by,
or agreed to be provided by, PFC or BTH to those persons identified in Section
5.20(d) of the PFC Disclosure Schedule, only to the extent such persons and such
benefits are identified in Section 5.20(d) of the PFC Disclosure Schedule, or
HUBCO at its option shall provide other, substantially equivalent, benefits to
such persons.
(e) Prior to, or effective upon, the Closing, PFC and
BTH shall cause their Non-Employee Directors' Retirement Plan to be terminated
and shall fully fund all benefits thereunder so that neither BTH nor HUBCO as
successor to PFC shall have any continuing obligation thereunder. Prior to such
termination, PFC and BTH may amend and fund the Non-Employee Directors'
Retirement Plan in the manner described in Section 5.2 of the PFC Disclosure
Schedule.
(f) Following consummation of the Merger, HUBCO shall
make available to all employees and officers of PFC or BTH employed by HUBCO or
its Subsidiaries following the Merger ("continuing employees") coverage under
the benefit plans generally available to HUBCO's employees and officers
(including pension and health and hospitalization) on the terms and conditions
available to HUBCO's employees and officers. Following consummation of the
Merger, HUBCO shall honor the severance policies of PFC and BTH previously
disclosed to HUBCO in writing, and HUBCO shall not change such severance
policies (as applicable to persons employed by PFC or BTH on the Closing Date)
for a period of six months following the Effective Time. After the Effective
Time, HUBCO may terminate, merge or change existing PFC or BTH benefit plans.
Continuing employees will receive credit for prior employment by PFC or BTH for
the sole purpose of determining whether such continuing employees are eligible
to participate in or be vested under HUBCO's medical, vacation, sick leave,
disability, pension, and other employee benefit plans. Credit for prior service
will not be given for purposes of benefit accrual under any defined benefit
pension plan of HUBCO.
ARTICLE VI - CLOSING CONDITIONS
6.1 Conditions to Each Party's Obligations Under this
Agreement. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) Approval of Stockholders; SEC Registration. This
Agreement and the transactions contemplated hereby shall have been approved by
the requisite vote of the stockholders of PFC. The HUBCO Registration Statement
and Proxy Statement-Prospectus shall have been declared effective by the SEC and
shall not be subject to a stop order or any threatened stop order, and the
issuance of the HUBCO Common Stock shall have been qualified in every state
where such qualification is required under the applicable state securities laws.
(b) Regulatory Filings. All necessary regulatory or
governmental approvals and consents (including without limitation any required
approval of the FRB, the OTS and the SEC) required to consummate the
transactions contemplated hereby shall have been obtained without any term or
condition which would materially impair the value of PFC and BTH, taken as a
whole, to HUBCO. All conditions required to be satisfied prior to the Effective
Time by the terms of such approvals and consents shall have been satisfied; and
all statutory waiting periods in respect thereof (including the
Hart-Scott-Rodino waiting period if applicable) shall have expired.
(c) Suits and Proceedings. No order, judgment or
decree shall be outstanding against a party hereto or a third party that would
have the effect of preventing completion of the Merger; no suit, action or other
proceeding shall be pending or threatened by any governmental body in which it
is sought to restrain or prohibit the Merger; and no suit, action or other
proceeding shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit the Merger or obtain other substantial
monetary or other relief against one or more parties hereto in connection with
this Agreement and which HUBCO or PFC determines in good faith, based upon the
advice of their respective counsel, makes it inadvisable to proceed with the
Merger because any such suit, action or proceeding has a significant potential
to be resolved in such a way as to deprive the party electing not to proceed of
any of the material benefits to it of the Merger.
(d) Tax Opinion. HUBCO and PFC shall each have
received an opinion, dated as of the Effective Time, of Pitney, Hardin, Kipp &
Szuch, or of counsel to PFC reasonably acceptable to HUBCO, reasonably
satisfactory in form and substance to PFC and its counsel and to HUBCO, based
upon representation letters reasonably required by such counsel, dated on or
about the date of such opinion, and such other facts and representations as
counsel may reasonably deem relevant, to the effect that: (i) the Merger will be
treated for federal income tax purposes as a reorganization qualifying under the
provisions of Section 368 of the Code; (ii) no gain or loss will be recognized
by PFC; (iii) no gain or loss will be recognized by PFC shareholders upon the
exchange of PFC Common Stock solely for HUBCO Common Stock; (iv) the basis of
any HUBCO Common Stock received in exchange for PFC Common Stock shall equal the
basis of the recipient's PFC Common Stock surrendered on the exchange, reduced
by the amount of cash received, if any, on the exchange, and increased by the
amount of the gain recognized, if any, on the exchange (whether characterized as
dividend or capital gain income); and (v) the holding period for any HUBCO
Common Stock received in exchange for PFC Common Stock will include the period
during which PFC Common Stock surrendered on the exchange was held, provided
such stock was held as a capital asset on the date of the exchange.
(e) Pooling of Interests. HUBCO shall have received a
letter, dated the Closing Date, from its accountants, Arthur Andersen,
reasonably satisfactory to HUBCO and PFC, to the effect that the Merger shall be
qualified to be treated by HUBCO as a pooling-of-interests for accounting
purposes.
6.2 Conditions to the Obligations of HUBCO Under this
Agreement. The obligations of HUBCO under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:
(a) Representations and Warranties; Performance of
Obligations of PFC and BTH. Except for those representations which are made as
of a particular date, the representations and warranties of PFC contained in
this Agreement shall be true and correct in all material respects on the Closing
Date as though made on and as of the Closing Date. PFC shall have performed in
all material respects the agreements, covenants and obligations to be performed
by it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the PFC
Disclosure Schedule to render such representation or warranty true and correct
in all material respects as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the PFC Disclosure
Schedule related to events occurring following the execution of this Agreement
and (ii) the facts disclosed in such supplement or amendment would not either
alone, or together with any other supplements or amendments to the PFC
Disclosure Schedule, materially adversely affect the representation as to which
the supplement or amendment relates.
(b) Opinion of Counsel. HUBCO shall have received an
opinion of counsel to PFC, dated the Closing Date, in form and substance
reasonably satisfactory to HUBCO, substantially in accordance with Exhibit
6.2(b) hereto.
(c) Certificates. PFC shall have furnished HUBCO with
such certificates of its officers or other documents to evidence fulfillment of
the conditions set forth in this Section 6.2 as HUBCO may reasonably request.
(d) Legal Fees. PFC shall have furnished HUBCO with
letters from all attorneys representing PFC and BTH in any significant matters
confirming that all material legal fees have been paid in full for services
rendered as of the Effective Time.
(e) Merger-Related Expenses. PFC shall have provided
HUBCO with an accounting of all merger-related expenses incurred by it through
the Closing Date, including a good faith estimate of such expenses incurred but
as to which invoices have not been submitted as of the Closing Date. The
merger-related expenses of PFC shall be reasonable.
6.3 Conditions to the Obligations of PFC Under this Agreement.
The obligations of PFC under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of
Obligations of HUBCO. Except for those representations which are made as of a
particular date, the representations and warranties of HUBCO contained in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on and as of the Closing Date. HUBCO shall have performed in all
material respects the agreements, covenants and obligations to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the HUBCO
Disclosure Schedule to render such representation or warranty true and correct
in all material respects as of the Closing Date, the representation and warranty
shall be deemed true and correct as of the Closing Date only if (i) the
information contained in the supplement or amendment to the HUBCO Disclosure
Schedule related to events occurring following the execution of this Agreement
and (ii) the facts disclosed in such supplement or amendment would not either
alone, or together with any other supplements or amendments to the HUBCO
Disclosure Schedule, materially adversely effect the representation as to which
the supplement or amendment relates.
(b) Opinion of Counsel to HUBCO. PFC shall have
received an opinion of counsel to HUBCO, dated the Closing Date, in form and
substance reasonably satisfactory to PFC, substantially in accordance with
Exhibit 6.3(b) hereto.
(c) Fairness Opinion. PFC shall have received an
opinion from Advest dated no more than three days prior to the date the Proxy
Statement-Prospectus is mailed to PFC's stockholders (and, if it shall become
necessary to resolicit proxies thereafter, dated no more than three days prior
to the date of any substantive amendment to the Proxy Statement/Prospectus) to
the effect that, in its opinion, the consideration to be paid to stockholders of
PFC hereunder is fair to such stockholders from a financial point of view
("Fairness Opinion").
(d) Certificates. HUBCO shall have furnished PFC with
such certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 6.3 as PFC may
reasonably request.
ARTICLE VII - TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated prior to the
Effective Time, whether before or after approval of this Agreement by the
stockholders of PFC:
(a) by mutual written consent of the parties hereto;
(b) by HUBCO or PFC (i) if the Effective Time shall
not have occurred on or prior to the Cutoff Date unless the failure of such
occurrence shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe its agreements set forth herein to be performed
or observed by such party at or before the Effective Time, or (ii) if a vote of
the stockholders of PFC is taken and such stockholders fail to approve this
Agreement at the meeting (or any adjournment thereof) held for such purpose;
(c) by HUBCO or PFC upon written notice to the other
if any application for regulatory or governmental approval necessary to
consummate the Merger and the other transactions contemplated hereby shall have
been denied or withdrawn at the request or recommendation of the applicable
regulatory agency or Governmental Entity or by HUBCO upon written notice to PFC
if any such application is approved with conditions (other than conditions which
are customary in such regulatory approvals) which materially impair the value of
PFC and BTH, taken as a whole, to HUBCO;
(d) by HUBCO if (i) there shall have occurred a
material adverse change in the business, operations, assets, or financial
condition of PFC and BTH, taken as a whole, from that disclosed by PFC in PFC's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (it being
understood that those matters disclosed in the PFC Disclosure Schedule shall not
be deemed to constitute such a material adverse change) or (ii) there was a
material breach in any representation, warranty, covenant, agreement or
obligation of PFC hereunder and such breach shall not have been remedied within
30 days after receipt by PFC of notice in writing from HUBCO to PFC specifying
the nature of such breach and requesting that it be remedied;
(e) by PFC if (i) there shall have occurred a
material adverse change in the business, operations, assets or financial
condition of HUBCO and its Subsidiaries taken as a whole from that disclosed by
HUBCO in HUBCO's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 except for the Effects of Announced Acquisitions (it being understood that
those matters disclosed in the HUBCO Disclosure Schedule shall not be deemed to
constitute such a material adverse change); or (ii) there was a material breach
in any representation, warranty, covenant, agreement or obligation of HUBCO
hereunder and such breach shall not have been remedied within 30 days after
receipt by HUBCO of notice in writing from PFC specifying the nature of such
breach and requesting that it be remedied;
(f) by PFC, if PFC's Board of Directors shall have
approved an Acquisition Transaction after determining, upon advice of counsel,
that such approval was necessary in the exercise of its fiduciary obligations
under applicable laws;
(g) by HUBCO if the conditions set forth in Sections
6.1 and 6.2 are not satisfied and are not capable of being satisfied by the
Cutoff Date;
(h) by PFC if the conditions set forth in Sections
6.1 and 6.3 are not satisfied and are not capable of being satisfied by the
Cutoff Date; or
(i) by PFC, in accordance with Section 2.1(a)(iii).
7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement by either HUBCO or PFC pursuant to Section 7.1,
this Agreement (other than Section 5.5(b), the penultimate sentence of Section
5.6(h), this Section 7.2 and Section 8.1) shall forthwith become void and have
no effect, without any liability on the part of any party or its officers,
directors or stockholders. Nothing contained herein, however, shall relieve any
party from any liability for any breach of this Agreement.
7.3 Amendment. This Agreement may be amended by action taken
by the parties hereto at any time before or after adoption of this Agreement by
the stockholders of PFC but, after any such adoption, no amendment shall be made
which reduces the amount or changes the form of the consideration to be
delivered to the shareholders of PFC without the approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties hereto.
7.4 Extension; Waiver. The parties may, at any time prior to
the Effective Time of the Merger, (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party against which the waiver is
sought to be enforced.
ARTICLE VIII - MISCELLANEOUS
8.1 Expenses.
(a) Except as otherwise expressly stated herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal, accounting and investment
banking fees and expenses) shall be borne by the party incurring such costs and
expenses. Notwithstanding the foregoing, PFC may bear the expenses of BTH.
(b) Notwithstanding any provision in this Agreement
to the contrary, in the event that either of the parties shall willfully default
in its obligations hereunder, the non-defaulting party may pursue any remedy
available at law or in equity to enforce its rights and shall be paid by the
willfully defaulting party for all damages, costs and expenses, including
without limitation legal, accounting, investment banking and printing expenses,
incurred or suffered by the non-defaulting party in connection herewith or in
the enforcement of its rights hereunder.
8.2 Survival. The respective representations, warranties,
covenants and agreements of the parties to this Agreement shall not survive the
Effective Time, but shall terminate as of the Effective Time, except for Article
II, this Section 8.2 and Sections 5.5(b), 5.14, 5.17 and 5.20.
8.3 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or by reputable overnight courier or sent by registered or certified
mail, postage prepaid, as follows:
(a) If to HUBCO, to:
HUBCO, Inc.
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: Kenneth T. Neilson, Chairman,
President and Chief Executive Officer
Copy to:
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
Attn.: D. Lynn Van Borkulo-Nuzzo, Esq.
And copy to:
Pitney, Hardin, Kipp & Szuch
(Delivery) 200 Campus Drive
Florham Park, New Jersey
(Mail) P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Michael W. Zelenty, Esq.
(b) If to PFC or BTH, to:
Poughkeepsie Financial Corp.
249 Main Mall
Poughkeepsie, New York 12601
Attn.: Joseph B. Tockarshewsky, Chairman,
President and Chief Executive Officer
Copy to:
Elias, Matz, Tiernan & Herrick L.L.P.
The Walker Building, 12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Attn.: W. Michael Herrick, Esq.
or such other addresses as shall be furnished in writing by any party, and any
such notice or communications shall be deemed to have been given as of the date
actually received.
8.4 Parties in Interest; Assignability. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement is intended to
confer, expressly or by implication, upon any other person any rights or
remedies under or by reason of this Agreement except the Indemnitees described
in Section 5.14. This Agreement and the rights and obligations of the parties
hereunder may not be assigned.
8.5 Entire Agreement. This Agreement, which includes the
Disclosure Schedules hereto and the other documents, agreements and instruments
executed and delivered pursuant to or in connection with this Agreement,
contains the entire Agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto, other than any confidentiality agreements entered into by the parties
hereto.
8.6 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
8.7 Governing Law. This Agreement shall be governed by the
laws of the State of New Jersey, without giving effect to the principles of
conflicts of laws thereof.
8.8 Descriptive Headings. The descriptive headings of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
IN WITNESS WHEREOF, HUBCO, PFC and BTH have caused this
Agreement to be executed by their duly authorized officers and by no less than a
majority of the directors of each of them as of the day and year first above
written.
ATTEST: HUBCO, INC.
D. LYNN VAN BORKULO-NUZZO KENNETH T. NEILSON
By: _________________________________ By: ________________________________
Kenneth T. Neilson, Chairman,
President and Chief Executive Officer
ATTEST: POUGHKEEPSIE FINANCIAL CORP.
SUZANNE A. GILLESPIE JOSEPH B. TOCKARSHEWSKY
By: _________________________________ By: ________________________________
Joseph B. Tockarshewsky, Chairman,
President and Chief Executive Officer
ATTEST: BANK OF THE HUDSON
SUZANNE A. GILLESPIE JOSEPH B. TOCKARSHEWSKY
By: _________________________________ By: ________________________________
Joseph B. Tockarshewsky, Chairman,
President and Chief Executive Officer
<PAGE>
AGREEMENT OF PFC AND BTH DIRECTORS
Reference is made to the Agreement and Plan of Merger, dated
October 22, 1997 (the "Merger Agreement"), among HUBCO, Inc., Poughkeepsie
Financial Corp., and Bank of the Hudson. Capitalized terms used herein and not
otherwise defined have the meanings given to them in the Merger Agreement.
Each of the following persons, being all of the directors of
PFC and BTH, solely in such person's capacity as a holder of PFC Common Stock,
agrees to vote or cause to be voted all shares of PFC Common Stock which are
held by such person, or over which such person exercises full voting control
(except as trustee or in a fiduciary capacity, or as nominee), in favor of the
Merger.
It is understood and agrees that this Agreement of PFC and BTH
Directors (this "Agreement") relates solely to the capacity of the undersigned
as shareholders or other beneficial owners of shares of PFC Common Stock and is
not in any way intended to affect the exercise by the undersigned of the
undersigned's responsibilities as directors of PFC or BTH. It is further
understood and agreed that this Agreement is not in any way intended to affect
the exercise by the undersigned of any fiduciary responsibility which the
undersigned may have in respect of any shares of PFC Common Stock held by the
undersigned as of the date hereof.
MILTON CHAZEN
- ---------------------------- -----------------------------
Milton Chazen Henry C. Meagher
ROBERT M. PERKINS
- ---------------------------- -----------------------------
Nicole deCordova, Jr. Robert M. Perkins
BURTON GOLD ELIZABETH K. SHEQUINE
- ---------------------------- -----------------------------
Burton Gold Elizabeth K. Shequine
ROBERT J. HUGHES JOSEPH B. TOCKARSHEWSKY
- ---------------------------- -----------------------------
Robert J. Hughes Joseph B. Tockarshewsky
JAMES V. TOMAI, JR.
- ---------------------------- -----------------------------
Jeh V. Johnson James V. Tomai, Jr.
Dated: October 22, 1997
<PAGE>
EXHIBIT 5.17-1
FORM OF PFC AFFILIATE LETTER
October __, 1997
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Gentlemen:
I am delivering this letter to you in connection with the
proposed acquisition (the "Merger") of Poughkeepsie Financial Corporation, a
Delaware corporation and registered savings and loan holding company (the
"Company"), by HUBCO, Inc., a New Jersey corporation and registered bank holding
company ("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of
October 22, 1997 (the "Agreement") between the Company, Bank of the Hudson and
HUBCO. I currently own shares of the Company's common stock, $.01 par value
("PFC Common Stock"). As a result of the Merger, I will receive shares of
HUBCO's common stock, no par value ("HUBCO Common Stock") in exchange for my PFC
Common Stock.
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of the Company, as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations promulgated under the Securities Act of 1933, as amended (the "1933
Act") by the Securities and Exchange Commission ("SEC") and as the term
"affiliate" is used for purposes of the SEC's rules and regulations applicable
to the determination of whether a merger can be accounted for as a "pooling of
interests" as specified in the SEC's Accounting Series Release 135, as amended
by Staff Accounting Bulletins Nos. 65 and 76 ("ASR 135").
I represent to and agree with HUBCO that:
A. Transfer Review Restrictions. During the period beginning
on the date hereof and ending 30 days prior to the consummation of the Merger, I
shall not sell, transfer, reduce my risk with respect to or otherwise dispose of
("transfer") any PFC Common Stock owned by me, and I shall not permit any
relative who shares my home, or any person or entity who or which I control, to
transfer any PFC Common Stock owned by such person or entity, without notifying
HUBCO in advance of the proposed transfer and giving HUBCO a reasonable
opportunity to review the transfer before it is consummated. HUBCO, if advised
to do so by its independent public accountants, may instruct me not to make or
permit the transfer because it may interfere with the "pooling of interests"
treatment of the Merger. I shall abide by any such instructions.
B. Transfer Restrictions During Merger Consummation Period. I
shall not transfer any PFC Common Stock owned by me, and I shall not permit any
relative who shares my home, or any person or entity who or which I control, to
transfer any PFC Common Stock owned by such person or entity during the period
beginning 30 days prior to the consummation of the Merger and ending immediately
after financial results covering at least 30 days of post-Merger combined
operations have been published by HUBCO by means of the filing of a Form 10-Q or
Form 8-K under the Securities Exchange Act of 1934, as amended, the issuance of
a quarterly earnings report, or any other public issuance which satisfies the
requirements of ASR 135. For purposes of this paragraph only, "PFC Common Stock"
includes HUBCO Common Stock into which my Poughkeepsie Common Stock is
converted.
C. Compliance with Rule 145. I have been advised that the
issuance of HUBCO Common Stock to me pursuant to the Merger will be registered
with the SEC under the 1933 Act on a Registration Statement on Form S-4.
However, I have also been advised that, since I may be deemed to be an affiliate
of the Company at the time the Merger is submitted for a vote of the Company's
stockholders, any transfer by me of HUBCO Common Stock is restricted under Rule
145 promulgated by the SEC under the 1933 Act. I agree not to transfer the HUBCO
Common Stock received by me or any of my affiliates unless (i) such transfer is
made in conformity with the volume and other limitations of Rule 145 promulgated
by the SEC under the 1933 Act, (ii) in the opinion of HUBCO's counsel or counsel
reasonably acceptable to HUBCO, such transfer is otherwise exempt from
registration under the 1933 Act or (iii) such transfer is registered under the
1933 Act.
D. Stop Transfer Instructions; Legend on Certificates. I also
understand and agree that stop transfer instructions will be given to HUBCO's
transfer agents with respect to the HUBCO Common Stock received by me and any of
my affiliates and that there will be placed on the certificates of the HUBCO
Common Stock issued to me and any of my affiliates, or any substitutions
therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED OCTOBER
22, 1997 BETWEEN THE REGISTERED HOLDER HEREOF AND HUBCO, INC., A COPY
OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF HUBCO, INC."
E. Consultation with Counsel. I have carefully read this
letter and the Agreement and discussed the requirements of such documents and
other applicable limitations upon my ability to transfer HUBCO Common Stock to
the extent I felt necessary with my counsel or counsel for the Company.
Execution of this letter is not an admission on my part that I
am an "affiliate" of the Company as described in the second paragraph of this
letter, or a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter. This letter shall
terminate concurrently with any termination of the Agreement in accordance with
its terms.
Very truly yours,
-----------------------------
Name:
Accepted this ___ day of October , 1997 by HUBCO, INC.
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT 5.17-2
FORM OF AFFILIATE LETTER FOR HUBCO AFFILIATES
October ___, 1997
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Gentlemen:
I am delivering this letter to you in connection with the
proposed merger (the "Merger") of Poughkeepsie Financial Corporation, a Delaware
Corporation and registered savings and loan holding company ("PFC"), with and
into HUBCO, Inc., a New Jersey corporation and registered bank holding company
("HUBCO"), pursuant to the Agreement and Plan of Merger dated as of October 22,
1997(the "Agreement") between HUBCO and PFC. I currently own shares of HUBCO's
common stock, no par value ("HUBCO Common Stock").
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of HUBCO, as the term "affiliate" is used for
purposes of the rules and regulations of the Securities and Exchange Commission
(the "Commission") applicable to the determination of whether a merger can be
accounted for as a "pooling of interests" as specified in the Commission's
Accounting Series Release 135, as amended by Staff Accounting Bulletins Nos. 65
and 76 ("ASR 135").
I represent and covenant with HUBCO and PFC that:
A. Transfer Restrictions Prior to Merger Consummation. During
the period beginning on the date hereof and ending 30 days prior to the
consummation of the Merger, I shall not sell, transfer, reduce my risk with
respect to or otherwise dispose of ("transfer") any HUBCO Common Stock owned by
me, and I shall not permit any relative who shares my home, or any person or
entity who or which I control, from transferring any HUBCO Common Stock owned by
such person or entity, without notifying HUBCO in advance of the proposed
transfer and giving HUBCO a reasonable opportunity to object to the transfer
before it is consummated. HUBCO, upon advice of its independent public
accountants, may instruct me not to make or permit the transfer because it may
interfere with the "pooling of interests" treatment of the Merger. I shall abide
by any such instructions.
B. Post-Consummation Transfer Restrictions. During the period
beginning 30 days prior to the consummation of the Merger and ending immediately
after financial results covering at least 30 days of post-Merger combined
operations have been published by HUBCO by means of filing of a Form 10-Q or
Form 8-K under the Securities Exchange Act of 1934, the issuance of a quarterly
earnings report, or any other public issuance which satisfies the requirements
of ASR 135, I shall not transfer any HUBCO Common Stock owned by me, and I shall
not permit any relative who shares my home, or any person or entity who or which
I control, to transfer any HUBCO Common Stock owned by such person or entity.
C. Consultation with Counsel. I have carefully read this
letter and the Agreement and discussed the requirements of such documents and
other applicable limitations upon my ability to transfer HUBCO Common Stock to
the extent I felt necessary with my counsel or counsel for HUBCO.
Execution of this letter is not an admission on my part that I
am an "affiliate" of HUBCO as described in the second paragraph of this letter,
or a waiver of any rights I may have to object to any claim that I am such an
affiliate on or after the date of this letter. This letter shall terminate
concurrently with any termination of the Agreement in accordance with its terms.
Very truly yours,
-------------------------------------
Name:
Title:
Accepted this ____ day of
October, 1997 by
HUBCO, INC.
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT 6.2
FORM OF OPINION OF COUNSEL TO PFC
TO BE DELIVERED TO HUBCO ON THE EFFECTIVE TIME
(a) PFC and BTH have full corporate power to carry out the
transactions contemplated in the Agreement. The execution and delivery of the
Agreement and the consummation of the transactions contemplated thereunder have
been duly and validly authorized by all necessary corporate action on the part
of PFC and BTH, and the Agreement constitutes the valid and legally binding
obligations of PFC and BTH enforceable in accordance with its terms, except as
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally or the
rights of creditors of federal savings institutions or their holding companies,
(ii) general equitable principles, and (iii) laws relating to the safety and
soundness of insured depository institutions, and except that no opinion need be
rendered as to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered in a proceeding
in equity or at law). Subject to satisfaction of the conditions set forth in the
Agreement, neither the transactions contemplated in the Agreement, nor
compliance by PFC and BTH with any of the provisions thereof, will (i) conflict
with or result in a breach or default under (A) the certificate of incorporation
or bylaws of PFC or the charter or bylaws of BTH, or (B) based on certificates
of officers and without independent verification, to the knowledge of such
counsel, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which PFC or BTH is a party; or (ii) to the
knowledge of such counsel, result in the creation or imposition of any material
lien, instrument or encumbrance upon the property of PFC or BTH, except such
material lien, instrument or obligation that has been disclosed to HUBCO
pursuant to the Agreement, or (iii) violate in any material respect any order,
writ, injunction, or decree known to such counsel, or any statute, rule or
regulation applicable to PFC or BTH.
(b) PFC is a corporation validly existing under the laws of
the State of Delaware and has the corporate power and authority to own or lease
all of its properties and assets and to conduct the business in which it is
currently engaged as described in the Proxy Statement/Prospectus. BTH is a
validly existing federally-chartered savings bank organized under the laws of
the United States of America. The deposits of BTH are insured to the maximum
extent provided by law by the Federal Deposit Insurance Corporation.
(c) PFC is authorized to transact business as a foreign
corporation in the State of New York as of the date hereof.
(d) There is, to the knowledge of such counsel, no legal,
administrative, arbitration or governmental proceeding or investigation pending
or threatened to which PFC or BTH is a party which would, if determined
adversely to PFC or BTH, have a material adverse effect on the business,
properties, results of operations, or condition, financial or otherwise, of PFC
or BTH taken as a whole or which presents a claim to restrain or prohibit the
transactions contemplated by the Agreement.
(e) No consent, approval, authorization, or order of any
federal or state court or federal or state governmental agency or body, or to
such counsels knowledge of any third party, is required for the consummation by
PFC or BTH of the transactions contemplated by the Agreement, except for such
consents, approvals, authorizations or orders as have been obtained or which
would not have a Material Adverse Effect upon HUBCO upon consummation of the
Merger.
In addition to the foregoing opinions, counsel shall state that on the
sole basis of such counsel's participation in conferences with officers and
employees of PFC in connection with the preparation of the Prospectus/Proxy
Statement and without other independent investigation or inquiry, such counsel
has no reason to believe that the Prospectus/Proxy Statement, including any
amendments or supplements thereto (except for the financial information,
financial statements, notes to financial statements, financial schedules and
other financial or statistical data and stock valuation information contained or
incorporated by reference therein and except for any information supplied by
HUBCO for inclusion therein, as to which counsel need express no belief), as of
the date of mailing thereof and as of the date of the meeting of shareholders of
PFC to approve the Merger, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make any statement therein, in
light of the circumstances under which it was made, not misleading. Counsel may
state in connection with the foregoing that such counsel has not independently
verified and does not assume any responsibility for the accuracy, completeness
or fairness of any information or statements contained in the Prospectus/Proxy
Statement, except with respect to identified statements of law or regulations or
legal conclusions relating to PFC or BTH or the transactions contemplated in the
Agreement and that it is relying as to materiality as to factual matters on
certificates of officers and representatives of the parties to the Agreement and
other factual representations by PFC and BTH.
Such counsel's opinion shall be limited to matters governed by
federal banking and securities laws and by Delaware corporate law and, with
respect to paragraph (c), New York corporate law.
<PAGE>
EXHIBIT 6.3
FORM OF OPINION OF COUNSEL TO HUBCO
TO BE DELIVERED TO PFC ON THE EFFECTIVE TIME
(a) HUBCO is a corporation validly existing under the laws of
the State of New Jersey. HUBCO has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as described
in the Proxy Statement/Prospectus on pages __ and __ under the caption
"_____________________________." HUBCO is registered as a bank holding company
under the BHCA.
(b) Each Subsidiary of HUBCO listed as such in the HUBCO
Disclosure Schedule is validly existing under the laws of the jurisdiction of
its incorporation.
(c) The authorized capital stock of HUBCO consists of
____________ shares of common stock, no par value per share ("HUBCO Common
Stock") and _____________ shares of Series B, no par value, Convertible
Preferred Stock (the "Authorized Preferred Stock). Except for
to our knowledge, there are no outstanding subscription rights, options,
conversion rights, warrants or other agreements or commitments of any nature
whatsoever (either firm or conditional) obligating HUBCO to issue, deliver or
sell, cause to be issued, delivered or sold, or restricting HUBCO from selling
any additional HUBCO Common Stock or Authorized Preferred Stock or obligating
HUBCO to grant, extend or enter into any such agreement or commitment. The HUBCO
Common Stock to be issued in connection with the Merger in accordance with
Article II of the Agreement, when so issued in accordance therewith, will be
duly authorized, validly issued, fully paid and non-assessable, free of
preemptive rights and free and clear of all liens, encumbrances or restrictions
created by HUBCO.
(d) The Agreement has been authorized, executed and delivered
by HUBCO and constitutes the valid and binding obligations of HUBCO enforceable
in accordance with its terms, except that the enforceability of the obligations
of HUBCO may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, or laws affecting institutions the deposits of which
are insured by the FDIC or other laws heretofore or hereafter enacted relating
to or affecting the enforcement of creditors' rights generally and by principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). In addition, certain remedial and other
provisions of the Agreement may be limited by implied covenants of good faith,
fair dealing, and commercially reasonable conduct, by judicial discretion, in
the instance of equitable remedies, and by applicable public policies and laws.
(e) Subject to satisfaction of the conditions set forth in the
Agreement, the execution and delivery of the Agreement and the consummation of
the transactions contemplated thereby will not (i) conflict with or violate any
provision of or result in the breach of any provision of the Certificate of
Incorporation or By-Laws of HUBCO; (ii) based on certificates of officers of
HUBCO and without independent verification, conflict with or violate in any
material respect, or result in a material breach or violation of the terms or
provisions of, or constitute a default under, or result in (whether upon or
after the giving of notice or lapse of time or both) any material obligation
under, any indenture, mortgage, deed of trust or loan agreement or any other
agreement, instrument, judgment, order, arbitration award or decree of which we
have knowledge (through our representation of HUBCO in connection therewith or
in the course of our representation of HUBCO in connection with the Agreement)
and to which HUBCO is a party or by which HUBCO is bound; or (iii) cause HUBCO
to violate any corporation or banking law applicable to HUBCO.
(f) All actions of the directors and shareholders of HUBCO
required by federal banking law and New Jersey law or by the Certificate of
Incorporation or By-Laws of HUBCO, to be taken by HUBCO to authorize the
execution, delivery and performance of the Agreement and consummation of the
Merger have been taken.
(g) Assuming that there has been due authorization of the
Merger by all necessary corporate and governmental proceedings on the part of
PFC and that PFC has taken all action required to be taken by it prior to the
Effective Time, upon the appropriate filing of the Certificates of Merger in
respect of the Merger with the Delaware Secretary of State and the New Jersey
Secretary of State in accordance with Section 1.6 of the Agreement, the Merger
will become effective at the Effective Time, as such term is defined in Section
1.6, and upon effectiveness of the Merger each share of PFC Common Stock will be
converted as provided in Article II of the Agreement.
(h) No approvals, authorizations, consents or other actions or
filings under federal banking law or New Jersey law ("Approvals") are required
to be obtained by HUBCO in order to permit the execution and delivery of the
Agreement by HUBCO and the performance by HUBCO of the transactions contemplated
thereby other than those Approvals which have been obtained or those Approvals
or consents required to be obtained by PFC.
(i) The Registration Statement has been declared effective by
the Securities and Exchange Commission ("SEC") under the 1933 Act and we are not
aware that any stop order suspending the effectiveness has been issued under the
1933 Act or proceedings therefor initiated or threatened by the SEC.
We are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Proxy Statement/Prospectus and make no representation that we have independently
verified the accuracy, completeness or fairness of such statements, but from our
examination of the Proxy Statement/Prospectus and our general familiarity with
HUBCO no facts have come to our attention that caused us to believe that (except
for financial statements and other tabular financial information, and other
financial and statistical data and information, as to which we do not express
any belief) the Proxy Statement/Prospectus on the date of the mailing thereof
and on the date of the meeting of stockholders of PFC at which the Agreement was
approved, contained any untrue statement of a material fact regarding HUBCO or
the Merger, or omitted to make a material fact regarding HUBCO or the Merger
therein, in light of the circumstances under which they were made, not
misleading.
We are members of the Bar of the State of New Jersey and we
express no opinion as to any of the laws of any jurisdiction other than the laws
of the State of New Jersey and federal laws and regulations of the United States
of America.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated as of October
22, 1997, is by and between HUBCO, Inc., a New Jersey corporation and registered
bank holding company ("HUBCO"), and Poughkeepsie Financial Corp., a Delaware
corporation and registered savings and loan holding company ("PFC").
BACKGROUND
WHEREAS, HUBCO and PFC, as of the date hereof, are prepared to
execute a definitive agreement and plan of merger (the "Merger Agreement")
pursuant to which PFC will be merged with and into HUBCO (the "Merger"); and
WHEREAS, HUBCO has advised PFC that it will not execute the
Merger Agreement unless PFC executes this Agreement; and
WHEREAS, the Board of Directors of PFC has determined that the
Merger Agreement provides substantial benefits to the shareholders of PFC; and
WHEREAS, as an inducement to HUBCO to enter into the Merger
Agreement and in consideration for such entry, PFC desires to grant to HUBCO an
option to purchase authorized but unissued shares of common stock of PFC in an
amount and on the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual covenants and
agreements set forth herein and in the Merger Agreement, HUBCO and PFC,
intending to be legally bound hereby, agree:
1. Grant of Option. PFC hereby grants to HUBCO the
option to purchase 2,000,000 shares of common stock, $0.01 par value, of PFC
(the "Common Stock") at a price of $7.875 per share (the "Option Price"), on the
terms and conditions set forth herein (the "Option").
2. Exercise of Option. This Option shall not be
exercisable until the occurrence of a Triggering Event (as such term is
hereinafter defined). Upon or after the occurrence of a Triggering Event (as
such term is hereinafter defined), HUBCO may exercise the Option, in whole or in
part, at any time or from time to time, subject to the terms and conditions set
forth herein and the termination provisions of Section 19 of this Agreement.
The term "Triggering Event" means the occurrence of any of the
following events:
A person or group (as such terms are defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder) other than HUBCO or an affiliate of HUBCO:
a. acquires beneficial ownership (as such
term is defined in Rule 13d-3 as promulgated under the Exchange Act) of at least
15% of the then outstanding shares of Common Stock; or
b. enters into a letter of intent or an
agreement, whether oral or written, with PFC pursuant to which such person or
any affiliate of such person would (i) merge or consolidate, or enter into any
similar transaction, with PFC, (ii) acquire all or a significant portion of the
assets or liabilities of PFC, or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial ownership or to vote
securities representing, 15% or more of the then outstanding shares of Common
Stock; or
c. makes a filing with any bank or thrift
regulatory authorities or publicly announces a bona fide proposal (a "Proposal")
for (i) any merger with, consolidation with or acquisition of all or a
significant portion of all the assets or liabilities of, PFC or any other
business combination involving PFC, or (ii) a transaction involving the transfer
of beneficial ownership of securities representing, or the right to acquire
beneficial ownership or to vote securities representing, 15% or more of the
outstanding shares of Common Stock, and thereafter, if such Proposal has not
been Publicly Withdrawn (as such term is hereinafter defined) at least 15 days
prior to the meeting of stockholders of PFC called to vote on the Merger and
PFC's stockholders fail to approve the Merger by the vote required by applicable
law at the meeting of stockholders called for such purpose; or
d. makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly Withdrawn, PFC willfully
takes any action in any manner which would materially interfere with its ability
to consummate the Merger or materially reduce the value of the transaction to
HUBCO.
The term "Triggering Event" also means the taking of any
material direct or indirect action by PFC or any of its directors, senior
executive officers, investment bankers or other person with actual or apparent
authority to speak for the Board of Directors, inviting, encouraging or
soliciting any proposal which has as its purpose a tender offer for the shares
of Common Stock, a merger, consolidation, plan of exchange, plan of acquisition
or reorganization of PFC, or a sale of a significant number of shares of Common
Stock or any significant portion of its assets or liabilities.
The term "significant portion" means 25% of the assets or
liabilities of PFC. The term "significant number" means 15% of the outstanding
shares of Common Stock.
"Publicly Withdrawn", for purposes of clauses (c) and (d)
above, shall mean an unconditional bona fide withdrawal of the Proposal coupled
with a public announcement of no further interest in pursuing such Proposal or
in acquiring any controlling influence over PFC or in soliciting or inducing any
other person (other than HUBCO or any affiliate) to do so.
Notwithstanding the foregoing, the Option may not be exercised
at any time (i) in the absence of any required governmental or regulatory
approval or consent necessary for PFC to issue the shares of Common Stock
covered by the Option (the "Option Shares") or HUBCO to exercise the Option or
prior to the expiration or termination of any waiting period required by law, or
(ii) so long as any injunction or other order, decree or ruling issued by any
federal or state court of competent jurisdiction is in effect which prohibits
the sale or delivery of the Option Shares.
PFC shall notify HUBCO promptly in writing of the occurrence
of any Triggering Event known to it, it being understood that the giving of such
notice by PFC shall not be a condition to the right of HUBCO to exercise the
Option. PFC will not take any action which would have the effect of preventing
or disabling PFC from delivering the Option Shares to HUBCO upon exercise of the
Option or otherwise performing its obligations under this Agreement, except to
the extent required by applicable securities and banking laws and regulations.
In the event HUBCO wishes to exercise the Option, HUBCO shall
send a written notice to PFC (the date of which is hereinafter referred to as
the "Notice Date") specifying the total number of Option Shares it wishes to
purchase and a place and date between two and ten business days inclusive from
the Notice Date for the closing of such a purchase (a "Closing"); provided,
however, that a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals and the expiration of any legally
required notice or waiting period, if any.
3. Payment and Delivery of Certificates. At any
Closing hereunder (a) HUBCO will make payment to PFC of the aggregate price for
the Option Shares so purchased by wire transfer of immediately available funds
to an account designated by PFC; (b) PFC will deliver to HUBCO a stock
certificate or certificates representing the number of Option Shares so
purchased, free and clear of all liens, claims, charges and encumbrances of any
kind or nature whatsoever created by or through PFC, registered in the name of
HUBCO or its designee, in such denominations as were specified by HUBCO in its
notice of exercise and, if necessary, bearing a legend as set forth below; and
(c) HUBCO shall pay any transfer or other taxes required by reason of the
issuance of the Option Shares so purchased.
If required under applicable federal securities laws, a legend
will be placed on each stock certificate evidencing Option Shares issued
pursuant to this Agreement, which legend will read substantially as follows:
The shares of stock evidenced by this certificate have not been
registered for sale under the Securities Act of 1933 (the "1933 Act").
These shares may not be sold, transferred or otherwise disposed of
unless a registration statement with respect to the sale of such shares
has been filed under the 1933 Act and declared effective or, in the
opinion of counsel reasonably acceptable to Poughkeepsie Financial
Corp., said transfer would be exempt from registration under the
provisions of the 1933 Act and the regulations promulgated thereunder.
No such legend shall be required if a registration statement is filed and
declared effective under Section 4 hereof.
4. Registration Rights. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from HUBCO, PFC
shall, if necessary for the resale of the Option or the Option Shares by HUBCO,
prepare and file a registration statement with the Securities and Exchange
Commission and any state securities bureau covering the Option and such number
of Option Shares as HUBCO shall specify in its request, and PFC shall use its
best efforts to cause such registration statement to be declared effective in
order to permit the sale or other disposition of the Option and the Option
Shares, provided that HUBCO shall in no event have the right to have more than
one such registration statement become effective, and provided further that PFC
shall not be required to prepare and file any such registration statement in
connection with any proposed sale with respect to which counsel to PFC delivers
to PFC and to HUBCO (which is reasonably acceptable to HUBCO) its opinion to the
effect that no such filing is required under applicable laws and regulations
with respect to such sale or disposition; provided further, however, that PFC
may delay any registration of Option Shares above for a period not exceeding 90
days in the event that PFC shall in good faith determine that any such
registration would adversely effect an offering of securities by PFC for cash.
HUBCO shall provide all information reasonable requested by PFC for inclusion in
any registration statement to be filed hereunder.
In connection with such filing, PFC shall use its best efforts
to cause to be delivered to HUBCO such certificates, opinions, accountant's
letters and other documents as HUBCO shall reasonably request and as are
customarily provided in connection with registrations of securities under the
Securities Act of 1933, as amended. All expenses incurred by PFC in complying
with the provisions of this Section 4, including without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for PFC and blue sky fees and expenses shall be paid by PFC.
Underwriting discounts and commissions to brokers and dealers relating to the
Option Shares, fees and disbursements of counsel to HUBCO and any other expenses
incurred by HUBCO in connection with such registration shall be borne by HUBCO.
In connection with such filing, PFC shall indemnify and hold harmless HUBCO
against any losses, claims, damages or liabilities, joint or several, to which
HUBCO may become subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
preliminary or final registration statement or any amendment or supplement
thereto, or arise out of a material fact required to be stated therein or
necessary to make the statements therein not misleading; and PFC will reimburse
HUBCO for any legal or other expense reasonably incurred by HUBCO in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that PFC will not be liable in any case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such preliminary or final registration statement or such amendment or
supplement thereto in reliance upon and in conformity with written information
furnished by or on behalf of HUBCO specifically for use in the preparation
thereof. HUBCO will indemnify and hold harmless PFC to the same extent as set
forth in the immediately preceding sentence but only with reference to written
information specifically furnished by or on behalf of HUBCO for use in the
preparation of such preliminary or final registration statement or such
amendment or supplement thereto; and HUBCO will reimburse PFC for any legal or
other expense reasonably incurred by PFC in connection with investigating or
defending any such loss, claim, damage, liability or action. Notwithstanding
anything to the contrary herein, no indemnifying party shall be liable for any
settlement effected without its prior written consent.
5. Adjustment Upon Changes in Capitalization. In the
event of any change in the Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, conversions, exchanges of shares or
the like, then the number and kind of Option Shares and the Option Price shall
be appropriately adjusted.
In the event any capital reorganization or reclassification of
the Common Stock, or any consolidation, merger or similar transaction of PFC
with another entity, or any sale of all or substantially all of the assets of
PFC, shall be effected in such a way that the holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions (in form
reasonably satisfactory to the holder hereof) shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified herein and in lieu of the Common
Stock immediately theretofore purchasable and receivable upon exercise of the
rights represented by this Option, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of shares
of Common Stock immediately theretofore purchasable and receivable upon exercise
of the rights represented by this Option had such reorganization,
reclassification, consolidation, merger or sale not taken place; provided,
however, that if such transaction results in the holders of Common Stock
receiving only cash, the holder hereof shall be paid the difference between the
Option Price and such cash consideration without the need to exercise the
Option.
6. Filings and Consents. Each of HUBCO and PFC will
use its reasonable efforts to make all filings with, and to obtain consents of,
all third parties and governmental authorities necessary to the consummation of
the transactions contemplated by this Agreement.
Exercise of the Option herein provided shall be subject to
compliance with all applicable laws including, in the event HUBCO is the holder
hereof, approval of the Securities and Exchange Commission, the Board of
Governors of the Federal Reserve System, the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation or the New York Department of Banking, and
PFC agrees to cooperate with and furnish to the holder hereof such information
and documents as may be reasonably required to secure such approvals.
7. Representations and Warranties of PFC. PFC hereby
represents and warrants to HUBCO as follows:
a. Due Authorization. PFC has full corporate
power and authority to execute, deliver and perform this Agreement and all
corporate action necessary for execution, delivery and performance of this
Agreement has been duly taken by PFC.
b. Authorized Shares. PFC has taken and, as
long as the Option is outstanding, will take all necessary corporate action to
authorize and reserve for issuance all shares of Common Stock that may be issued
pursuant to any exercise of the Option.
c. No Conflicts. Neither the execution and
delivery of this Agreement nor consummation of the transactions contemplated
hereby (assuming all appropriate regulatory approvals) will violate or result in
any violation or default of or be in conflict with or constitute a default under
any term of the Certificate of Incorporation or Bylaws of PFC or any agreement,
instrument, judgment, decree or order applicable to PFC.
8. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a breach of this
Agreement and that the obligations of the parties hereto shall be specifically
enforceable. Notwithstanding the foregoing, HUBCO shall have the right to seek
money damages against PFC for a breach of this Agreement.
9. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the subject matter
hereof.
10. Assignment or Transfer. HUBCO may not sell,
assign or otherwise transfer its rights and obligations hereunder, in whole or
in part, to any person or group of persons other than to an affiliate of HUBCO.
HUBCO represents that it is acquiring the Option for HUBCO's own account and not
with a view to or for sale in connection with any distribution of the Option or
the Option Shares. HUBCO is aware that neither the Option nor the Option Shares
is the subject of a registration statement filed with, and declared effective
by, the Securities and Exchange Commission pursuant to Section 5 of the
Securities Act, but instead each is being offered in reliance upon the exemption
from the registration requirement provided by Section 4(2) thereof and the
representations and warranties made by HUBCO in connection therewith.
11. Amendment of Agreement. Upon mutual consent of
the parties hereto, this Agreement may be amended in writing at any time, for
the purpose of facilitating performance hereunder or to comply with any
applicable regulation of any governmental authority or any applicable order of
any court or for any other purpose.
12. Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force and
effect.
13. Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered personally, by express
service, cable, telegram or telex, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
If to HUBCO:
HUBCO, Inc.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attention: Mr. Kenneth T. Neilson
President and Chief Executive Officer
With a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
Florham Park, New Jersey 07932-0950
Attention: Ronald H. Janis, Esq.
Michael W. Zelenty, Esq.
If to PFC:
Poughkeepsie Financial Corp.
249 Main Mall
Poughkeepsie, New York 12601
Attention: Mr. Joseph B. Tockarshewsky
Chairman, President and Chief Executive
Officer
With a copy to:
Elias, Matz, Tiernan & Herrick L.L.P.
The Walker Building, 12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Attention: W. Michael Herrick, Esq.
Hugh T. Wilkinson, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
14. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New Jersey.
15. Captions. The captions in the Agreement are
inserted for convenience and reference purposes, and shall not limit or
otherwise affect any of the terms or provisions hereof.
16. Waivers and Extensions. The parties hereto may,
by mutual consent, extend the time for performance of any of the obligations or
acts of either party hereto. Each party may waive (a) compliance with any of the
covenants of the other party contained in this Agreement and/or (b) the other
party's performance of any of its obligations set forth in this Agreement.
17. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
18. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
19. Termination. This Agreement shall terminate upon
either the termination of the Merger Agreement as provided therein or the
consummation of the transactions contemplated by the Merger Agreement; provided,
however, that if termination of the Merger Agreement occurs after the occurrence
of a Triggering Event (as defined in Section 2 hereof), this Agreement shall not
terminate until the later of 18 months following the date of the termination of
the Merger Agreement or the consummation of any proposed transactions which
constitute the Triggering Event.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to
resolutions adopted by its Board of Directors, has caused this Stock Option
Agreement to be executed by its duly authorized officer, all as of the day and
year first above written.
POUGHKEEPSIE FINANCIAL CORP.
JOSEPH B. TOCKARSHEWSKY
By:-----------------------------------------------
Joseph B. Tockarshewsky
Chairman, President and Chief Executive Officer
HUBCO, INC.
D. LYNN VAN BORKULO-NUZZO
By:---------------------------------------------
D. Lynn Van Borkulo-Nuzzo
Executive Vice President and Corporate Secretary
