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) - November 9, 1994
VALLEY NATIONAL BANCORP
(Exact Name of Registrant as Specified in Charter)
NEW JERSEY
(State or Other Jurisdiction of Incorporation)
0-11179 22-2477875
(Commission File Number) (IRS Employer Identification No.)
1445 Valley Road, Wayne, New Jersey 07470
(Address of Principal Executive Offices)
(201) 305-8800
(Registrant's Telephone Number)<PAGE>
<PAGE>
Item 5 - Other Events
On November 9, 1994, Valley National Bancorp ("Valley"),
and its commercial bank subsidiary, Valley National Bank ("VNB"),
entered into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Valley will acquire American Union
Bank ("American"), a $55 million, two office bank headquartered in
Union, New Jersey. The acquisition is to be a tax free
merger in which the shareholders of American will receive 0.50
shares of Valley Common Stock ("Valley Stock") for each of the
549,970 outstanding shares of the common stock of American,
resulting in the issuance by Valley of 274,985 shares of Valley
Stock, or approximately one percent of Valley's outstanding shares.
The announced merger is subject to, among other conditions,
the approval of the Department of Banking of the State of New
Jersey, the Comptroller of the Currency, and American shareholders.
Pursuant to the Merger Agreement, American will be merged into
VNB. In connection with an earlier letter of intent, American had
granted Valley an option to purchase 180,000 shares of American's
authorized but unissued common stock under certain conditions. In
connection with the Merger Agreement, American and Valley entered
into a revised Stock Option Agreement, dated November 9, 1994,
which contained the same principal terms as the original,
superseded stock option agreement.
Item 7 - Exhibits
99.1 Press release, dated November 10, 1994
99.2 Merger Agreement, dated November 9, 1994
99.3 Stock Option Agreement, dated November 9, 1994
SIGNATURES
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.
VALLEY NATIONAL BANCORP
Dated: November 16, 1994 By:/s/ GERALD H. LIPKIN
Gerald H. Lipkin, Chairman
Chief Executive Officer<PAGE>
<PAGE>
INDEX TO EXHIBITS
99.1 Press Release, dated November 10, 1994
99.2 Merger Agreement, dated November 9, 1994
99.3 Stock Option Agreement, dated November 9, 1994
Exhibit 99.1
For Immediate Release: November 10, 1994
VALLEY NATIONAL BANCORP AND AMERICAN UNION BANK
SIGN DEFINITIVE MERGER AGREEMENT
WAYNE, NJ - Gerald H. Lipkin, Chairman and Chief Executive Officer
of Valley National Bancorp (NYSE; VLY), and Alan Turtletaub,
Chairman of American Union Bank, jointly announced today that they
have signed a definitive merger agreement by which Valley will
acquire American Union Bank, a $55 million, two-office bank
headquartered in Union. The definitive merger agreement was
negotiated pursuant to the previously announced letter of intent
signed by the parties.
"The proposed merger with American Union is consistent with
Valley's strategy of growth within our market through acquisitions
of other strong financial institutions," Lipkin noted. With its
offices in Union and Roselle Park, the American Union acquisition
will enhance Valley's presence in Union County.
"Working with American Union's management we have been able to
identify some very significant cost savings. Those savings can be
accomplished while still retaining American Union's officers and
employees", said Lipkin.
Pursuant to the merger, American Union Bank will be merged into
Valley's subsidiary, Valley National Bank. The acquisition of
American Union is designed as a tax-free merger in which each of
the 549,970 presently outstanding shares of American Union common
stock will be exchanged for .50 shares of Valley common stock.
American Union also granted Valley a revised option on 180,000
shares of American Union's authorized but unissued stock. The
option permits Valley to acquire the American Union shares under
certain conditions subject to the right of shareholders of American
Union to exercise their preemptive rights.
The acquisition is conditioned upon necessary bank regulatory
approvals, the approval of American Union's shareholders and other
customary conditions.
During August 1994, Valley signed a definitive merger agreement
pursuant to which Valley agreed to acquire Rock Financial Corpora-
tion, holding company for Rock Bank, a $190 million five-office
bank headquartered in North Plainfield. That acquisition is
anticipated to close on November 30, 1994.
Valley National Bank, the principal subsidiary of Valley National
Bancorp, currently has $3.5 billion in assets and operates 58
branches in Bergen, Essex, Hudson, Morris and Passaic counties.
Exhibit 99.2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of November
9, 1994 ("Agreement"), is among Valley National Bancorp ("Valley"),
a corporation chartered under the laws of the State of New Jersey,
Valley National Bank, a national banking association and subsidiary
of Valley ("VNB"), and American Union Bank, a commercial bank
chartered under the laws of the State of New Jersey ("American
Union").
Valley and VNB desire to acquire American Union and
American Union's Board of Directors has determined, based upon the
terms and conditions hereinafter set forth, that the acquisition is
in the best interests of American Union and its stockholders. The
acquisition will be accomplished by merging American Union into VNB
with VNB as the surviving bank, and American Union shareholders
receiving the consideration hereinafter set forth. The Boards of
Directors of American Union, Valley and VNB have duly adopted and
approved this Agreement and the Board of Directors of American
Union has directed that it be submitted to its shareholders for
approval.
American Union, Valley and VNB entered into a letter of
intent, dated October 14, 1994 (the "Letter of Intent") and a Stock
Option Agreement, dated October 14, 1994 (the "Valley Stock
Option") in contemplation of entering into this Agreement.
Accordingly, the parties hereto 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),
American Union shall be merged with and into VNB under the charter
of VNB (the "Merger") in accordance with the National Bank Act and
the New Jersey Banking Act of 1948, as amended, and VNB shall be
the surviving bank (the "Surviving Bank").
1.2. Effect of the Merger. At the Effective Time (as
hereafter defined), the Surviving Bank shall be considered the same
business and corporate entity as each of American Union and VNB and
thereupon and thereafter, all the property, rights, powers and
franchises of each of American Union and VNB shall vest in the
Surviving Bank and the Surviving Bank shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations
and duties of each of American Union and VNB and shall have
succeeded to all of each of their relationships, fiduciary or
otherwise, as fully and to the same extent as if such property
rights, privileges, powers, franchises, debts, obligations, duties
and relationships had been originally acquired, incurred or entered
into by the Surviving Bank.
1.3. Articles of Association. The Articles of Associa-
tion of VNB as it exists immediately prior to the Effective Time
shall continue as the Articles of Association of the Surviving
Bank, except that the Articles of Association of the Surviving Bank
shall be amended to increase the capital and delete certain
provisions so that the Articles of Association shall be as set
forth in Schedule 1, until otherwise amended as provided by law.
1.4. Bylaws. The Bylaws of VNB as they exist immediate-
ly prior to the Effective Date shall continue as the Bylaws of the
Surviving Bank until otherwise amended as provided by law.
1.5. Directors and Officers. The directors and officers
of VNB as of the Effective Time shall continue as the directors and
officers of the Surviving Bank.
1.6. Effective Time and Closing. The Merger shall
become effective (and be consummated) upon the date specified in a
notice to the Comptroller of the Currency (the "OCC") filed by VNB
with the approval of American Union, which approval shall not be
unreasonably withheld. The date and time specified in such notice
shall be the "Effective Time". A closing (the "Closing") shall
take place prior to the Effective Time at 10:00 a.m., on a day
mutually agreed to by Valley and American Union within thirty (30)
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 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), at VNB's main office or at such other
place, time or date as VNB and American Union may mutually agree
upon. The notice from VNB to the OCC shall specify as the
Effective Time the close of business on the date of the Closing as
agreed to by VNB and American Union.
1.7. Capital Stock. As of September 30, 1994, VNB had
capital of $9,787,665, divided into 1,957,533 shares of common
stock, each of $5.00 par value, $24,263,818 of surplus, and
undivided profits of $222,146,848. As of September 30, 1994,
American Union had capital of $2,749,850, divided into 549,970
shares of common stock, each of $5.00 par value, $2,749,850 of
surplus, and $(1,224,139) of undivided profits. At the Effective
Time, the amount of capital stock of VNB shall be $9,787,665,
divided into 1,957,533 shares of common stock, each of $5.00 par
value, and VNB shall have a surplus of $28,539,379 and undivided
profits, including capital reserves, which when combined with the
capital and surplus will be equal to the combined capital struc-
tures of VNB and American Union as stated in the preceding two
sentences, adjusted however, for (i) earnings and expenses between
September 30, 1994 and the Effective Time and (ii) the acquisition
of RockBank by VNB if the same shall close between September 30,
1994 and the Effective Time.
ARTICLE II
CONVERSION OF AMERICAN UNION SHARES
2.1. Conversion of American Union Shares. Each share of
common stock, $5.00 par value, of American Union ("American Union
Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares as defined in Section
2.3) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and represent the
right to receive 0.50 (the "Exchange Ratio") shares of Valley's
common stock, no par value ("Valley Common Stock"), subject to
adjustments as set forth in the subsections to this Section 2.1.
(a) The Exchange Ratio shall be appropriately adjusted
for any stock split, stock dividend, stock combination, reclassifi-
cation or similar transaction ("Capital Change") effected by Valley
with respect to Valley Common Stock between the date hereof and the
Effective Date. The parties shall mutually agree upon such
adjustment in writing or, if unable to agree, shall arbitrate the
dispute, using a mutually agreed upon arbitrator whose decision
shall be final and non-appealable.
(b) No fractional shares of Valley Common Stock will be
issued, and in lieu thereof, each holder of American Union Common
Stock who would otherwise be entitled to a fractional interest will
receive, as soon as practicable after the Effective Time, an amount
in cash determined by multiplying such fractional interest by the
Average Closing Price. The "Average Closing Price" shall mean the
average price of Valley Common Stock calculated based upon the
closing price during the first 10 of the 15 consecutive trading
days immediately preceding the Closing. The Average Closing Price
shall be determined by (x) first, recording the closing price (the
"Daily Price") of Valley Common Stock reported on the New York
Stock Exchange and published in The Wall Street Journal during the
first 10 of the 15 consecutive trading days immediately preceding
the Closing; and (y) second, computing the average of the Daily
Prices in the 10 day period.
2.2. Exchange of Shares.
(a) American Union and Valley hereby appoint Valley
National Bank, Trust Department (the "Exchange Agent") as the
Exchange Agent for purposes of effecting the conversion of American
Union Common Stock. All fees and expenses of the Exchange Agent
shall be paid by Valley. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of
record (a "Record Holder") of a certificate or certificates which,
immediately prior to the Effective Time represented outstanding
shares of American Union Common Stock (other than Dissenting Shares
as defined in Section 2.3) (the "Certificates"), a mutually agreed
upon letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange
Agent), and instructions for use in effecting the surrender of the
Certificates in exchange for Valley Common Stock (and cash in lieu
of fractional shares) as provided in Section 2.1. Upon surrender
of a Certificate for exchange and cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, the
Record Holder shall be entitled to promptly receive in exchange for
such Certificate the consideration as provided in Section 2.1
hereof and the Certificates so surrendered shall be cancelled. The
Exchange Agent shall not be obligated to deliver or cause to be
delivered to any Record Holder the consideration to which such
Record Holder would otherwise be entitled until such Record Holder
surrenders the Certificate for exchange or, in default thereof, an
appropriate Affidavit of Loss and Indemnity Agreement and/or a bond
as may be reasonably required in each case by Valley. Notwith-
standing the time of surrender of the Certificates, Record Holders
(other than holders of Dissenting Shares) shall be deemed share-
holders of Valley for all purposes from the Effective Time, except
that Valley shall withhold the payment of dividends from any Record
Holder until such Record Holder effects the exchange of Certifi-
cates for Valley Common Stock. (Such Record Holder shall receive
such withheld dividends, without interest, upon effecting the share
exchange.)
(b) After the Effective Time, there shall be no
transfers on the stock transfer books of American Union of the
shares of American Union Common Stock which were outstanding
immediately prior to the Effective Time and, if any Certificates
representing such shares are presented for transfer, they shall be
cancelled and exchanged for the Merger consideration.
(c) If payment of the consideration pursuant to Section
2.1 hereof is to be made in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it
shall be a condition of such payment that the Certificate so
surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form
for transfer, and that the person requesting such payment shall pay
to the Exchange Agent in advance any transfer or other taxes
required by reason of the payment to a person other than that of
the registered holder of the Certificate surrendered, or required
for any other reason, or shall establish to the reasonable
satisfaction of the Exchange Agent that such tax has been paid or
is not payable.
2.3. Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, any holder of American Union Common
Stock shall have the right to dissent in the manner provided in the
National Bank Act, 12 U.S.C. Section 215a, and if all necessary
requirements of the National Bank Act are met, such shares shall be
entitled to payment in cash from VNB of the fair value of such
shares as determined in accordance with the National Bank Act. All
shares of American Union Common Stock as to which the holder
properly exercises dissenters' rights in accordance with the
National Bank Act shall constitute "Dissenting Shares" unless and
until such rights are waived by the party initially seeking to
exercise such rights.
2.4 VNB Common Stock. The shares of common stock of VNB
outstanding immediately prior to the Effective Time shall not be
affected by the Merger but shall be the same number of shares of
the Surviving Bank.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMERICAN UNION
References herein to "American Union 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 American Union to Valley
and VNB. American Union hereby represents and warrants to Valley
and VNB as follows:
3.1. Organization.
(a) American Union is a New Jersey banking corporation
whose deposits are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation ("FDIC") to the fullest
extent permitted by law. American Union is duly organized, validly
existing and in good standing under the laws of the State of New
Jersey. American Union 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 and is in good standing in each jurisdic-
tion 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, qualified or in good standing would
not have a material adverse effect on the business, operations,
assets or financial condition of American Union.
(b) American Union has no Subsidiaries. The term
"Subsidiary", when used in this Agreement with respect to American
Union, means any corporation, joint venture, association, partner-
ship, trust or other entity in which American Union has, directly
or indirectly at least a 50% interest or acts as a general partner.
The American Union Disclosure Schedule sets forth true and complete
copies of the Certificate of Incorporation and Bylaws of American
Union as in effect on the date hereof. Except as set forth in the
Disclosure Schedule, American Union does not own or control,
directly or indirectly, any equity interest in any corporation,
company, association, partnership, joint venture or other entity
and owns no real estate, except real estate used for its banking
premises.
3.2. Capitalization. The authorized capital stock of
American Union consists of 1,000,000 shares of American Union
Common Stock and no shares of preferred stock. As of the date
hereof, there were 549,970 shares of American Union Common Stock
issued and outstanding and no shares issued and held in the
treasury. All issued and outstanding shares of American Union
Common Stock have been duly authorized and validly issued, are
fully paid, and nonassessable and are subject to pre-emptive
rights. Except for the Valley Stock Option, American Union neither
has nor 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 American Union or any securities representing the right to
purchase or otherwise receive any shares of such capital stock or
any securities convertible into or representing the right to
subscribe for 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 the stockholders of American
Union, and subject to the parties obtaining all necessary regulato-
ry approvals, American Union 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 American Union.
Except for the approvals described in paragraph (b) below, no other
corporate proceedings on the part of American Union are necessary
to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by American Union
and constitutes the valid and binding obligation of American Union,
enforceable against American Union in accordance with its terms.
(b) Neither the execution and delivery of this Agreement
by American Union, nor the consummation by American Union of the
transactions contemplated hereby in accordance with the terms
hereof, or compliance by American Union with any of the terms or
provisions hereof, will (i) violate any provision of American
Union's Certificate of Incorporation or other governing instrument
or Bylaws, (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 American Union or any of its properties or assets, or
(iii) except as set forth in the American Union 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 properties or assets of
American Union 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 American Union
is a party, or by which it or any of its properties or assets may
be bound or affected except, with respect to (ii) and (iii) above,
such as individually and in the aggregate will not have a material
adverse effect on the business, operations, assets or financial
condition of American Union, or the ability of American Union to
consummate the transactions contemplated hereby. Except for
consents and approvals of or filings or registrations with or
notices to the third parties listed in the American Union Disclo-
sure Schedule, the OCC, the Commissioner of Banking of the State of
New Jersey (the "Commissioner"), the Securities and Exchange
Commission (the "SEC"), and the stockholders of American Union, 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 American Union in connection with (x) the
execution and delivery by American Union of this Agreement and (y)
the consummation by American Union of transactions contemplated
hereby.
3.4. Financial Statements.
(a) The American Union Disclosure Schedule sets forth
copies of the statements of condition of American Union as of
December 31, 1991, 1992 and 1993, and the related statements of
income, stockholders' equity and cash flows for the periods ended
December 31 in each of the three years 1991 through 1993, in each
case accompanied by the audit report of KPMG Peat Marwick,
independent public accountants with respect to American Union, and
the unaudited statements of condition and related statements of
income, stockholders' equity and cash flows of American Union for
the periods ended March 31, June 30, and September 30, 1994, as
filed with the FDIC (collectively, the "American Union Financial
Statements"). The American Union Financial Statements (including
the related notes) have been prepared in accordance with generally
accepted accounting principles consistently applied during the
periods involved (except as approved by such independent public
accountants and disclosed therein), and fairly present the
financial condition of American Union as of the respective dates
set forth therein, and the related statements of income, stock-
holders' equity and cash flows fairly present the results of the
operations, stockholders' equity and cash flows of American Union
for the respective periods set forth therein.
(b) The books and records of American Union have been
and 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 American Union Financial Statements
(including the notes thereto), as of September 30, 1994 American
Union did not have any liabilities, whether absolute, accrued,
contingent or otherwise, which are material to the business,
operations, assets or financial condition of American Union. Since
September 30, 1994 and to the date hereof, American Union has not
incurred any liabilities except in the ordinary course of business
and consistent with prudent banking practice, and except as
specifically contemplated by this Agreement or relating to other
matters disclosed in this Agreement.
3.5. Broker's and Other Fees. Neither American Union
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 contem-
plated by this Agreement. Except as set forth in the American
Union Disclosure Schedule, 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 American Union.
3.6. Absence of Certain Changes or Events.
(a) Except as set forth in the American Union Disclosure
Schedule, there has not been any material adverse change in the
business, operations, assets or financial condition of American
Union since September 30, 1994 and to the best of American Union's
knowledge, no facts or conditions exist which American Union
believes will cause or is likely to cause such a material adverse
change in the future.
(b) Except as set forth in the American Union Disclosure
Schedule, American Union has not taken or permitted any of the
actions set forth in Section 5.2 hereof between September 30, 1994
and the date hereof and American Union has conducted its business
only in the ordinary course, consistent with past practice.
3.7. Legal Proceedings. Except as disclosed in the
American Union Disclosure Schedule, American Union is not a party
to any, and there are no pending or, to the best of American
Union's knowledge, threatened, material legal, administrative,
arbitral or other proceedings, claims, actions or governmental
investigations of any nature against American Union. Except as
disclosed in the American Union Disclosure Schedule, American Union
is not a party to any material order, judgment or decree entered
against American Union in any lawsuit or proceeding.
3.8. Taxes and Tax Returns.
(a) American Union 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 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. American Union has established (and until
the Effective Time will establish) on its books and records
reserves that it reasonably believes are adequate for the payment
of all federal, state and local taxes not yet due and payable, but
are anticipated to be incurred in respect of American Union through
the Effective Time. Except as set forth in the American Union
Disclosure Schedule, the federal income tax returns of American
Union have been examined by the Internal Revenue Service (the
"IRS") (or are closed to examination due to the expiration of the
applicable statute of limitations) and no deficiencies were
asserted as a result of such examinations which have not been
resolved and paid in full. Except as set forth in the American
Union Disclosure Schedule, the applicable state income tax returns
of American Union have been examined by the applicable authorities
(or are closed to examination due to the expiration of the statute
of limitations) and no deficiencies were asserted as a result of
such examinations which have not been resolved and paid in full.
To the best knowledge of American Union, there are no audits or
other administrative or court proceedings presently pending, or
claims asserted, for taxes or assessments upon American Union nor
has American Union given any currently outstanding waivers or
comparable consents regarding the application of the statute of
limitations with respect to any taxes or tax Returns.
(b) Except as set forth in the American Union Disclosure
Schedule, American Union (i) has not requested any extension of
time within which to file any tax Return which Return has not since
been filed, (ii) is not a party to any agreement providing for the
allocation or sharing of taxes, (iii) is not 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 American Union
(nor does American Union have any knowledge that the IRS has
proposed any such adjustment or change of accounting method) and
(iv) has not filed a consent pursuant to Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply.
3.9. Employee Benefit Plans.
(a) Except as set forth in the American Union Disclosure
Schedule, American Union does not maintain or contribute to any
"employee pension benefit plan", within the meaning of Section
3(2)(A) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), "employee welfare benefit plan", within the
meaning of Section 3(1) of ERISA, stock option plan, stock purchase
plan, deferred compensation plan, severance plan, bonus plan,
employment agreement or other similar plan, program or arrangement.
American Union has not, since September 2, 1974, contributed to any
"Multiemployer Plan", within the meaning of Sections 3(37) and
4001(a)(3) of ERISA.
(b) Except with respect to customary health and
disability benefits, there are no unfunded benefits obligations
which are not accounted for by reserves shown on the American Union
Financial Statements and established under generally accepted
accounting principles, or otherwise noted on such American Union
Financial Statements.
(c) Except as agreed to by Valley in writing, the
consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former employee of American
Union to severance pay or any similar payment or (ii) result in
payments not deductible by reason of Section 280G of the Code or
regulations promulgated or proposed thereunder.
3.10. Reports.
(a) Each communication mailed by American Union to all
of its stockholders since January 1, 1991, and each annual,
quarterly or special report, and proxy statement, as of its date,
complied in all material respects with all applicable statutes,
rules and regulations enforced or promulgated by the applicable
regulatory agency 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 disclosures as of a later date shall
be deemed to modify disclosures as of an earlier date.
(b) American Union has, since January 1, 1991, duly
filed with the FDIC in correct form the monthly, quarterly and
annual reports required to be filed under applicable laws and
regulations, and American Union promptly will deliver or make
available to Valley accurate and complete copies of such reports.
The American Union Disclosure Schedule lists all examinations of
American Union conducted by either the FDIC or the New Jersey
Department of Banking since January 1, 1991 and the dates of any
responses thereto submitted by American Union.
3.11. American Union Information. The information
relating to American Union to be contained in the Proxy State-
ment/Prospectus (as defined in Section 5.6(a) hereof) to be
delivered to stockholders of American Union in connection with the
solicitation of their approval of this Agreement and the transac-
tions contemplated hereby, as of the date the Proxy State-
ment/Prospectus is mailed to stockholders of American Union, 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 necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
information relating to American Union in the Registration
Statement (as defined in Section 5.6(a) hereof), as of the date of
the filing thereof, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
3.12. Compliance with Applicable Law.
(a) General. Except as set forth in the American Union
Disclosure Schedule, American Union holds all material licenses,
franchises, permits and authorizations necessary for the lawful
conduct of its business under and pursuant to each, 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 American Union (other than where such defaults or
non-compliances will not, alone or in the aggregate, result in a
material adverse effect on the business, operations, assets or
financial condition of American Union) and American Union has not
received notice of violation of, and does not know of any viola-
tions (other than violations which will not, alone or in the
aggregate, result in a material adverse effect on the business,
operations, assets or financial condition of American Union) of,
any of the above.
(b) CRA. Without limiting the foregoing, except as set
forth in the American Union Disclosure Schedule, American Union has
complied in all material respects with the Community Reinvestment
Act ("CRA") and received a CRA rating of "satisfactory" as of its
last examination, and American Union has not received any written
notice from any persons asserting that such person would object to
the consummation of this Merger due to the CRA performance of or
rating of American Union.
3.13. Certain Contracts.
(a) Except as disclosed in the American Union Disclosure
Schedule, (i) American Union is not a party to or bound by any
contract or understanding (whether written or, to the best of its
knowledge, oral) with respect to the employment or termination of
any present or former officers, employees, directors or consul-
tants. The American Union Disclosure Schedule sets forth true and
correct copies of all written employment agreements or termination
agreements with officers, employees, directors, or consultants to
which American Union is a party.
(b) Except as disclosed in the American Union Disclosure
Schedule, (i) as of the date of this Agreement, American Union is
not a party to or bound by any commitment, agreement or other
instrument which is material to the business operations, assets or
financial condition of American Union, (ii) no commitment,
agreement or other instrument to which American Union is a party or
by which it is bound limits the freedom of American Union to
compete in any line of business or with any person, and (iii)
American Union is not a party to any collective bargaining
agreement.
(c) Except as disclosed in the American Union Disclosure
Schedule, neither American Union nor, to the best knowledge of
American Union, any other party thereto, is in default in any
material respect under any material lease, contract, mortgage,
promissory note, deed of trust, loan agreement or other commitment
or arrangement.
3.14. Properties and Insurance.
(a) American Union has good and, as to owned real
property, if any, marketable title to all material assets and
properties, whether real or personal, tangible or intangible,
reflected in American Union's balance sheet as of December 31,
1993, 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,
1993), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure liabili-
ties that are reflected in such balance sheet or the notes thereto
or 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 American
Union and (iv) with respect to owned real property, if any, title
imperfections noted in title reports delivered to Valley prior to
the date hereof. American Union, as lessee, has the right under
valid and subsisting leases to occupy, use, possess and control, in
all material respects, all real property leased by it, as presently
occupied, used, possessed and controlled by it.
(b) The American Union Disclosure Schedule lists all
policies of insurance and bonds covering business operations and
insurable properties and assets of American Union, all risks
insured against, and the amount thereof and deductibles relating
thereto. Except as set forth in the American Union Disclosure
Schedule, as of the date hereof, American Union has not received
any notice of cancellation or notice of a material amendment of any
such insurance policy or bond and is not in default in any material
respect under such policy or bond, and, to the best of its
knowledge, no coverage thereunder is being disputed and all
material claims thereunder have been filed in a timely fashion.
3.15. Minute Books. The minute books of American Union
contain accurate records of all meetings and other corporate action
held of its stockholders and Boards of Directors (including
committees of its Boards of Directors).
3.16. Environmental Matters. Except as disclosed in the
American Union Disclosure Schedule, American Union has not received
any written notice, citation, claim, assessment, proposed assess-
ment or demand for abatement alleging that American Union (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 clean-up of any condition material to the business,
operations, assets or financial condition of American Union.
Except as disclosed in the American Union Disclosure Schedule,
American Union has no knowledge that any toxic or hazardous
substances or materials have been emitted, generated, disposed of
or stored on any property owned or leased by American Union in any
manner that violates or, after the lapse of time may violate, any
presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials.
3.17. Reserves. As of the date hereof, the allowance
for possible loan and lease losses in the American Union Financial
Statements was adequate at the time based upon past loan loss
experiences and potential losses in the portfolio at the time to
cover all known or reasonably anticipated loan losses.
3.18. Disclosure. There are no material facts concern-
ing the business, operations, assets or financial condition of
American Union which have not been disclosed to Valley which would
have a material adverse effect on the business, operations or
financial condition of American Union. Valley hereby acknowledges
that it has been informed of the circumstances surrounding the
expiration of American Union's 1994 proposed common stock offering.
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 VNB AND VALLEY
References herein to the "Valley 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 Valley to American Union.
Valley hereby represents and warrants to American Union as follows:
4.1. Corporate Organization.
(a) Valley is a corporation duly organized and validly
existing and in good standing under the laws of the State of New
Jersey. Valley 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 and is in good standing 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, qualified or in good standing would not have a
material adverse effect on the business, operations, assets or
financial condition of Valley or any of its Subsidiaries (defined
below). Valley is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "BHCA").
(b) Each of the Subsidiaries of Valley are listed in the
Valley Disclosure Schedule. The term "Subsidiary" when used in
this Agreement with reference to Valley means any corporation,
joint venture, association, partnership, trust or other entity in
which Valley has, directly or indirectly, at least a 50% interest
or acts as a general partner. Each Subsidiary of Valley is duly
organized and validly existing and in good standing under the laws
of the jurisdiction of its incorporation. VNB is a national bank
whose deposits are insured by the Bank Insurance Fund of the FDIC
to the fullest extent permitted by law. Each Subsidiary of Valley
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
and is in good standing 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, qualified or in good standing would not have a material
adverse effect on the business, operations, assets or financial
condition of Valley or any of its Subsidiaries. The Valley
Disclosure Schedule sets forth true and complete copies of the
Articles of Association and Bylaws of VNB as in effect on the date
hereof.
4.2. Capitalization. The authorized capital stock of
Valley consists solely of [37,537,500] shares of Valley Common
Stock. As of September 30, 1994, there were 27,177,567 shares of
Valley Common Stock issued and outstanding, including 113,003
treasury shares. Since such date, and from time to time hereafter,
Valley may repurchase shares of its Common Stock. Since September
30, 1994, to and including the date of this Agreement, no addition-
al shares of Valley Common Stock have been issued except in
connection with exercises of options granted under the Long-Term
Stock Incentive Plan of Valley (the "Valley Option Plan") or grants
of restricted stock under the Valley Option Plan or upon exercise
of outstanding Warrants (as hereafter defined). As of September
30, 1994, except for: (a) 443,213 shares of Valley Common Stock
issuable upon exercise of outstanding stock options and stock
appreciation rights granted pursuant to the Valley Option Plan, (b)
up to 586,139 shares issuable upon exercise of the outstanding
warrants issued by Valley in connection with the acquisition of
Mayflower Financial Corporation (the "Warrants"), and (c) 10,312
shares of Valley Common Stock issuable upon exercise of outstanding
stock options granted to a consultant for Valley, there were no
shares of Valley Common Stock issuable upon the exercise of
outstanding stock options or otherwise. All issued and outstanding
shares of Valley Common Stock, and all issued and outstanding
shares of capital stock of Valley'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 Valley's
Subsidiaries are owned by Valley free and clear of any liens,
encumbrances, charges, restrictions or rights of third parties.
Except for the options and stock appreciation rights referred to
above under the Valley Option Plan and the Warrants, and shares of
Valley Common Stock to be issued (and options for shares of Valley
Common Stock to be issued) in connection with the Agreement and
Plan of Merger, dated as of August 26, 1994, among Valley, VNB,
Rock Financial Corporation and RockBank (the "Rock Agreement"),
neither Valley nor any of Valley's Subsidiaries has or is bound by
any outstanding subscriptions, options, warrants, calls, commit-
ments or agreements of any character calling for the transfer,
purchase or issuance of any shares of capital stock of Valley or
Valley's Subsidiaries or any securities representing the right to
otherwise receive any shares of such capital stock or any securi-
ties convertible into or representing the right to purchase or
subscribe for any such shares, and there are no agreements or
understandings with respect to voting of any such shares. No
additional grants of awards, or exercises of outstanding awards,
under the Valley Option Plan, or exercises of Warrants, prior to
the Effective Time shall be required to be disclosed or reported to
American Union to keep this representation true or correct.
4.3. Authority; No Violation.
(a) Valley and VNB have 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 Valley and VNB.
No other corporate proceedings on the part of Valley and VNB are
necessary to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by
Valley and VNB and constitutes a valid and binding obligation of
Valley and VNB, enforceable against Valley and VNB in accordance
with its terms.
(b) Neither the execution or delivery of this Agreement
nor the consummation by Valley and VNB of the transactions
contemplated hereby in accordance with the terms hereof, will (i)
violate any provision of the Certificate of Incorporation on other
governing instrument or Bylaws of Valley or VNB, (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 Valley or VNB 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 encum-
brance upon any of the properties or assets of Valley or VNB 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 Valley or VNB is a party,
or by which Valley or VNB or any of their properties or assets may
be bound or affected, except, with respect to (ii) and (iii) above,
such as individually and in the aggregate will not have a material
adverse effect on the business, operations, assets or financial
condition of Valley and Valley's Subsidiaries on a consolidated
basis, or the ability of Valley and VNB to consummate the transac-
tions contemplated hereby. Except for consents and approvals of or
filings or registrations with or notices to the OCC, the Commis-
sioner, the SEC, applicable state securities bureaus or commis-
sions, and the New York Stock Exchange (the "NYSE"),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 Valley or VNB in connection with (a) the execution and delivery
by Valley or VNB of this Agreement and (b) the consummation by
Valley of the Merger and the other transactions contemplated
hereby. To the best of Valley's knowledge, no fact or condition
exists which Valley has reason to believe will prevent it or VNB
from obtaining the aforementioned consents and approvals within the
time frame contemplated hereby.
4.4. Financial Statements.
(a) Valley has previously delivered to American Union
copies of the consolidated statements of financial condition of
Valley as of December 31, 1991, 1992 and 1993, 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 1991 through 1993, in each case accompanied by
the audit report of KPMG Peat Marwick, independent public accoun-
tants with respect to Valley, and the unaudited consolidated
statements of condition of Valley as of March 31, June 30, and
September 30, 1994, and the related unaudited consolidated
statements of income, changes in stockholders' equity and cash
flows for the three months then ended as reported in Valley's
Quarterly Reports on Form 10-Q, filed with the SEC under the
Securities and Exchange Act of 1934, as amended (the "1934 Act")
(collectively, the "Valley Financial Statements"). The Valley
Financial Statements (including the related notes), have been
prepared in accordance with generally accepted accounting princi-
ples consistently applied during the periods involved (except as
approved by such independent public accountants and disclosed
therein), and fairly present the consolidated financial position of
Valley and its consolidated subsidiaries as of the respective dates
set forth therein, and the related consolidated statements of
income, changes in stockholders' equity and of cash flows (includ-
ing the related notes, where applicable) fairly present the results
of the consolidated operations and changes in stockholders' equity
and of cash flows of Valley and its consolidated subsidiaries for
the respective fiscal periods set forth therein.
(b) The books and records of Valley have been and 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 Valley Financial Statements (including the
notes thereto), as of September 30, 1994 neither Valley nor any of
its Subsidiaries had or has, as the case may be, any obligation or
liability, whether absolute, accrued, contingent or otherwise,
which are material to the business, operations, assets or financial
condition of Valley or any of its Subsidiaries. Since September
30, 1994, neither Valley nor any of its Subsidiaries have incurred
any liabilities, except in the ordinary course of business and
consistent with prudent banking practice.
4.5. Brokerage Fees. Except for fees to be paid to MG
Advisors, Inc. (which shall be the sole responsibility of Valley),
neither Valley nor VNB 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.
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 Valley and Valley's Subsidiaries
on a consolidated basis since September 30, 1994 and to the best of
Valley's knowledge, no fact or condition exists which Valley
believes will cause or is likely to cause such a material adverse
change in the future.
4.7. Valley Information. The information relating to
Valley, this Agreement and the transactions contemplated hereby in
the Proxy Statement/Prospectus (as defined in Section 5.6(a)
hereof), as of the date of the mailing of the Proxy State-
ment/Prospectus, and up to and including the date of the meeting of
stockholders of American Union to which such Proxy State-
ment/Prospectus relates, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The information relating to
Valley, this Agreement and the transactions contemplated hereby in
the Registration Statement (as defined in Section 5.6(a) hereof),
as of the date of the filing thereof, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circum-
stances under which they were made, not misleading.
4.8. Capital Adequacy. At the Effective Time, after
taking into effect the Merger and the transactions contemplated
hereunder, Valley will have sufficient capital to satisfy all
applicable regulatory capital requirements.
4.9. Valley Common Stock. At the Effective Time, the
Valley Common Stock to be issued pursuant to the terms of Section
2.1, when so issued, shall 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 or
through Valley.
4.10. Legal Proceedings. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor any of its Subsid-
iaries is a party to any, and there are no material pending or, to
the best of Valley's knowledge, threatened, legal, administrative,
arbitral or other proceedings, claims, actions or governmental
investigations of any nature against Valley or any of its Subsid-
iaries which, if decided adversely to Valley, or any of its
Subsidiaries, would have a material adverse effect on the business,
operations, assets or financial condition of Valley and its
Subsidiaries on a consolidated basis. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor any of Valley's
Subsidiaries is a party to any order, judgment or decree entered
against Valley or any such Subsidiary in any lawsuit or proceeding
which would have a material adverse affect on the business,
operations, assets or financial condition of Valley and its
Subsidiaries on a consolidated basis.
4.11. Taxes and Tax Returns. Valley and each of its
Subsidiaries has duly filed (and until the Effective Time will so
file) all Returns required to be filed by it 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. Valley and each of its Subsidiaries have established (and
until the Effective Time will establish) on its books and records
reserves that it reasonably believes are adequate for the payment
of all federal, state and local taxes not yet due and payable, but
are anticipated to be incurred in respect of Valley and its
Subsidiaries through the Effective Time. No deficiencies exist or
have been asserted based upon the federal income tax returns of
Valley and VNB. To be best knowledge of Valley, there are no
audits or other administrative or court proceedings pending, or
claims asserted, for taxes or assessments upon Valley or any of its
Subsidiaries.
4.12. Employee Benefit Plans.
(a) Valley and its Subsidiaries maintain or contribute
to certain "employee pension benefit plans" (the "Valley Pension
Plans"), as such term is defined in Section 3 of ERISA, and
"employee welfare benefit plans" (the "Valley Welfare Plans"), as
such term is defined in Section 3 of ERISA. Since September 2,
1974, neither Valley nor its Subsidiaries have contributed to any
"Multiemployer Plan", as such term is defined in Section 3(37) of
ERISA.
(b) Each of the Valley Pension Plans and each of the
Valley Welfare Plans 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.
4.13. Reports.
(a) Each communication mailed by Valley to all of its
stockholders since January 1, 1991, and each annual, quarterly or
special report, and proxy statement as of its date, complied in all
material respects with all applicable statutes, rules and regula-
tions enforced or promulgated by the applicable regulatory agency
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 disclosures as of a later date shall be deemed to
modify disclosures as of an earlier date.
(b) Valley and VNB have, since January 1, 1991, duly
filed with the OCC and the FRB in correct form the monthly,
quarterly and annual reports required to be filed under applicable
laws and regulations, and Valley, upon request, promptly will
deliver or make available to American Union accurate and complete
copies of such reports.
4.14. Compliance with Applicable Law. Valley and its
Subsidiaries hold all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to each, 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 or the NYSE relating to
Valley and its Subsidiaries (other than where such default or
non-compliance will not result in a material adverse effect on the
business, operations, assets or financial condition of Valley and
its Subsidiaries on a consolidated basis), and neither Valley nor
any of its Subsidiaries has received notice of violation of, and
does not know of any violations (other than violations which will
not, alone or in the aggregate, result in a material adverse effect
on the business operations, assets or financial condition of Valley
and its Subsidiaries on a consolidated basis) of, any of the above.
4.15. Properties and Insurance.
(a) Valley 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 Valley's consolidated balance sheet as of December 31,
1993, 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,
1993). Valley and its Subsidiaries as lessees have the right under
valid and subsisting leases to occupy, use, possess and control in
all material respects, all real property leased by them as
presently occupied, used, possessed and controlled by them.
(b) The business operations and all insurable properties
and assets of Valley and its Subsidiaries are insured for their
benefit against all risks which, in the reasonable judgment of the
management of Valley should be insured against, with such deduct-
ibles and against such risks and losses as are in the opinion of
the management of Valley adequate for the business engaged in by
Valley and its Subsidiaries. As of the date hereof, Valley has not
received any notice of cancellation of or material amendment to any
such insurance policy or bond and is not in default in any material
respect under any such policy or bond, and, to the best of its
knowledge, no coverage thereunder is being disputed and all
material claims thereunder have been filed in a timely fashion.
4.16. Minute Books. The minute books of Valley and its
Subsidiaries contain accurate 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).
4.17. Environmental Matters. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor any of its Subsid-
iaries has received any written notice, citation, claim, assess-
ment, proposed assessment or demand for abatement alleging that
Valley 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
clean-up of any condition material to the business, operations,
assets or financial condition of Valley or its Subsidiaries.
Except as disclosed in the Valley Disclosure Schedule, Valley has
no knowledge that any toxic or hazardous substances or materials
have been emitted, generated, disposed of or stored on any property
owned or leased by Valley or any of its Subsidiaries in any manner
that violates or, after the lapse of time may 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 Valley and
its Subsidiaries on a consolidated basis.
4.18. Reserves. As of the date hereof, the allowance
for possible loan and lease losses in the Valley Financial
Statements was adequate based at the time upon past loan loss
experiences and potential losses in the portfolio at the time to
cover all known or reasonably anticipated loan losses.
4.19. Disclosures. Except for other acquisition
transactions which have not yet been publicly disclosed by Valley,
there are no material facts concerning the business, operations,
assets or financial condition of Valley which would have a material
adverse effect on the business, operations or financial condition
of Valley which have not been disclosed to American Union directly
or indirectly by access to any filing by Valley under the 1934 Act.
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 American Union. During
the period from the date of this Agreement to the Effective Time,
American Union shall conduct its business and engage in transac-
tions permitted hereunder only in the ordinary course and consis-
tent with prudent banking practice, except with the prior written
consent of Valley, which consent will not be unreasonably withheld.
American Union also shall use its best efforts to (i) preserve its
business organization intact, (ii) keep available to itself the
present services of its employees and (iii) preserve for itself and
Valley the goodwill of its customers and others with whom business
relationships exist, in each case provided that American Union
shall not be required to take any unreasonable or extraordinary act
or any action which would conflict with any other term of this
Agreement.
5.2. Negative Covenants and Dividend Covenants.
American Union agrees that from the date hereof to the
Effective Time, except as otherwise approved by Valley in writing
or as permitted or required by this Agreement, it will not:
(a) change any provision of its Certificate of Incorpo-
ration or Bylaws or any similar governing documents;
(b) change the number of shares of its authorized
capital stock or issue any more shares of American Union
Common Stock or other capital stock or issue or grant any
option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to the
authorized or issued capital stock of American Union 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,
or redeem or otherwise acquire any shares of such capital
stock;
(c) grant any severance or termination pay (other than
pursuant to policies of American Union in effect on the
date hereof and disclosed to Valley in the American Union
Disclosure Schedule or as agreed to by Valley in writing)
to, or enter into or amend any employment agreement with,
any of its directors, officers or employees; adopt any
new employee benefit plan or arrangement of any type or
amend any such existing benefit plan or arrangement; or
award any increase in compensation or benefits to its
directors, officers or employees except with respect to
salary increases and bonuses in the ordinary course of
business and consistent with past practices and policies;
(d) sell or dispose of any substantial amount of assets
or incur any significant liabilities other than in the
ordinary course of business consistent with past practic-
es and policies;
(e) make any capital expenditures outside of the
ordinary course of business other than pursuant to
binding commitments existing on the date hereof and other
than expenditures necessary to maintain existing assets
in good repair;
(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;
(h) make any material change in its accounting methods
or practices, other than changes required in accordance
with generally accepted accounting principles; or
(i) agree to do any of the foregoing.
5.3. No Solicitation. American Union 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 Valley) 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 American Union (an "Acquisition Transac-
tion"). Notwithstanding the foregoing, American Union may (i)
enter into discussions or negotiations or provide information in
connection with an unsolicited possible Acquisition Transaction if
the Board of Directors of American Union, after consulting with
counsel, determines that such discussions or negotiations should be
commenced in the exercise of its fiduciary responsibilities or such
information should be furnished in the exercise of its fiduciary
responsibilities; and (ii) respond to inquiries from its sharehold-
ers in the ordinary course of business. American Union will
promptly communicate to Valley the terms of any proposal, whether
written or oral, which it may receive in respect of any Acquisition
Transaction and the fact that it is having discussions or negotia-
tions with, or supplying information to, a third party in connec-
tion with a possible Acquisition Transaction.
5.4. Current Information. During the period from the
date of this Agreement to the Effective Time, American Union will,
at the request of Valley, cause one or more of its designated
representatives to confer on a monthly or more frequent basis with
representatives of Valley regarding American Union's business,
operations, properties, assets and financial condition and matters
relating to the completion of the transactions contemplated herein.
Without limiting the foregoing, after granting any loan or
extension of credit by renewal or otherwise, American Union will
send to Valley a description (i.e., a copy of the loan documents)
for each new loan or extension of credit, and each renewal of an
existing loan or extension of credit, in excess of $250,000. 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 after the date of this
Agreement, American Union will deliver to Valley American Union's
call reports filed with the FDIC and Valley will deliver to
American Union Valley's quarterly reports on Form 10-Q, as filed
with the SEC under the 1934 Act. As soon as reasonably available,
but in no event more than 90 days after the end of each fiscal
year, American Union will deliver to Valley and Valley will deliver
to American Union their respective Annual Reports.
5.5. Access to Properties and Records; Confidentiality.
(a) American Union shall permit Valley and its agents
and representatives, including, without limitation, officers,
directors, employees, attorneys, accountants and financial advisors
(collectively, "Representatives"), and Valley and VNB shall permit
American Union and its Representatives reasonable access to their
respective properties, and shall disclose and make available to
Valley and its Representatives or American Union and its Represen-
tatives, as the case may be, all books, papers and records relating
to their respective assets, stock ownership, properties, opera-
tions, 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, organiza-
tional documents, bylaws, material contracts and agreements,
filings with any regulatory authority, independent auditors' work
papers (subject to the receipt by such auditors of a standard
access representation letter), litigation files, plans affecting
employees, and any other business activities or prospects in which
Valley and its representatives or American Union and its represen-
tatives 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 or would contravene any law, rule, regulation, order or
judgment. The parties will use their best efforts to obtain
waivers of any such restriction and in any event make appropriate
substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply. American Union
acknowledges that Valley may be involved in discussions concerning
other potential acquisitions and Valley shall not be obligated to
disclose such information to American Union except as such
information is publicly disclosed by Valley.
(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 Representatives 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 keep confidential all
such information, and shall not directly or indirectly use such
information for any competitive or commercial purposes or any other
purpose not expressing permitted hereby. Each party hereto shall
inform its Representatives of the terms of this Section 5.5. Any
breach of this Section 5.5 by a Representative of a party hereto
shall conclusively be deemed to be a breach thereof by such party.
In the event that the Merger contemplated hereby does not occur or
this Agreement is terminated, all documents, notes and other
writings prepared by a party hereto or its Representatives based on
information furnished by the other party, and all other documents
and records obtained from another party hereto in connection
herewith, 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 other than as a result of a
disclosure by any party hereto or its Representative; (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 require-
ment or in accordance with an order of a court of competent
jurisdiction, provided that in the event of any disclosure required
by this clause (ii), the disclaiming party will give at least ten
(10) days prior written notice of such disclosure to the other
parties and shall not disclose any such information without an
opinion of counsel supporting its position that such information
must be disclosed.
(c)In addition to all other remedies that may be
available to any party hereto in connection with a breach by any
other party hereto of its or its Representative's obligations
hereunder, each party hereto shall be entitled to specific
performance and injunctive and other equitable relief. Each party
hereto waives, and agrees to use its best efforts to cause its
Representatives to waive, any requirement to secure or post a bond
in connection with any such relief.
5.6. Regulatory Matters.
(a) For the purposes of holding the meeting of American
Union stockholders referred to in Section 5.7 hereof and register-
ing or otherwise qualifying under applicable federal and state
securities laws Valley Common Stock to be issued to Record Holders
in connection with the Merger, the parties hereto shall cooperate
in the preparation and filing by Valley of a Registration Statement
with the SEC which shall include an appropriate proxy statement and
prospectus satisfying all applicable requirements of applicable
state and federal laws, including the Securities Act of 1933, as
amended (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 American Union
to the American Union shareholders and optionees, together with any
and all amendments and supplements thereto, is herein referred to
as the "Proxy Statement/Prospectus" and the various documents to be
filed by Valley under the 1933 Act with the SEC to register for
sale the Valley Common Stock to be issued to Record Holders and
optionees, including the Proxy Statement/Prospectus, together with
any and all amendments and supplements thereto, are referred to
herein as the "Registration Statement").
(b) Valley shall furnish information concerning Valley
as is necessary in order to cause the Proxy Statement/Prospectus,
insofar as it relates to Valley, to comply with Section 5.6(a)
hereof. Valley agrees promptly to advise American Union if at any
time prior to the American Union shareholder meeting referred to in
Section 5.7 hereof, any information provided by Valley in the Proxy
Statement/Prospectus becomes incorrect or incomplete in any
material respect and to provide American Union with the information
needed to correct such inaccuracy or omission. Valley shall
furnish American Union with such supplemental information as may be
necessary in order to cause the Proxy Statement/Prospectus, insofar
as it relates to Valley, to comply with Section 5.6(a) after the
mailing thereof to American Union shareholders.
(c) American Union shall furnish Valley with such
information concerning American Union as is necessary in order to
cause the Proxy Statement/Prospectus, insofar as it relates to
American Union, to comply with Section 5.6(a) hereof. American
Union agrees promptly to advise Valley if, at any time prior to the
American Union shareholder's meeting referred to in Section 5.7
hereof, information provided by American Union in the Proxy
Statement/Prospectus becomes incorrect or incomplete in any
material respect and to provide Valley with the information needed
to correct such inaccuracy or omission. American Union shall
furnish Valley with such supplemental information as may be
necessary in order to cause the Proxy Statement/Prospectus, insofar
as it relates to American Union, to comply with Section 5.6(a)
after the mailing thereof to American Union shareholders.
(d) Valley shall promptly make such filings as are
necessary in connection with the offering of the Valley Common
Stock with applicable state securities agencies and shall use all
reasonable efforts to qualify the offering of the Valley Common
Stock under applicable state securities laws at the earliest
practicable date. American Union shall promptly furnish Valley
with such information regarding the American Union shareholders as
Valley requires to enable it to determine what filings are required
hereunder. American Union authorizes Valley to utilize in such
filings the information concerning American Union provided to
Valley in connection with, or contained in, the Proxy Statement/
Prospectus. Valley shall furnish American Union with drafts of all
such filings, shall provide American Union the opportunity to
comment thereon, and shall keep American Union advised of the
status thereof. Valley and American Union shall as promptly as
practicable file the Registration Statement containing the Proxy
Statement/Prospectus with the SEC, and each of Valley and American
Union shall promptly notify the other of all communications, oral
or written, with the SEC concerning the Registration Statement and
the Proxy Statement/Prospectus.
(e) Valley shall cause the Valley Common Stock to be
issued in connection with the Merger to be listed on the NYSE.
(f) The parties hereto will cooperate with each other
and use their 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 OCC. The
parties shall each have the right to review in advance and comment
on all information relating to the other, as the case may be, 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. Valley and VNB shall
cause their application to the OCC to be filed (i) within 45 days
of the date hereof, so long as American Union provides all
information necessary to complete the application within 30 days of
the date hereof, or (ii) within 15 days after all such information
is provided, if American Union does not provide all such informa-
tion within such 30 day period. Valley shall provide to American
Union drafts of all filings and applications referred to in this
Section 5.6(f) and shall give American Union the opportunity to
comment thereon prior to their filing.
(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 body in respect of the transactions
contemplated hereby.
5.7. Approval of Stockholders. American Union will (a)
take all steps reasonably necessary duly to call, give notice of,
convene and hold a meeting of the stockholders of American Union as
soon as reasonably practicable for the purpose of securing the
approval by such stockholders of this Agreement, (b) subject to the
qualification set forth in Section 5.3 hereof, recommend to the
stockholders of American Union the approval of this Agreement and
the transactions contemplated hereby and use its best efforts to
obtain, as promptly as practicable, such approval, and (c)
cooperate and consult with Valley with respect to each of the
foregoing matters. In connection therewith, each director of
American Union agrees to vote his or her shares of American Union
in favor of the Merger.
5.8. Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably 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 contem-
plated by this Agreement and using its 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. 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 otherwise 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.
5.9. Public Announcements. The parties hereto shall
cooperate with each other in the development and distribution of
all news releases and other public disclosures with respect to this
Agreement or any of the transactions contemplated hereby, except as
may be otherwise required by law or regulation or as to which the
party releasing such information has used its best efforts to
discuss with the other party in advance.
5.10. Failure to Fulfill Conditions. In the event that
Valley or American Union determines that a material condition to
its obligation to consummate the transactions contemplated hereby
cannot be fulfilled on or prior to June 30, 1995 and that it will
not waive that condition, it will promptly notify the other party.
Except for any acquisition or merger discussions Valley may enter
into with other parties, American Union and Valley will promptly
inform the other of any facts applicable to American Union or
Valley, respectively, or their respective directors, officers or
Subsidiaries, that would be likely to prevent or materially delay
approval of the Merger by any governmental authority 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, no supplement or amendment
to such Schedules shall correct or cure any warranty which was
untrue when made, but supplements or amendments may be used to
disclose subsequent facts or events to maintain the truthfulness of
any warranty.
5.12. Transaction Expenses of American Union. American
Union shall mutually agree with Valley about printing arrangements
for the Proxy Statement/Prospectus before entering into any binding
contract for such expenses and shall avoid, to the extent possible,
author's alterations after the Proxy Statement/Prospectus is sent
to the printer.
5.13. Closing. The parties hereto shall cooperate and
use reasonable efforts to try to cause the Effective Time to occur
in the first quarter of 1995. In the event that: (a) the Effective
Time does not occur before the record date (the "Record Date") used
to determine the shareholders of Valley entitled to receive a
dividend on April 1, 1995 and (b) the Proxy Statement/Prospectus is
filed with the SEC prior to December 15, 1994, then notwithstanding
Section 5.2(b) hereof, American Union shall be permitted to declare
and pay a dividend to its shareholders in an amount equal to the
amount of the dividend its shareholders would have received from
Valley had the Effective Date occurred prior to the Record Date.
5.14. Indemnification. Valley agrees that it will, or
if it is not permitted to do so under applicable law, it will cause
VNB to, after the Effective Time, and to the extent permitted by
applicable law, provide to the former and then current directors,
officers and agents of American Union indemnification equivalent to
that provided by the Certificate of Incorporation and By-laws of
American Union with respect to acts or omissions occurring prior to
the Effective Time, whether asserted prior to or after the
Effective Time, including without limitation, the authorization of
this Agreement and the transactions contemplated hereby, for a
period of six years from the Effective Time, or in the case of
matters occurring prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time,
until such matters are finally resolved. To the extent permitted
by applicable law, Valley or VNB (as applicable) shall advance
expenses to former and current officers and directors of American
Union in connection with the foregoing indemnification.
5.15. Employment Matters. Valley will endeavor to
continue the employment of all officers and employees of American
Union with the same or equivalent salary and benefits. If prior to
the Effective Time Valley believes it will be unable to continue
the employment of any employee of American Union, Valley and
American Union will mutually agree in writing upon a severance
policy.
5.16. Pooling and Tax-Free Reorganization Treatment.
Neither Valley nor American Union shall intentionally take, fail to
take or cause to be taken or not be taken, any action within its
control, whether before or after the Effective Time, 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.
5.17. Affiliates.
(a) Promptly, but in any event within two weeks, after
the execution and delivery of this Agreement, (i) American Union
shall deliver to Valley (x) a letter identifying all persons who,
to the knowledge of American Union, may be deemed to be affiliates
of American Union under Rule 145 of the 1933 Act, including without
limitation all directors and executive officers of American Union
and (y) a letter identifying all persons who, to the knowledge of
American Union, may be deemed to be affiliates of American Union as
that term (affiliate) is used for purposes of qualifying for
"pooling of interests" accounting treatment; and (ii) Valley shall
identify to American Union all persons who, to the knowledge of
Valley, may be deemed affiliates of Valley as that term (affili-
ates) is used for purposes of qualifying for "pooling of interests"
accounting treatment.
(b) Each person who may be deemed an affiliate of
American Union (under either Rule 415 of the 1933 Act or the
accounting treatment rules) shall execute a letter substantially in
the form of Exhibit 5.17 hereto agreeing to be bound by the
restrictions of Rule 145, as set forth in Exhibit 5.17 and agreeing
to be bound by the rules which permit the Merger to be treated as
a pooling of interests for accounting purposes. In addition,
Valley shall cause its affiliates (as that term is used for
purposes of qualifying for pooling of interests) to execute a
letter within two weeks of the date hereof, in which such persons
agree to be bound by the rules which permit the Merger to be
treated as a pooling of interests for accounting treatment.
5.18. Compliance with the Industrial Site Recovery Act.
American Union, at its sole cost and expense, shall obtain prior to
the Effective Time, either: (a) a Letter of Non-Applicability from
the New Jersey Department of Environmental Protection and Energy
("NJDEPE") stating that none of the facilities located in New
Jersey owned or operated by American Union (each, a "Facility") is
an "industrial establishment," as such term is defined under the
Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement
issued by the NJDEPE pursuant to ISRA authorizing the consummation
of the transactions contemplated by this Agreement; or (c) a
Negative Declaration approval, Remedial Action Workplan approval,
No Further Action letter or other document or documents issued by
the NJDEPE advising that the requirements of ISRA have been
satisfied with respect to each Facility subject to ISRA. In the
event American Union obtains a Remediation Agreement, American
Union will post or have posted an appropriate Remediation Funding
Source or will have obtained the NJDEPE's approval to self-guaranty
any Remediation Funding Source required under any such Remediation
Agreement.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions of 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 American Union Stockholders; SEC
Registration. This Agreement and the transactions contemplated
hereby shall have been approved by the requisite vote of the
stockholders of American Union. The Registration Statement 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
Valley Common Stock shall have been qualified in every state where
such qualification is required under the applicable state securi-
ties laws. The Valley Common Stock to be issued in connection with
the Merger, shall have been approved for listing on the NYSE.
(b) Regulatory Filings. All necessary regulatory or
governmental approvals and consents (including without limitation
any required approval of the OCC) required to consummate the
transactions contemplated hereby shall have been obtained without
any term or condition which would materially impair the value of
American Union, taken as a whole, to Valley. 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 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 Valley or American Union
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 Free Exchange. Valley and American Union shall
have received an opinion, satisfactory to Valley and American
Union, of Pitney, Hardin, Kipp & Szuch, counsel for Valley, to the
effect that the transactions contemplated hereby will result in a
reorganization (as defined in Section 368(a) of the Code), and
accordingly no gain or loss will be recognized for federal income
tax purposes to Valley, American Union, VNB or the Bank or to the
shareholders of American Union who exchange their shares of
American Union for Valley Common Stock (except to the extent that
cash is received in lieu of fractional shares of Valley Common
Stock).
6.2. Conditions to the Obligations of Valley Under this
Agreement. The obligations of Valley 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 American Union. The representations and warranties
of American Union 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. American Union shall have performed
in all material respects the agreements, covenants and obligations
necessary 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 American Union
Disclosure Schedule to render such representation or warranty true
and correct 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
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 American Union Disclo-
sure Schedule, materially adversely effect the representation as to
which the supplement or amendment relates.
(b) Consents. Valley shall have received the written
consents of any person whose consent to the transactions contem-
plated hereby is required under the applicable instrument.
(c) Opinion of Counsel. Valley shall have received an
opinion of counsel to American Union, dated the date of the
Closing, in form and substance reasonably satisfactory to Valley.
(d) Pooling of Interests. The Merger shall be qualified
to be treated by Valley as a pooling-of-interests for accounting
purposes.
(e) Certificates. American Union shall have furnished
Valley with such certificates of its officers or others (without
personal liability) and such other documents to evidence fulfill-
ment of the conditions set forth in this Section 6.2 as Valley may
reasonably request.
6.3. Conditions to the Obligations of American Union
Under this Agreement. The obligations of American Union 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 Valley. The representations and warranties of
Valley 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. Valley and VNB shall have performed in all
material respects, the agreements, covenants and obligations to be
performed by them 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 Valley Disclosure
Schedule to render such representation or warranty true and correct
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
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 Valley Disclosure
Schedule, materially adversely effect the representation as to
which the supplement or amendment relates.
(b) Opinion of Counsel to Valley. American Union shall
have received an opinion of counsel to Valley, dated the date of
the Closing, in form and substance reasonably satisfactory to
American Union.
(c) Fairness Opinion. American Union shall have
received an opinion from Capital Consultants of Princeton, Inc. as
of the date the Proxy Statement/Prospectus is mailed to American
Union's stockholders, to the effect that, in its opinion, the
consideration to be paid to stockholders of American Union
hereunder is fair to such stockholders.
(d) Certificates. Valley shall have furnished American
Union with such certificates of its officers or others (without
personal liability) and such other documents to evidence fulfill-
ment of the conditions set forth in this Section 6.3 as American
Union may reasonably request.
(e)Indemnity. American Union and its Representatives
shall be indemnified by Valley or VNB, as the case may be, as
provided in Section 5.14 hereof.
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 American Union:
(a) By mutual written consent of the parties hereto.
(b) By Valley or American Union (i) if the Effective
Time shall not have occurred on or prior to June 30, 1995 or (ii)
if a vote of the stockholders of American Union is taken and such
stockholders fail to approve this Agreement at the meeting (or any
adjournment thereof) held for such purpose, unless in each case 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 (or the directors of American Union, as set forth in Section
5.7) at or before the Effective Time.
(c) By Valley or American Union upon written notice to
the other if any application for regulatory or governmental
approval necessary to consummate the Merger and the other transac-
tions contemplated hereby shall have been denied or withdrawn at
the request or recommendation of the applicable regulatory agency
or governmental authority or by Valley upon written notice to
American Union if any such application is approved with conditions
which materially impair the value of American Union, taken as a
whole, to Valley (provided that no term or condition which is
customarily imposed by any regulatory authority in transactions
similar to the transaction contemplated hereby shall be deemed to
materially impair the value of American Union, taken as a whole, to
Valley), unless any 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 Date.
(d) By Valley if (i) there shall have occurred a
material adverse change in the business, operations, assets, or
financial condition of American Union from that disclosed by
American Union on the date of this Agreement, or (ii) there was a
material breach in any representation, warranty, covenant,
agreement or obligation of American Union hereunder.
(e) By American Union, if (i) there shall have occurred
a material adverse change in the business, operations, assets or
financial condition of Valley, VNB or Valley and its Subsidiaries
on a consolidated basis from that disclosed by Valley on the date
of this Agreement; or (ii) there was a material breach in any
representation, warranty, covenant, agreement or obligation of
Valley hereunder.
(f) By American Union if the Average Closing Price is
less than $19.00 per share. The $19.00 per share amount shall be
adjusted for any capital change after the date hereof, as provided
in Section 2.1(a).
(g) By Valley or American Union if any condition to
Closing specified under Article VI hereof applicable to such party
cannot reasonably be met after giving the other party a reasonable
opportunity to cure any such condition.
7.2. Effect of Termination. In the event of the
termination and abandonment of this Agreement by either Valley or
American Union pursuant to Section 7.1, this Agreement (except the
provisions of Section 5.5(b) hereof) 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 mutual
action taken by the parties hereto at any time before or after
adoption of this Agreement by the stockholders of American Union
but, after any such adoption, no amendment shall be made which
reduces or changes the amount or form of the consideration to be
delivered to the shareholders of American Union without the
approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of Valley and
American Union.
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 represen-
tations 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. 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.
8.2. Notices. All notices or other communications which
are required or permitted hereunder shall be in writing and
sufficient if delivered personally or sent by telecopier with
confirming copy sent the same day by registered or certified mail,
postage prepaid, as follows:
(a) If to Valley, to:
Valley National Bancorp
1445 Valley Road
Wayne, New Jersey 07474-0558
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
Telecopier No. (201) 305-0024
Copy to:
Pitney, Hardin, Kipp & Szuch
Delivery:
200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Ronald H. Janis, Esq.
Telecopier No. (201) 966-1550
(b)If to American Union, to:
American Union Bank
2784 Morris Avenue
Union, New Jersey 07083
Attn.: Alan Turtletaub, Chairman
Telecopier No.: (908) 686-6907
and
Alan Turtletaub, Chairman
The Money Store
2840 Morris Avenue
Union, New Jersey 07083
Copy to:
Sills, Cummis, Zuckerman, Radin,
Tischman, Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102
Attn.: Steven Radin, Esq., Victor Boyajian, Esq.
Telecopier No.: (201) 643-6500
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 so delivered or telecopied and
mailed.
8.3. Parties in Interest. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns. No
assignment of this Agreement may be made except upon the written
consent of the other parties hereto. No person or entity shall be
deemed a third-party beneficiary under this Agreement, other than
the directors and officers of American Union with respect to
Section 5.14 hereof.
8.4. 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, including
the Letter of Intent. The Confidentiality Agreement between the
parties dated as of October 18, 1994 shall survive the execution of
this Agreement.
8.5. 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.
8.6. 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.
8.7. 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, Valley, VNB and American Union have
caused this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
ATTEST: VALLEY NATIONAL BANCORP
By:______________________ By:
Peter Southway, President Gerald H. Lipkin
Chairman and Chief
Executive Officer
ATTEST: AMERICAN UNION BANK
By:______________________ By:
Gerald F. Metzheiser, Alan Turtletaub, Chairman
President
ATTEST: VALLEY NATIONAL BANK
By:______________________ By:
Peter Southway, President Gerald H. Lipkin,
Chairman and Chief
Executive Officer
Exhibit 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated
November 9, 1994, is by and between Valley National Bancorp, a New
Jersey corporation and registered bank holding company ("Valley"),
and American Union Bank, a New Jersey banking corporation ("Ameri-
can").
BACKGROUND
1. Valley, American and Valley National Bank (the
"Bank"), a wholly-owned subsidiary of Valley, as of the date
hereof, have executed an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Valley will acquire American through
a merger of American with and into the Bank (the "Merger").
2. As an inducement to Valley and the Bank to enter into
the Merger Agreement and in consideration for such entry, American
desires to grant to Valley an option to purchase authorized but
unissued shares of common stock of American 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, Valley and American, intending to be legally bound
hereby, agree:
1. Grant of Option. American hereby grants to Valley
the option (the "Option") to purchase 180,000 shares (as the same
may be adjusted pursuant hereto, the "Option Shares") of American
common stock, $5.00 par value (the "Common Stock"), at a price of
$10.00 per share (as the same may be adjusted pursuant hereto, the
"Option Price"), on the terms and conditions set forth herein.
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), Valley may
exercise the Option, in whole or in part, at any time or from time
to time, subject to and in accordance with the terms hereof.
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 Valley or an
affiliate of Valley:
a. acquires beneficial ownership (as such term is
defined in Rule 13d-3 as promulgated under the Exchange Act) of at
least 20% of the then outstanding shares of Common Stock;
b. enters into a letter of intent or an agreement,
whether oral or written, with American pursuant to which such
person or any affiliate of such person would (i) merge or consoli-
date, or enter into any similar transaction with American, (ii)
acquire all or a significant portion of the assets or liabilities
of American, or (iii) acquire beneficial ownership of securities
representing, or the right to acquire beneficial ownership or to
vote securities representing 20% or more of the then outstanding
shares of Common Stock;
c. makes a filing with any bank or thrift
regulatory authorities or publicly announces a bona fide proposal
(a "Proposal") for (i) any merger, consolidation or acquisition of
all or a significant portion of all the assets or liabilities of
American or any other business combination involving American, 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, 20% or more of the
outstanding shares of Common Stock, and thereafter, if such
Proposal has not been Publicly Withdrawn (as such term is hereinaf-
ter defined) at least 15 days prior to the meeting of stockholders
of American called to vote on the Merger and American' stockholders
fail to approve the Merger by the vote required by applicable law
at the meeting of stockholders called for such purpose;
d. makes a bona fide Proposal and thereafter, but
before such Proposal has been Publicly Withdrawn, American
willfully takes any action in any manner which would materially
interfere with its desire or ability to enter into a definitive
Merger Agreement or its ability to consummate the Merger or
materially reduce the value of the transaction to Valley; or
e. which is the holder of more than 5% of the
Common Stock solicits proxies in opposition to approval of the
Merger.
The term "Triggering Event" also means the taking of any
direct or indirect action by American or any of its directors,
officers or agents to invite, encourage or solicit any proposal
which has as its purpose a tender offer for the shares of the
Common Stock, a merger, consolidation, plan of exchange, plan of
acquisition or reorganization of American, or a sale of shares of
the Common Stock or any significant portion of American's assets or
liabilities.
The term "significant portion" means 25% of the assets or
liabilities of American.
"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 American or in soliciting or inducing any other person (other
than Valley 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 governmen-
tal or regulatory approval or consent necessary for American to
issue the Option Shares or Valley 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 jurisdic-
tion is in effect which prohibits the sale or delivery of the
Option Shares.
American shall notify Valley promptly in writing of the
occurrence of any Triggering Event known to it, it being understood
that the giving of such notice by American shall not be a condition
to the right of Valley to exercise the Option. American will not
take any action which would have the effect of preventing or
disabling American from delivering the Option Shares to Valley upon
exercise of the Option or otherwise performing its obligations
under this Agreement.
In the event Valley wishes to exercise the Option, Valley
shall send a written notice to American (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
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.
Promptly following the Notice Date, American shall mail
to its shareholders who have preemptive rights with respect to the
Common Stock a notice, in form and substance approved by Valley
(the "Shareholder Notice"), which shall afford each such sharehold-
er the right to purchase such shareholder's pro rata share of the
Option Shares at a per share purchase price equal to the lesser of
the Option Price or the book value per share of Common Stock as of
the then most recent fiscal year end of American. Such right to
purchase Option Shares shall be in full satisfaction of each
American shareholder's preemptive rights. The Closing shall be
delayed for such time as is reasonably necessary to arrange for
mailing the Shareholder Notice and to permit the American share-
holders an opportunity to exercise such right to purchase Option
Shares. The number of Option Shares available for purchase by
Valley pursuant to the Option automatically shall be reduced by the
aggregate number of shares purchased by the American shareholders
in exercise of the above-described rights.
3. Payment and Delivery of Certificates. At any Closing
hereunder (a) Valley will make payment to American of the aggregate
price for the Option Shares so purchased by wire transfer of
immediately available funds to an account designated by American,
(b) American will deliver to Valley 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 American,
registered in the name of Valley or its designee, in such denomina-
tions as were specified by Valley in its notice of exercise and
bearing a legend as set forth below and (c) Valley shall pay any
transfer or other taxes required by reason of the issuance of the
Option Shares so purchased.
Unless a registration statement is filed and declared
effective under Section 4 hereof, 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 American Union Bank, said transfer would be
exempt from registration under the provisions of the 1933
Act and the regulations promulgated thereunder.
4. Registration Rights. Upon or after the occurrence of
a Triggering Event and upon receipt of a written request from
Valley, American shall prepare and file a registration statement
with the Securities and Exchange Commission, covering the Option
and such number of Option Shares as Valley shall specify in its
request, and American 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 Valley shall in no event have the right to have more
than one such registration statement become effective.
In connection with such filing, American shall use its
best efforts to cause to be delivered to Valley such certificates,
opinions, accountant's letters and other documents as Valley 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 American in complying with
the provisions of this Section 4, including without limitation, all
registration and filing fees, printing expenses, fees and disburse-
ments of counsel for American and blue sky fees and expenses shall
be paid by American. Underwriting discounts and commissions to
brokers and dealers relating to the Option Shares, fees and
disbursements of counsel to Valley and any other expenses incurred
by Valley in connection with such registration shall be borne by
Valley. In connection with such filing, American shall indemnify
and hold harmless Valley against any losses, claims, damages or
liabilities, joint or several, to which Valley 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 American will reimburse Valley for any
legal or other expense reasonably incurred by Valley in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that American 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 of 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 Valley specifical-
ly for use in the preparation thereof. Valley will indemnify and
hold harmless American 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 Valley for
use in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and Valley will
reimburse American for any legal or other expense reasonably
incurred by American in connection with investigating or defending
any such loss, claim, damage, liability or action.
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 reclassifica-
tion of the Common Stock, or any consolidation, merger or similar
transaction of American with another entity, or in the event any
sale of all or substantially all of the assets of American 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, Consents and Compliance with Law. Each of
Valley and American will use its best 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
Valley is the holder hereof, approval of the Board of Governors of
the Federal Reserve System. American 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 American. American
hereby represents and warrants to Valley as follows:
a. Due Authorization. American 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 American.
b. Authorized Shares. American 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 by-laws of American or any
agreement, instrument, judgment, decree, statute, rule or order
applicable to American.
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, Valley
shall have the right to seek money damages against American 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. Valley 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 Valley, except upon or after the occurrence of a
Triggering Event. Valley represents that it is acquiring the
Option for Valley's own account and not with a view to or for sale
in connection with any distribution of the Option or the Option
Shares. Valley is aware that presently neither the Option nor the
Option Shares are being offered by a registration statement filed
with, and declared effective by, the Securities and Exchange
Commission, but instead are being offered in reliance upon the
exemption from the registration requirements pursuant to Section
4(2) of the Securities Act of 1933, as amended. Valley shall have
the right to assign this Agreement to any party it selects after
the occurrence of a Triggering Event.
11. Amendment of Agreement. By 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:<PAGE>
If to Valley:
Valley National Bancorp
1445 Valley Road
Wayne, New Jersey 07470
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
With a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
Florham Park, New Jersey 07932-0950
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attn.: Ronald H. Janis, Esq.
If to American:
American Union Bank
2784 Morris Avenue
Union, New Jersey 07083
Attn.: Alan Turtletaub,
Chairman
With a copy to:
Sills, Cummis, Zuckerman, Radin,
Tischman, Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102
Attn.: Steven Radin, 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
(i) compliance with any of the covenants of the other party
contained in this Agreement and/or (ii) the other party's perfor-
mance 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, except as provided
in Section 10 permitting Valley to assign its rights and obliga-
tions hereunder.
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, this
Agreement shall not terminate until the later of 12 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
Agreement to be executed by its duly authorized officer, all as of
the day and year first above written.
ATTEST: AMERICAN UNION BANK
________________________ By:___________________________
, Secretary Alan Turtletaub,
Chairman
ATTEST: VALLEY NATIONAL BANCORP
________________________ By:___________________________
, Secretary Gerald H. Lipkin,
Chairman & Chief
Executive Officer
