<PAGE>
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) - FEBRUARY 27, 1995
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)
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Item 5 - Other Events
1. On February 27, 1995, Valley National Bancorp ("Valley")
entered into a definitive merger agreement with Lakeland First
Financial Group, Inc. ("Lakeland"), by which Valley will
acquire Lakeland, the holding company for Lakeland Savings
Bank, a $661 million, 16-branch bank headquartered in
Succasunna, New Jersey. The parties had signed a letter of
intent on January 26, 1995.
As previously announced, Lakeland will be merged into Valley.
The acquisition of Lakeland is designed as a tax-free merger
in which each of the 3,901,770 outstanding shares of
Lakeland's common stock, $0.10 per share will be exchanged for
1.225 shares of Valley's common stock, no par value ("Valley
Common Stock"). In connection with the execution of the
letter of intent, Lakeland also granted Valley an option to
acquire 1,250,000 shares of Lakeland's authorized but unissued
common stock.
The acquisition of Lakeland is conditioned upon necessary bank
regulatory approvals, the approval of Lakeland's shareholders
and other customary conditions. The parties anticipate that
the merger will be consummated in the third quarter of this
year.
2. On February 28, 1995, Valley completed the previously
announced merger with American Union Bank ("American Union"),
a $55 million, two-office bank headquartered in Union, New
Jersey. As a result of the merger, American Union
shareholders received .50 shares of Valley Common Stock for
each share of American Union's common stock. American Union
has 549,970 outstanding shares of common stock.
Item 7. Exhibits
99.1 Press Release, dated February 27, 1995
99.2 Press Release, dated February 28, 1995
99.3 Agreement and Plan of Merger dated as of February
27, 1995 among Valley, Lakeland, Valley National
Bank and Lakeland Savings Bank
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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: March 1, 1995 By: /s/ GERALD H. LIPKIN
-------------------------
Gerald H. Lipkin
Chairman and Chief Executive
Officer
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INDEX TO EXHIBITS
99.1 Press Release, dated February 27, 1995
99.2 Press Release, dated February 28, 1995
99.3 Agreement and Plan of Merger dated as of February 27,
1995 among Valley, Lakeland, Valley National Bank and
Lakeland Savings Bank
Exhibit 99.1
For Immediate Release: February 27, 1995
VALLEY NATIONAL BANCORP AND LAKELAND FIRST FINANCIAL GROUP
SIGN DEFINITIVE MERGER AGREEMENT
WAYNE, NJ -- Gerald H. Lipkin, Chairman and Chief Executive Officer
of Valley National Bancorp (NYSE:VLY) and Mike Halpin, President
and Chief Executive Officer of Lakeland First Financial Group, Inc.
(NASDAQ:LLSL) jointly announced today that they have signed a
definitive merger agreement by which Valley will acquire Lakeland,
the holding company for Lakeland Savings Bank, a $661 million, 16-
branch bank headquartered in Succasunna, NJ. The parties had
signed a letter of intent on January 26, 1995. The merger will
expand Valley's branch network in Morris County and extend it into
two new counties, Sussex and Warren.
"With a current return on assets of 1.41% and a return on equity
over 18%, Lakeland represents the type or superior performing
organization that Valley seeks to coin with in expanding its
franchise," said Gerald H. Lipkin.
As previously announced, Lakeland will be merged into Valley. The
acquisition of Lakeland is designed as a tax-free merger in which
each of the 3,901,770 outstanding shares of Lakeland common stock
will be exchanged for 1.225 shares of Valley common stock. In
connection with the execution of the letter of intent, Lakeland
also granted Valley an option to acquire 1,250,000 shares of
Lakeland's authorized but unissued common stock.
In its most recent merger, completed in November, 1994, Valley
acquired RockBank, a $190 million institution based in North
Plainfield. That merger added five branches in Middlesex, Somerset
and Union counties to the Valley network. During November, 1994,
Valley signed a definitive merger agreement pursuant to which
Valley agreed to acquire American Union Bank, a $55 million, two-
office bank headquartered in Union, NJ. It is anticipated that
this merger will be consummated on February 28, 1995.
Mike Halpin indicated that "the merger will bring together two
great banking institutions creating a much stronger franchise and
market presence in northern New Jersey. As a result of the merger,
Lakeland will be able to provide an expanded array of banking
services to its customers such as investment management and trust
services, and cash management services as well as many convenient
branch locations."
The acquisition is conditioned upon necessary bank regulatory
approvals, the approval of Lakeland's shareholders and other
customary conditions. The parties anticipate that the merger will
be consummated in the third quarter of this year.
Valley National Bank, the principal subsidiary or Valley National
Bancorp, currently has $3.7 billion in assets and operates 62
branches in 41 communities in Bergen, Essex, Hudson, Middlesex,
Morris, Passaic, Somerset and Union counties.
Exhibit 99.2
For Immediate Release: February 28, 1995
VALLEY NATIONAL BANCORP COMPLETES MERGER WITH AMERICAN UNION BANK
WAYNE, NJ -- Gerald H. Lipkin, Chairman and Chief Executive Officer
of Valley National Bancorp (NYSE:VLY) announced today the comple-
tion of the previously announced merger with American Union Bank,
based in Union, New Jersey.
As a result of the merger, American Union shareholders received .50
shares of Valley common stock for each share of American Union
common stock that they own. American Union has 549,970 outstanding
shares of common stock.
American Union has approximately $55 million in assets and operates
two branch offices in Union and Roselle Park.
Lipkin noted, "The merger with American Union is consistent with
Valley's strategy of growth within New Jersey through acquisitions
of other strong financial institutions."
The merger increases Valley National's total assets to approximate-
ly $3.7 billion and its branch network to 64 offices in 43
communities in Bergen, Essex, Hudson, Middlesex, Morris, Passaic,
Somerset, and Union counties.
On February 27, 1995, Valley signed a definitive merger agreement
by which Valley agreed to acquire Lakeland First Financial Group,
Inc., the holding company for Lakeland Savings Bank, a $661
million, 16-branch bank headquartered in Succasunna, NJ. The
definitive merger agreement was negotiated pursuant to the
previously announced letter of intent signed by the parties. The
merger will expand Valley's branch network in Morris County and
extend it into two new counties, Sussex and Warren.
Exhibit 99.3
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February
27, 1995 ("Agreement"), is among Valley National Bancorp, a New
Jersey corporation and registered bank holding company ("Valley"),
Valley National Bank, a national banking association ("VNB"),
Lakeland First Financial Group, Inc., a New Jersey corporation and
registered bank holding company ("Lakeland") and Lakeland Savings
Bank, a savings bank chartered under the laws of New Jersey (the
"Bank").
Valley desires to acquire Lakeland and Lakeland's Board
of Directors has determined, based upon the terms and conditions
hereinafter set forth, that the acquisition is in the best
interests of Lakeland and its stockholders. The acquisition will
be accomplished by merging Lakeland into Valley with Valley as the
surviving corporation and, at the same time, merging the Bank into
VNB with VNB as the surviving bank, and Lakeland shareholders
receiving the consideration hereinafter set forth. The Boards of
Directors of Lakeland, Valley, the Bank and VNB have duly adopted
and approved this Agreement and the Board of Directors of Lakeland
has directed that it be submitted to its shareholders for approval.
Lakeland and Valley entered into a letter of intent,
dated January 26, 1995 (the "Letter of Intent"), and a Stock Option
Agreement, dated January 26, 1995 (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),
Lakeland shall be merged with and into Valley (the "Merger") in
accordance with the New Jersey Business Corporation Act and Valley
shall be the surviving corporation (the "Surviving Corporation").
Immediately following the Effective Time, the Bank shall be merged
with and into VNB as provided in Section 1.7 hereof.
1.2. EFFECT OF THE MERGER. At the Effective Time (as
hereafter defined), the Surviving Corporation shall be considered
the same business and corporate entity as each of Lakeland and
Valley and thereupon and thereafter, all the property, rights,
powers and franchises of each of Lakeland and Valley shall vest in
the Surviving Corporation and the Surviving Corporation shall be
subject to and be deemed to have assumed all of the debts,
liabilities, obligations and duties of each of Lakeland and Valley
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 Corporation.
1.3. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Valley as it exists immediately prior to the
Effective Time shall not be amended by the Merger, but shall
continue as the certificate of incorporation of the Surviving
Corporation until otherwise amended as provided by law.
1.4. BYLAWS. The bylaws of Valley as they exist
immediately prior to the Effective Date shall continue as the by-
laws of the Surviving Corporation until otherwise amended as
provided by law.
1.5. DIRECTORS AND OFFICERS. The directors and officers
of Valley as of the Effective Time shall continue as the directors
and officers of the Surviving Corporation with the additions
provided for in Section 5.15 hereof.
1.6. EFFECTIVE TIME AND CLOSING. The Merger shall
become effective (and be consummated) upon the filing of the
certificate of merger (the "Certificate of Merger") with the New
Jersey Secretary of State. The term "Effective Time" shall mean
the date and time when the Certificate of Merger is so filed. A
closing (the "Closing") shall take place prior to the Effective
Time at 10:00 a.m., on the first day of the month next 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
Valley's main office or at such other place, time or date as Valley
and Lakeland may mutually agree upon. When all necessary
regulatory and governmental approvals and consents have been
received and all statutory waiting periods in respect thereto are
scheduled to expire on a date certain (or have already expired) and
all other 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) have been met, then the parties shall schedule a date for
the Closing (the "Scheduled Closing Date"). Immediately following
the Closing, the Certificate of Merger shall be filed with the New
Jersey Secretary of State.
1.7. THE BANK MERGER. Immediately following the
Effective Time, the Bank shall be merged with and into VNB (the
"Bank Merger") in accordance with the provisions of the National
Bank Act and the New Jersey Banking Act of 1948, as amended, and
VNB shall be the surviving bank (the "Surviving Bank"). Upon the
consummation of the Bank Merger, the separate existence of the Bank
shall cease and the Surviving Bank shall be considered the same
business and corporate entity as each of the Bank and VNB and all
of the property, rights, powers and franchises of each of the Bank
and VNB shall vest in the Surviving Bank and the Surviving Bank
shall be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Bank 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. Upon the consummation of the Bank
Merger, the articles of association and bylaws of VNB shall become
the articles of association and bylaws of the Surviving Bank and
the officers, employees and directors of VNB and the officers and
employees of the Bank shall be the officers, employees and
directors of the Surviving Bank with such additions from the
directors of Lakeland as specified herein. In connection with the
execution of this Agreement, the Bank and VNB shall execute and
deliver a separate merger agreement (the "Bank Merger Agreement")
in the form of Appendix A, annexed hereto, for delivery to the OCC
(as hereafter defined) and the Commissioner (as hereafter defined)
for approval of the Bank Merger.
ARTICLE II
CONVERSION OF LAKELAND SHARES
2.1. CONVERSION OF LAKELAND SHARES AND OPTIONS. Each
share of common stock, $0.10 par value, of Lakeland ("Lakeland
Common Stock"), issued and outstanding immediately prior to the
Effective Time, and each validly outstanding option to purchase
Lakeland Common Stock, shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted, paid or
cancelled as follows:
(a) LAKELAND COMMON STOCK. Each share of Lakeland
Common Stock shall be converted into and represent the right to
receive 1.225 (the "Exchange Ratio") shares of Valley's common
stock, no par value ("Valley Common Stock"), subject to adjustments
as set forth in this subsection 2.1(a).
(i) The Exchange Ratio and the Average Closing
Price (as hereafter defined) shall be appropriately adjusted
for any stock split, stock dividend, stock combination,
reclassification or similar transaction ("Capital Change")
effected by Valley with respect to Valley Common Stock between
January 26, 1995 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.
(ii) No fractional shares of Valley Common Stock
will be issued, and in lieu thereof, each holder of Lakeland
Common Stock who would otherwise be entitled to a fractional
interest will receive an amount in cash determined by
multiplying such fractional interest by the Average Closing
Price (as hereafter defined).
(iii) 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.
(b) LAKELAND STOCK OPTIONS. At the Effective Time, each
outstanding option to purchase Lakeland Common Stock (a "Lakeland
Option") granted under the Stock Option Plans of Lakeland (the
"Lakeland Option Plans") shall be converted, at the election of the
holder of such Lakeland Option (an "optionee"), as follows:
(i) into an option to purchase Valley Common Stock,
wherein (x) the right to purchase shares of Lakeland Common
Stock pursuant to the Lakeland Option shall be converted into
the right to purchase that same number of shares of Valley
Common Stock multiplied by the Exchange Ratio, (y) the option
exercise price per share of Valley Common Stock shall be the
previous option exercise price per share of the Lakeland
Common Stock divided by the Exchange Ratio and (z) in all
other material respects the option shall be subject to the
same terms and conditions as governed the Lakeland Option on
which it was based, including the length of time within which
the option may be exercised and for any options which are
"incentive stock options" (as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
adjustments shall be and are intended to be effected in a
manner which is consistent with Section 424(a) of the Code; or
(ii) if the Lakeland Option is fully vested at the
Closing, into the right to receive immediately after the
Effective Time a number of whole shares of Valley Common Stock
equal to (x) the excess of the sum determined by multiplying
(A) the number of shares of Lakeland Common Stock covered by
the Lakeland Option, times (B) the Exchange Ratio, times (C)
the Average Closing Price, less (y) the aggregate exercise
price for the Lakeland Option (z) divided by the Average
Closing Price. No fractional shares of Valley Common Stock
shall be issued pursuant to this Section 2.1(b)(ii), and in
lieu thereof, each optionee who would otherwise be entitled to
a fractional interest will receive an amount in cash
determined by multiplying such fractional interest by the
Average Closing Price.
2.2. EXCHANGE OF SHARES.
(a) Lakeland and Valley hereby appoint Valley National
Bank, Trust Department (the "Exchange Agent") as the Exchange Agent
for purposes of effecting the conversion of Lakeland Common Stock
and Lakeland Options. 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 Lakeland Common Stock (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. Notwithstanding the time of surrender of the
Certificates, Record Holders shall be deemed shareholders 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 Certificates for Valley
Common Stock. (Such Record Holder shall receive such withheld
dividends, without interest, upon effecting the share exchange.)
With respect to each outstanding Lakeland Option the Exchange Agent
shall, 10 days prior to Closing, distribute option election forms
to each optionee and, upon receipt from the optionee of a properly
completed option election, shall after the Effective Time
distribute to the optionee Valley Common Stock or an amendment to
the option grant evidencing the conversion of the grant to an
option to purchase Valley Common Stock in accordance with Section
2.1 hereof.
(b) After the Effective Time, there shall be no
transfers on the stock transfer books of Lakeland of the shares of
Lakeland 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 consideration as provided in Section 2.1 hereof.
(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 satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
2.3. NO DISSENTERS' RIGHTS. Consistent with the
provisions of the New Jersey Business Corporation Act, no
shareholder of Lakeland shall have the right to dissent.
2.4. VALLEY SHARES. The shares of Valley Common Stock
outstanding at the Effective Time shall not be affected by the
Merger, but along with the additional shares of Valley Common Stock
to be issued as provided in Section 2.1 hereof, shall become the
outstanding common stock of the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LAKELAND
References herein to "Lakeland 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 Lakeland to Valley. Lakeland
hereby represents and warrants to Valley as follows:
3.1. CORPORATE ORGANIZATION.
(a) Lakeland is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey. Lakeland has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business
as it is now being conducted and is duly licensed or qualified to
do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the
business, operations, assets or financial condition of Lakeland on
a consolidated basis. Lakeland is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended
("BHCA").
(b) Each of the Subsidiaries of Lakeland are listed in
the Lakeland Disclosure Schedule. The term "Subsidiary", when used
in this Agreement with respect to Lakeland, means any corporation,
joint venture, association, partnership, trust or other entity in
which Lakeland has, directly or indirectly at least a 50% interest
or acts as a general partner. Each Subsidiary of Lakeland is duly
organized, validly existing and in good standing under the laws of
its state of incorporation. The Bank is a New Jersey savings bank
whose deposits are insured by the Savings Association Insurance
Fund of the Federal Deposit Insurance Corporation ("FDIC") to the
fullest extent permitted by law. Each Subsidiary of Lakeland has
the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now
being conducted and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not
have a material adverse effect on the business, operations, assets
or financial condition of Lakeland and its Subsidiaries. The
Lakeland Disclosure Schedule sets forth true and complete copies of
the Certificate of Incorporation and Bylaws of Lakeland and each
Lakeland Subsidiary as in effect on the date hereof. Except as set
forth in the Lakeland Disclosure Schedule, Lakeland 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 (i) residential real
estate acquired through foreclosure or deed in lieu of foreclosure
in each individual instance with a fair market value less than
$500,000 and (ii) real estate used for its banking premises.
3.2. CAPITALIZATION. The authorized capital stock of
Lakeland consists of 15,000,000 shares of Lakeland Common Stock and
5,000,000 shares of preferred stock ("Lakeland Preferred Stock").
As of February 3, 1995, there were 3,901,770 shares of Lakeland
Common Stock issued and outstanding and no shares issued and held
in the treasury. There are no shares of Lakeland Preferred Stock
issued or outstanding. As of February 3, 1995, there were 110,157
shares of Lakeland Common Stock issuable upon exercise of
outstanding Lakeland Options granted to directors, officers and
employees of the Bank pursuant to the Lakeland Option Plan. The
Lakeland Disclosure Schedule sets forth true and complete copies of
the Lakeland Option Plans and of each outstanding Lakeland Option.
All issued and outstanding shares of Lakeland Common Stock, and all
issued and outstanding shares of capital stock of each Lakeland
Subsidiary, have been duly authorized and validly issued, are fully
paid, and nonassessable. The authorized capital stock of the Bank
consists of 10,000,000 shares of common stock, $2.00 par value.
All of the outstanding shares of capital stock of each Lakeland
Subsidiary are owned by Lakeland and are free and clear of any
liens, encumbrances, charges, restrictions or rights of third
parties. Except for the Lakeland Options and the Valley Stock
Option, neither Lakeland nor any Lakeland Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of
Lakeland or any Lakeland Subsidiary 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 purchase or 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 shareholders of Lakeland,
and subject to the parties obtaining all necessary regulatory
approvals, Lakeland and the Bank 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 each of Lakeland
and the Bank. The execution and delivery of the Bank Merger
Agreement has been duly and validly approved by the Board of
Directors of the Bank. Except for the approvals described in
paragraph (b) below, no other corporate proceedings on the part of
Lakeland or the Bank are necessary to consummate the transactions
contemplated hereby (except for the approval by Lakeland of the
Bank Merger Agreement). This Agreement has been duly and validly
executed and delivered by Lakeland and the Bank, and constitutes
valid and binding obligations of Lakeland and the Bank, enforceable
against Lakeland and the Bank in accordance with its terms.
(b) Neither the execution and delivery of this Agreement
by Lakeland and the Bank, nor the consummation by Lakeland and the
Bank of the transactions contemplated hereby in accordance with the
terms hereof, or compliance by Lakeland and the Bank with any of
the terms or provisions hereof, will (i) violate any provision of
Lakeland's or the Bank'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 Lakeland or the Bank or any of their
respective properties or assets, or (iii) except as set forth in
the Lakeland Disclosure Schedule, violate, conflict with, result in
a breach of any provisions of, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the
respective properties or assets of Lakeland or the Bank 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 Lakeland or the Bank is a party,
or by which either or both of them or any of their respective
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 Lakeland and its
Subsidiaries on a consolidated basis, and which will not prevent or
delay the consummation of the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations
with or notices to the Comptroller of the Currency ("OCC"), the
Commissioner of Banking of the State of New Jersey (the
"Commissioner"), the Board of Governors of the Federal Reserve
System ("FRB"), the Securities and Exchange Commission ("SEC"), the
New Jersey Secretary of State, and the shareholders of Lakeland, 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 Lakeland or the Bank in connection with (x)
the execution and delivery by Lakeland and the Bank of this
Agreement and (y) the consummation by Lakeland and the Bank of
transactions contemplated hereby and (z) the execution and delivery
by the Bank of the Bank Merger Agreement and the consummation by
the Bank of the transactions contemplated thereby.
3.4. FINANCIAL STATEMENTS.
(a) The Lakeland Disclosure Schedule sets forth copies
of the consolidated statements of condition of Lakeland as of June
30, 1992, 1993 and 1994, and the related consolidated statements of
income, stockholders' equity and cash flows for the periods ended
June 30 in each of the three years 1992 through 1994, in each case
accompanied by the audit report of Stephen P. Radics, independent
public accountants with respect to Lakeland, and the unaudited
consolidated statements of condition and related consolidated
statements of income, stockholders' equity and cash flows of
Lakeland for the periods ended September 30, 1994 and December 31,
1994, as filed with the SEC on Form 10-Q under the Securities
Exchange Act of 1934, as amended (the "1934 Act") (collectively,
the "Lakeland Financial Statements"). The Lakeland Financial
Statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, and fairly
present the consolidated financial condition of Lakeland as of the
respective dates set forth therein, and the related consolidated
statements of income, stockholders' equity and cash flows fairly
present the results of the consolidated operations, stockholders'
equity and cash flows of Lakeland for the respective periods set
forth therein.
(b) The books and records of Lakeland and its
Subsidiaries 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 Lakeland Financial Statements (including
the notes thereto), as of December 31, 1994 neither Lakeland nor
any of its Subsidiaries had any material liabilities, whether
absolute, accrued, contingent or otherwise material to the
business, operations, assets or financial condition of Lakeland or
any of its Subsidiaries. Since December 31, 1994 and to the date
hereof, neither Lakeland nor any of its Subsidiaries have incurred
any material liabilities except in the ordinary course of business
and consistent with prudent banking practice, except as
specifically contemplated by this Agreement.
3.5. BROKERAGE FEES. Neither Lakeland nor any of its
Subsidiaries nor any of their respective directors or officers has
employed any broker or finder or incurred any liability for any
broker's or finder's fees or commissions in connection with any of
the transactions contemplated by this Agreement, except for Hopper
Soliday & Co., Inc. ("Hopper Soliday"). Copies of the agreements
with Hopper Soliday are set forth in the Lakeland Disclosure
Schedule.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) There has not been any material adverse change in
the business, operations, assets or financial condition of Lakeland
and its Subsidiaries on a consolidated basis since December 31,
1994 and to Lakeland's knowledge, no facts or conditions exist
which Lakeland believes will cause or is likely to cause such a
material adverse change in the future.
(b) Except as set forth in the Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries has taken or
permitted any of the actions set forth in Section 5.2 hereof
between December 31, 1994 and the date hereof and Lakeland and the
Lakeland Subsidiaries have conducted their business only in the
ordinary course, consistent with past practice.
3.7. LEGAL PROCEEDINGS. Except as disclosed in the
Lakeland Disclosure Schedule, neither Lakeland nor any of its
Subsidiaries is a party to any, and there are no pending or, to
Lakeland's knowledge, threatened, legal, administrative, arbitral
or other proceedings, claims, actions or governmental
investigations of any nature against Lakeland or any of its
Subsidiaries. Except as disclosed in the Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries is a party
to any order, judgment or decree entered against Lakeland or any
Lakeland Subsidiary in any lawsuit or proceeding.
3.8. TAXES AND TAX RETURNS.
(a) To its knowledge, Lakeland and each Lakeland
Subsidiary have duly filed (and until the Effective Time will so
file) all returns, declarations, reports, information returns and
statements ("Returns") required to be filed by them in respect of
any federal, state and local taxes (including withholding taxes,
penalties or other payments required) and each has duly paid (and
until the Effective Time will so pay) all such taxes due and
payable, other than taxes or other charges which are being
contested in good faith (and disclosed to Valley in writing).
Lakeland and each Lakeland Subsidiary have established (and until
the Effective Time will establish) on their books and records
reserves for the payment of all federal, state and local taxes not
yet due and payable, but incurred in respect of Lakeland or any
Lakeland Subsidiary through such date, which reserves are, to the
knowledge of Lakeland, adequate for such purposes. Except as set
forth in the Lakeland Disclosure Schedule, the federal income tax
returns of Lakeland and its Subsidiaries 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 Lakeland Disclosure Schedule, the applicable state income
tax returns of Lakeland and its Subsidiaries 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 knowledge of Lakeland, there are
no audits or other administrative or court proceedings presently
pending nor any other disputes pending, or claims asserted for,
taxes or assessments upon Lakeland or any of its Subsidiaries, nor
has Lakeland or any of its Subsidiaries 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 Lakeland Disclosure
Schedule, neither Lakeland nor any of its Subsidiaries (i) has
requested any extension of time within which to file any tax Return
which Return has not since been filed, (ii) is a party to any
agreement providing for the allocation or sharing of taxes, (iii)
is required to include in income any adjustment pursuant to Section
481(a) of the Code, by reason of a voluntary change in accounting
method initiated by Lakeland or any Lakeland Subsidiary (nor does
Lakeland have any knowledge that the IRS has proposed any such
adjustment or change of accounting method) or (iv) has filed a
consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply.
3.9. EMPLOYEE BENEFIT PLANS. Except as disclosed in the
Lakeland Disclosure Schedule:
(a) Neither Lakeland nor any of its Subsidiaries
maintains or contributes 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") (the "Lakeland
Pension Plans"), "employee welfare benefit plan", within the
meaning of Section 3(1) of ERISA (the "Lakeland Welfare Plans"),
stock option plan, stock purchase plan, deferred compensation plan,
severance plan, bonus plan, employment agreement or other similar
plan, program or arrangement. Neither Lakeland nor any of its
Subsidiaries has, since September 2, 1974, contributed to any
"Multiemployer Plan", within the meaning of Sections 3(37) and
4001(a)(3) of ERISA.
(b) Lakeland has delivered to Valley a complete and
accurate copy of each of the following with respect to each of the
Lakeland Pension Plans and Lakeland Welfare Plans: (i) plan
document, summary plan description, and summary of material
modifications (if not available, a detailed description of the
foregoing); (ii) trust agreement or insurance contract, if any;
(iii) most recent IRS determination letter, if any; (iv) most
recent actuarial report, if any; and (v) most recent annual report
on Form 5500.
(c) The present value of all accrued benefits under each
of the Lakeland Pension Plans subject to Title IV of ERISA, based
upon the actuarial assumptions used for purposes of the most recent
actuarial valuation prepared by such Pension Plan's actuary, did
not exceed the then current value of the assets of such plans
allocable to such accrued benefits.
(d) During the last five years, the Pension Benefit
Guaranty Corporation (the "PBGC") has not asserted any claim for
liability against Lakeland or any of its Subsidiaries which has not
been paid in full.
(e) All premiums (and interest charges and penalties for
late payment, if applicable) due to the PBGC with respect to each
Lakeland Pension Plan have been paid. All contributions required
to be made to each Lakeland Pension Plan under the terms thereof,
ERISA or other applicable law have been timely made, and all
amounts properly accrued to date as liabilities of Lakeland and its
Subsidiaries which have not been paid have been properly recorded
on the books of Lakeland and its Subsidiaries.
(f) To the knowledge of Lakeland, each of the Lakeland
Pension Plans, the Lakeland Welfare Plans and each other plan and
arrangement identified on the Lakeland Disclosure Schedule has been
operated in compliance in all material respects with the provisions
of ERISA, the Code, all regulations, rulings and announcements
promulgated or issued thereunder, and all other applicable
governmental laws and regulations. Furthermore, the IRS has issued
a favorable determination letter with respect to each of the
Lakeland Pension Plans and Lakeland is not aware of any fact or
circumstance which would disqualify either plan, that could not be
retroactively corrected (in accordance with the procedures of the
IRS).
(g) To the knowledge of Lakeland, within the past two
plan years no non-exempt prohibited transaction, within the meaning
of Section 4975 of the Code or Section 406 of ERISA, has occurred
with respect to any of the Lakeland Welfare Plans or Lakeland
Pension Plans.
(h) No Lakeland Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable
events", within the meaning of Section 4034(b) of ERISA, with
respect to any of the Lakeland Pension Plans.
(i) To the knowledge of Lakeland, no "accumulated
funding deficiency", within the meaning of Section 412 of the Code,
has been incurred with respect to any of the Lakeland Pension
Plans.
(j) There are no pending, or, to the knowledge of
Lakeland, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the
Lakeland Pension Plans or the Lakeland Welfare Plans, any trusts
related thereto or any other plan or arrangement identified in the
Lakeland Disclosure Schedule.
(k) No Lakeland Pension or Welfare Plan provides medical
or death benefits (whether or not insured) beyond an employee's
retirement or other termination of service, other than (i) coverage
mandated by law, or (ii) death benefits under any Lakeland Pension
Plan.
(l) Except with respect to customary health, life and
disability benefits or as disclosed in the Lakeland Disclosure
Schedule, there are no unfunded benefits obligations which are not
accounted for by reserves shown on the financial statements and
established under GAAP, or otherwise noted on such financial
statements.
(m) With respect to each Lakeland Pension and Welfare
Plan that is funded wholly or partially through an insurance
policy, there will be no liability of Lakeland or any Lakeland
Subsidiary as of the Effective Time under any such insurance policy
or ancillary agreement with respect to such insurance policy in the
nature of a retroactive rate adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or partially
out of events occurring prior to the Effective Time.
(n) Except as hereafter 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 Lakeland or
any Lakeland Subsidiary to severance pay or any similar payment, or
(ii) accelerate the time of payment, vesting, or increase the
amount, of any compensation due to any current employee or former
employee under any Lakeland Pension or Welfare Plan.
3.10. REPORTS.
(a) Each communication mailed by Lakeland to its
stockholders since January 1, 1992, and each annual, quarterly or
special report, proxy statement or communication, 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) Lakeland and the Bank have, since January 1, 1992,
duly filed with the FDIC and the FRB in correct form in all
material respects the monthly, quarterly and annual reports
required to be filed under applicable laws and regulations, and
Lakeland promptly will deliver or make available to Valley accurate
and complete copies of such reports. The Lakeland Disclosure
Schedule lists all examinations of Lakeland or the Bank conducted
by either the New Jersey Department of Banking, FDIC or the FRB
since January 1, 1992 and the dates of any responses thereto
submitted by Lakeland or the Bank.
3.11. LAKELAND AND BANK INFORMATION. The information
relating to Lakeland and the Bank to be contained in the Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof) to be
delivered to stockholders of Lakeland in connection with the
solicitation of their approval of this Agreement and the
transactions contemplated hereby, as of the date the Proxy
Statement/Prospectus is mailed to stockholders of Lakeland, 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.
3.12. COMPLIANCE WITH APPLICABLE LAW.
(a) GENERAL. Except as set forth in the Lakeland
Disclosure Schedule, each of Lakeland and the Lakeland Subsidiaries
hold 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 Lakeland or the Bank (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 Lakeland and its Subsidiaries on
a consolidated basis) and Lakeland has not received notice of
violation of, and does not know of any violations of, any of the
above.
(b) CRA. Without limiting the foregoing, to its
knowledge the Bank has complied in all material respects with the
Community Reinvestment Act ("CRA") and Lakeland has no reason to
believe that any person or group would object to the consummation
of this Merger due to the CRA performance of or rating of the Bank.
Except as listed on the Lakeland Disclosure Schedule, no person or
group has adversely commented upon the Bank's CRA performance.
3.13. CERTAIN CONTRACTS.
(a) Except as disclosed in the Lakeland Disclosure
Schedule under this Section or Section 3.5, (i) neither Lakeland
nor any Lakeland Subsidiary is a party to or bound by any contract
or understanding (whether written or oral) with respect to the
employment or termination of any present or former officers,
employees, directors or consultants. The Lakeland Disclosure
Schedule sets forth true and correct copies of all employment
agreements or termination agreements with officers, employees,
directors, or consultants to which Lakeland or any Lakeland
Subsidiary is a party.
(b) Except as disclosed in the Lakeland Disclosure
Schedule, (i) as of the date of this Agreement, neither Lakeland
nor any Lakeland Subsidiary is a party to or bound by any
commitment, agreement or other instrument which contemplates the
payment by Lakeland or any Lakeland Subsidiary of amounts in excess
of $100,000, or which has a term extending beyond December 31, 1995
and cannot be terminated by Lakeland or its subsidiary without
consent of the other party thereto, (ii) no commitment, agreement
or other instrument to which Lakeland or any Lakeland Subsidiary is
a party or by which any of them is bound limits the freedom of
Lakeland or any Lakeland Subsidiary to compete in any line of
business or with any person, and (iii) neither Lakeland nor any
Lakeland Subsidiary is a party to any collective bargaining
agreement.
(c) Except as disclosed in the Lakeland Disclosure
Schedule, neither Lakeland nor any Lakeland Subsidiary nor, to the
knowledge of Lakeland, any other party thereto, is in default in
any material respect under any material lease, contract, mortgage,
promissory note, deed of trust, loan or other commitment or
arrangement.
3.14. PROPERTIES AND INSURANCE.
(a) Lakeland 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 Lakeland's consolidated balance sheet as of December
31, 1994, 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,
1994), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure
liabilities 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
Lakeland and its Subsidiaries taken as a whole and (iv) with
respect to owned real property, title imperfections noted in title
reports delivered to Valley prior to the date hereof. Lakeland and
its Subsidiaries as lessees have the right under valid and
subsisting leases to occupy, use, possess and control all property
leased by them in all material respects as presently occupied,
used, possessed and controlled by them.
(b) The Lakeland Disclosure Schedule lists all policies
of insurance covering business operations and all insurable
properties and assets of Lakeland and its Subsidiaries showing all
risks insured against, in each case under valid, binding and
enforceable policies or bonds, with such amounts and such
deductibles as are specified. As of the date hereof, neither
Lakeland nor any of its Subsidiaries has received any notice of
cancellation or notice of a material amendment of any such
insurance policy or bond or is in default under such policy or
bond, 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 Lakeland and
its Subsidiaries contain records that are accurate in all material
respects of all meetings and other corporate action held of their
respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
3.16. ENVIRONMENTAL MATTERS. Except as disclosed in the
Lakeland Disclosure Schedule, neither Lakeland nor any of its
Subsidiaries has received any written notice, citation, claim,
assessment, proposed assessment or demand for abatement alleging
that Lakeland 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 Lakeland or its Subsidiaries.
Except as disclosed in the Lakeland Disclosure Schedule, Lakeland
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 Lakeland 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.
3.17. RESERVES. As of the date hereof, the reserve for
loan and lease losses in the Lakeland Financial Statements is , to
Lakeland's knowledge, adequate based upon past loan loss
experiences and potential losses in the current portfolio to cover
all known or anticipated loan losses.
3.18. NO PARACHUTE PAYMENTS. No officer, director,
employee or agent (or former officer, director, employee or agent)
of Lakeland or any Lakeland Subsidiary is entitled now, or will or
may be entitled to as a consequence of this Agreement or the
Merger, to any payment or benefit from Lakeland, a Lakeland
Subsidiary, Valley or VNB which if paid or provided would
constitute an "excess parachute payment", as defined in Section
280G of the Code or regulations promulgated thereunder.
3.19 DISCLOSURE. There are no material facts concerning
the business, operations, assets or financial condition of Lakeland
or its Subsidiaries which could have a material adverse effect on
the business, operations or financial condition of Lakeland or its
Subsidiaries on a consolidated basis which have not been disclosed
to Valley directly or indirectly by access to any filing by
Lakeland under the 1934 Act. The representations and warranties
contained in Article III of this Agreement are accurate in all
material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF 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 Lakeland.
Valley hereby represents and warrants to Lakeland 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 in each jurisdiction in which the nature of the
business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the
business, operations, assets or financial condition of Valley or
its Subsidiaries (defined below). Valley is registered as a bank
holding company under 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 in
each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not
have a material adverse effect on the business, operations, assets
or financial condition of Valley and its Subsidiaries.
4.2. CAPITALIZATION. The authorized capital stock of
Valley consists solely of 37,537,500 shares of Valley Common Stock.
As of December 31, 1994, there were 28,828,404 shares of Valley
Common Stock issued and outstanding net of treasury stock, and
121,696 treasury shares. Since such date, and from time to time
hereafter, Valley may repurchase shares of its Common Stock. Since
December 31, 1994, to and including the date of this Agreement, no
additional 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 December 31,
1994, except for: (a) 485,624 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 565,065 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 274,985
shares of Valley Common Stock to be issued in connection with the
Agreement and Plan of Merger, dated as of November 9, 1994, among
Valley, VNB, American Union Bank (the "American Union Agreement"),
neither Valley nor any of Valley's Subsidiaries has or is bound by
any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of
Valley or Valley's Subsidiaries or any securities representing the
right to otherwise receive any shares of such capital stock or any
securities 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.
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. Valley has a sufficient number of authorized but unissued
shares of Valley Common Stock to pay the consideration for the
Merger set forth in Section 2.1 of this Agreement. 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 each of Valley and VNB. No
other corporate proceedings on the part of Valley and VNB are
necessary to consummate the transactions contemplated hereby
(except for the approval by Valley of the Bank Merger Agreement).
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 or Bylaws
of Valley or the Articles of Association or Bylaws of 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
encumbrance 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 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
transactions contemplated hereby. Except for consents and
approvals of or filings or registrations with or notices to the
OCC, the Commissioner, the FRB, the New Jersey Secretary of State,
the SEC, or applicable state securities bureaus or commissions, 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, (b) the
consummation by Valley of the Merger and the other transactions
contemplated hereby and (c) the execution and delivery by VNB of
the Bank Merger Agreement and the consummation by VNB of the Bank
Merger and other transactions contemplated thereby. To 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.
4.4. FINANCIAL STATEMENTS.
(a) Valley has previously delivered to Lakeland 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 LLP, independent public accountants
with respect to Valley, and the unaudited consolidated statements
of condition of Valley as of March 30, 1994, June 30, 1994 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 1934
Act (collectively, the "Valley Financial Statements"). The Valley
Financial Statements (including the related notes), have been
prepared in accordance with generally accepted accounting
principles consistently applied during the periods involved, and
fairly present the consolidated financial position of Valley as of
the respective dates set forth therein, and the related
consolidated statements of income, changes in stockholders' equity
and of cash flows (including the related notes, where applicable)
fairly present the results of the consolidated operations and
changes in stockholders' equity and of cash flows of Valley for the
respective fiscal periods set forth therein.
(b) The books and records of Valley and its subsidiaries
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 material
obligation or liability, whether absolute, accrued, contingent or
otherwise, 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 material 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., 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 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 and its subsidiaries, this Agreement and the transactions
contemplated hereby in the Registration Statement and Proxy
Statement/Prospectus (as defined in Section 5.6(a) hereof), as of
the date of the mailing of the Proxy Statement/Prospectus, and up
to and including the date of the meeting of stockholders of
Lakeland 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.
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, with no personal liability attaching to the
ownership thereof.
4.10. LEGAL PROCEEDINGS. Except as disclosed in the
Valley Disclosure Schedule, neither Valley nor its Subsidiaries is
a party to any, and there are no pending or, to Valley's knowledge,
threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature
against Valley or any of its Subsidiaries 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 effect on the business, operations, assets or
financial condition of Valley and its Subsidiaries on a
consolidated basis.
4.11. TAXES AND TAX RETURNS. To the knowledge of
Valley, Valley and its Subsidiaries have duly filed (and until the
Effective Time will so file) all Returns required to be filed by
them in respect of any federal, state and local taxes (including
withholding taxes, penalties or other payments required) and have
duly paid (and until the Effective Time will so pay) all such taxes
due and payable, other than taxes or other charges which are being
contested in good faith. Valley and its Subsidiaries have
established (and until the Effective Time will establish) on their
books and records reserves for the payment of all federal, state
and local taxes not yet due and payable, but incurred in respect of
Valley and its Subsidiaries through such date, which reserves are,
to the knowledge of Valley, adequate for such purposes. No
deficiencies exist or have been asserted based upon the federal
income tax returns of Valley and VNB.
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) To the knowledge of Valley, 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.
(c) To the knowledge of Valley, no "accumulated funding
deficiency" within the meaning of Section 412 of the Code has been
incurred with respect to any of the Valley Pension Plans.
(d) Except with respect to customary health, life and
disability benefits or as disclosed on the Valley Disclosure
Schedule, there are no unfunded benefit obligations which are not
accounted for by reserves shown on the financial statements of
Valley and established under GAAP or otherwise noted on such
financial statements.
4.13. REPORTS.
(a) Each communication mailed by Valley to its
stockholders since January 1, 1992, and each annual, quarterly or
special report, proxy statement or communication, 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) Valley and VNB have, since January 1, 1992, duly
filed with the OCC and the FRB in correct form in all material
respects the monthly, quarterly and annual reports required to be
filed under applicable laws and regulations, and Valley, upon
written request from Lakeland, promptly will deliver or make
available to Lakeland accurate and complete copies of such reports.
The Valley Disclosure Schedule lists the dates of all examinations
of Valley or VNB conducted by either the OCC, the FRB or the FDIC
since January 1, 1992, and the dates of any responses thereto
submitted by Valley or VNB.
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 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 Valley has not received
notice of violations of, and does not know of any violations of,
any of the above. Without limiting the foregoing, to its knowledge
VNB has complied in all material respects with the CRA and Valley
has no reason to believe that any person or group would object to
the consummation of the Merger due to the CRA performance or rating
of VNB. To the knowledge of Valley, except as listed on the Valley
Disclosure Schedule, no person or group has adversely commented
upon VNB's CRA performance.
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), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure
liabilities 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 Valley
and its subsidiaries taken as a whole and (iv) with respect to
owned real property, title imperfections noted in title reports
delivered to Lakeland prior to the date hereof. Valley and its
Subsidiaries as lessees have the right under valid and subsisting
leases to occupy, use, possess and control all property leased by
them in all material respects 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, in each case under
valid, binding and enforceable policies or bonds, with such
deductibles 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, neither Valley
nor any of its Subsidiaries has received any notice of cancellation
or notice of a material amendment of any such insurance policy or
bond or is in default under such policy or bond, 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 records that are accurate in all material
respects 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
Subsidiaries has received any written notice, citation, claim,
assessment, 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 reserve for
loan and lease losses in the Valley Financial Statements is, to
Valley's knowledge, adequate based upon past loan loss experiences
and potential losses in the current portfolio to cover all known or
anticipated loan losses.
4.19. DISCLOSURES. Except for other acquisition
transactions which Valley may not yet have publicly disclosed,
there are no material facts concerning the business, operations,
assets or financial condition of Valley which could have a material
adverse effect on the business, operations or financial condition
of Valley which have not been disclosed to Lakeland directly or
indirectly by access to any filing by Valley under the 1934 Act.
The representations and warranties contained in Article IV of this
Agreement are accurate in all material respects.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. CONDUCT OF THE BUSINESS OF LAKELAND. During the
period from the date of this Agreement to the Effective Time,
Lakeland shall, and shall cause each of its Subsidiaries to,
conduct its respective business and engage in transactions
permitted hereunder only in the ordinary course and consistent with
prudent banking practice, except with the prior written consent of
Valley, which consent will not be unreasonably withheld. Lakeland
also shall use its best efforts to (i) preserve its business
organization and that of each Lakeland Subsidiary intact, (ii) keep
available to itself the present services of its employees and those
of its Subsidiaries, provided that neither Lakeland nor any of its
Subsidiaries shall be required to take any unreasonable or
extraordinary act or any action which would conflict with any other
term of this Agreement, and (iii) preserve for itself and Valley
the goodwill of its customers and those of its Subsidiaries and
others with whom business relationships exist.
5.2. NEGATIVE COVENANTS AND DIVIDEND COVENANTS.
(a) Lakeland 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, nor
will it permit any of its Subsidiaries to:
(i) change any provision of its Certificate of
Incorporation or Bylaws or any similar governing documents;
(ii) except for the issuance of Lakeland Common Stock
pursuant to the present terms of the outstanding Lakeland
Options, change the number of shares of its authorized or
issued common or preferred 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 Lakeland or any Lakeland Subsidiary or
any securities convertible into shares of such stock, or
split, combine or reclassify any shares of its capital stock,
or redeem or otherwise acquire any shares of such 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, other
than Lakeland's regular quarterly dividends of $.15 per share
and one special dividend, to be declared after the Scheduled
Closing Date has been set, in an amount such that between
January 26, 1995 and the Closing Date, Lakeland shareholders
will receive dividends equivalent to those they would have
received as Valley shareholders during the same time period if
the Merger had closed on January 26, 1995;
(iii) grant any severance or termination pay (other than
pursuant to policies of Lakeland in effect on the date hereof
and disclosed to Valley in the Lakeland 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, other than the severance payment to William H.
McNear, Chairman of Lakeland's Board of Directors, in the
amount of $150,000 in settlement of his Retainer Agreement
with Lakeland upon the Effective Time (which payment shall be
reduced in such manner and to such extent so that, when
aggregated with all other payments to be made to such person
by Lakeland, such payment shall not be deemed an "excess
parachute payment" in accordance with Section 280G of the Code
or be subject to the excise tax provided in Section 4999(a) of
the Code); 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 in the ordinary course of business and
consistent with past practices and policies;
(iv) 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 practices and
policies;
(v) make any capital expenditures in excess of $100,000
other than pursuant to binding commitments existing on the
date hereof and other than expenditures necessary to maintain
existing assets in good repair;
(vi) file any applications or make any contract with
respect to branching or site location or relocation, other
than branching initiatives already underway as disclosed to
Valley on the Lakeland Disclosure Schedule. Any such
initiative requiring a competitive bid to an independent third
party or requiring a competitive bid to an instrumentality of
a government or quasi-governmental body will be disclosed only
on a direct confidential basis;
(vii) agree to acquire in any manner whatsoever (other
than to foreclose on collateral for a defaulted loan) any
business or entity;
(viii) make any material change in its accounting
methods or practices, other than changes required in
accordance with generally accepted accounting principles;
(ix) take any action that would result in any of the
representations and warranties contained in Article III of
this Agreement not being true and correct in any material
respect at the Effective Time; or
(x) agree to do any of the foregoing.
(b) Valley agrees that from the date hereof to the
Effective Time, except as otherwise approved by Lakeland in writing
or as permitted or required by this Agreement, it will not, nor
will it permit any of it Subsidiaries to:
(i) take any action that is intended or may
reasonably be expected to result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in
any material respect, or that may result in any condition,
agreement or covenant set forth in this Agreement not being
satisfied;
(ii) take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section
368 of the Code;
(iii) consolidate with or merge with any other person
or entity in which Valley is not the surviving entity, or convey,
transfer or lease its properties and assets substantially as an
entirety to any person or entity unless such person or entity shall
expressly assume the obligations of Valley under this Agreement; or
(iv) authorize or enter into any agreement or
commitment to do any of the foregoing.
5.3. NO SOLICITATION. Lakeland and the Bank 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 Lakeland or the Bank (an "Acquisition
Transaction"). Notwithstanding the foregoing, Lakeland may enter
into discussions or negotiations or provide information in
connection with an unsolicited possible Acquisition Transaction if
the Board of Directors of Lakeland, 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. Lakeland 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 negotiations with, or supplying
information to, a third party in connection with a possible
Acquisition Transaction.
5.4. CURRENT INFORMATION. During the period from the
date of this Agreement to the Effective Time, Lakeland will cause
one or more of its designated representatives to confer on a
monthly or more frequent basis with representatives of Valley
regarding Lakeland's business, operations, properties, assets and
financial condition and matters relating to the completion of the
transactions contemplated herein. Without limiting the foregoing,
Lakeland will send to Valley a monthly list of each new loan or
extension of credit, and each renewal of an existing loan or
extension of credit, in excess of $500,000, made during such month,
and provide Valley with a copy of the loan offering for any such
loan, extension of credit, or renewal upon request. 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, Lakeland
will deliver to Valley the Bank's call reports filed with the
Commissioner and FDIC and Lakeland's quarterly reports on Form 10-Q
as filed with the SEC under the 1934 Act, and Valley will deliver
to Lakeland Valley's quarterly reports on Form 10-Q, as filed with
the SEC under the 1934 Act, and VNB's call reports filed with the
OCC and the FDIC. As soon as reasonably available, but in no event
more than 90 days after the end of each fiscal year, Lakeland will
deliver to Valley and Valley will deliver to Lakeland their
respective audited Annual Reports, in each case as filed on Form
10-K with the SEC under the 1934 Act.
5.5. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) Lakeland and the Bank shall permit Valley and its
representatives, and Valley and VNB shall permit Lakeland and its
representatives, accompanied by an officer of the respective party,
reasonable access to their respective properties, and shall
disclose and make available to Valley and its representatives or
Lakeland and its representatives as the case may be, all books,
papers and records relating to their respective assets, stock
ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and
stockholders' meetings, organizational documents, 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 Lakeland
and its representatives may have a reasonable interest. Neither
party shall be required to provide access to or to disclose
information where such access or disclosure would violate or
prejudice the rights of any customer 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. Lakeland acknowledges that Valley may be involved in
discussions concerning other potential acquisitions and Valley
shall not be obligated to disclose such information to Lakeland
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 advisors shall return
to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any
copies of such information, shall use its best efforts to keep
confidential all such information, and shall not directly or
indirectly use such information for any competitive or other
commercial purposes. In the event that the Merger contemplated
hereby does not occur, all documents, notes and other writings
prepared by a party hereto or its advisors based on information
furnished by the other party shall be promptly destroyed. The
obligation to keep such information confidential shall continue for
five years from the date the proposed Merger is abandoned but shall
not apply to (i) any information which (A) the party receiving the
information can establish by convincing evidence was already in its
possession prior to the disclosure thereof to it by the other
party; (B) was then generally known to the public; (C) became known
to the public through no fault of the party receiving such
information; or (D) was disclosed to the party receiving such
information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal
requirement or in accordance with an order of a court of competent
jurisdiction.
5.6. REGULATORY MATTERS.
(a) For the purposes of holding the meeting of Lakeland
shareholders referred to in Section 5.7 hereof and registering or
otherwise qualifying under applicable federal and state securities
laws Valley Common Stock to be issued to Record Holders and
optionees 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 Lakeland
to the Lakeland shareholders and optionees together with any and
all amendments or 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, 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 Lakeland if at any time
prior to the Lakeland 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 Lakeland with the information
needed to correct such inaccuracy or omission. Valley shall
furnish Lakeland 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 Lakeland shareholders.
(c) Lakeland shall furnish Valley with such information
concerning Lakeland and the Bank as is necessary in order to cause
the Proxy Statement/Prospectus, insofar as it relates to such
corporations, to comply with Section 5.6(a) hereof. Lakeland
agrees promptly to advise Valley if, at any time prior to the
Lakeland shareholder's meeting referred to in Section 5.6(a)
hereof, information provided by Lakeland 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. Lakeland shall furnish
Valley with such supplemental information as may be necessary in
order to cause the Proxy Statement/Prospectus, insofar as it
relates to Lakeland and the Bank, to comply with Section 5.6(a)
after the mailing thereof to Lakeland shareholders.
(d) Valley shall as promptly as practicable, at its sole
expense, 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. Lakeland shall
promptly furnish Valley with such information regarding the
Lakeland shareholders as Valley requires to enable it to determine
what filings are required hereunder. Lakeland authorizes Valley to
utilize in such filings the information concerning Lakeland and the
Bank provided to Valley in connection with, or contained in, the
Proxy Statement/ Prospectus. Valley shall furnish Lakeland with
copies of all such filings and keep Lakeland advised of the status
thereof. Valley and Lakeland shall as promptly as practicable file
the Registration Statement containing the Proxy
Statement/Prospectus with the SEC, and each of Valley and Lakeland
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 New York
Stock Exchange.
(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, waivers, 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 and the
FRB. The parties shall each have the right to review in advance
all information relating to the other, as the case may be, and any
of their respective subsidiaries, which appears in any filing made
with, or written material submitted to, any third party or
governmental body in connection with the transactions contemplated
by this Agreement. Valley and VNB shall cause at least a draft of
their respective applications to the FRB and an actual application
to the OCC to be filed within 45 days of the date hereof, so long
as Lakeland and the Bank provide all information necessary to
complete the application within 30 days of the date hereof.
(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 SHAREHOLDERS. Lakeland will (a) take
all steps necessary duly to call, give notice of, convene and hold
a meeting of the shareholders of Lakeland as soon as reasonably
practicable for the purpose of securing the approval by such
shareholders of this Agreement, (b) subject to the qualification
set forth in Section 5.3 hereof, recommend to the shareholders of
Lakeland the approval of this Agreement and the transactions
contemplated hereby and use its best efforts to obtain, as promptly
as practicable, such approvals, and (c) cooperate and consult with
Valley with respect to each of the foregoing matters. In
connection therewith, each director of Lakeland agrees (i) to vote
in favor of the Merger, and (ii) take such action as is necessary
or is reasonably required by Valley to consummate 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 necessary, proper or
advisable under applicable laws and regulations to satisfy the
conditions to Closing and to consummate and make effective the
transactions contemplated by this Agreement, including, without
limitation, using reasonable efforts to lift or rescind any
injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions
contemplated by this Agreement and using its 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 Lakeland determines that a material condition to its
obligation to consummate the transactions contemplated hereby
cannot be fulfilled on or prior to October 31, 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, Lakeland and Valley will promptly
inform the other of any facts applicable to Lakeland or Valley,
respectively, or their respective directors or officers, 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 LAKELAND. Lakeland shall
mutually agree with Valley about printing arrangements for the
Proxy Statement/Prospectus before entering into any binding
contract for such expenses.
5.13. CLOSING. The parties hereto shall cooperate and
use reasonable efforts to try to cause the Effective Time to occur
on July 1 or October 1, 1995.
5.14. INDEMNIFICATION. After the Effective Time, to the
extent permitted by applicable law, and the Certificate of
Incorporation or Articles of Association, Valley agrees that it
will, or will cause VNB to, provide to the directors and officers
of Lakeland and the Bank indemnification equivalent to that
provided by the Certificate of Incorporation and Bylaws of each of
Lakeland and the Bank with respect to acts or omissions occurring
prior to 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, and the Certificate of
Incorporation or Articles of Association, Valley or VNB (as
applicable) shall advance expenses in connection with the foregoing
indemnification.
5.15. NEW VALLEY DIRECTORS; OFFICERS.
(a) DIRECTORS. As of the Effective Time, Valley shall
cause its Board of Directors to take action to appoint at the
Effective Time two directors of Lakeland to the Board of Directors
of Valley. One of the Lakeland directors to be so elected shall be
William H. McNear and the other director shall be selected by the
nominating committee of the Board of Directors of Valley from two
nominees submitted by the Board of Directors of Lakeland. In
addition, John Grabovetz shall be designated as a Director Emeritus
of Valley at the Effective Time.
(b) OFFICERS. As of the Effective Time, Valley shall
appoint Michael Halpin a First Senior Vice President of VNB and
Valley shall assume in writing Mr. Halpin's employment contract, a
copy of which is included in the Lakeland Disclosure Schedule.
5.16. EMPLOYMENT MATTERS. Valley intends to continue
the employment of all officers and employees of the Bank, and to
the extent practical, at the same location, with the same or
equivalent salary and benefits. Valley intends to have all
Lakeland employees participate in the benefits and opportunities
available to all Valley employees.
5.17. POOLING AND TAX-FREE REORGANIZATION TREATMENT.
Neither Valley nor Lakeland 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.
5.18 LAKELAND OPTION PLAN. From and after the Effective
Time, each Lakeland Option which is converted to an option to
purchase Valley Common Stock under Section 2.1(b)(i) shall be
administered, operated and interpreted by a committee comprised of
members of the Board of Directors of Valley appointed by the Board
of Directors of Valley. Valley shall reserve for issuance the
number of shares of Valley Common Stock necessary to satisfy
Valley's obligations. Valley shall also register, if not
previously registered pursuant to the 1933 Act, the shares
authorized for issuance under the Lakeland Options so converted.
5.19. AFFILIATES.
(a) Promptly, but in any event within 30 days, after the
execution and delivery of this Agreement, (i) Lakeland shall
deliver to Valley (x) a letter identifying all persons who, to the
knowledge of Lakeland, may be deemed to be affiliates of Lakeland
under Rule 145 of the 1933 Act, including without limitation all
directors and executive officers of Lakeland and (y) a letter
identifying all persons who, to the knowledge of Lakeland, may be
deemed to be affiliates of Lakeland as that term (affiliate) is
used for purposes of qualifying for pooling-of-interests accounting
treatment; and (ii) Valley shall identify to Lakeland all persons
who, to the knowledge of Valley, may be deemed affiliates of Valley
as that term (affiliates) is used for purposes of qualifying for
pooling-of-interests accounting treatment.
(b) Lakeland shall cause each director of Lakeland to,
and Lakeland shall use its best efforts to cause each executive
officer of Lakeland and each other person who may be deemed an
affiliate of Lakeland (under either Rule 415 of the 1933 Act or the
accounting treatment rules) to, execute and deliver to Valley
within 30 days after the execution and delivery of this Agreement,
a letter substantially in the form of Exhibit 5.19 hereto agreeing
to be bound by the restrictions of Rule 145, as set forth in
Exhibit 5.19 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 each director and
executive officer of Valley to, and Valley shall use its best
efforts to cause each other person who may be deemed an affiliate
of Valley (as that term is used for purposes of qualifying for
pooling of interests) to, execute and deliver to Valley within 30
days after the execution and delivery of this Agreement, a letter
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.
(c) Valley agrees to publish financial results covering
at least 30 days of combined operations of Valley and Lakeland as
soon as practicable after consummation of the Merger.
5.20. COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY ACT.
Lakeland, at its sole cost and expense, shall use its best efforts
to obtain prior to the Effective Time, with respect to each
facility located in New Jersey owned or operated by Lakeland or any
Lakeland Subsidiary (each, a "Facility"), either: (a) a Letter of
Non-Applicability ("LNA") from the New Jersey Department of
Environmental Protection ("NJDEP") stating that the Facility is not
an "industrial establishment," as such term is defined under the
Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement
issued by the NJDEP pursuant to ISRA authorizing the consummation
of the transactions contemplated by this Agreement; (c) a Negative
Declaration approval, Remedial Action Workplan approval, No Further
Action letter or other document or documents issued by the NJDEP
advising that the requirements of ISRA have been satisfied with
respect to the Facility; or (d) an opinion addressed to Valley from
New Jersey legal counsel reasonably acceptable to Valley to the
effect that ISRA has been complied with, or is inapplicable, with
respect to the Facility. In the event Lakeland obtains a
Remediation Agreement, Lakeland will post or have posted an
appropriate Remediation Funding Source or will have obtained the
NJDEP'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 LAKELAND SHAREHOLDERS; SEC REGISTRATION.
This Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote of the shareholders of
Lakeland. 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 securities
laws. The Valley Common Stock to be issued in connection with the
Merger, including Valley Common Stock to be issued for the Lakeland
Options, shall have been approved for listing on the New York Stock
Exchange.
(b) REGULATORY FILINGS. All necessary regulatory or
governmental approvals and consents (including without limitation
any required approval of the OCC and any approval or waiver
required by the FRB) required to consummate the transactions
contemplated hereby shall have been obtained without any term or
condition which would materially impair the value of Lakeland and
the Bank, taken as a whole, to Valley or which would materially
impair the value of Valley and VNB, taken as a whole, to Lakeland.
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 or the Bank 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 the
Bank Merger or obtain other substantial monetary or other relief
against one or more parties hereto in connection with this
Agreement and which Valley or Lakeland 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 or the Bank Merger.
(d) TAX FREE EXCHANGE. Valley and Lakeland shall have
received an opinion, satisfactory to Valley and Lakeland, 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, Lakeland, VNB or the Bank or to the
shareholders of Lakeland who exchange their shares of Lakeland for
Valley Common Stock (except to the extent that cash is received in
lieu of fractional shares of Valley Common Stock).
(e) POOLING OF INTERESTS. The Merger shall be qualified
to be treated by Valley as a pooling-of-interests for accounting
purposes and Valley shall have received a letter from KPMG Peat
Marwick LLP (and a concurring or back-up letter from Stephen P.
Radics, as necessary or appropriate to enable KPMG Peat Marwick to
issue its letter) to the effect that the Merger will qualify for
pooling-of-interests accounting treatment if closed and consummated
in accordance with the Agreement.
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 LAKELAND AND BANK. The representations and
warranties of Lakeland 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. Lakeland 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 Lakeland
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 Lakeland Disclosure
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
contemplated hereby is required under the applicable instrument.
(c) OPINION OF COUNSEL. Valley shall have received an
opinion of counsel to Lakeland, dated the date of the Closing, in
form and substance reasonably satisfactory to Valley, covering the
matters set forth on Schedule 6.2 hereto and any other matters
reasonably requested by Valley.
(d) BANK ACTION. The Bank shall have taken all
necessary corporate action to effectuate the Bank Merger
immediately following the Effective Time.
(e) CERTIFICATES. Lakeland shall have furnished Valley
with such certificates of its officers or other documents to
evidence fulfillment of the conditions set forth in this Section
6.2 as Valley may reasonably request.
(f) ENVIRONMENTAL LAW COMPLIANCE. Lakeland shall have
obtained, with respect to each Facility, an LNA, a Remediation
Agreement, a Negative Declaration approval, a Remedial Action
Workplan approval (in which event Lakeland will post or have posted
an appropriate Remediation Funding Source or will have obtained the
NJDEP's approval to self-guaranty any Remediation Funding Source
required under any such Remediation Agreement), a No Further Action
letter or other document or documents issued by the NJDEP advising
that the requirements of ISRA have been satisfied with respect to
the Facility or an opinion of the type referred to in Section
5.20(d) hereof.
6.3. CONDITIONS TO THE OBLIGATIONS OF LAKELAND UNDER
THIS AGREEMENT. The obligations of Lakeland 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 shall have performed in all material
respects, the agreements, covenants and obligations to be performed
by it prior to the Closing Date. With respect to any
representation or warranty which as of the Closing Date has
required a supplement or amendment to the 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. Lakeland shall have
received an opinion of counsel to Valley, dated the date of the
Closing, in form and substance reasonably satisfactory to Lakeland,
covering the matters set forth on Schedule 6.3 hereto.
(c) FAIRNESS OPINION. Lakeland shall have received an
opinion from Hopper Soliday as of the date of this Agreement and
the date the Proxy Statement/Prospectus is mailed to Lakeland's
stockholders, to the effect that, in its opinion, the consideration
to be paid to stockholders of Lakeland hereunder is fair to such
stockholders from a financial point of view.
(d) LAKELAND DIRECTORS AND OFFICERS. Valley shall have
taken all action necessary to appoint two directors of Lakeland to
the Board of Directors of Valley, shall have appointed Michael
Halpin a First Senior Vice President of Valley and shall have
assumed in writing the contract of Michael Halpin, all as provided
in Section 5.15 and shall appoint John Grabovetz as Director
Emeritus.
(e) CERTIFICATES. Valley shall have furnished Lakeland
with such certificates of its officers or others and such other
documents to evidence fulfillment of the conditions set forth in
this Section 6.3 as Lakeland may reasonably request.
(f) VNB ACTION. VNB shall have taken all necessary
corporate action to effectuate the Bank Merger immediately
following the Effective Time.
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 Lakeland:
(a) By mutual written consent of the parties hereto.
(b) By Valley or Lakeland (i) if the Effective Time
shall not have occurred on or prior to October 31, 1995 or (ii) if
a vote of the stockholders of Lakeland 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
agreement set forth herein to be performed or observed by such
party (or the directors of Lakeland) at or before the Effective
Time.
(c) By Valley or Lakeland upon written notice to the
other if any application for regulatory or governmental approval
necessary to consummate the Merger and the other transactions
contemplated hereby shall have been denied or withdrawn at the
request or recommendation of the applicable regulatory agency or
governmental authority or by Valley upon written notice to Lakeland
if any such application is approved with conditions which
materially impair the value of Lakeland and the Bank, taken as a
whole, to Valley.
(d) By Valley if (i) there shall have occurred a
material adverse change in the business, operations, assets, or
financial condition of Lakeland or the Bank, taken as a whole, from
that disclosed by Lakeland on the date of this Agreement; or (ii)
if the net operating income excluding security gains and losses
(after tax but excluding expenses related to this Agreement) of
Lakeland for any full fiscal quarter after December 31, 1994, is
materially less than the net income of Lakeland for each of the
last two fiscal quarters of calendar year 1994; or (iii) there was
a material breach in any representation, warranty, covenant,
agreement or obligation of Lakeland hereunder.
(e) By Lakeland, if (i) there shall have occurred a
material adverse change in the business, operations, assets or
financial condition of Valley or VNB from that disclosed by Valley
on the date of this Agreement; or (ii) if the net operating income
excluding security gains and losses (after tax but excluding
expenses related to this Agreement) of Valley for any full fiscal
quarter after December 31, 1994, is materially less than the net
income of Valley for each of the last two fiscal quarters of
calendar year 1994; or (iii) there was a material breach in any
representation, warranty, covenant, agreement or obligation of
Valley hereunder.
(f) By Valley or Lakeland 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.
(g) By Lakeland in the event that, as provided in
Section 5.3 hereof, the fiduciary responsibilities of the Board of
Directors of Lakeland established under applicable law require
Lakeland to participate or authorize participation in any
Acquisition Transaction.
7.2. EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement by either Valley or
Lakeland pursuant to Section 7.1, this Agreement 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 Lakeland 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 Lakeland without the approval of such
stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of Valley and Lakeland.
7.4. EXTENSION; WAIVER. The parties may, at any time
prior to the Effective Time of the Merger, (i) extend the time for
the performance of any of the obligations or other acts of the
other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document
delivered pursuant thereto; or (iii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on
the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on
behalf of such party against which the waiver is sought to be
enforced.
ARTICLE VIII
MISCELLANEOUS
8.1. EXPENSES. 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, except that the cost of printing and mailing the Proxy
Statement/Prospectus shall be borne equally by the parties hereto
if the transaction is terminated.
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 Lakeland, to:
Lakeland First Financial Group, Inc.
250 Route 10
Succasunna, New Jersey 07876
Attn: Michael Halpin,
President and Chief Executive Officer
Telecopier No. (201) 584-2234
Copy to:
Malizia, Spidi, Sloane and Fisch, P.C.
1301 K Street, N.W., Suite 700 East
Washington, D.C. 20005
Attn: John J. Spidi, Esq.
Telecopier No. (202) 434-4661
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. Nothing in
this Agreement is intended to confer, expressly or by implication,
upon any other person any rights or remedies under or by reason of
this Agreement, except for the indemnitees covered by Section 5.14
hereof, the persons referred to in Section 5.15 and the persons
signing letter agreements pursuant to Section 5.19 hereof who shall
be entitled to the benefits of such Section 5.19. No assignment of
this Agreement may be made except upon the written consent of the
other parties hereto.
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. If any provision of this Agreement is found
invalid, it shall be considered deleted and shall not invalidate
the remaining provisions.
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.
8.8 SURVIVAL. All representations, warranties and,
except to the extent specifically provided otherwise herein,
agreements and covenants, other than those agreements and covenants
set forth in Sections 5.14, 5.15 and 5.18 which shall survive the
Merger, shall terminate as of the Effective Time.
[Remainder of Page Intentionally Blank]
IN WITNESS WHEREOF, Valley, VNB, the Bank and Lakeland
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: /s/ PETER SOUTHWAY By: /s/ GERALD H. LIPKIN
------------------------- -------------------------
Peter Southway, President Gerald H. Lipkin
Chairman and Chief
Executive Officer
ATTEST: LAKELAND FIRST FINANCIAL GROUP, INC.
By: /s/ WILLIAM H. McNEAR By: /s/ MICHAEL HALPIN
------------------------- -------------------------
William H. McNear, Michael Halpin, President
Chairman and Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
By: /s/ PETER SOUTHWAY By: /s/ GERALD H. LIPKIN
------------------------- -------------------------
Peter Southway, President Gerald H. Lipkin
Chairman and Chief
Executive Officer
ATTEST: LAKELAND SAVINGS BANK
By: /s/ WILLIAM H. McNEAR By: /s/ MICHAEL HALPIN
------------------------- -------------------------
William H. McNear, Michael Halpin, President
Chairman and Chief Executive Officer
