As filed with the Securities and Exchange Commission on March 17, 1999
Registration No. ____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
New Jersey
(State or other Jurisdiction of Incorporation of Organization)
6711
(Primary Standard Industrial Classification Code Number)
22-2477875
(I.R.S. Employer Identification No.)
1455 Valley Road
Wayne, New Jersey 07470
973-305-8800
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Gerald H. Lipkin, Chairman, President and Chief Executive Officer
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07470
973-305-8800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please send copies of all communications to:
RONALD H. JANIS, ESQ. RICHARD S. MILLER, ESQ.
MICHAEL W. ZELENTY, ESQ. Williams, Caliri, Miller & Otley
Pitney, Hardin, Kipp & Szuch 1428 Route 23
200 Campus Drive Wayne, New Jersey 07040
Florham Park, New Jersey 07932 (973) 694-0800
(973) 966-6300
<PAGE>
Approximate date of commencement of proposed sale to the
public: At the Effective Date of the Merger, as defined in the Agreement and
Plan of Merger dated as of December 17, 1998 (the "Merger Agreement"), among
Valley National Bancorp ("Valley"), Valley National Bank ("VNB"), Ramapo
Financial Corporation ("Ramapo"), and Ramapo's subsidiary, The Ramapo Bank
("TRB") attached as Appendix A to the Proxy Statement-Prospectus.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. |_|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. |_| ___________
If this form is a post-effective amendment filed pursuant to
Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. |_| __________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================== ============== ========================= ============================ ================
Title of each class of securities Amount to be Proposed maximum Proposed maximum aggregate Amount of
to be registered registered offering price per offering price** registration
unit** fee***
<S> <C> <C> <C> <C>
Common Stock, no par value 3,855,933 $25.0735 $96,681,843 $26,878
Shares*
==================================== ============== ========================= ============================ ================
</TABLE>
* The number of shares of Valley Common Stock issuable in the Merger in exchange
for shares of Ramapo Common Stock, assuming the Exchange Ratio of 0.425 set
forth in the Merger Agreement, and assuming that all currently outstanding
options to acquire shares of Ramapo Common Stock are exercised prior to the
Effective Time of the Merger. The Registrant also registers hereby such
additional shares of its common stock as may be issuable in the Merger pursuant
to the anti-dilution provisions of the Merger Agreement.
** Estimated solely for the purpose of calculating the registration fee for the
filing of this registration Statement on Form S-4 (the "S-4") pursuant to Rule
457(f)(1) under the Securities Act based on the Exchange Ratio of 0.425 and on
the average ($10.65625) of the high ($10.6875) and low ($10.625) prices reported
on the Nasdaq Stock Market (National Market) ("Nasdaq") for Ramapo Common Stock
as of March 12, 1999, a date within five business days prior to the filing of
the S-4.
*** $18,719 of this amount was previously paid in connection with the filing of
the Preliminary Proxy Materials in connection with the Merger on February 19,
1999.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
[RAMAPO LOGO]
MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT
The Board of Directors of Ramapo Financial Corporation has approved the
merger of Ramapo into Valley National Bancorp.
In the merger, Ramapo shareholders will receive 0.425 shares of Valley
common stock for each share of Ramapo common stock. Cash will be paid instead of
fractional shares. If any stock split, stock dividend or similar transaction
occurs prior to the closing, the 0.425 exchange ratio will be adjusted
appropriately.
Valley common stock is listed on the New York Stock Exchange under the
symbol "VLY". Based on March 16, 1999 closing prices, 0.425 shares of Valley
common stock had a value of $10.84.
Ramapo shareholders will not be taxed on the exchange of Ramapo stock
for Valley stock.
When the merger is completed, Ramapo shareholders will own, not
including any options, about 3,402,210 shares, or 5.8% of Valley's common stock.
The merger cannot be completed unless Ramapo's shareholders approve it.
We have scheduled a special meeting so you can vote on the merger. The Ramapo
Board of Directors unanimously recommends that you vote to approve the merger.
The date, time and place of the meeting are as follows:
Tuesday, April 27, 1999
4:00 P.M.
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
Only shareholders of record as of March 15, 1999 are entitled to attend
and vote at the meeting.
Your vote is very important. Whether or not you plan to attend the
meeting, please take the time to vote by completing and mailing the enclosed
proxy card to us. If you sign, date and mail your proxy card without indicating
how you want to vote your proxy will be counted as a vote in favor of the
merger.
[Insert Signature]
Mortimer J. O'Shea
President and Chief Executive Officer
Ramapo Financial Corporation
Neither the Securities and Exchange Commission, nor any bank regulatory agency,
nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
This proxy statement-prospectus is dated March __, 1999, and
is first being mailed to Ramapo shareholders on March __, 1999.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY 1
What this Document is About 1
Voting on the Merger 1
The Companies 1
The Merger 1
SUMMARY FINANCIAL DATA OF VALLEY 6
SUMMARY FINANCIAL DATA OF RAMAPO 7
COMPARATIVE PER SHARE DATA 8
SUMMARY PRO FORMA FINANCIAL
INFORMATION 10
INTRODUCTION 11
FORWARD LOOKING STATEMENTS 11
CERTAIN INFORMATION ABOUT VALLEY 12
General 12
Valley National Bank 12
CERTAIN INFORMATION ABOUT RAMAPO 13
General 13
The Ramapo Bank 13
THE MEETING 13
Date, Time and Place 13
Purpose 14
Board Recommendation 14
Record Date; Required Vote 14
Voting Rights; Proxies 14
Solicitation of Proxies 15
Quorum 15
THE PROPOSED MERGER 16
General Description 16
Consideration; Exchange Ratio;
Cash instead of Fractional Shares 16
Conversion of Ramapo Options 17
Background of and Reasons for the Merger 17
Interests of Certain Persons in the Merger 19
Opinion of Ramapo's Financial Advisor 20
Resale Considerations Regarding
Valley Common Stock 23
Conditions to the Merger 24
Conduct of Business Pending the Merger 24
Stock Option to Valley for Ramapo Shares 25
Representations, Warranties and Covenants 26
Regulatory Approvals 26
Management and Operations
After the Merger 26
Exchange of Certificates 27
Amendments 27
Termination 27
Accounting Treatment of the Merger 28
Federal Income Tax Consequences 29
No Dissenters' Rights 30
PRO FORMA FINANCIAL INFORMATION 30
DESCRIPTION OF VALLEY COMMON
STOCK 35
General 35
Dividend Rights 35
Voting Rights 35
Liquidation Rights 35
Assessment and Redemption 35
Other Matters 36
COMPARISON OF THE RIGHTS OF
SHAREHOLDERS OF VALLEY AND
RAMAPO 36
Voting Requirements 36
Cumulative Voting 36
Classified Board of Directors 37
Dividends 37
By-laws 37
Limitations of Liability of Directors
and Officers 37
Preferred Stock 37
SHAREHOLDER PROPOSALS 38
INFORMATION INCORPORATED BY
REFERENCE 38
OTHER MATTERS 39
LEGAL OPINION 39
EXPERTS 39
APPENDIX A Merger Agreement A-1
APPENDIX B Stock Option Agreement B-1
APPENDIX C Danielson Fairness Opinion C-1
<PAGE>
HOW TO GET COPIES OF RELATED DOCUMENTS
This document incorporates important business and financial information
about Valley National Bancorp and Ramapo Financial Corporation that is not
included in or delivered with this document. Ramapo shareholders may receive the
information free of charge by writing or calling the persons listed below. For
Valley documents, make your request to Alan D. Eskow, Corporate Secretary,
Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey 07470; telephone
number (973) 305-8800. For Ramapo documents, make your request to Janet M.
Maloy, Corporate Secretary, Ramapo Financial Corporation, 64 Mountain View
Boulevard, Wayne, New Jersey 07470; telephone number (973) 305-4102. We will
respond to your request within one business day by sending the requested
documents by first class mail or other equally prompt means. In order to ensure
timely delivery of the documents in advance of the meeting, any request should
be made by April 20, 1999.
<PAGE>
SUMMARY
This is a summary of certain information regarding the proposed merger and the
shareholder meeting to vote on the merger. We urge you to carefully read the
entire proxy statement-prospectus, including the appendixes, before deciding how
to vote.
What this Document is About
The Board of Directors of Ramapo Financial Corporation has approved the
merger of Ramapo into Valley National Bancorp. The merger cannot be completed
unless the shareholders of Ramapo approve it. The Ramapo Board has called a
special meeting of Ramapo shareholders to vote on the merger. This document is
the proxy statement used by the Ramapo Board to solicit proxies for the meeting.
It is also the prospectus of Valley regarding the Valley common stock to be
issued if the merger is completed.
Voting on the Merger
Shares Entitled to Vote... The Ramapo Board has selected March 15, 1999 as
the record date for the meeting. Each of the
8,151,449 shares of Ramapo common stock
outstanding on the record date are entitled to
vote at the meeting.
Vote Required to Approve
the Merger.................. The affirmative vote of a majority of the
shareholders present in person or by proxy and
entitled to vote is required to approve the
merger.
The Companies
Valley.................... Valley, a New Jersey corporation, is the bank
holding company for Valley National Bank. Valley
National Bank is a national bank that operates
over 100 branches located in northern New Jersey.
At December 31, 1998, Valley had consolidated
assets of $5.5 billion. Valley's principal
executive offices are located at 1455 Valley Road,
Wayne, New Jersey 07470 and its telephone number
is (973) 305-8800.
Ramapo...................... Ramapo, a New Jersey corporation, is the bank
holding company for The Ramapo Bank. The Ramapo
Bank is a New Jersey-chartered commercial bank
that operates eight branches located in northern
New Jersey. At December 31, 1998, Ramapo had
consolidated assets of $338 million. Ramapo's
principal executive offices are located at 64
Mountain View Boulevard, Wayne, New Jersey 07470
and its telephone number is (973) 696-6100.
The Merger
General Description....... Ramapo will merge with Valley, with Valley as the
surviving entity. The merger will occur on a date
selected by Valley, within ten business days after
all material conditions to closing have been met
or any other date on which Valley and Ramapo
agree. Valley and Ramapo have tentatively selected
June 11, 1999 as the closing date. The terms of
the proposed merger are set forth in a merger
agreement signed by Ramapo and Valley and their
bank subsidiaries. A copy of the merger agreement
is attached as Appendix A to this document and is
incorporated herein by reference. Consideration to
Ramapo Shareholders; 0.425
Exchange Ratio.............. In the merger, you will receive 0.425 shares of
Valley common stock for each share of Ramapo
common stock. If there is any stock split, stock
dividend or similar transaction affecting Valley
common stock prior to the closing, the 0.425
exchange ratio will be adjusted appropriately.
Cash Instead of Fractional
Shares...................... You will not receive fractional shares of Valley
common stock in the merger. Instead you will
receive, without interest, cash equal to the
fractional share interest you otherwise would have
received, multiplied by the value of Valley common
stock. For this purpose, Valley stock will be
valued at the average of its closing prices during
a ten day trading period ending five days prior to
the merger.
No Dissenters Rights........ You do not have dissenters' rights of appraisal in
connection with the merger.
Tax-Free Nature of the
Merger..................... Valley's counsel, Pitney, Hardin, Kipp & Szuch,
has delivered its opinion that the merger will
qualify as a tax-free reorganization. The
conversion of Ramapo stock into Valley stock will
be tax-free for Valley, Ramapo and the Ramapo
shareholders. Ramapo shareholders will recognize
no taxable gain or loss until they sell the Valley
common stock that they receive in the merger. The
basis of the Valley common stock received by each
Ramapo shareholder will be the basis of the Ramapo
common stock converted in connection with the
merger. The holding period of the Valley common
stock will include the holding period of the
Ramapo common stock converted.
We urge you to read the more complete description
of the merger's tax consequences on page 29 and to
consult your own tax advisors regarding the
specific tax consequences of the merger to you
under applicable tax laws.
Exchanging Your Stock
Certificates................ Promptly after the merger occurs, the exchange
agent will send you letters of transmittal and
instructions for exchanging your Ramapo stock
certificates into Valley stock certificates. You
should not send in your stock certificates until
you receive instructions from the exchange agent.
Second Quarter 1999
Dividends................... Valley and Ramapo have agreed to pay cash
dividends to Ramapo shareholders for the second
quarter of 1999 equivalent to the dividends they
would receive as Valley shareholders after the
merger. Thus, if Valley's second quarter dividend
record date falls after the merger is completed,
Ramapo will not pay second quarter cash dividends
and Ramapo shareholders who become Valley
shareholders in the merger will receive second
quarter cash dividends from Valley. If Valley's
second quarter dividend record date falls before
the merger is completed, then Ramapo will pay
second quarter cash dividends at a rate which is
equivalent to Valley's cash dividends, and Ramapo
shareholders who became Valley shareholders in the
merger wil not receive any additional second
quarter cash dividends from Valley.
Reselling the Stock You
Receive in the Merger....... The shares of Valley common stock to be issued in
the merger will be registered under the Securities
Act of 1933. Except as noted in this paragraph,
and in more detail in the section "Resale
Considerations Regarding Valley Common Stock" on
pages 23-24, you may freely transfer those shares
after you receive them. Ramapo has identified its
directors, executive officers and others who may
be deemed its "affiliates." Those persons have
entered into agreements restricting their ability
to transfer the shares they will get in the
merger.
<PAGE>
Conversion of Ramapo Stock
Options..................... In the merger, holders of options to purchase
Ramapo common stock will receive options to
purchase Valley common stock. The new options will
have the same terms and conditions as the old
options, except that the number of shares and the
exercise price will be adjusted to reflect the
0.425 exchange ratio.
Reasons for the Merger..... As part of Ramapo's strategic review, which
included working with a consultant, Ramapo's Board
determined that the interests of Ramapo's
shareholders, and specifically the return on their
investment, would be best served by a merger with
a larger institution at this time. Valley entered
into the merger agreement as part of Valley's
ongoing strategy of growth through acquisitions.
Opinion of Ramapo's
Financial Advisor........... Danielson Associates, Inc. is Ramapo's financial
advisor on the merger. As of the date of this
proxy statement, Danielson considers the merger to
be fair to Ramapo shareholders from a financial
point of view. A copy of Danielson's opinion, is
included as Appendix C to this document. For
information on how Danielson arrived at its
opinion, see pages 20-23.
Differences in
Share-holders' Rights....... In the merger, you will become a Valley
shareholder. Your rights as a Ramapo shareholder
are currently governed by New Jersey corporate law
and Ramapo's certificate of incorporation and
by-laws. The rights of Valley shareholders are
governed by New Jersey corporate law and Valley's
certificate of incorporation and by-laws. The
rights of Ramapo and Valley shareholders differ
with respect to voting requirements and various
other matters. See pages 36-37.
Conditions to the Merger.... Completion of the merger is contingent on a number
of conditions, including:
* Approval of the merger by Ramapo shareholders at
the meeting;
* Receipt of bank regulatory approvals;
* Receipt of an updated opinion from Valley's
counsel regarding the tax-free nature of the
merger; this condition will not be waived
without resoliciting the vote of Ramapo
shareholders;
* Receipt of a letter from Valley's independent
public accountants regarding qualification of
the merger for pooling-of-interests accounting;
and
* Receipt of the fairness opinion of Danielson,
which is Appendix C to this document.
OCC Approval................ Completion of the merger requires approval by the
Office of the Comptroller of the Currency. OCC
approval does not constitute an endorsement of the
merger or a determination that the terms of the
merger are fair to Ramapo shareholders. Valley and
Ramapo have applied for OCC approval, and expect
to receive it. However, we can not assure you that
it will be granted, or that it will be granted on
a timely basis without conditions unacceptable to
Valley.
<PAGE>
Terminating the Merger
Agreement................... Ramapo can terminate the merger agreement if the
average closing price of Valley common stock
during a ten trading day period ending five days
before the merger is less than $23.50. Valley can
terminate the merger agreement if Ramapo's net
operating income falls below specified target
levels during any fiscal quarter after September
30, 1998. Either Ramapo or Valley can terminate
the merger agreement if the merger has not been
completed by September 30, 1999. For a more
complete description of these and other
termination rights available to Ramapo and Valley,
see pages 27-28.
Amending the Merger
Agreement................... Valley and Ramapo may amend the merger agreement
any time before the merger is completed. However,
an amendment to decrease the exchange ratio and
certain other types of amendments cannot be made
following adoption of the merger agreement by
Ramapo shareholders without obtaining their
approval.
Pooling Accounting
Treatment of the Merger..... Valley expects to account for the merger as a
pooling-of-interests for financial reporting
purposes. One of the conditions to Valley's and
Ramapo's obligations to close the merger is that
Valley receives a letter from its independent
public accountants regarding qualification of the
merger for pooling accounting treatment.
Ramapo has Agreed Not to
Solicit Alternative
Transactions................ In the merger agreement, Ramapo has agreed not to
encourage, negotiate with, or provide any
information to any person other than Valley
concerning an acquisition transaction involving
Ramapo or The Ramapo Bank. However, Ramapo may
take certain of these actions if its Board of
Directors determines that it should do so. This
determination by the Board must be made after the
Board consults with counsel, and must be based on
the Board's fiduciary duties. This restriction,
along with the option described in the following
paragraph, may deter other potential acquirors of
control of Ramapo.
Ramapo has Granted Valley a
Stock Option................ As a condition to Valley entering into the merger
agreement, Valley required that Ramapo grant
Valley a stock option that was designed to deter
other companies from attempting to acquire control
of Ramapo. The option gives Valley the right to
purchase for $7.50 per share up to 1,608,159
shares of Ramapo common stock, representing 19.9%
of the outstanding Ramapo shares when the option
was granted. The option is exercisable only if
certain specific triggering events occur and the
merger does not occur. Valley has no right to vote
the shares covered by the option prior to its
exercise.
Valley could recognize a gain if it exercises the
option and resells the shares it acquires for more
than the exercise price. The option may deter
other potential acquirors of Ramapo, since it
would probably increase the cost of acquiring all
the shares of Ramapo common stock. Valley's
exercise of the option could also make
pooling-of-interests accounting treatment
unavailable to another potential acquiror. The
agreement granting the option is set forth as
Appendix B to this document.
<PAGE>
Financial Interests of
Ramapo's Directors and
Officers in the Merger...... The merger agreement provides that Valley and
Valley National Bank will each appoint Richard S.
Miller to its Board of Directors upon completion
of the merger. Mr. Miller is currently a director
of Ramapo and The Ramapo Bank.
The merger agreement also provides that Valley
will indemnify the directors and officers of
Ramapo against certain liabilities for a six-year
period following completion of the merger.
At the March 15, 1999 record date, directors and
executive officers of Ramapo and their affiliates
of Ramapo owned 374,049 shares or 4.59% of the
Ramapo common stock.
For additional information on the benefits of the
merger to Ramapo management, see pages 19-20.
<PAGE>
SUMMARY FINANCIAL DATA OF VALLEY
We summarize below certain historical consolidated financial data for
Valley. The data presented for the years 1994 through 1998, and as of the end of
those years, comes from Valley's audited consolidated financial statements.
Valley's audited consolidated financial statements as of December 31, 1998 and
1997, and for each of the years in the three-year period ended December 31,
1998, are incorporated by reference in this document. See pages 38-39.
The "per common share data" below has been restated to give retroactive
effect to stock splits and stock dividends.
<TABLE>
<CAPTION>
At or For Years Ended December 31,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ----------- ----------- ---------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Interest income $ 389,656 $ 387,084 $ 368,626 $ 358,484 $ 329,916
Interest expense 160,104 165,885 162,791 160,276 130,002
------------ ------------- ------------- ------------- ------------
Net interest income 229,552 221,199 205,835 198,208 199,914
Provision for possible loan losses 12,370 12,650 3,556 3,321 6,300
------------ ------------- ------------- ------------- ------------
Net interest income after
provision 217,182 208,549 202,279 194,887 193,614
For possible loan losses
Non-interest income 43,073 43,012 30,236 24,721 27,666
Non-interest expense 134,757 129,218 124,532 109,674 109,513
------------ ------------- ------------- ------------- ------------
Income before income taxes 125,498 122,343 107,983 109,934 111,767
Income taxes 28,150 35,397 36,479 42,030 41,804
============ ============= ============= ============= ============
Net income $ 97,348 $ 86,946 $ 71,504 $ 67,904 $ 69,963
============ ============= ============= ============= ============
PER COMMON SHARE DATA:
Earnings per share:
Basic $ 1.77 $ 1.58 $ 1.33 $ 1.24 $ 1.27
Diluted 1.75 1.57 1.33 1.24 1.26
Book value 10.06 9.23 8.16 7.94 7.05
Dividends 0.97 0.85 0.76 0.72 0.69
RATIOS:
Return on average assets 1.82% 1.63% 1.37% 1.34% 1.42%
Return on average equity 18.47 17.93 15.74 15.99 17.96
FINANCIAL CONDITION DATA:
Total assets $ 5,541,207 $ 5,360,698 $ 5,359,628 $ 5,217,900 $4,996,980
Investment securities held to 237,410 166,615 260,074 329,131 968,471
maturity
Investment securities available 927,481 1,090,638 1,070,565 1,243,540 751,036
for sale
Trading account securities 1,592 -- -- -- --
Loans (net of unearned income) 3,977,850 3,803,434 3,618,462 3,165,417 2,949,451
Allowance for possible loan losses 49,868 48,542 47,811 45,580 47,448
Deposits 4,674,689 4,602,321 4,746,012 4,645,955 4,409,250
Shareholders' equity 555,787 509,303 467,295 449,737 395,154
</TABLE>
<PAGE>
SUMMARY FINANCIAL DATA OF RAMAPO
On this page, we summarize certain selected historical consolidated
financial data for Ramapo. The data presented for the years 1994 through 1998,
and as of the end of those years, comes from Ramapo's audited consolidated
financial statements. Ramapo's audited consolidated financial statements as of
December 31, 1998 and 1997, and for each of the years in the three-year period
ended December 31, 1998, are incorporated by reference in this document. See
pages 38-39.
<TABLE>
<CAPTION>
At or For Years Ended December 31,
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ----------- ----------- ---------- -----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Interest income $ 21,637 $ 19,734 $ 18,218 $ 18,343 $ 14,919
Interest expense 7,554 6,297 5,804 6,106 4,958
----------- ------------- ------------- ------------ -------------
Net interest income 14,083 13,437 12,414 12,237 9,961
Provision for possible loan losses 275 480 400 500 1,221
----------- ------------- ------------- ------------ -------------
Net interest income after
provision 13,808 12,957 12,014 11,737 8,740
for possible loan losses
Non-interest income 2,301 2,182 2,374 2,447 3,322
Non-interest expense 9,956 10,028 10,054 12,148 13,324
----------- ------------- ------------- ------------ -------------
Income (loss) before income
taxes (benefit) 6,153 5,111 4,334 2,036 (1,262)
Income taxes (benefit) 2,230 1,906 1,278 (4,212) (285)
=========== ============= ============= ============ =============
Net income (loss) $ 3,923 $ 3,205 $ 3,056 $ 6,248 $ (977)
=========== ============= ============= ============ =============
PER COMMON SHARE DATA:
Earnings (loss) per share:
Basic $ 0.48 $ 0.40 $ 0.38 $ 0.76 $ (0.38)
Diluted 0.46 0.38 0.37 0.75 (0.38)
Book value 4.19 3.86 3.59 3.28 2.47
Dividends 0.15 0.12 0.04 -- --
RATIOS:
Return on average assets 1.25% 1.17% 1.23% 2.56% (0.42)%
Return on average equity 12.06 10.66 11.09 27.85 (9.04)
FINANCIAL CONDITION DATA:
Total assets $ 337,762 $ 285,727 $ 271,524 $ 246,516 $ 238,216
Investment securities held to 49,480 40,438 26,395 20,030 3,485
maturity
Investment securities available 95,707 48,556 41,648 39,328 17,763
for sale
Loans (net of unearned income) 169,799 169,106 165,070 160,580 164,345
Allowance for possible loan losses 4,773 4,628 5,115 4,853 6,501
Deposits 295,460 249,760 239,889 217,062 211,864
Shareholders' equity 34,022 31,297 29,036 27,249 21,755
</TABLE>
<PAGE>
COMPARATIVE PER SHARE DATA
On this page, we set forth the earnings per share, period-end book
value per share and cash dividends per share for the common stock of Valley and
Ramapo for the periods noted. The data is set forth on an historical and pro
forma basis, as well as pro forma equivalent per share data for Ramapo. Ramapo
pro forma equivalent per share data is computed by multiplying the pro forma
combined per share data (giving effect to the merger) by the 0.425 exchange
ratio used in the merger. The historical per share data were derived from the
financial statements of Valley and Ramapo that are incorporated by reference
herein. The pro forma combined share data were derived after giving effect to
the merger as if it occurred at the beginning of the period presented using the
pooling-of-interests method of accounting.
The historical per share data for Valley has been restated to
retroactively reflect the effect of stock dividends and stock splits. See "Pro
Forma Financial Information" on pages 30-34; "Summary Financial Data of Valley"
on page 6; and "Summary Financial Data of Ramapo" on page 7.
<TABLE>
<CAPTION>
Pro Forma
Pro Forma Equivalent
Combined per
Historical Historical Valley Ramapo
Valley Ramapo and Ramapo Share
<S> <C> <C> <C> <C>
Year Ended December 31, 1998
Earnings Per Share
Basic........................ $ 1.77 $ 0.48 $ 1.73 $ 0.74
Diluted...................... 1.75 0.46 1.71 0.73
Book Value Per Share.................. 10.06 4.19 10.05 4.27
Cash Dividends Per Share.............. 0.97 0.15 0.97 0.41
Year Ended December 31, 1997
Earnings Per Share
Basic........................ $ 1.58 $ 0.40 $ 1.55 $ 0.66
Diluted...................... 1.57 0.38 1.53 0.65
Book Value Per Share.................. 9.23 3.86 9.22 3.92
Cash Dividends Per Share ............. 0.85 0.12 0.85 0.36
Year Ended December 31, 1996
Earnings Per Share
Basic........................ $ 1.33 $ 0.38 $ 1.31 $ 0.56
Diluted...................... 1.33 0.37 1.30 0.55
Book Value Per Share.................. 8.16 3.59 8.18 3.48
Cash Dividends Per Share.............. 0.76 0.04 0.76 0.32
</TABLE>
<PAGE>
The first table below presents, for the periods indicated, the high and
low closing prices per share of Valley common stock and Ramapo common stock. The
closing prices of Valley common stock have been restated to give retroactive
effect to stock dividends and stock splits. The second table presents
information concerning the last closing price of Valley common stock and of
Ramapo common stock on December 16, 1998, the last business day before the
merger was announced, and on March 16, 1999, a date shortly before the date of
this proxy statement-prospectus. The second table also presents the equivalent
value of Valley common stock per Ramapo share which is computed by multiplying
the last closing price of Valley common stock on the dates indicated by the
0.425 exchange ratio. Valley common stock is listed on the New York Stock
Exchange and Ramapo common stock is traded on the Nasdaq National Market System.
We urge you to obtain current market quotations for Valley common stock and
Ramapo common stock. Because the exchange ratio is fixed and trading prices
fluctuate, Ramapo shareholders are not assured of receiving any specific market
value of Valley common stock. The price of Valley common stock when the merger
becomes effective may be higher or lower than its price when the merger
agreement was signed, when this proxy statement was mailed or when Ramapo
shareholders meet to vote on the merger.
<TABLE>
<CAPTION>
Closing Sale Closing Sale
Price Per Share Price Per Share
of Valley of Ramapo
Common Stock Common Stock
High Low High Low
<S> <C> <C> <C> <C>
1997:
First Quarter...................... $ 21.14 $ 19.33 $ 6.31 $ 5.00
Second Quarter..................... 22.41 20.38 6.50 5.63
Third Quarter...................... 25.34 21.91 8.06 6.19
Fourth Quarter..................... 32.20 25.05 9.64 7.75
1998:
First Quarter...................... $ 33.70 $ 28.20 $ 8.88 $ 7.63
Second Quarter..................... 34.09 29.00 8.25 7.13
Third Quarter...................... 35.50 26.13 8.38 6.13
Fourth Quarter..................... 29.94 25.13 11.13 4.75
1999:
First Quarter
(through March 16, 1999)........... $ 29.31 $ 25.13 $ 11.69 $ 10.25
<CAPTION>
Equivalent
Closing Sale Closing Sale Value of Valley
Price Per Share Price Per Share Common Stock Per
of Valley of Ramapo Share of Ramapo
Common Stock Common Stock Common Stock
Date
December 16, 1998.................... $28.44 $ 7.75 $12.09
March 16, 1999....................... 25.50 10.56 10.84
</TABLE>
<PAGE>
SUMMARY PRO FORMA FINANCIAL INFORMATION
The following tables present certain unaudited combined condensed
financial information derived from the unaudited pro forma financial information
for the periods and at the dates indicated. The pro forma combined information
gives effect to the proposed merger accounted for as a pooling of interests, as
if the merger had been consummated for statement of income purposes on the first
day of the applicable periods and for balance sheet purposes on December 31,
1998. See "Pro Forma Financial Information" on pages 30-34. The Summary Pro
Forma Financial Information is based on the historical financial statements of
Valley and Ramapo incorporated by reference herein. See pages 38-39. The Summary
Pro Forma Financial Information assumes a 0.425 exchange ratio. Valley's
historical earnings per share have been restated to give retroactive effect to
stock dividends and splits.
The Summary Pro Forma Financial Information should be read in
conjunction with the Pro Forma Financial Information and the related notes
thereto on pages 30-34 and the consolidated financial statements and related
notes incorporated by reference in this document. The Summary Pro Forma
Financial Information does not necessarily indicate the results of operations
which would have been achieved had the merger been consummated as of the
beginning of the periods for which the data are presented and should not be
construed as being representative of future periods.
<TABLE>
<CAPTION>
At or For Years Ended December 31,
----------------------------------------------
1998 1997 1996
----------- ---------- ----------
(Dollars in thousands, except per share data)
<S> <C> <C> <C>
Income Statement Data:
Net interest income........................................... $ 243,635 $ 234,636 $ 218,249
Provision for possible loan losses............................ 12,645 13,130 3,956
Net interest income after provision for possible loan losses.. 230,990 221,506 214,293
Income before income taxes.................................... 131,651 127,454 112,317
Net income.................................................... 101,271 90,151 74,560
Earnings per common share:
Basic................................................ 1.73 1.55 1.31
Diluted.............................................. 1.71 1.53 1.30
Financial Condition Data:
Total assets.................................................. $5,878,969
Total deposits................................................ 4,970,149
Total shareholders' equity.................................... 589,809
Book value per common share................................... 10.05
</TABLE>
<PAGE>
INTRODUCTION
The Board of Directors of Ramapo Financial Corporation and Valley
National Bancorp have approved an Agreement and Plan of Merger, dated as of
December 17, 1998, among Valley, Valley's subsidiary, Valley National Bank,
Ramapo and Ramapo's subsidiary, The Ramapo Bank. The merger agreement provides
for Ramapo to be merged with Valley, with Valley as the surviving corporation.
The merger cannot be completed unless the shareholders of Ramapo approve it.
This document serves two purposes. It is the proxy statement being used
by the Ramapo Board to solicit proxies for use at a special Ramapo shareholders'
meeting called by the Board to seek approval of the merger agreement. It is also
the prospectus of Valley regarding the Valley common stock to be issued if the
merger is completed. Thus, we sometimes refer to this document as the proxy
statement-prospectus.
This document describes the merger agreement in detail. A copy of the
merger agreement is attached as Appendix A to this document and is incorporated
herein by reference. We urge you to read this entire document and the appendixes
carefully.
All information and statements contained or incorporated by reference
in this document about Ramapo were supplied by Ramapo and all information and
statements about Valley were supplied by Valley.
No person has been authorized to give any information or to make any
representation other than what is included in this document. If any information
or representation is given or made, it must not be relied upon as having been
authorized.
FORWARD LOOKING STATEMENTS
This document contains and incorporates by reference certain forward
looking statements regarding the financial condition, results of operations and
business of Valley and Ramapo. These statements are not historical facts and
include expressions about Valley's and/or Ramapo's
* confidence,
* strategies and expressions about earnings,
* new and existing programs and products,
* relationships,
* opportunities,
* technology and
* market conditions.
You may identify these statements by looking for
* forward-looking terminology, like "expect," "believe" or
"anticipate," or
* expressions of confidence like "strong" or "on-going," or
* similar statements or variations of those terms.
These forward-looking statements involve certain risks and
uncertainties. Actual results may differ materially from the results the forward
looking statements contemplate because of, among others, the following
possibilities:
* Valley does not realize expected cost savings or revenue
enhancements from the merger as anticipated;
* deposit attrition, customer loss or revenue loss following the
merger is greater than expected;
* competitive pressure in the banking and financial services
industry increases significantly;
* changes occur in the interest rate environment;
* Valley's or Ramapo's Year 2000 compliance program does not
effectively address Year 2000 computer problems; and
* general economic conditions, either nationally or in the state of
New Jersey, are less favorable than expected.
Neither Valley nor Ramapo assumes any obligation for updating its
forward-looking statements at any time.
CERTAIN INFORMATION ABOUT VALLEY
General
Valley, a New Jersey corporation, was organized in 1983 as a holding
company for Valley National Bank. Valley indirectly owns additional subsidiaries
through Valley National Bank. Valley is registered as a bank holding company
with the Board of Governors of the Federal Reserve System under the Bank Holding
Company Act.
As of December 31, 1998, Valley had:
* consolidated assets $5.5 billion
* deposits $4.7 billion
* shareholders' equity $555.8 million
* loans $4.0 billion
Valley's principal executive offices and telephone number are:
1455 Valley Road
Wayne, New Jersey 07470
(973) 305-8800
Valley National Bank
Valley National Bank, a wholly owned subsidiary of Valley, is a
national banking association chartered in 1927 under the laws of the United
States. Valley National Bank is a member of the Federal Reserve System and the
FDIC insures its deposits. Valley National Bank maintains its principal office
in Wayne, New Jersey and operates over 100 branches in northern New Jersey.
Valley National Bank provides a full range of commercial and retail
bank services, including:
* accepting demand, savings and time deposits
* extension of credit, including
consumer loans
real estate loans
Small Business Administration loans
other commercial credits
* full personal and corporate trust services, including
pension services
fiduciary services
<PAGE>
Valley National Bank has several wholly owned subsidiaries, including:
* a mortgage servicing company which services loans for others as
well as the bank
* an investment company which holds, maintains and manages
investments for the bank
* a subsidiary which owns and services auto loans
* an Edge Act Corporation that owns a finance company located in
Toronto, Canada.
CERTAIN INFORMATION ABOUT RAMAPO
General
Ramapo, a New Jersey corporation, was organized in 1970. Its principal
subsidiary is The Ramapo Bank. Ramapo indirectly owns additional subsidiaries
through The Ramapo Bank. These include an investment company, and several real
estate holding corporations. Ramapo is registered as a bank holding company with
the Board of Governors of the Federal Reserve System under the Bank Holding
Company Act.
At December 31, 1998 Ramapo had:
* consolidated assets $337.8 million
* deposits $295.5 million
* shareholders' equity $ 34.0 million
* loans $170.0 million
Ramapo's principal executive offices and telephone number are:
64 Mountain View Boulevard
Wayne, New Jersey 07470
(973) 696-6100
The Ramapo Bank
The Ramapo Bank, a wholly owned subsidiary of Ramapo, is a commercial
bank chartered under the laws of the State of New Jersey in 1967. The Ramapo
Bank's deposits are insured by the FDIC. Its principal office is in Wayne, New
Jersey, and it operates eight branch offices in Passaic, Essex and Morris
Counties in New Jersey. The Ramapo Bank provides a full range of commercial and
retail banking services.
THE MEETING
Date, Time and Place
This document solicits, on behalf of the Ramapo Board, proxies to be
voted at a special meeting of Ramapo shareholders and at any adjournments or
postponements thereof. The meeting is scheduled for:
Tuesday, April 27, 1999
4:00 P.M.
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
Purpose
At the meeting, Ramapo shareholders will consider and vote on:
* approval and adoption of the merger agreement
* any other matters that may properly be brought before the meeting.
<PAGE>
Board Recommendation
The Ramapo Board of Directors has unanimously approved the merger
agreement and unanimously recommends a vote FOR approval and adoption of the
merger agreement.
Record Date; Required Vote
The Ramapo Board has fixed the close of business on March 15, 1999 as
the record date for the meeting. Only holders of record of Ramapo common stock
at that time are entitled to get notice of the meeting and to vote at the
meeting. On the record date, there were 8,151,449 shares of Ramapo common stock
outstanding. Each of those shares will be entitled to one vote on each matter
properly submitted to the meeting.
The merger cannot be completed without Ramapo shareholder approval. The
affirmative vote of a majority of those shareholders present in person or by
proxy and entitled to vote is required to approve the merger agreement.
On the March 15, 1999 record date, the directors and executive officers
of Ramapo as a group beneficially owned 374,049 shares of Ramapo common stock,
representing 4.59% of the issued and outstanding shares. These figures are
calculated without counting shares that could be acquired by exercising stock
options since the shares underlying those options cannot be voted at the
meeting. In connection with the execution of the merger agreement, the directors
of Ramapo and The Ramapo Bank agreed to vote all the shares they beneficially
own FOR the merger agreement.
The matters to be considered at the meeting are of great importance to
the shareholders of Ramapo. Accordingly, we urge you to read and carefully
consider the information presented in this proxy statement-prospectus, and to
complete, date, sign and promptly return the enclosed proxy in the enclosed
postage paid envelope.
Voting Rights; Proxies
If you properly execute a proxy card and send it to Ramapo in a timely
manner, your proxy will be voted in accordance with the instructions you
indicate on the proxy card, unless you revoke your proxy prior to the vote. If
you send us a proxy card that does not instruct us how to vote, your shares will
be voted FOR approval and adoption of the merger agreement.
The Ramapo Board is not aware of any matters that will come before the
meeting other than the vote on the merger. If any other matters come before the
meeting, the persons named on the enclosed proxy card will have the discretion
to vote on those matters using their best judgment, unless you specifically
withhold that authorization when you complete your proxy card.
You may revoke any proxy that you give at any time before it is used to
cast your vote. Simply showing up at the meeting will not automatically revoke
your proxy. To revoke a proxy, you must either file a written notice of
revocation with the Ramapo Corporate Secretary, or deliver a properly executed
proxy with a later date to the Ramapo Corporate Secretary. The Ramapo Corporate
Secretary will be in attendance at the meeting and, prior thereto, can be
reached at the following address:
Janet M. Maloy
Corporate Secretary
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
The election inspectors appointed for the meeting, who will determine
whether or not a quorum is present, will tabulate votes cast by proxy or in
person at the meeting. Abstentions and "broker non-votes" will be treated as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. Abstentions occur when proxies are marked as abstentions,
or when shareholders appear in person but abstain from voting. "Broker
non-votes" occur when a broker indicates on a proxy that it does not have
discretionary authority regarding certain shares.
Solicitation of Proxies
In addition to using the mails, the directors, officers and employees
of Ramapo may solicit proxies for the meeting from shareholders in person or by
telephone. These directors, officers and employees will not be specifically
compensated for their services. Ramapo expects to retain Corporate Investor
Communications, Inc., a proxy-soliciting firm, to assist it in soliciting
proxies. Ramapo anticipates that it will pay to Corporate Investor
Communications fees and reimburse its out-of-pocket expenses, with the total
amount not exceeding $5,000. Ramapo will also make arrangements with brokerage
firms and other custodians, nominees and fiduciaries to send proxy materials to
their principals and will reimburse those parties for their expenses in doing
so. Ramapo will bear all costs of soliciting proxies for the meeting.
Quorum
The presence, in person or by proxy, of at least a majority of the
Ramapo common stock issued and outstanding and entitled to be voted at the
meeting is necessary to constitute a quorum.
<PAGE>
THE PROPOSED MERGER
A copy of the merger agreement is attached as Appendix A to this proxy
statement-prospectus and is incorporated by reference herein. Descriptions of
the merger and the merger agreement are qualified in their entirety by reference
to the merger agreement.
General Description
The merger agreement provides for the merger of Ramapo with and into
Valley, with Valley as the surviving entity. A closing under the merger
agreement is to occur within ten business days after all material conditions to
closing, including receipt of regulatory approvals and the expiration of
regulatory waiting periods, have been met. The merger agreement provides that
Valley will set the exact closing date in a notice delivered to Ramapo. The
merger agreement also provides that Valley and Ramapo may agree on a different
closing date. The parties have tentatively selected June 11, 1999 as the closing
date, and they currently anticipate closing on or about that date. The merger
will become effective at the time specified in a certificate of merger which
Valley and Ramapo will prepare and which Valley will file with the New Jersey
Secretary of State following the closing. Valley and Ramapo anticipate that the
merger will become effective on the opening of business on the first business
day after the closing date. Immediately after the merger is effective, Valley
will merge The Ramapo Bank with Valley National Bank, with Valley National Bank
as the surviving entity. The exact closing date and effective time are dependent
upon satisfaction of numerous conditions, some of which are not under Valley's
or Ramapo's control.
Consideration; Exchange Ratio; Cash instead of Fractional Shares
When the merger becomes effective, except as noted below, each
outstanding share of Ramapo common stock will be converted into the right to
receive 0.425 shares of Valley common stock. The 0.425 exchange ratio is subject
to adjustment to take into account any stock split, stock dividend or similar
transaction with respect to Valley common stock between the date of the merger
agreement and the effective time of the merger. Certain shares of Ramapo common
stock held by Ramapo or by Valley or its subsidiaries will be cancelled in the
merger and will not be converted into Valley common stock.
Instead of fractional shares of Valley common stock, Ramapo
shareholders will receive, without interest, a cash payment equal to the
fractional share interest to which they would otherwise be entitled multiplied
by the value of Valley common stock. For this purpose, Valley common stock will
be valued at the average of its closing prices for the ten consecutive trading
days ending with and including the fifth day before the merger is completed.
This valuation measure is subject to an anti-dilution adjustment in the event of
stock split, stock dividend or similar transaction with respect to Valley common
stock between the date of the merger agreement and the time the merger becomes
effective. All shares of Valley common stock to be issued to a Ramapo
shareholder will be combined to make as many whole shares as possible before
calculating that shareholder's fractional share interest.
The price of Valley common stock at the time the merger becomes
effective may be higher or lower than the price
* when the merger agreement was signed,
* when this proxy statement was mailed,
* when the Ramapo shareholders meet to vote on the merger or
* when Ramapo shareholders receive Valley stock certificates from
the exchange agent following the merger.
We urge you to obtain current market quotations for the Valley common stock and
the Ramapo common stock.
Conversion of Ramapo Options
Options to acquire Ramapo common stock have been issued pursuant to:
* the Ramapo Financial Corporation 1995 Stock Option Plan for
Non-Employee Directors,
* the Ramapo Financial Corporation 1995 Employee Stock Option Plan,
and
* the Ramapo Financial Corporation Non-Statutory Stock Option
Agreement of Mortimer J. O'Shea dated March 17, 1994.
The merger agreement provides that each of these options which is
outstanding when the merger becomes effective will be converted into an option
to purchase Valley common stock. The terms of the new option will be determined
as follows:
* the right to purchase shares of Ramapo common stock pursuant to
the old option will be converted in the new option into the right
to purchase that same number of shares of Valley common stock
multiplied by the exchange ratio,
* the option exercise price per share of Valley common stock will
be the previous option exercise price per share of Ramapo common
stock divided by the exchange ratio, and
* in all other material respects the new option will be subject to
the same terms and conditions as governed the old option on which
it was based, including the length of time within which the
option may be exercised.
Valley has reserved for issuance the number of shares of Valley common
stock necessary to satisfy Valley's obligations under the converted options.
Valley has agreed to register those shares pursuant to the Securities Act as
soon as practicable after the merger becomes effective. As of March 10, 1999,
there were options outstanding for 921,334 shares of Ramapo common stock which
would be converted in the merger as described above.
Background of and Reasons for the Merger
Background of the Merger
In early summer 1998 the Ramapo Board was conducting ongoing strategic
planning activities. At that time, the Board retained the services of Danielson
Associates, a financial advisory and bank consulting firm. Danielson Associates
and its principal, Arnold Danielson, had previously consulted with The Ramapo
Bank during the capital stress period in the early 1990s and had been
instrumental in the bank's raising additional capital at that time, and its
recovery thereafter. With Danielson, the Board explored Ramapo's various
strategic alternatives. These included:
* internal growth through branching and the possible chartering of
new affiliated banks;
* external growth through the exploration of acquisition
opportunities;
* exploring the possibility of a so called "merger of equals"; and
* considering a sale to, or merger with, a larger financial
institution.
Danielson recommended, and the Board concurred, that the Ramapo
shareholders' long range best interest would be served by selecting and pursuing
one or more of the affirmative alternatives presented. This recommendation was
based, in part, on:
* the current competitive structure of the financial services
industry,
* Ramapo's size, and
* Ramapo's future growth and earnings prospects.
The Board continued studying Ramapo's strategic alternatives into the
fall of 1998, although the Board did not actively pursue any single strategy.
The Board's consideration of the Danielson recommendations was limited to a
great extent due to the stock market retreat and the general decline of bank
acquisition activity in the late summer of 1998.
With the recovery of the stock market and merger activity in the late
fall of 1998, the Ramapo Board redirected its interest to selecting and actively
pursuing a positive strategy.
The Board asked Danielson Associates to update its analysis of Ramapo.
Danielson Associates concluded that, of the alternatives discussed earlier, the
sale or merger of Ramapo was the most preferred alternative, and was in the best
interest of Ramapo's shareholders. The Board concurred with this recommendation.
The Board authorized Danielson to contact the potential merger partners
identified by the Board, provide them with relevant financial data on a
confidential basis, and invite them to submit a written proposal to merge with
or acquire Ramapo. Of the six potential merger partners identified, three chose
to submit written proposals. It was the Board's best business judgment that the
Valley proposal was the most favorable to Ramapo's shareholders. The Board
reached this determination after considering the proposed exchange ratio and
other factors, including:
* Valley's geographic location,
* Valley's operating record, including its many years of profitable
operation,
* Valley's banking philosophy and customer relationships,
* Valley's dividend payment record and
* the fact that Valley's stock was traded on the New York Stock
Exchange.
In addition, the Board considered Danielson's opinion that Valley's
stock was positive in terms of future value appreciation. After negotiations of
the details, a definitive agreement was entered into on December 17, 1998,
subject to shareholder approval.
Ramapo's Reasons for the Merger
It is the Ramapo Board's opinion that the interests of Ramapo's
shareholders, and specifically the return on their investment, will best be
served by a merger with a larger institution at this time. The Board has
consulted with Ramapo's independent financial consultant, Danielson Associates,
which concurs with this view. The Valley proposal was the most attractive merger
proposal that the Ramapo Board received. The Board believes that delay in
pursuing the merger strategy could jeopardize the potential sales price which
Ramapo could receive in any transaction.
Recommendations of the Ramapo Board of Directors
The Ramapo Board believes that the merger is fair to, and in the best
interests of, Ramapo and its shareholders. Accordingly, the Board unanimously
approved the merger agreement and merger and recommends that Ramapo shareholders
vote FOR the approval and adoption of the merger agreement and merger.
Valley's Reasons for the Merger
Valley has an ongoing strategy of growth through acquisitions. When
Valley was invited to make an offer to acquire Ramapo, Valley made its offer
consistent with this strategy. Valley believes that the merger with Ramapo will
strengthen Valley's franchise in northern New Jersey.
Interests of Certain Persons in the Merger
In considering the recommendation of the Ramapo Board regarding the
merger, Ramapo shareholders should know that certain directors and officers of
Ramapo have interests in the merger in addition to their interests as
shareholders of Ramapo. All those additional interests are described below, to
the extent they are material and are known to Ramapo. The Ramapo Board was aware
of these interests and considered them, among other matters, in approving the
merger agreement:
Board Membership. The merger agreement provides that Valley and Valley
National Bank will each appoint Richard S. Miller to its Board of Directors when
the merger becomes effective. Mr. Miller is currently a director of Ramapo and
The Ramapo Bank.
Employment and Change in Control Agreements. Mr. Mortimer J. O'Shea is
currently the President and CEO and Mr. Erwin D. Knauer is currently the Senior
Vice President of Ramapo. Each of Mr. O'Shea and Mr. Knauer has a contract with
Ramapo that provides for him to receive two years base salary as severance pay
upon a change in control where he does not continue in the employ of the
surviving corporation in a comparable position. Valley and Mr. O'Shea have
agreed that in addition to paying the severance payment provided for under his
existing contract, Valley will retain Mr. O'Shea as a full time consultant for
up to 90 days after the merger is completed, and he will agree not to compete
with Valley in an area near Valley's main office for a two-year period following
his consulting term. In return, Valley will pay Mr. O'Shea a weekly retainer
equivalent to his current salary of $4,470 per week during the 90 day period in
which he provides the consulting services. Valley and Mr. Knauer have reached an
agreement that he may either accept employment with Valley or rely upon and be
paid in accordance with the terms of his existing contract with Ramapo should he
not accept employment with Valley. If he does not accept employment with Valley,
Mr. Knauer may additionally agree not to compete with Valley in an area near
Valley's main office for two years after his employment ends. If he so agrees,
he will be paid under his existing change in control contract with Ramapo and
also be paid $163,350 for his covenant not to compete, subject to reduction to
the extent necessary to avoid triggering excise taxes under Section 280G of the
Internal Revenue Code.
Mr. Paul Fitzgerald is currently a senior vice president of Ramapo's
banking subsidiary, The Ramapo Bank. Mr. Fitzgerald currently has a contract
with Ramapo that provides for him to receive one year's base salary as severance
pay upon a change in control where he does not continue in the employ of the
surviving corporation in a comparable position. As an alternative, Valley has
offered Mr. Fitzgerald an employment agreement that would provide for Mr.
Fitzgerald to be employed by Valley for a two-year term at comparable
compensation with an agreement by him not to compete with Valley in an area near
Valley's main office for two years after the termination of his employment.
Mr. Walter Wojcik, Treasurer of Ramapo, does not currently have a
change in control agreement with Ramapo. Valley has offered Mr. Wojcik a
two-year employment agreement at his present compensation on the same basic
terms and conditions as those offered Mr. Fitzgerald and described above.
Valley has also offered employment agreements to certain other officers
of Ramapo's subsidiary, The Ramapo Bank, at their current compensation levels.
Stock Benefits. When the merger becomes effective, each outstanding
Ramapo Option will be converted into an option to purchase Valley common stock.
All outstanding, non-vested options will vest upon the approval of the merger by
Ramapo's shareholders. See "Conversion of Ramapo Options" on page 17.
Indemnification; Directors and Officers. The merger agreement requires
Valley to indemnify each director and officer of Ramapo and The Ramapo Bank to
the fullest extent permitted under applicable law and its Certificate of
Incorporation and By-laws, for a period of six years after the merger is
completed. The merger agreement also requires Valley and Valley National Bank to
advance expenses in connection with the indemnification to the fullest extent
permitted under applicable law and its Certificate of Incorporation and By-laws.
Share Ownership. As of the March 15, 1999 record date for the meeting,
the directors of Ramapo and The Ramapo Bank beneficially owned in the aggregate
approximately 4.55% of the issued and outstanding shares of Ramapo common stock.
In connection with the execution of the merger agreement, the directors of
Ramapo and The Ramapo Bank agreed to vote all the shares they beneficially own
in favor of the merger agreement. As of the record date, executive officers of
Ramapo who are not also directors beneficially owned in the aggregate 0.4% of
the issued and outstanding shares of Ramapo common stock.
Opinion of Ramapo's Financial Advisor
Ramapo retained Danielson Associates, Inc. to advise the Ramapo Board
of Directors on the fairness to its shareholders of the financial terms of the
offer to acquire Ramapo. Danielson Associates is regularly engaged in the
valuation of banks, bank holding companies, and thrifts in the connection with
mergers, acquisitions, and other securities transactions; and has knowledge of,
and experience with, the New Jersey banking markets and banking organizations
operating in those markets. Ramapo selected Danielson Associates because of
Danielson Associate's knowledge of, expertise with, and reputation in the
financial services industry.
In this capacity, Danielson Associates reviewed the merger agreement
with respect to the pricing and other terms and conditions of the Merger, but
the decision to accept the offer was ultimately made by the Board of Directors
of Ramapo. Danielson Associates rendered its oral opinion to the Ramapo Board,
which it subsequently confirmed in writing, that as of the date of the opinion,
the financial terms of Valley's offer were fair to Ramapo and its shareholders.
No limitations were imposed by the Ramapo Board upon Danielson Associates with
respect to the investigation made or procedures followed by it in arriving at
its opinion.
In arriving at its opinion, Danielson Associates:
* Reviewed certain business and financial information relating to
Ramapo and Valley, including annual reports for the fiscal year
ended December 31, 1997 and call report data from 1990 to 1997
and quarterly reports for 1998;
* Discussed the past and current operations, financial condition
and prospects of Ramapo with its senior executives;
* Analyzed the pro forma impact of the merger on Valley's earnings
per share, capitalization, and financial ratios;
* Reviewed the reported prices and trading activity for Valley
common stock and compared it to similar bank holding companies;
* Reviewed and compared the financial terms, to the extent publicly
available, with comparable transactions;
* Reviewed the merger agreement and certain related documents; and
* Considered other factors that it deemed appropriate.
Danielson Associates did not obtain any independent appraisal of assets
or liabilities of Ramapo or Valley or their subsidiaries. Danielson Associates
did not independently verify the information provided by Ramapo or Valley and
assumed the accuracy and completeness of all such information.
In arriving at its opinion, Danielson Associates performed a variety of
financial analyses. Danielson Associates believes that its analyses must be
considered as a whole. Consideration of portions of the analyses and the factors
considered therein, without considering all the factors and analyses, could
create an incomplete view of the analyses and the process underlying Danielson
Associates' opinion. The preparation of a fairness opinion is a complex process
involving subjective judgments and is not necessarily susceptible to partial
analysis and summary description.
In its analyses, Danielson Associates made certain assumptions with
respect to industry performance, business and economic conditions, and other
matters, many of which were beyond Ramapo's or Valley's control. Any estimates
contained in Danielson Associates analyses are not necessarily indicative of the
future results of value, which may be significantly more or less favorable than
such estimates. Estimates of the value of companies do not purport to be
appraisals or necessarily reflect the prices at which companies or their
securities may actually be sold.
The following is a summary of selected analyses considered by Danielson
Associates in connection with its opinion letter.
Pro Forma Merger Analyses
Danielson Associates analyzed the changes in the amount of earnings and
book value represented by the receipt of about $107.5 million for all of the
outstanding shares of Ramapo common stock and Ramapo options and warrants, which
will be paid in Valley common stock. The analysis evaluated, among other things,
possible dilution in earnings and capital per share for Valley common stock.
Comparable Companies
Danielson Associates compared certain financial factors for Valley,
with the medians for selected banks and bank holding companies that Danielson
Associates deemed to be comparable to Valley. The selected institutions
included:
* Mercantile Bankshares Corp.,
* Keystone Financial, Inc.,
* Wilmington Trust,
* Riggs National Corporation,
* UST Corp.,
* Fulton Financial Corporation,
* Commerce Bancorp, Inc.,
* Susquehanna Bancshares, Inc.,
* Trust Company of New Jersey, and
* TrustCo Bank Corp. of New York.
The results were as follows:
<PAGE>
<TABLE>
<CAPTION>
Median of
Factor Considered Valley Comparable Banks
<S> <C> <C>
December 17, 1998 stock price as a multiple of
earnings for the four quarters ended September 30, 1998 16.6x 18.6x
December 17, 1998 stock price as a percentage of book
value at September 30, 1998 304% 261%
Dividend yield, based on dividends paid for the
four quarters ended September 30, 1998 and
stock price as of December 17, 1998 3.31% 2.70%
Capital as a percentage of assets as of September 30,
1998 10.00% 9.01%
Nonperforming assets (including real estate owned,
non-accrual loans, loans 90 days past due and
restructured loans) as a percentage of total assets
as of September 30, 1998 0.48% 0.67%
Return on average assets for the four quarters ended
September 30, 1998 1.85% 1.41%
Return on average equity for the four quarters ended
September 30, 1998 19.45% 14.92%
</TABLE>
Danielson Associates also compared other income, expense, and balance
sheet information of such companies with similar information about Valley.
Comparable Transaction Analysis
Danielson Associates compared the consideration to be paid in the
merger to the latest twelve months earnings and equity capital of Ramapo with
earnings and capital multiples paid in acquisitions of New Jersey banks through
the opinion date. Of these, the most applicable recent transactions included:
* Commerce Bancorp's acquisitions of Prestige Financial Corp. and
Community First Banking Company
* Lakeland Bancorp's acquisition of High Point Financial Corp.
* Richmond County Financial Corp.'s acquisition of Ironbound
Bancorp
* Sovereign Bancorp's acquisition of Carnegie Bancorp.
The comparison yielded the following results:
<TABLE>
<CAPTION>
Median of
Factor Considered Ramapo Comparable Transactions
<S> <C> <C>
Consideration paid in the transactions as a
percentage of latest available reported book value 322% 293%
Consideration paid in the transactions as a
multiple of latest available reported earnings for
trailing four quarters 30.1x 26.7x
</TABLE>
<PAGE>
Other Analysis
In addition to performing the analyses summarized above, Danielson
Associates also considered:
* The general market for bank and thrift mergers,
* The historical financial performance of Ramapo and Valley,
* The deposit market shares of both banks, and
* The general economic conditions and prospects of those banks.
No company or transaction used in this composite analysis is identical
to Ramapo or Valley. Accordingly, an analysis of the results of the foregoing is
not mathematical. Rather, it involves complex consideration and judgments
concerning differences in financial and operating characteristics of the
companies and other factors that could affect the public trading values of the
company or companies to which they are being compared.
The summary set forth above does not purport to be a complete
description of the analyses and procedures performed by Danielson Associates in
the course of arriving at its opinion.
In payment for its services as the financial advisor to Ramapo,
Danielson Associates is to be paid an estimated fee of about $625,000.
The full text of the updated opinion of Danielson Associates dated the
date of this proxy statement-prospectus, which sets forth assumptions made and
matters considered, is attached hereto as Appendix C to this proxy
statement-prospectus. Ramapo shareholders are urged to read this opinion in its
entirety. Danielson Associates' opinion is directed only to the consideration to
be received by Ramapo shareholders in the Merger and does not constitute a
recommendation to any Ramapo shareholder as to how such shareholder should vote
at the Shareholders Meeting.
Resale Considerations Regarding Valley Common Stock
The shares of Valley common stock that will be issued if the merger is
consummated have been registered under the Securities Act of 1933. These
registered shares will be freely transferable, except for shares received by
persons, including directors and executive officers of Ramapo, who may be deemed
to be "affiliates" of Ramapo under Rule 145 promulgated under the Securities
Act. An "affiliate" of an issuer is defined generally as a person who "controls"
the issuer. Directors, executive officers and 10% shareholders may be deemed to
control the issuer. Affiliates may not sell their shares of Valley common stock
acquired pursuant to the merger, except pursuant to an effective registration
statement under the Securities Act covering the Valley common stock or in
compliance with Rule 145 or another applicable exemption from the registration
requirements of the Securities Act.
Persons who may be deemed to be "affiliates" of Ramapo have delivered
letters to Valley in which they have agreed to certain restrictions on their
ability to transfer, whether by sale or otherwise, any Ramapo common stock owned
by them and any Valley common stock they acquire in the merger. Valley required
these restrictions in order to comply with the accounting rules governing a
pooling-of-interests, and to comply with Rule 145 under the Securities Act. The
persons who may be deemed affiliates have agreed not to transfer the shares
during a period which begins 30 days before the merger is completed and ends
when Valley publishes financial results covering at least 30 days of post-merger
combined operations of Valley and Ramapo. Those persons have also agreed not to
transfer their Ramapo common stock prior to that restricted period without
giving Valley advance notice and an opportunity to object if the transfer would
interfere with pooling-of-interests accounting for the merger. Those persons
have also agreed to refrain from transferring Valley common stock acquired by
them in the merger, except in compliance with certain restrictions imposed by
Rule 145. Certificates representing the shares of Valley common stock issued to
those persons pursuant to the merger will bear a legend reflecting that the
shares are restricted in accordance with the letter signed by the person and may
not be transferred except in compliance with those restrictions.
Persons who may be deemed "affiliates" of Valley have also delivered
letters to Valley in which they have agreed not to transfer Valley common stock
beneficially owned by them in violation of the pooling accounting restrictions.
Conditions to the Merger
The obligation of each party to consummate the merger is subject to
satisfaction or waiver of certain conditions, including:
* approval of the merger agreement by the shareholders of Ramapo;
* receipt of all necessary consents, approvals and authorizations
from federal and state government authorities;
* absence of any litigation that would restrain or prohibit the
consummation of the merger, or that has significant potential to
be resolved in a way that would deprive the terminating party of
the material benefits of the merger;
* receipt of a letter from Valley's independent accountants
regarding qualification of the merger for pooling of interests
accounting treatment; and
* receipt of an opinion of Pitney, Hardin, Kipp & Szuch regarding
the tax-free nature of the merger. If this condition is waived,
i.e., if the merger is not necessarily tax-free but Valley and
Ramapo wish to consummate it anyway, Ramapo will resolicit its
shareholders' vote on the merger.
The obligation of Valley to consummate the merger is also conditioned
on, among other things:
* continued accuracy, in all material respects, of the
representations and warranties of Ramapo contained in the merger
agreement; and
* performance by Ramapo, in all material respects, of its
obligations under the merger agreement.
The obligation of Ramapo to consummate the merger is also conditioned
on, among other things:
* continued accuracy, in all material respects, of the
representations and warranties of Valley contained in the merger
agreement;
* performance by Valley, in all material respects, of its
obligations under the merger agreement; and
* receipt by Ramapo of the fairness opinion letter of Danielson
Associates, Inc. which is attached as Appendix C to this proxy
statement prospectus.
Conduct of Business Pending the Merger
The merger agreement requires Ramapo to conduct its business until the
merger takes place only in the ordinary course of business and consistent with
prudent banking practices, except as permitted under the merger agreement or
with the written consent of Valley. Under the merger agreement, Ramapo has
agreed not to take certain actions without the prior written consent of Valley
or unless permitted by the merger agreement, including, among other things, the
following:
* change any provision of its Certificate of Incorporation, By-laws
or similar governing documents;
* issue new stock, grant an option, or declare, set aside or pay
any dividend other than Ramapo's regular quarterly cash dividends
of $0.04 per share; Valley and Ramapo have agreed to pay cash
dividends to Ramapo shareholders for the second quarter of 1999
equivalent to the dividends they would receive as Valley
shareholders after the merger. Thus, if Valley's second quarter
dividend record date falls after the merger is completed, Ramapo
will not pay second quarter cash dividends and Ramapo
shareholders who become Valley shareholders in the merger will
receive second quarter cash dividends from Valley. If Valley's
second quarter dividend record date falls before the merger is
completed, then Ramapo will pay second quarter cash dividends at
a rate which is equivalent to Valley's cash dividends, and Ramapo
shareholders who became Valley shareholders in the merger will
not receive any additional second quarter cash dividends from
Valley.
* grant anyone severance or termination pay, or enter into or amend
any employment agreement;
* adopt any new employee benefit plan, or award any increase in
compensation or benefits;
* file any applications or make any contracts regarding branching
or site location or relocation;
* agree to acquire any business or entity (other than to foreclose
on collateral for a defaulted loan);
* make any material change in its accounting methods or practices
not required by generally accepted accounting principles, also
known as "GAAP"; and
* take any action that would cause any of its representations or
warranties in the merger agreement to be materially untrue or
incorrect when the merger takes effect.
Under the merger agreement, Ramapo cannot encourage or solicit or hold
discussions or negotiations with, or provide any information to, any person,
entity or group, other than Valley, concerning any (1) merger, (2) sale of
stock, (3) sale of substantial assets or liabilities outside the ordinary course
of business or (4) similar transactions. However, Ramapo may enter into
discussions or negotiations or provide any information in connection with an
unsolicited possible transaction of this sort if the Ramapo Board, after
consulting with counsel, determines in the exercise of its fiduciary
responsibilities that it should take those actions. Ramapo has agreed to
promptly communicate to Valley the terms of any proposal it may receive with
respect to any acquisition transaction. This restriction, along with the option
described in the following section, may deter other potential acquirors of
control of Ramapo.
Stock Option to Valley for Ramapo Shares
As a condition to Valley entering into the merger agreement, Valley
required that Ramapo grant Valley an option that was designed to deter other
companies from attempting to acquire control of Ramapo. The option gives Valley
the right to purchase for $7.50 per share up to 1,608,159 shares of Ramapo
common stock, representing 19.9% of the outstanding Ramapo shares when the
option was granted. The option is exercisable only if certain specific
triggering events occur and the merger does not occur. Valley has no right to
vote the shares covered by the option prior to its exercise.
Valley could recognize a gain if it exercises the option and resells
the shares it acquires for more than the exercise price. The existence of the
option may deter other potential acquirors of control of Ramapo, since it would
probably increase the cost of acquiring all the shares of Ramapo common stock.
Valley's exercise of the option could also make pooling-of-interests accounting
treatment unavailable to a subsequent acquiror. The agreement granting the
option is set forth as Appendix B to this document.
Representations, Warranties and Covenants
The merger agreement contains customary mutual representations and
warranties, as well as covenants, relating to, among other things:
* corporate organization and similar corporate matters,
* authorization, execution and enforceability of the merger
agreement,
* the accuracy of information contained in each party's filings
with the SEC,
* the accuracy of information supplied by each party in creating
this document,
* compliance with applicable laws,
* the absence of material litigation,
* certain bank regulatory matters,
* the absence of certain material changes or events since
September 30, 1998,
* the adequacy of loan loss reserves, and
* each party's preparations to have its data processing systems be
Year 2000 compliant.
Regulatory Approvals
Consummation of the Valley-Ramapo merger and the merger of The Ramapo
Bank into Valley National Bank requires the approval of the Office of the
Comptroller of the Currency. OCC approval does not constitute an endorsement of
the merger or a determination by the OCC that the terms of the merger are fair
to the shareholders of Ramapo or Valley. Valley filed an application for OCC
approval on February 12, 1999. Valley also corresponded with the Federal Reserve
Board on February 12, 1999 and received confirmation on March 5, 1999 that the
merger does not require a formal application for approval of the Federal Reserve
Board. While Valley and Ramapo anticipate receiving OCC approval, we can give no
assurance that it will be granted, or that it will be granted on a timely basis
without conditions unacceptable to Valley or Ramapo.
Management and Operations After the Merger
As a result of the merger, Ramapo will be merged with and into Valley,
with Valley as the surviving entity. Immediately following the merger, The
Ramapo Bank will be merged with and into Valley National Bank, with Valley
National Bank as the surviving entity. Valley National Bank will continue to
operate as a wholly-owned subsidiary of Valley.
At the time the merger becomes effective, Richard S. Miller, currently
age 64, will become a director of both Valley and Valley National Bank. Mr.
Miller is currently a director of both Ramapo and The Ramapo Bank. He is the
senior member of the law firm of Williams, Caliri, Miller & Otley located in
Wayne, New Jersey. His legal practice is concentrated in the representation of
financial institutions and business interests.
Exchange of Certificates
When the merger takes effect, no one will any longer have any rights as
a Ramapo shareholder. Certificates that represented shares of Ramapo common
stock automatically will represent the shares of Valley common stock into which
the merger converts those shares of Ramapo common stock.
Promptly after the merger takes effect, Valley will have its exchange
agent send written instructions and a letter of transmittal to each holder of
Ramapo common stock, indicating how to exchange Ramapo stock certificates for
the Valley stock certificates. Ramapo shareholders should not send in their
stock certificates until they receive instructions from the exchange agent.
Each share of Valley common stock issued in exchange for Ramapo common
stock will be deemed to have been issued at the time the merger becomes
effective. Thus, Ramapo shareholders who receive Valley common stock in the
merger will be entitled to receive any dividend or other distribution which may
be payable to holders of record of Valley common stock as of any date on or
after the time the merger becomes effective. However, no dividend or other
distribution will actually be paid with respect to any shares of Valley common
stock until the certificates formerly representing shares of Ramapo common stock
have been surrendered. At that time any accrued dividends and other
distributions on those shares of Valley common stock will be paid without
interest. See "Consideration; Exchange Ratio; Cash instead of Fractional Shares"
on page 16.
Ramapo shareholders, promptly after they surrender their Ramapo stock
certificates to the exchange agent, will receive a certificate representing the
full number of shares of Valley common stock into which their shares of Ramapo
common stock have been converted. At the time the new stock certificate is
issued, a check for the amount of the fractional share interest, if any, will
also be issued to the former Ramapo shareholder.
Amendments
Valley and Ramapo may amend the merger agreement by mutual written
consent at any time before the merger is completed. However, the merger
agreement provides that certain types of amendments, such as an amendment to
decrease the exchange ratio, cannot be made following adoption of the merger
agreement by the Ramapo shareholders without their approval.
Termination
Valley and Ramapo may terminate the merger agreement by mutual written
consent at any time.
Either Valley or Ramapo may terminate the merger agreement for certain
reasons, including the following:
* the merger has not been completed by September 30, 1999,
* the Ramapo shareholders fail to approve the merger agreement at
the meeting, or
* a regulatory approval needed to complete the merger has been
denied or withdrawn.
Valley may terminate the merger agreement if:
* there has been a material adverse change in Ramapo's business,
operations, assets or financial condition,
* Ramapo's net operating income, excluding security gains and
losses (after tax but excluding merger-related expenses), for any
full fiscal quarter after September 30, 1998 is less than
$750,000,
* Ramapo materially breaches the merger agreement, or
* a regulatory approval needed to complete the merger is given with
conditions which materially impair the value of Ramapo to Valley.
Ramapo may terminate the merger agreement if:
* there has been a material adverse change in Valley's business,
operations, assets or financial condition, or
* Valley materially breaches the merger agreement.
Ramapo may also terminate the merger agreement if the average of the
closing prices of Valley common stock for the ten consecutive trading days
ending with and including the fifth day before the merger closes is less than
$23.50. Your vote is being solicited at a time, and the Ramapo shareholder
meeting will probably occur at a time, when it is impossible to determine
whether this termination right will exist.
The Ramapo Board has not made a determination as to whether it would
exercise its right to terminate the merger agreement if the Valley's average
common stock price is below $23.50 during the measurement period. In considering
whether to exercise its termination right in such a situation, the Ramapo Board
would, consistent with its fiduciary duties, take into account all relevant
facts and circumstances that exist at the time and would consult with its
financial advisor and legal counsel. Approval of the merger agreement by the
Ramapo shareholders at the meeting will confer on the Ramapo Board the power,
consistent with its fiduciary duties, to elect to consummate the merger in such
event and without any further action by, or resolicitation of, the shareholders
of Ramapo.
If the merger agreement is terminated, each party will bear its own
expenses and will retain all rights and remedies it may have at law or equity
under the merger agreement.
Accounting Treatment of the Merger
Valley expects to account for the merger under the pooling-of-interests
method of accounting in accordance with generally accepted accounting
principles. Each party's obligation to consummate the merger is conditioned upon
Valley's receiving a letter from its independent public accountants that the
merger qualifies for such accounting treatment. In the merger agreement, Valley
has agreed to take the necessary actions to cure appropriate tainted treasury
shares so that the merger meets the treasury stock condition for
pooling-of-interests accounting.
Under pooling-of-interests accounting principles, as of the time the
merger becomes effective, the assets and liabilities of Ramapo would be added to
those of Valley at their recorded book values and the stockholders' equity
accounts of Valley and Ramapo would be combined on Valley's consolidated balance
sheet. Under the pooling of interests method of accounting, Valley's
consolidated financial statements will be retroactively adjusted after the
merger to combine the statements of condition and results of operations for
periods prior to the consummation of the merger. The pro forma financial
information contained in this proxy statement has been prepared using the
pooling-of-interests accounting basis to account for the merger. See "Pro Forma
Financial Information" beginning on page 30.
Both the pooling-of-interests and purchase methods of accounting are
acceptable methods of recording business combinations. However, they are not
alternative choices in accounting for the same transaction. If all the criteria
for recording a transaction as a pooling are met, the transaction must be so
recorded. The method of accounting for a business combination can have a
significant effect on the reported earnings and financial condition of a
company.
Federal Income Tax Consequences
The following is a discussion of certain federal income tax
consequences of the merger. The discussion may not apply to special situations,
such as those of any Ramapo shareholders
* who received Valley common stock upon the exercise of employee
stock options or otherwise as compensation,
* that hold Ramapo common stock as part of a "straddle" or
"conversion transaction," or
* that are insurance companies, securities dealers, financial
institutions or foreign persons.
This discussion does not address any aspects of state, local or foreign
taxation. It is based upon laws, regulations, rulings and decisions now in
effect and on proposed regulations. All of these are subject to change by
legislation, administrative action or judicial decision, and the changes could
have retroactive effects. No ruling has been or will be requested from the
Internal Revenue Service on any tax matter relating to the tax consequences of
the merger.
As an exhibit to the Registration Statement of which this proxy
statement is a part, Pitney, Hardin, Kipp & Szuch, counsel to Valley, have
advised Valley and Ramapo in an opinion dated the date of this proxy statement
that:
* the merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended.
* Ramapo will not recognize any gain or loss.
* Ramapo shareholders will not recognize any gain or loss for
federal income tax purposes upon the exchange in the merger of
shares of Ramapo common stock solely for Valley common stock,
except with respect to cash received instead of a fractional
share interest in Valley common stock.
* The basis of Valley common stock received in the merger by Ramapo
shareholders, including the basis of any fractional share
interest in Valley common stock, will be the same as the basis of
the shares of Ramapo common stock surrendered in exchange
therefor.
* The holding period of Valley common stock will include the
holding period during which the shares of Ramapo common stock
surrendered in exchange therefor were held by the Ramapo
shareholder, provided those shares of Ramapo common stock were
held as capital assets.
* Cash received by a holder of Ramapo common stock instead of a
fractional share interest in Valley common stock will be treated
as received in exchange for such fractional share interest. If
the fractional share would have constituted a capital asset in
hands of that holder, the holder generally should recognize a
capital gain or loss equal to the amount of cash received, less
the portion of the adjusted tax basis in Ramapo common stock
allocable to the fractional share interest.
Consummation of the merger is conditioned, among other things, on
receipt by each of Valley and Ramapo of an opinion of Pitney, Hardin, Kipp &
Szuch, dated the closing date of the merger, to the same effect. If this
condition is waived, i.e., if the merger is not necessarily tax-free but Valley
and Ramapo wish to consummate it anyway, Ramapo will resolicit its shareholders'
vote on the merger.
The opinions of Pitney, Hardin, Kipp & Szuch summarized above are or
will be based, among other things, on representations contained in certificates
of officers of Ramapo and Valley.
Certain tax consequences of the merger may vary depending upon the
particular circumstances of each holder of Ramapo common stock, and other
factors. Therefore, you are urged to consult your own tax advisor to determine
the particular tax consequences to you of the merger, including the application
and effect of state and local income and other tax laws.
No Dissenters' Rights
Under applicable New Jersey law, Ramapo shareholders do not have
dissenters' rights of appraisal in connection with the merger.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined financial information
presents pro forma combined condensed statement of condition of Valley and
Ramapo at December 31, 1998, giving effect to the merger as if it had been
consummated at such date. Under the pooling of interests method of accounting
Valley's consolidated financial statements will be retroactively adjusted after
the merger to combine the statements of condition and results of operations for
periods prior to the consummation of the merger. Valley's and Ramapo's
historical financial data have been combined to illustrate the pro forma
combined statements of condition and results of operations for the periods
presented. Also presented are the pro forma combined condensed statements of
income for the years ended December 31, 1998, 1997 and 1996 giving effect to the
merger as if it were consummated on January 1 of each year. The unaudited pro
forma financial information is based on the historical financial statements of
Valley and Ramapo after giving effect to the merger under the
pooling-of-interests method of accounting and based upon the assumptions and
adjustments contained in the accompanying notes to pro forma combined condensed
financial information.
The unaudited pro forma financial information has been prepared by
Valley's management based upon the historical financial statements and related
notes thereto of Valley and Ramapo incorporated herein by reference. The
unaudited pro forma financial information should be read in conjunction with
such historical financial statements and notes. The pro forma financial
information does not give effect to any anticipated cost savings or
merger-related expenses and restructuring charges in connection with the merger.
The pro forma combined condensed statements of income are not necessarily
indicative of operating results which would have been achieved had the merger
been consummated as of the beginning of the periods for which such data are
presented and should not be construed as being representative of future periods.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined Condensed Statement of Condition
December 31, 1998
(Unaudited)
Valley and
Valley Ramapo Pro Forma Ramapo
Historical Historical Adjustments(1) Combined
----------- ----------- ---------------- ------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 175,794 $ 10,127 $ -- $ 185,921
Federal funds sold 102,000 6,100 -- 108,100
Investment securities held to maturity 237,410 49,480 -- 286,890
Investment securities available for sale 927,481 95,707 -- 1,023,188
Trading account securities 1,592 -- -- 1,592
Loans 3,977,850 169,799 -- 4,147,649
Allowance for possible loan losses (49,868) (4,773) (54,641)
Other assets 168,948 11,322 -- 180,270
============ ============ ============ ============
Total assets $ 5,541,207 $ 337,762 $ -- $5,878,969
============ ============ ============ ============
LIABILITIES
Deposits $ 4,674,689 $ 295,460 $ -- $4,970,149
Borrowings 266,030 4,536 -- 270,566
Other liabilities 44,701 3,744 -- 48,445
------------ ------------ ------------ ------------
Total liabilities 4,985,420 303,740 -- 5,289,160
------------ ------------ ------------ ------------
SHAREHOLDERS' EQUITY
Common stock 24,424 8,114 (6,459) 26,079
Surplus 311,611 13,267 6,459 331,337
Retained earnings 223,185 12,694 -- 235,879
Accumulated other comprehensive income (loss) 4,084 (53) -- 4,031
Treasury stock (6,186) -- -- (6,186)
Unallocated common stock held by the ESOP (1,331) -- -- (1,331)
------------ ------------ ------------ ------------
Total shareholders' equity 555,787 34,022 -- 589,809
------------ ------------ ------------ ------------
Total liabilities and shareholders' equity $ 5,541,207 $ 337,762 $ -- $5,878,969
============ ============ ============ ============
</TABLE>
(1) Pro forma adjustment to common stock and surplus represents the difference
between the stated value of Valley common stock and the par value of Ramapo
common stock.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined Condensed Statement of Income
For the Year Ended December 31, 1998
(Unaudited)
Valley and
Valley Ramapo Pro Forma Ramapo
Historical Historical Adjustments Combined
------------ ---------- --------------- ------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Interest income $ 389,656 $ 21,637 $ -- $ 411,293
Interest expense 160,104 7,554 -- 167,658
-------------- ------------ ------------ --------------
Net interest income 229,552 14,083 -- 243,635
Provision for possible loan losses 12,370 275 -- 12,645
-------------- ------------ ------------ --------------
Net interest income after provision
for possible loan losses 217,182 13,808 -- 230,990
Non-interest income 43,073 2,301 -- 45,374
Non-interest expense 134,757 9,956 -- 144,713
-------------- ------------ ------------ --------------
Income before income taxes 125,498 6,153 -- 131,651
Income taxes 28,150 2,230 -- 30,380
-------------- ------------ ------------ --------------
Net income $ 97,348 $ 3,923 $ -- $ 101,271
============== ============ ============ ==============
Earnings per share (1):
Basic $ 1.77 $ 0.48 $ -- $ 1.73
Diluted 1.75 0.46 -- 1.71
Weighted average number of shares outstanding:
Basic 54,987,473 8,119,839 -- 58,438,405
Diluted 55,607,255 8,509,765 -- 59,223,905
</TABLE>
(1) The historical earnings per share of Valley have been restated to give
retroactive effect to stock dividends and stock splits.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined Condensed Statement of Income
For the Year Ended December 31, 1997
(Unaudited)
Valley and
Valley Ramapo Pro Forma Ramapo
Historical Historical Adjustments Combined
------------- ---------- ---------------- -------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Interest income $ 387,084 $ 19,734 $ -- $ 406,818
Interest expense 165,885 6,297 -- 172,182
-------------- ------------ ------------ --------------
Net interest income 221,199 13,437 -- 234,636
Provision for possible loan losses 12,650 480 -- 13,130
-------------- ------------ ------------ --------------
Net interest income after provision
for possible loan losses 208,549 12,957 -- 221,506
Non-interest income 43,012 2,182 -- 45,194
Non-interest expense 129,218 10,028 -- 139,246
-------------- ------------ ------------ --------------
Income before income taxes 122,343 5,111 -- 127,454
Income taxes 35,397 1,906 -- 37,303
-------------- ------------ ------------ --------------
Net income $ 86,946 $ 3,205 -- 90,151
============== ============ ============ ==============
Earnings per share (1):
Basic $ 1.58 $ 0.40 $ -- $ 1.55
Diluted 1.57 0.38 -- 1.53
Weighted average number of shares outstanding:
Basic 54,906,154 8,100,055 -- 58,348,677
Diluted 55,294,894 8,409,877 -- 58,869,092
</TABLE>
(1) The historical earnings per share of Valley have been restated to give
retroactive effect to stock dividends and stock splits.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined Condensed Statement of Income
For the Year Ended December 31, 1996
(Unaudited)
Valley and
Valley Ramapo Pro Forma Ramapo
Historical Historical Adjustments Combined
------------- ---------- ---------------- -------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Interest income $ 368,626 $ 18,218 $ -- $ 386,844
Interest expense 162,791 5,804 -- 168,595
-------------- ------------ ------------ --------------
Net interest income 205,835 12,414 -- 218,249
Provision for possible loan losses 3,556 400 -- 3,956
-------------- ------------ ------------ --------------
Net interest income after provision
for possible loan losses 202,279 12,014 -- 214,293
Non-interest income 30,236 2,374 -- 32,610
Non-interest expense 124,532 10,054 -- 134,586
-------------- ------------ ------------ --------------
Income before income taxes 107,983 4,334 -- 112,317
Income taxes 36,479 1,278 -- 37,757
-------------- ------------ ------------ --------------
Net income $ 71,504 $ 3,056 $ -- $ 74,560
============== ============ ============ ==============
Earnings per share (1):
Basic $ 1.33 $ 0.38 $ -- $ 1.31
Diluted 1.33 0.37 -- 1.30
Weighted average number of shares outstanding:
Basic 53,074,424 8,096,961 -- 56,515,632
Diluted 53,459,884 8,198,056 -- 56,944,058
</TABLE>
(1) The historical earnings per share of Valley have been restated to give
retroactive effect to stock dividends and stock splits.
<PAGE>
DESCRIPTION OF VALLEY COMMON STOCK
The authorized capital stock of Valley consists of 98,437,500 shares of
common stock, of which 55,266,325 shares were issued and outstanding as of
December 31, 1998.
General
Valley is a New Jersey general business corporation governed by the New
Jersey Business Corporation Act and a registered bank holding company under the
Bank Holding Company Act. The following description of Valley common stock
describes certain general terms of Valley common stock.
Dividend Rights
Holders of Valley common stock are entitled to dividends when, as and
if declared by the Board of Directors of Valley out of funds legally available
for the payment of dividends. The only statutory limitation is that such
dividends may not be paid when Valley is insolvent. Funds for the payment of
dividends by Valley must come primarily from the earnings of Valley's bank
subsidiary. Thus, as a practical matter, any restrictions on the ability of
Valley National Bank to pay dividends will act as restrictions on the amount of
funds available for payment of dividends by Valley.
As a national banking association, Valley National Bank is subject to
limitations on the amount of dividends it may pay to Valley, Valley National
Bank's only shareholder. Prior OCC approval is required to the extent the total
dividends to be declared by Valley National Bank in any calendar year exceeds
net profits for that year combined with the bank's retained net profits from the
preceding two calendar years, less any transfers to capital surplus. Under this
limitation, Valley National Bank could declare dividends in 1999 without prior
approval of the OCC of up to $46.5 million plus an amount equal to Valley
National Bank's net profits for 1999 to the date of such dividend declaration.
Valley is also subject to the certain Federal Reserve Board policies
that may, in certain circumstances, limit its ability to pay dividends. These
policies require, among other things, that a bank holding company maintain a
minimum capital base. The Federal Reserve Board would most likely seek to
prohibit any dividend payment that would reduce a holding company's capital
below these minimum amounts.
Voting Rights
At meetings of shareholders, holders of Valley common stock are
entitled to one vote per share. The quorum for shareholders' meetings is a
majority of the outstanding shares. Generally, actions and authorizations to be
taken or given by shareholders require the approval of a majority of the votes
cast by holders of Valley common stock at a meeting at which a quorum is
present.
Liquidation Rights
In the event of liquidation, dissolution or winding up of Valley,
holders of Valley common stock are entitled to share equally and ratably in
assets available for distribution after payment of debts and liabilities.
Assessment and Redemption
All outstanding shares of Valley common stock are fully paid and
nonassessable. Valley common stock is not redeemable at the option of the issuer
or the holders thereof.
Other Matters
American Stock Transfer and Trust Company is presently both the
transfer agent and the registrar for Valley common stock. Valley common stock is
traded on the New York Stock Exchange, and is registered with the SEC under
Section 12(b) of the Exchange Act.
COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF VALLEY AND RAMAPO
At the time the merger becomes effective, each Ramapo shareholder will
become a shareholder of Valley. Each of Valley and Ramapo is a business
corporation incorporated in New Jersey under the New Jersey Business Corporation
Act. The following is a comparison of certain provisions of the respective
certificates of incorporation and by-laws of each of Ramapo and Valley, and a
description of certain provisions of the Business Corporation Act applicable to
Valley and Ramapo. This summary does not purport to be complete and is qualified
in its entirety by reference to the Business Corporation Act, which may change
from time to time, and the respective certificates of incorporation and by-laws
of Valley and Ramapo, which also may be changed.
Voting Requirements
Under the Business Corporation Act, unless a greater vote is specified
in the certificate of incorporation, the affirmative vote of a majority of the
votes cast by shareholders entitled to vote on the matter is required to
approve:
* an amendment to the certificate of incorporation,
* the voluntary dissolution of the corporation,
* the sale or other disposition of all or substantially all of the
corporation's assets outside the ordinary course of business, or
* the merger or consolidation of the corporation with another
corporation.
Neither Valley nor Ramapo's Certificate of Incorporation presently
contains provisions specifying a greater vote in those circumstances.
The New Jersey Shareholders Protection Act limits certain transactions
involving an "interested shareholder" and a "resident domestic corporation." An
interested shareholder is one that beneficially owns 10% or more of the voting
power of the resident domestic corporation. The Shareholders Protection Act
prohibits certain business combinations between an interested shareholder and a
resident domestic corporation for five years following the interested
shareholder acquiring its stock, unless the corporation's board of directors
approved the business combination prior to the interested shareholder's stock
acquisition date. After the five-year period expires, the prohibition on certain
business combinations continues unless the combination is approved by the
affirmative vote of two-thirds of the voting stock not beneficially owned by the
interested shareholder, the combination is approved by the board prior to the
interested shareholder's stock acquisition date or certain fair price provisions
are satisfied. The Shareholders Protection Act applies to both Valley and
Ramapo.
Cumulative Voting
Under the Business Corporation Act, shareholders of a New Jersey
corporation do not have cumulative voting rights in the election of directors
unless the certificate of incorporation so provides. Neither Valley's nor
Ramapo's Certificate of Incorporation presently provides for cumulative voting.
Classified Board of Directors
The Business Corporation Act permits a New Jersey corporation to
provide for a classified board in its certificate of incorporation. The
Certificate of Incorporation of Valley does not provide for a classified Board
of Directors. Valley's entire Board of Directors is elected each year.
Ramapo's Certificate of Incorporation provides for three classes of
directors with each class comprising approximately one-third of the members of
the Board. Directors are elected for three year terms, with one class being
elected each year.
Dividends
The Business Corporation Act generally provides that a New Jersey
corporation may declare and pay dividends on its outstanding stock so long as
the corporation is not insolvent and would not become insolvent as a consequence
of the dividend payment. Valley's Certificate of Incorporation does not
presently contain any restriction on Valley's ability to pay dividends. Funds
for the payment of dividends by Valley must come primarily from the earnings of
Valley's bank subsidiary. Thus, as a practical matter, any restrictions on the
ability of Valley National Bank to pay dividends act as restrictions on the
amount of funds available for the payment of dividends by Valley. Similarly,
Ramapo's Certificate of Incorporation does not restrict Ramapo's ability to pay
dividends, but funds for Ramapo's dividends come primarily from the earnings of
The Ramapo Bank. Therefore, any restrictions on the ability of The Ramapo Bank
to pay dividends act as restrictions on the amount of funds available for the
payment of dividends payable by Ramapo.
By-laws
Under the Business Corporation Act, the board of directors of a New
Jersey corporation has the power to adopt, amend, or repeal the corporation's
by-laws, unless such powers are reserved in the certificate of incorporation to
the shareholders. Neither Valley's nor Ramapo's Certificate of Incorporation
presently reserve such powers to shareholders.
Limitations of Liability of Directors and Officers
Under the Business Corporation Act, a New Jersey corporation may
include in its certificate of incorporation a provision that would eliminate or
limit directors' or officers' liability to the corporation or to its
shareholders, for monetary damage for breaches of their fiduciary duty of care.
However, a director or officer cannot be relieved from liability or otherwise
indemnified for any breach of duty based upon an act or omission:
* in breach of the person's duty of loyalty to the corporation or
its shareholders,
* not in good faith or involving a knowing violation of law, or
* resulting in the person's receipt of an improper personal
benefit.
Valley's Certificate of Incorporation contains provisions that limit
its directors' and officers' liability to the full extent permitted by New
Jersey law. Ramapo's Certificate of Incorporation contains no such provisions.
Preferred Stock
Ramapo's Certificate of Incorporation contains so-called "blank check
preferred stock" provisions -- provisions whereby the Ramapo Board of Directors
can issue new shares of authorized but unissued preferred stock without
shareholder approval. Ramapo does not currently have any preferred stock issued
or outstanding. Valley's Certificate of Incorporation does not authorize the
issuance of preferred stock.
SHAREHOLDER PROPOSALS
The New Jersey Business Corporation Act requires that the notice of
shareholders' meeting, for either a regular or special meeting, specify the
purpose or purposes of the meeting. Thus, shareholder proposals must be referred
to in Ramapo's notice of shareholders' meeting for such proposal to be validly
considered at an annual meeting of Ramapo.
Ramapo will hold its 1999 annual meeting only if the merger is not
completed. Any Ramapo shareholder who wishes to have a proposal included in
Ramapo's notice of shareholders' meeting, proxy statement and proxy card for its
1999 annual meeting must submit the proposal to Ramapo by the applicable
deadline. The deadline was November 20, 1998, subject to change as noted below.
If Ramapo changes its 1999 annual meeting date to a date more than 30
days from the date of its 1998 annual meeting, then the deadline referred to in
the preceding paragraph will be changed to a reasonable time before Ramapo
begins to print and mail its proxy materials. If Ramapo changes the date of the
1999 Annual meeting in a manner which alters the deadline, Ramapo will so state
under Item 5 of the first quarterly report on Form 10-Q it files with the SEC
after the date change.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by Valley (Commission File No. 0-11179)
with the SEC are hereby incorporated in this proxy statement-prospectus:
Annual Report on Form 10-K for the year ended December 31, 1998
The description of Valley common stock set forth in Valley's
Registration Statement on Form 8-A filed by Valley pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of updating such
description
The following documents filed by Ramapo (Commission File No. 0-7806)
with the SEC are hereby incorporated in this proxy statement-prospectus:
Annual Report on Form 10-K for the year ended December 31, 1998
The description of Ramapo common stock set forth in Ramapo's
Registration Statement on Form 8-A filed by Ramapo pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of updating such
description
All documents filed by Valley or Ramapo pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this document but
before the earlier of (1) the date of the Ramapo meeting, or (2) the termination
of the merger agreement, are hereby incorporated by reference into this document
and shall be deemed a part of this document from the date they are filed.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this proxy
statement-prospectus to the extent that a statement contained herein or in any
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this proxy statement-prospectus.
The public may read and copy any documents Valley or Ramapo file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, DC 20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an Internet site that contains reports, proxy and information
statements, and other information about Valley and Ramapo at http://www.sec.gov.
OTHER MATTERS
As of the date of this proxy statement, the Ramapo Board of Directors
knows of no other matters to be presented for action by the shareholders at the
meeting. If any other matters are properly presented, however, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment on such matters.
LEGAL OPINION
Pitney, Hardin, Kipp & Szuch, counsel to Valley, will pass upon certain
legal matters relating to the issuance of the shares of Valley common stock
offered hereby and certain tax consequences of the merger.
EXPERTS
The consolidated financial statements of Valley as of December 31, 1998
and 1997 and for each of the years in the three-year period ended December 31,
1998 have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The consolidated financial statements of Ramapo as of December 31, 1998
and 1997 and for each of the years in the three-year period ended December 31,
1998 have been incorporated by reference in this proxy statement-prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
Representatives of Arthur Andersen LLP will be present at the meeting.
They will be given an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from shareholders
present at the meeting.
<PAGE>
Appendix A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 17,
1998 ("Agreement"), is among Valley National Bancorp, a New Jersey corporation
and registered bank holding company ("Valley"), Valley National Bank, a national
banking association ("VNB"), Ramapo Financial Corporation, a New Jersey
corporation and registered bank holding company ("Ramapo") and The Ramapo Bank,
a state-chartered commercial bank (the "Bank").
RECITALS
Valley desires to acquire Ramapo and Ramapo's Board of
Directors has determined, based upon the terms and conditions hereinafter set
forth, that the acquisition is in the best interests of Ramapo and its
stockholders. The acquisition will be accomplished by merging Ramapo 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 Ramapo stockholders receiving the
consideration hereinafter set forth. The Boards of Directors of Ramapo, Valley,
the Bank and VNB have duly adopted and approved this Agreement and the Board of
Directors of Ramapo has directed that it be submitted to its stockholders for
approval.
As a condition precedent to entering into this Agreement,
Valley has required that Ramapo grant it an option to purchase authorized but
unissued shares of Ramapo common stock and, as a consequence, Valley and Ramapo
have entered into a Stock Option Agreement, dated the date hereof (the "Valley
Stock Option").
NOW, THEREFORE, intending to be legally bound, 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), Ramapo shall be merged
with and into Valley (the "Merger") in accordance with the New Jersey Business
Corporation Act ("NJBCA") 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, the
Surviving Corporation shall be considered the same business and corporate entity
as each of Ramapo and Valley and thereafter all the property, rights,
privileges, powers and franchises of each of Ramapo 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 Ramapo 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 addition provided for in Section 5.20
hereof.
1.6 Closing Date, Closing and Effective Time. Unless a
different date, time and/or place are agreed to by the parties hereto, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m., at the
offices of Valley, 1445 Valley Road, Wayne, New Jersey, on a date (the "Closing
Date") which shall be within ten business days following the receipt of all
necessary regulatory and governmental approvals and consents and the expiration
of all statutory waiting periods in respect thereof and the satisfaction or
waiver of all of the conditions to the consummation of the Merger specified in
Article VI hereof (other than the delivery of certificates, opinions and other
instruments and documents to be delivered at the Closing), with the exact date
determined by Valley upon written notice to Ramapo. The Merger shall become
effective (and be consummated) upon the effective time specified by Valley and
Ramapo in the certificate of merger (the "Certificate of Merger"), which shall
be prepared by Valley, shall be in form and substance satisfactory to Valley and
Ramapo, and shall be filed with the Secretary of State of the State of New
Jersey. The parties currently anticipate that the Certificate of Merger shall
specify as the effective time the opening of business on the first business day
following the Closing Date. If no effective time is specified in the Certificate
of Merger, the Merger shall become effective (and be consummated) upon the
filing of the Certificate of Merger.
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, New Jersey Banking Act
of 1948, as amended (the "NJ Banking Act") and/or the regulations of the New
Jersey Department of Banking and Insurance ("Department"), 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, privileges, 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, the officers and employees of VNB and the officers
and employees of the Bank shall be the officers and employees of the Surviving
Bank with such additions as officers as the Board of Directors of VNB shall
determine, and the directors of VNB shall be the directors of the Surviving
Bank. 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
substantially the form of Exhibit A, annexed hereto, for delivery to the Office
of the Comptroller of the Currency ("OCC") and the Department for approval of
the Bank Merger.
ARTICLE II
CONVERSION OF RAMAPO COMMON STOCK AND OPTIONS
Each share of common stock, $1.00 par value, of Ramapo
("Ramapo Common Stock"), issued and outstanding immediately prior to the
Effective Time, and each option to purchase shares of Ramapo Common Stock
validly issued pursuant to any of the Ramapo Financial Corporation 1995
Stock-Option Plan for Non-employee Directors (the "Ramapo Non-Employee Director
Option Plan") or the Ramapo Financial Corporation 1995 Employee Stock Option
Plan (the "Ramapo Employee Option Plan") or the Ramapo Financial Corporation
Non-statutory Stock Option Agreement of Mortimer J. O'Shea, dated March 17, 1994
(the "O'Shea Non-statutory Plan") and outstanding immediately prior to the
Effective Time (each a "Ramapo Option" and collectively, the "Ramapo Options")
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted or cancelled at the Effective Time in accordance with this
Article II.
2.1 Conversion of Ramapo Common Stock; Exchange Ratio; Cash in
Lieu of Fractional Shares. Each share of Ramapo Common Stock issued and
outstanding immediately prior to the Effective Time, other than shares to be
cancelled pursuant to Section 2.4 hereof, shall be converted into the right to
receive 0.425 (the "Exchange Ratio") shares of Common Stock, no par value, of
Valley ("Valley Common Stock"), subject to adjustment as set forth in Section
2.6 below. No fractional shares of Valley Common Stock will be issued, and in
lieu thereof, each holder of Ramapo 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 Pre-Closing Price of Valley
Common Stock. "Average Pre-Closing Price of Valley Common Stock" means the
average of the Closing Prices of Valley Common Stock for the ten consecutive
full trading days in which such shares are quoted on the New York Stock Exchange
(the "NYSE") ending with (and including) the Determination Date. "Closing Price"
of Valley Common Stock means the daily closing sales price of such stock as
reported on the NYSE (as reported in The Wall Street Journal or, if not reported
thereby, another authoritative source as chosen by Valley). "Determination Date"
means the date five days prior to the Closing.
2.2. Exchange of Shares.
(a) Ramapo and Valley hereby appoint Valley National Bank,
Trust Department as the exchange agent (the "Exchange Agent") for purposes of
effecting the conversion of Ramapo Common Stock and Ramapo 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 Ramapo
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 hereof.
(b) Upon surrender of Certificates 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 Certificates the consideration as provided in Section 2.1
hereof and the Certificates so surrendered shall be canceled. 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 Certificates 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 stockholders 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.)
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of Ramapo of the shares of Ramapo 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
canceled and exchanged for the consideration as provided in Section 2.1 hereof.
(d) If payment of the consideration pursuant to Section 2.1
hereof is to be made in a name other than that in which the Certificates
surrendered in exchange therefor is registered, it shall be a condition of such
payment that the Certificates 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 Certificates
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.
(e) With respect to each outstanding Ramapo Option the
Exchange Agent shall, after the Effective Time, distribute to the Optionee an
amendment to the option grant evidencing the conversion of the grant to an
option to purchase Valley Common Stock in accordance with Section 2.7 hereof.
2.3. No Dissenters' Rights. Consistent with the provisions of
the NJBCA, no stockholder of Ramapo shall have appraisal rights with respect to
the Merger.
2.4. Cancelled Shares. Each share of Ramapo Common Stock (i)
which is held by Ramapo as treasury stock or (ii) which is held by the Bank or
any other direct or indirect subsidiary of the Bank (except as trustee or in a
fiduciary capacity) or (iii) which is held by Valley, shall be canceled and
retired at the Effective Time.
2.5. 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.
2.6 Anti-Dilution Adjustments. The Exchange Ratio and the
Average Pre-Closing Price of Valley Common Stock 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 the date hereof and the Effective Time.
2.7. Ramapo Stock Options. At the Effective Time, each
outstanding Ramapo Option granted to an eligible individual (an "Optionee")
under any of the Ramapo Non-Employee Director Option Plan or the Ramapo Employee
Option Plan or the O'Shea Non-statutory Plan shall be converted into an option
to purchase Valley Common Stock (a "Stock Option"), wherein (x) the right to
purchase shares of Ramapo Common Stock pursuant to the Ramapo 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
Ramapo 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 Ramapo 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.
Shares of Valley Common Stock issuable upon exercise of Stock Options shall be
covered by an effective registration statement on Form S-8, and Valley shall
file a registration statement on Form S-8 covering such shares as soon as
practicable after the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RAMAPO
References herein to "Ramapo 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 Ramapo to
Valley or will be delivered within 15 days of the date hereof pursuant to
Section 5.11(a) by Ramapo to Valley. Ramapo hereby represents and warrants to
Valley as follows:
3.1. Corporate Organization.
(a) Ramapo is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey. Ramapo 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 Ramapo on a consolidated basis. Ramapo is registered as a bank
holding company under the BHCA.
(b) All of the Subsidiaries of Ramapo are listed in the Ramapo
Disclosure Schedule. The term "Subsidiary", when used in this Agreement with
respect to Ramapo, means any corporation, joint venture, association,
partnership, trust or other entity in which Ramapo has, directly or indirectly
at least a 50% interest or acts as a general partner. Each Subsidiary of Ramapo
is duly organized, validly existing and in good standing under the laws of its
state of incorporation. The Bank is a state-chartered commercial bank whose
deposits are insured by Bank Insurance Fund ("BIF") of the Federal Deposit
Insurance Corporation ("FDIC") to the fullest extent permitted by law. Each
Subsidiary of Ramapo 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 Ramapo and its Subsidiaries on a consolidated basis. The
Ramapo Disclosure Schedule sets forth true and complete copies of the
Certificates of Incorporation or Charter, as the case may be, and Bylaws of
Ramapo and each Ramapo Subsidiary as in effect on the date hereof. Except as set
forth in the Ramapo Disclosure Schedule, Ramapo 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 Ramapo consists of 15,000,000
shares of Ramapo Common Stock and 1,000,000 shares of stock, no par value per
share ("Ramapo No Par Stock") which may be divided into classes and into series
within any class or classes as determined by the Board of Directors. As of the
date hereof, there were 8,081,199 shares of Ramapo Common Stock issued and
outstanding, and no shares issued and held in the treasury, and no shares of
Ramapo No Par Stock outstanding. As of the date hereof, there were 966,884
shares of Ramapo Common Stock issuable upon exercise of outstanding Ramapo
Options (the "Option Shares") granted to, directors and officers of Ramapo or
the Bank pursuant to the Ramapo Non-Employee Director Option Plan or the Ramapo
Employee Option Plan or the O'Shea Non-statutory Plan. The Ramapo Disclosure
Schedule sets forth (i) all options which may be exercised for issuance of
Ramapo Common Stock and the terms upon which the options may be exercised, and
(ii) true and complete copies of each of the Ramapo Non-Employee Director Option
Plan and the Ramapo Employee Option Plan and the O'Shea Non-statutory Plan and a
specimen of each form of agreement pursuant to which any outstanding stock
option was granted, including a list of each outstanding stock option issued
pursuant thereto. All issued and outstanding shares of Ramapo Common Stock, and
all issued and outstanding shares of capital stock of each Ramapo Subsidiary,
have been duly authorized and validly issued, are fully paid, and nonassessable.
The authorized capital stock of the Bank consists of 2,000,000 shares of common
stock, $2.00 par value. All of the outstanding shares of capital stock of each
Ramapo Subsidiary are owned by Ramapo and are free and clear of any liens,
encumbrances, charges, restrictions or rights of third parties. Except for the
Ramapo Options and the Valley Stock Option, neither Ramapo nor any Ramapo
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 Ramapo or any Ramapo
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 stockholders of Ramapo, and subject to
the parties obtaining all necessary regulatory approvals, Ramapo 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 Ramapo 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 Ramapo or the Bank are
necessary to consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Ramapo and the Bank, and
constitutes valid and binding obligations of Ramapo and the Bank, enforceable
against Ramapo and the Bank in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by
Ramapo and the Bank, nor the consummation by Ramapo and the Bank of the
transactions contemplated hereby in accordance with the terms hereof, or
compliance by Ramapo and the Bank with any of the terms or provisions hereof,
will (i) violate any provision of Ramapo's or the Bank's Certificates of
Incorporation 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 Ramapo or the Bank or
any of their respective properties or assets, or (iii) except as set forth in
the Ramapo 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 Ramapo 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 Ramapo 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
Ramapo 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
OCC, the Department, the Board of Governors of the Federal Reserve System
("FRB"), the Securities and Exchange Commission ("SEC"), applicable state
securities bureaus or commissions, the New Jersey Secretary of State and the
stockholders of Ramapo, 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 Ramapo or the Bank in connection with (x) the execution and
delivery by Ramapo and the Bank of this Agreement and (y) the consummation by
Ramapo and the Bank of the 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 Ramapo Disclosure Schedule sets forth copies of the
consolidated statements of condition of Ramapo as of December 31, 1995, 1996 and
1997, and the related consolidated statements of income, stockholders' equity
and cash flows for the periods ended December 31 in each of the three years 1995
through 1997, in each case accompanied by the audit report of Arthur Andersen
LLP, independent public accountants with respect to Ramapo, and the unaudited
consolidated statements of condition of Ramapo as of September 30, 1998 and
related unaudited consolidated statements of income, changes in stockholders'
equity and cash flows for the nine months then ended as reported in Ramapo's
Quarterly Report on Form 10-Q, filed with the SEC under the Securities and
Exchange Act of 1934, as amended (the "1934 Act") (collectively, the "Ramapo
Financial Statements"). The Ramapo 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 Ramapo 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 Ramapo for the
respective periods set forth therein.
(b) The books and records of Ramapo 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 Ramapo Financial Statements (including the notes
thereto), as of September 30, 1998 neither Ramapo 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 Ramapo or
any of its Subsidiaries. Since September 30, 1998 and to the date hereof,
neither Ramapo 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; Financial Advisor. Other than Danielson
Associates, Inc. ("Danielson"), neither Ramapo 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. Copies
of Ramapo's agreements with Danielson are set forth in the Ramapo Disclosure
Schedule. Danielson has delivered to Ramapo its written opinion with respect to
the fairness, from a financial point of view, of the Exchange Ratio to the
shareholders of Ramapo in the Merger. There are no fees (other than time charges
billed at usual and customary rates) payable to any consultants, including
lawyers and accountants, in connection with this transaction or which would be
triggered by consummation of this transaction or the termination of the services
of such consultants by Ramapo or any of its Subsidiaries other than fees which
will be payable by Ramapo to Danielson.
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 Ramapo and its
Subsidiaries on a consolidated basis since September 30, 1998 and, except for
the direct or indirect costs of the Merger, to Ramapo's knowledge, no facts or
conditions exist which Ramapo believes will cause or is likely to cause such a
material adverse change in the future.
(b) Except as set forth in the Ramapo Disclosure Schedule,
neither Ramapo nor any of its Subsidiaries has taken or permitted any of the
actions set forth in Section 5.2 hereof between September 30, 1998 and the date
hereof and Ramapo and the Ramapo Subsidiaries have conducted their business only
in the ordinary course, consistent with past practice.
3.7. Legal Proceedings. Except as disclosed in the Ramapo
Disclosure Schedule, neither Ramapo nor any of its Subsidiaries is a party to
any, and there are no pending or, to Ramapo's knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
investigations of any nature against Ramapo or any of its Subsidiaries. Except
as disclosed in the Ramapo Disclosure Schedule, neither Ramapo nor any of its
Subsidiaries is a party to any order, judgment or decree entered against Ramapo
or any Ramapo Subsidiary in any lawsuit or proceeding.
3.8. Taxes and Tax Returns.
(a) To the knowledge of Ramapo, Ramapo and each Ramapo
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). Ramapo and each Ramapo 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 Ramapo or any Ramapo Subsidiary
through such date, which reserves are, to the knowledge of Ramapo, adequate for
such purposes. Except as set forth in the Ramapo Disclosure Schedule, the
federal income tax returns of Ramapo 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 Ramapo Disclosure Schedule, the
applicable state income tax returns of Ramapo 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 Ramapo, 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 Ramapo or any of its Subsidiaries, nor has Ramapo
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 Returns.
(b) Except as set forth in the Ramapo Disclosure Schedule,
neither Ramapo 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 Ramapo or any Ramapo Subsidiary (nor does Ramapo 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.
(a) Except as disclosed in the Ramapo Disclosure Schedule,
neither Ramapo 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
"Ramapo Pension Plans"), "employee welfare benefit plan", within the meaning of
Section 3(1) of ERISA (the "Ramapo 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
Ramapo 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) Ramapo has delivered to Valley in the Ramapo Disclosure
Schedule a complete and accurate copy of each of the following with respect to
each of the Ramapo Pension Plans and Ramapo 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 both vested and
non-vested under each of the Ramapo 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 Ramapo Pension Plan's actuary, did not
exceed the then current value of the assets of such plans allocable to such
accrued benefits. To the best of Ramapo's knowledge, the actuarial assumptions
then utilized for such plans were reasonable and appropriate as of the last
valuation date and reflect then current market conditions.
(d) During the last six years, the Pension Benefit Guaranty
Corporation (the "PBGC") has not asserted any claim for liability against Ramapo
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 Ramapo Pension Plan
have been paid. All contributions required to be made to each Ramapo 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 Ramapo and its
Subsidiaries which have not been paid have been properly recorded on the books
of Ramapo and its Subsidiaries.
(f) Except as disclosed on the Ramapo Disclosure Schedule,
each of the Ramapo Pension Plans, the Ramapo Welfare Plans and each other plan
and arrangement identified on the Ramapo 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, which takes into account the Tax Reform
Act of 1986 and subsequent legislation, with respect to each of the Ramapo
Pension Plans and Ramapo is not aware of any fact or circumstance which would
disqualify any such plan, that could not be retroactively corrected (in
accordance with the procedures of the IRS).
(g) To the knowledge of Ramapo, 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 Ramapo
Welfare Plans or Ramapo Pension Plans.
(h) No Ramapo 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 Ramapo Pension Plans.
(i) To the knowledge of Ramapo, no "accumulated funding
deficiency", within the meaning of Section 412 of the Code, has been incurred
with respect to any of the Ramapo Pension Plans.
(j) There are no pending, or, to the knowledge of Ramapo,
threatened or anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the Ramapo Pension Plans or the Ramapo Welfare
Plans, any trusts related thereto or any other plan or arrangement identified in
the Ramapo Disclosure Schedule.
(k) No Ramapo 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 Ramapo Pension Plan.
(l) Except with respect to customary health, life and
disability benefits or as disclosed in the Ramapo Disclosure Schedule, there are
no unfunded benefits obligations which are not accounted for by reserves shown
on the Ramapo Financial Statements and established under GAAP, or otherwise
noted on such financial statements.
(m) With respect to each Ramapo Pension and Welfare Plan that
is funded wholly or partially through an insurance policy, there will be no
liability of Ramapo or any Ramapo 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 or as
disclosed on the Ramapo Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee of Ramapo or any Ramapo Subsidiary to severance pay,
unemployment compensation or any similar payment, or (ii) accelerate the time of
payment, accelerate the vesting, or increase the amount, of any compensation or
benefits due to any current employee or former employee under any Ramapo Pension
Plan or Ramapo Welfare Plan.
3.10. Reports.
(a) The Ramapo Disclosure Schedule lists, and as to item (i)
below Ramapo has previously delivered or made available to Valley a complete
copy of, each (i) final registration statement, prospectus, annual, quarterly or
special report and definitive proxy statement filed by Ramapo since January 1,
1995 pursuant to the Securities Act of 1933, as amended ("1933 Act"), or the
1934 Act and (ii) communication (other than general advertising materials, press
releases and dividend checks) mailed by Ramapo to its shareholders as a class
since January 1, 1995.
(b) Since June 1, 1996, (i) Ramapo has filed all reports that
it was required to file with the SEC under the 1934 Act, and (ii) Ramapo and the
Bank each has duly filed all material forms, reports and documents which they
were required to file with each agency charged with regulating any aspect of
their business, in each case in form which was correct in all material respects,
and, subject to permission from such regulatory authorities, Ramapo promptly
will deliver or make available to Valley accurate and complete copies of such
reports. As of their respective dates, each such form, report, or document
referred to in either of clauses (i) or (ii) above, and each final registration
statement, prospectus, annual, quarterly or special report, definitive proxy
statement or communication referred to in either of clauses (i) or (ii) of
paragraph (a) above, complied in all material respects with all applicable
statutes, rules and regulations and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information contained in any such document as of a later date shall be deemed to
modify information as of an earlier date. The Ramapo Disclosure Schedule lists
the dates of all examinations of Ramapo or the Bank conducted by either the
Department or the FDIC since January 1, 1996 and the dates of any responses
thereto submitted by Ramapo or the Bank.
3.11. Ramapo and Bank Information. The information relating to
Ramapo 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 Ramapo 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 Ramapo, 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 Ramapo Disclosure
Schedule, each of Ramapo and the Ramapo Subsidiaries holds all 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 Ramapo or any of its Subsidiaries (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
Ramapo and its Subsidiaries on a consolidated basis) and Ramapo 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 Ramapo 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 Ramapo Disclosure Schedule to the
knowledge of the Bank, no person or group has adversely commented upon the
Bank's CRA performance.
3.13. Certain Contracts.
(a) Except as disclosed in the Ramapo Disclosure Schedule
under this Section or Section 3.5, (i) neither Ramapo nor any Ramapo 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 and (ii) the consummation of the
transactions contemplated by this Agreement will not (either alone or upon the
occurrence of any additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from Ramapo or any Ramapo Subsidiary to
any officer, employee, director or consultant thereof. The Ramapo Disclosure
Schedule sets forth true and correct copies of all employment agreements or
termination agreements with officers, employees, directors, or consultants to
which Ramapo or any Ramapo Subsidiary is a party.
(b) Except as disclosed in the Ramapo Disclosure Schedule, (i)
as of the date of this Agreement, neither Ramapo nor any Ramapo Subsidiary is a
party to or bound by any commitment, agreement or other instrument which
contemplates the payment by Ramapo or any Ramapo Subsidiary of amounts in excess
of $100,000, or which has a term extending beyond June 1, 1999 and cannot be
terminated by Ramapo or its subsidiary without consent of the other party
thereto, (ii) no commitment, agreement or other instrument to which Ramapo or
any Ramapo Subsidiary is a party or by which any of them is bound limits the
freedom of Ramapo or any Ramapo Subsidiary to compete in any line of business or
with any person, and (iii) neither Ramapo nor any Ramapo Subsidiary is a party
to any collective bargaining agreement.
(c) Except as disclosed in the Ramapo Disclosure Schedule,
neither Ramapo nor any Ramapo Subsidiary nor, to the knowledge of Ramapo, 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) Ramapo 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 Ramapo's consolidated
balance sheet as of September 30, 1998, 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 September 30, 1998), 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 Ramapo 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. Ramapo 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 Ramapo Disclosure Schedule lists all policies of
insurance covering business operations and all insurable properties and assets
of Ramapo 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 Ramapo 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 Ramapo 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 set forth in the Ramapo
Disclosure Schedule:
(a) Neither Ramapo nor any Ramapo Subsidiary has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that Ramapo or such Ramapo Subsidiary (either directly or as
a trustee or fiduciary, or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for outstanding loans) is responsible for the correction or cleanup of any
condition resulting from the violation of any law, ordinance or other
governmental regulation regarding environmental matters, which correction or
cleanup would be material to the business, operations, assets or financial
condition of Ramapo and the Ramapo Subsidiaries taken as a whole. Ramapo has no
knowledge that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any real property owned or leased by Ramapo
or any Ramapo Subsidiary, as OREO or otherwise, or owned or controlled by Ramapo
or any Ramapo Subsidiary as a trustee or fiduciary (collectively, "Properties"),
in any manner that violates or, after the lapse of time will violate, any
presently existing federal, state or local law or regulation governing or
pertaining to such substances and materials.
(b) Ramapo has no knowledge that any of the Properties has
been operated in any manner in the three years prior to the date of this
Agreement that violated any applicable federal, state or local law or regulation
governing or pertaining to toxic or hazardous substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of Ramapo and the Ramapo Subsidiaries
taken as a whole.
(c) To the knowledge of Ramapo, except as set forth in the
Ramapo Disclosure Schedule, there are no underground storage tanks on, in or
under any of the Properties and no underground storage tanks have been closed or
removed from any of the Properties while the property was owned, operated or
controlled by Ramapo or any Ramapo Subsidiary.
3.17. Reserves. As of the date hereof, the reserve for loan
and lease losses in the Ramapo Financial Statements is 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 Excess Parachute Payments. No officer, director,
employee or agent (or former officer, director, employee or agent) of Ramapo or
any Ramapo Subsidiary is entitled now, or will or may be entitled to as a
consequence of this Agreement, the Merger or the Bank Merger, to any payment or
benefit from Ramapo, a Ramapo 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. Year 2000 Compliance. Ramapo and the Ramapo Subsidiaries
have taken all reasonable steps necessary to address the software, accounting
and record keeping issues raised in order for the data processing systems used
in the business conducted by Ramapo and the Ramapo Subsidiaries to be
substantially Year 2000 compliant on or before the end of 1999 and, except as
set forth in the Ramapo Disclosure Schedule, Ramapo does not expect the future
cost of addressing such issues to be material. Neither Ramapo nor any Ramapo
Subsidiary has received a rating of less than satisfactory from any bank
regulatory agency with respect to Year 2000 compliance.
3.20. Agreements with Bank Regulators. Neither Ramapo nor any
Ramapo Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any court, governmental authority or other regulatory or administrative agency
or commission, domestic or foreign ("Governmental Entity") which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies or its management, except for those the
existence of which has been disclosed in writing to Valley by Ramapo prior to
the date of this Agreement, nor has Ramapo been advised by any Governmental
Entity that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission, except as disclosed in writing to Valley by Ramapo prior
to the date of this Agreement. Neither Ramapo nor any Ramapo Subsidiary is
required by Section 32 of the Federal Deposit Insurance Act to give prior notice
to a Federal banking agency of the proposed addition of an individual to its
board of directors or the employment of an individual as a senior executive
officer, except as disclosed in writing to Valley by Ramapo prior to the date of
this Agreement.
3.21. Disclosure. No representation or warranty contained in
Article III of this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF 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 Ramapo. Valley hereby represents and warrants to Ramapo 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) All 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 BIF 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 98,437,500 shares of Valley Common Stock. As of November 30,
1998, there were 55,201,357 shares of Valley Common Stock issued and outstanding
net of treasury stock, and 303,545 treasury shares. Since November 30, 1998, 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 under the Valley Option Plan or grants or options under any option or
stock plan assumed by Valley in connection with any other acquisition (the
"Acquired Stock Plans"). As of November 30, 1998, except for: (a) 2,352,250
shares of Valley Common Stock issuable upon exercise of outstanding stock
options and stock appreciation rights granted pursuant to the Valley Option Plan
or the Acquired Stock Plans, and (b) 14,924 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, 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 Article II 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. The execution and delivery of the
Bank Merger Agreement has been duly and validly approved by the Board of
Directors of 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 Department, 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 Ramapo copies of the
consolidated statements of financial condition of Valley as of December 31,
1995, 1996 and 1997, 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 1995 through 1997, 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 September 30, 1998 and the related unaudited consolidated
statements of income, changes in stockholders' equity and cash flows for the
nine months then ended as reported in Valley's Quarterly Report 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 GAAP 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, 1998 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, 1998, 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, 1998 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 Ramapo 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. As of the date of this Agreement Valley
has, and 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) Except as set forth in Valley Disclosure Schedule, 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, 1996, 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, 1996, duly filed
with the OCC and, where applicable, 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 Valley, upon written request from
Ramapo, promptly will deliver or make available to Ramapo 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, 1996.
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 September 30, 1998, 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 September 30, 1998), 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
Ramapo 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. Year 2000 Compliance. Valley and the Valley Subsidiaries
have taken all reasonable steps necessary to address the software, accounting
and record keeping issues raised in order for the data processing systems used
in the business conducted by Valley and the Valley Subsidiaries to be
substantially Year 2000 compliant on or before the end of 1999 and Valley does
not expect the future cost of addressing such issues to be material. Neither
Valley nor any Valley Subsidiary has received a rating of less than satisfactory
from any bank regulatory agency with respect to Year 2000 compliance.
4.20. Agreements with Bank Regulators. Neither VNB nor any
Valley Subsidiary is a party to any agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution submitted to a
regulatory authority or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
any Governmental Entity which restricts materially the conduct of its business,
or in any manner relates to its capital adequacy, its credit or reserve policies
or its management, nor has Valley been advised by any Governmental Entity that
it is contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, except as disclosed in writing to Ramapo by Valley prior to the date
of this Agreement. Neither VNB nor any Valley Subsidiary is required by Section
32 of the Federal Deposit Insurance Act to give prior notice to a Federal
banking agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive officer,
except as disclosed in writing to Ramapo by Valley prior to the date of this
Agreement.
4.21. Disclosures. No representation or warranty contained in
Article IV of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements herein not
misleading.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of the Business of Ramapo. During the period from
the date of this Agreement to the Effective Time, Ramapo 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. Ramapo also shall use its best
efforts to (i) preserve its business organization and that of each Ramapo
Subsidiary intact, (ii) keep available to itself the present services of its
employees and those of its Subsidiaries, provided that neither Ramapo 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) Ramapo 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 Ramapo Common Stock pursuant
to the present terms of the outstanding Ramapo Options and the Valley Stock
Option and as disclosed in the Ramapo Disclosure Schedule, change the number of
shares of its authorized or issued common or No Par 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 Ramapo or
any Ramapo 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 its regular
quarterly dividend of $0.04;
(iii) grant any severance or termination pay (other than
pursuant to policies of Ramapo in effect on the date hereof and disclosed in the
Ramapo Disclosure Schedule or as agreed to by Valley in writing) to, or enter
into or amend any employment agreement with, any of its directors, officers or
employees, adopt any new employee benefit plan or arrangement of any type or
amend any such existing benefit plan or arrangement; or award any increase in
compensation or benefits to its directors, officers or employees;
(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
expenditures necessary to maintain existing assets in good repair and
expenditures described in business plans or budgets previously furnished to
Valley;
(vi) file any applications or make any contract with respect
to branching or site location or relocation;
(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 GAAP;
(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 Ramapo in writing or as permitted or
required by this Agreement, it will not, nor will it permit any of its
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;
(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. So long as this Agreement remains in
effect, Ramapo 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 Ramapo or the
Bank (an "Acquisition Transaction"). Notwithstanding the foregoing, Ramapo may
enter into discussions or negotiations or provide information in connection with
an unsolicited possible Acquisition Transaction if the Board of Directors of
Ramapo, after consulting with counsel, determines in the exercise of its
fiduciary responsibilities that such discussions or negotiations should be
commenced or such information should be furnished. Ramapo shall promptly
communicate to Valley the terms of any proposal, whether written or oral, which
it may receive in respect of any such Acquisition Transaction and the fact that
it is having discussions or negotiations with a third party about an Acquisition
Transaction.
5.4. Current Information. During the period from the date of
this Agreement to the Effective Time, Ramapo will cause one or more of its
designated representatives to confer on a monthly or more frequent basis with
representatives of Valley regarding Ramapo's business, operations, properties,
assets and financial condition and matters relating to the completion of the
transactions contemplated herein. Without limiting the foregoing, Ramapo 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 $100,000, 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, Ramapo will deliver to Valley the Bank's call
reports filed with the Department and FDIC and Ramapo's quarterly reports on
Form 10-Q as filed with the SEC under the 1934 Act, and Valley will deliver to
Ramapo 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, Ramapo will deliver to Valley and Valley will deliver to Ramapo
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) Ramapo and the Bank shall permit Valley and its
representatives, and Valley and VNB shall permit Ramapo 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 Ramapo 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 Ramapo 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. Ramapo acknowledges that Valley may be involved in discussions
concerning other potential acquisitions and Valley shall not be obligated to
disclose such information to Ramapo 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 is abandoned, 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.
(c) Without limiting the rights provided under Section 5.5(a),
each of Valley and Ramapo shall have the right to conduct a full and complete
acquisition audit and to perform such due diligence as it deems appropriate,
using its own officers and employees or third parties, for purposes of
determining whether there is a material breach of any representation or warranty
hereunder or a material adverse change in the business or financial condition of
the other party. Such acquisition audit or due diligence shall not be limited or
restricted by virtue of any audit or due diligence performed before the date
hereof or for any other reason, but shall not unduly interfere with the business
of the other party.
(d) Without limiting the foregoing, Valley and VNB, directly
or through agents, for a period of 30 calendar days (the "Due Diligence Period")
following the date of this Agreement, shall have the right to perform due
diligence on Ramapo and the Bank and a complete acquisition audit of Ramapo and
the Bank.
5.6. Regulatory Matters.
(a) For the purposes of holding the meeting of Ramapo
stockholders 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 1993 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 Ramapo to
the Ramapo stockholders 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 and VNB
as is necessary in order to cause the Proxy Statement/Prospectus, insofar as it
relates to Valley and VNB, to comply with Section 5.6(a) hereof. Valley agrees
promptly to advise Ramapo if at any time prior to the Ramapo stockholder 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 Ramapo with the information needed to correct such
inaccuracy or omission. Valley shall furnish Ramapo with such supplemental
information as may be necessary in order to cause the Proxy
Statement/Prospectus, insofar as it relates to Valley and VNB, to comply with
Section 5.6(a) after the mailing thereof to Ramapo stockholders.
(c) Ramapo shall furnish Valley with such information
concerning Ramapo and the Bank as is necessary in order to cause the Proxy
Statement/Prospectus, insofar as it relates to Ramapo and the Bank, to comply
with Section 5.6(a) hereof. Ramapo agrees promptly to advise Valley if, at any
time prior to the Ramapo stockholders' meeting referred to in Section 5.6(a)
hereof, information provided by Ramapo 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. Ramapo shall furnish
Valley with such supplemental information as may be necessary in order to cause
the Proxy Statement/Prospectus, insofar as it relates to Ramapo and the Bank, to
comply with Section 5.6(a) after the mailing thereof to Ramapo stockholders.
(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. Ramapo shall
promptly furnish Valley with such information regarding the Ramapo stockholders
as Valley requires to enable it to determine what filings are required
hereunder. Ramapo authorizes Valley to utilize in such filings the information
concerning Ramapo and the Bank provided to Valley in connection with, or
contained in, the Proxy Statement/Prospectus. Valley shall furnish Ramapo with
copies of all such filings and keep Ramapo advised of the status thereof. Valley
and Ramapo shall as promptly as practicable file the Registration Statement
containing the Proxy Statement/Prospectus with the SEC, and each of Valley and
Ramapo 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, the
Department, the FDIC and the FRB. The parties shall each have the right to
review in advance (and shall do so promptly) 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. The parties hereto shall use reasonable business efforts to file
for approval or waiver by the appropriate bank regulatory agencies within 60
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.
(h) Ramapo acknowledges that Valley is in or may be in the
process of acquiring other banks and financial institutions and that in
connection with such acquisitions, information concerning Ramapo may be required
to be included in the registration statements, if any, for the sale of
securities of Valley or in SEC reports in connection with such acquisitions.
Ramapo agrees to provide Valley with any information, certificates, documents or
other materials about Ramapo as are reasonably necessary to be included in such
other SEC reports or registration statements, including registration statements
which may be filed by Valley prior to the Effective Time. Ramapo shall use its
reasonable efforts to cause its attorneys and accountants to provide Valley and
any underwriters for Valley with any consents, comfort letters, opinion letters,
reports or information which are necessary to complete the registration
statements and applications for any such acquisition or issuance of securities.
Valley shall reimburse Ramapo for reasonable expenses thus incurred by Ramapo
should this transaction be terminated for any reason. Valley shall not file with
the SEC any registration statement or amendment thereto or supplement thereof
containing information regarding Ramapo unless Ramapo shall have consented in
writing to such filing, which consent shall not be unreasonably delayed or
withheld.
(i) Between the date of this Agreement and the Effective Time,
Ramapo shall cooperate with Valley to reasonably conform Ramapo's policies and
procedures regarding applicable regulatory matters, to those of Valley as Valley
may reasonably identify to Ramapo from time to time.
5.7. Approval of Stockholders. Ramapo will (a) take all steps
necessary duly to call, give notice of, convene and hold a meeting of the
stockholders of Ramapo as soon as reasonably practicable for the purpose of
securing the approval by such stockholders of this Agreement, (b) recommend to
the stockholders of Ramapo 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, Ramapo will
use reasonable efforts to cause each director of Ramapo to (i) agree 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. Valley will take the necessary actions to cure appropriate tainted
treasury shares so that the Merger meets the treasury stock condition for
pooling-of-interests accounting. 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 Ramapo determines that a material condition to its obligation to consummate
the transactions contemplated hereby cannot be fulfilled on or prior to
September 30, 1999 (the "Cutoff Date") 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, Ramapo and
Valley will promptly inform the other of any facts applicable to Ramapo 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.
(a) Ramapo has delivered to Valley as of the date hereof
certain items which presently constitute the Ramapo Disclosure Schedule. Ramapo
shall have the right to provide supplements, additions and corrections to the
Ramapo Disclosure Schedule for a period of 15 calendar days after the date
hereof and such supplements and additions or corrections provided within that
15-day period shall be deemed to have been provided on the date hereof and to
qualify the representations and warranties of Ramapo as of such date. However,
during the Due Diligence Period, Valley shall have the right, as hereafter
provided, to exercise its termination right based upon the supplements,
additions and corrections so provided.
(b) In addition to Ramapo's rights during the first 15-day
period under Section 5.11(a) above, 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 Ramapo.
(a) For planning purposes, Ramapo shall, within 30 days from
the date hereof, provide Valley with its estimated budget of transaction-related
expenses reasonably anticipated to be payable by Ramapo in connection with this
transaction based on facts and circumstances currently known, including the fees
and expenses of counsel, accountants, investment bankers and other
professionals. Ramapo shall promptly notify Valley if or when it determines that
it will expect to exceed its budget. Ramapo has previously disclosed to Valley
the method by which the fees of its investment bankers and counsel in connection
with this transaction are to be determined, and has disclosed to Valley the fees
of its counsel in connection with this transaction through a recent date.
(b) Promptly, but in any event within 30 days, after the
execution of this Agreement, Ramapo shall ask all of its attorneys and other
professionals to render current and correct invoices for all unbilled time and
disbursements. Ramapo shall accrue and/or pay all of such amounts as soon as
possible.
(c) Ramapo shall cause its professionals to render monthly
invoices within 30 days after the end of each month. Ramapo shall notify Valley
monthly of all out-of-pocket expenses which Ramapo has incurred in connection
with this transaction.
(d) Valley, in reasonable consultation with Ramapo, shall make
all arrangements with respect to the printing and mailing of the Proxy
Statement/Prospectus.
5.13. Closing. The parties hereto shall cooperate and use
reasonable efforts to try to cause the Effective Time to occur on or before June
1, 1999.
5.14. Indemnification. After the Effective Time, to the extent
permitted by applicable law and/or 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 Ramapo and the Bank indemnification 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/or
the Certificate of Incorporation or Articles of Association, Valley or VNB (as
applicable) shall advance expenses in connection with the foregoing
indemnification.
5.15. Employment Matters.
(a) Following consummation of the Merger, Valley will honor
the existing written employment and severance contracts with officers and
employees of Ramapo and the Bank that exist on the date hereof and are included
in the Ramapo Disclosure Schedule. Ramapo shall use its best efforts to cause
its officers to enter into the arrangements contemplated in Section 5.15 of the
Valley Disclosure Schedule.
(b) Following the consummation of the Merger and for one year
thereafter, VNB shall, to the extent not duplicative of other severance
benefits, honor the Bank's severance policy as specified in Section 5.15(b) of
the Ramapo Disclosure Schedule to pay one week of severance for each year of
service completed while employed by Ramapo and/or the Bank, with a maximum
benefit of 26 weeks and a minimum of four (4) weeks.
(c) Valley intends, to the extent practical, to continue the
employment of all officers and employees of the Bank, at or near the same
location, with the same or equivalent salary and benefits. Valley intends, to
the extent practical, to have all Ramapo employees participate in the benefits
and opportunities available to all Valley employees.
5.16. Pooling and Tax-Free Reorganization Treatment. Ramapo
shall not intentionally take, fail to take or cause to be taken, any action
within its control, whether before or after the Effective Time, which would
disqualify the Merger as a "pooling of interests" for accounting purposes or as
a "reorganization" within the meaning of Section 368(a) of the Code.
5.17. Ramapo Option Plan. From and after the Effective Time,
each Ramapo Option which is converted to an option to purchase Valley Common
Stock under Section 2.1(b) 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 Ramapo Options so converted.
5.18. Affiliates.
(a) Promptly, but in any event within 30 days, after the
execution and delivery of this Agreement, (i) Ramapo shall deliver to Valley (x)
a letter identifying all persons who, to the knowledge of Ramapo, may be deemed
to be affiliates of Ramapo under Rule 145 of the 1933 Act, including without
limitation all directors and executive officers of Ramapo and (y) a letter
identifying all persons who, to the knowledge of Ramapo, may be deemed to be
affiliates of Ramapo as that term (affiliate) is used for purposes of qualifying
for pooling-of-interests accounting treatment; and (ii) Valley shall identify to
Ramapo 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) Ramapo shall cause each director of Ramapo to, and Ramapo
shall use its best efforts to cause each executive officer of Ramapo and each
other person who may be deemed an affiliate of Ramapo (under either Rule 145 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 5.18 hereto agreeing to be bound by
the restrictions of Rule 145 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 substantially in the form
of Exhibit 5.18.1 hereto in which such persons agree to be bound by the rules
which permit the Merger to be treated as a pooling of interests for accounting
treatment.
5.19. Compliance with the Industrial Site Recovery Act.
Ramapo, 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 Ramapo or any Ramapo 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
Ramapo obtains a Remediation Agreement, Ramapo 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.
5.20. New Valley Director. As of the Effective Time, Valley
shall cause its Board of Directors and the VNB Board of Directors to take action
to appoint Richard S. Miller to the Boards of Directors of Valley and VNB,
respectively, at the Effective Time.
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 Ramapo Stockholders; SEC Registration. This
Agreement and the transactions contemplated hereby shall have been approved by
the requisite vote of the stockholders of Ramapo. 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 Ramapo 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 Ramapo and the
Bank, taken as a whole, to Valley. All conditions required to be satisfied prior
to the Effective Time by the terms of such approvals and consents shall have
been satisfied; and all statutory waiting periods in respect thereof shall have
expired.
(c) Suits and Proceedings. No order, judgment or decree shall
be outstanding against a party hereto or a third party that would have the
effect of preventing completion of the Merger; no suit, action or other
proceeding shall be pending or threatened by any governmental body in which it
is sought to restrain or prohibit the Merger 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 Ramapo
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 Ramapo shall have received
an opinion, satisfactory to Valley and Ramapo, 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, Ramapo, VNB or the Bank or to the stockholders of Ramapo who exchange
their shares of Ramapo 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 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 Ramapo and Bank. The representations and warranties of Ramapo 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. Ramapo 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 Ramapo 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 Ramapo Disclosure Schedule,
materially adversely affect 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 Ramapo, 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. Ramapo 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. Ramapo 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 Ramapo
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 5.19(d) hereof.
6.3. Conditions to the Obligations of Ramapo Under this
Agreement. The obligations of Ramapo 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 affect the representation as to which the supplement or amendment
relates.
(b) Opinion of Counsel to Valley. Ramapo shall have received
an opinion of counsel to Valley, dated the date of the Closing, in form and
substance reasonably satisfactory to Ramapo, covering the matters set forth on
Schedule 6.3 hereto and any other matter reasonably requested by Ramapo.
(c) Fairness Opinion. Ramapo shall have received opinions from
Danielson, as of the date of this Agreement and as of the date the Proxy
Statement/Prospectus is mailed to Ramapo's stockholders, with respect to the
fairness, from a financial point of view, of the Exchange Ratio to the
shareholders of Ramapo in the Merger.
(d) Certificates. Valley shall have furnished Ramapo 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 Ramapo may
reasonably request.
(e) 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 Ramapo, based upon any of the following:
(a) By mutual written consent of the parties hereto.
(b) By Valley or Ramapo (i) if the Effective Time shall not
have occurred on or prior to the Cutoff Date or (ii) if a vote of the
stockholders of Ramapo is taken and such stockholders fail to approve this
Agreement at the meeting (or any adjournment thereof) held for such purpose,
unless in each case the failure of such occurrence shall be due to the failure
of the party seeking to terminate this Agreement to perform or observe its
agreements set forth herein to be performed or observed by such party (or, in
the case of Ramapo, to be performed or observed by the directors of Ramapo) at
or before the Effective Time.
(c) By Valley or Ramapo 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 Ramapo if
any such application is approved with conditions which materially impair the
value of Ramapo 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
Ramapo or the Bank, taken as a whole, from that disclosed by Ramapo 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
Ramapo for any full fiscal quarter after September 30, 1998, is less than
$750,000; or (iii) there was a material breach in any representation, warranty,
covenant, agreement or obligation of Ramapo hereunder.
(e) By Ramapo, 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) there was a material breach in any representation, warranty, covenant,
agreement or obligation of Valley hereunder.
(f) By Valley or Ramapo if any condition to Closing specified
under Article VI hereof applicable to such party cannot reasonably be met on or
before the Cutoff Date after giving the other party a reasonable opportunity to
cure any such condition.
(g) By Ramapo if the Average Pre-Closing Price of Valley
Common Stock is less than $23.50.
(h) By Valley during the Due Diligence Period if the due
diligence review by Valley or any Disclosure Schedules provided by Ramapo after
the date hereof causes Valley to reasonably reach a conclusion about the
financial condition, business, assets or the quality of the representations and
warranties of Ramapo, significantly adverse from conclusions about the same
matters which Valley's senior executives held at the time Valley executed this
Agreement.
7.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement by either Valley or Ramapo 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,
except that Sections 5.5(b) and 8.1 hereof shall have continuing effect as set
forth therein. Nothing contained herein, however, shall relieve any party from
any liability for any willful 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 Ramapo 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 stockholders of Ramapo without the approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of Valley and Ramapo.
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
1455 Valley Road
Wayne, New Jersey 07474-0558
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
Telecopier No. (973) 305-0024
Copy to:
Pitney, Hardin, Kipp & Szuch
Attn.: Ronald H. Janis, Esq.
Delivery:
200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Telecopier No. (973) 966-1550
(b) If to Ramapo, to:
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
Attn.: Mortimer J. O'Shea,
President and Chief Executive Officer
Telecopier No. (973) 305-4089
Copy to:
Williams, Caliri, Miller & Otley
Attn.: Richard S. Miller, Esq.
Delivery:
1428 Route 23
Wayne, New Jersey 07470
Mail:
P.O. Box 995
Wayne, New Jersey 07474-0995
Telecopier No. (973) 694-0302
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. No assignment of this Agreement may be made
except upon the written consent of the other parties hereto.
8.4. Entire Agreement. This Agreement, 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 among 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. 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 which shall
survive the Merger, shall terminate as of the Effective Time.
8.9. Knowledge. Representations made herein which are
qualified by the phrase to the best of Ramapo's knowledge or similar phrases
refer as of the date hereof to the best knowledge of the Chief Executive Officer
and the Senior Vice President-Lending of Ramapo and thereafter refer to the best
knowledge of any senior officer of Ramapo or any Ramapo subsidiary.
Representations made herein which are qualified by the phrase to the best of
Valley's knowledge or similar phrases refer as of the date hereof to the best
knowledge of the President and Chief Executive Officer, the Executive Vice
President/Legal and the Chief Financial Officer of Valley and thereafter refer
to the best knowledge of any senior officer of Valley or any Valley subsidiary.
IN WITNESS WHEREOF, Valley, VNB, the Bank and Ramapo 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
PETER CROCITTO By: GERALD H. LIPKIN
________________________________________ _____________________________________
Peter Crocitto, Executive Vice President Gerald H. Lipkin, Chairman, President
and Chief Executive Officer
ATTEST: RAMAPO FINANCIAL CORPORATION
ERWIN D. KNAUER By: MORTIMER J. O'SHEA
______________________________________ ________________________________
Erwin D. Knauer, Senior Vice President Mortimer J. O'Shea, Chairman
Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
PETER CROCITTO By: GERALD H. LIPKIN
________________________________________ _____________________________________
Peter Crocitto, Executive Vice President Gerald H. Lipkin, Chairman, President
and Chief Executive Officer
ATTEST: THE RAMAPO BANK
ERWIN D. KNAUER By: MORTIMER J. O'SHEA
______________________________________ ________________________________
Erwin D. Knauer, Senior Vice President Mortimer J. O'Shea, Chairman
Chief Executive Officer
<PAGE>
CERTIFICATE OF THE DIRECTORS OF
RAMAPO FINANCIAL CORPORATION AND
THE RAMAPO BANK
Reference is made to the Agreement and Plan of Merger, dated
as of December 17, 1998 (the "Agreement"), among Valley National Bancorp, Valley
National Bank, Ramapo Bancorp Inc., and The Ramapo Bank Capitalized terms used
herein have the meanings given to them in the Agreement.
Each of the following persons, being all of the directors of
Ramapo and the Bank, express their intention, subject to their fiduciary duties,
to vote or cause to be voted all shares of Ramapo Common Stock which are held by
such person, or over which such person exercises full voting control (other than
shares with respect to which such person exercises control in a fiduciary
capacity, as to which no agreement is made hereby), in favor of the Merger.
MORTIMER J. O'SHEA
__________________________________ ___________________________________
MORTIMER J. O'SHEA JAMES R. KAPLAN
VICTOR C. OTLEY, JR. LOUIS D. MARCH
__________________________________ ___________________________________
VICTOR C. OTLEY, JR. LOUIS D. MARCH
ERWIN D. KNAUER ARNOLD SPEERT
__________________________________ ___________________________________
ERWIN D. KNAUER ARNOLD SPEERT
DONALD W. BARNEY SOLOMON W. MASTERS
__________________________________ ___________________________________
DONALD W. BARNEY SOLOMON W. MASTERS
RICHARD S. MILLER VINCENT R. D'ACCARDI
__________________________________ ___________________________________
RICHARD S. MILLER VINCENT R. D'ACCARDI
LOUIS S. MILLER
__________________________________
LOUIS S. MILLER
<PAGE>
Appendix B
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") dated December 17,
1998, is by and between Valley National Bancorp, a New Jersey corporation and
registered bank holding company ("Valley"), and Ramapo Financial Corporation a
New Jersey corporation and registered bank holding company ("Ramapo") for The
Ramapo Bank (the "Bank").
BACKGROUND
1. Valley, Ramapo, the Bank and Valley National Bank ("Valley
Bank"), a wholly-owned subsidiary of Valley, as of the date hereof, are prepared
to execute an Agreement and Plan of Merger (the "Merger Agreement") pursuant to
which Valley will acquire Ramapo through a merger of Ramapo with and into Valley
(the "Merger").
2. As an inducement to Valley to enter into the Merger
Agreement and in consideration for such entry and negotiation, Ramapo has agreed
to grant to Valley the Option.
AGREEMENT
In consideration of the foregoing and the mutual covenants and
agreements set forth herein and in the Merger Agreement, Valley and Ramapo,
intending to be legally bound hereby, agree:
1. Grant of Option. Ramapo hereby grants to Valley the option
to purchase up to 1,608,159 shares (the "Option Shares") of Ramapo's common
stock, $1.00 par value ("Common Stock") at an exercise price of $7.50 per share
(the "Option Price"), on the terms and conditions set forth herein (the
"Option").
2. Exercise of Option. This Option shall not be exercisable
until the occurrence of a Triggering Event (as such term is hereinafter
defined). Upon or after the occurrence of a Triggering Event (as such term is
hereinafter defined), Valley may exercise the Option, in whole or in part, at
any time or from time to time subject to the terms and conditions set forth
herein.
The term "Triggering Event" means the occurrence of any of the
following events:
A person or group (as such terms are defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder) other than Valley or an affiliate of Valley:
a. acquires beneficial ownership (as such term is defined in
Rule 13d-3 as promulgated under the Exchange Act) of at least 15% of the then
outstanding shares of Common Stock; provided, however, that the continuing
ownership by a person or group which as of the date hereof owns more than 15% of
the outstanding Common Stock shall not constitute a Triggering Event;
b. enters into a letter of intent or an agreement, whether
oral or written, with Ramapo pursuant to which such person or any affiliate of
such person would (i) merge or consolidate, or enter into any similar
transaction with Ramapo or the Bank, (ii) acquire all or a significant portion
of the assets or liabilities of Ramapo or the Bank, or (iii) acquire beneficial
ownership of securities representing, or the right to acquire beneficial
ownership or to vote securities representing 15% or more of the then outstanding
shares of Common Stock;
c. makes a filing with any bank or thrift regulatory
authorities or publicly announces a bona fide proposal (a "Proposal") for (i)
any merger, consolidation or acquisition of all or a significant portion of all
the assets or liabilities of Ramapo or any other business combination involving
Ramapo or the Bank, or (ii) a transaction involving the transfer of beneficial
ownership of securities representing, or the right to acquire beneficial
ownership or to vote securities representing, 15% or more of the outstanding
shares of Common Stock, and thereafter, if such Proposal has not been Publicly
Withdrawn (as such term is hereinafter defined) at least 15 days prior to the
meeting of stockholders of Ramapo called to vote on the Merger and Ramapo
stockholders fail to approve the Merger by the vote required by applicable law
at the meeting of stockholders called for such purpose; or
d. makes a bona fide Proposal and thereafter, but before such
Proposal has been Publicly Withdrawn, Ramapo (i) willfully takes any action in
any manner which would materially interfere with its ability to consummate the
Merger or (ii) willfully takes any action in any manner (other than actions
taken in the ordinary course of business) which would materially reduce the
value of the Merger to Valley .
The term "Triggering Event" also means the taking of any
direct or indirect action by Ramapo or any of its directors, executive officers,
investment bankers or other persons with actual or apparent authority to speak
for the Ramapo Board of Directors, inviting, encouraging or soliciting any
proposal which has as its purpose a tender offer for the shares of Common Stock,
a merger, consolidation, plan of exchange, plan of acquisition or reorganization
of Ramapo or the Bank, or a sale of shares of Common Stock or stock of the Bank,
or any significant portion of the assets or liabilities of Ramapo or the Bank.
The term "significant portion" means 15% of the assets or
liabilities of Ramapo.
"Publicly Withdrawn", for purposes of clauses (c) and (d)
above, shall mean an unconditional bona fide withdrawal of the Proposal coupled
with a public announcement of no further interest in pursuing such Proposal or
in acquiring any controlling influence over Ramapo or in soliciting or inducing
any other person (other than Valley or any affiliate of Valley) to do so.
Notwithstanding the foregoing, the Option may not be exercised
at any time (i) in the absence of any required governmental or regulatory
approval or consent necessary for Ramapo to issue the Option Shares or Valley to
exercise the Option or prior to the expiration or termination of any waiting
period required by law, or (ii) so long as any injunction or other order, decree
or ruling issued by any federal or state court of competent jurisdiction is in
effect which prohibits the sale or delivery of the Option Shares.
Ramapo shall notify Valley promptly in writing of the
occurrence of any Triggering Event known to it, it being understood that the
giving of such notice by Ramapo shall not be a condition to the right of Valley
to exercise the Option. Ramapo will not take any action which would have the
effect of preventing or disabling Ramapo from delivering the Option Shares to
Valley upon exercise of the Option or otherwise performing its obligations under
this Agreement.
In the event Valley wishes to exercise the Option, Valley
shall send a written notice to Ramapo (the date of which is hereinafter referred
to as the "Notice Date") specifying the total number of Option Shares it wishes
to purchase and a place and date for the closing of such a purchase (a
"Closing"); provided, however, that a Closing shall not occur prior to two
business days nor later than 20 business days after the later of receipt of any
necessary regulatory approvals and the expiration of any legally required notice
or waiting period, if any.
3. Payment and Delivery of Certificates. At any Closing
hereunder (a) Valley will make payment to Ramapo of the aggregate price for the
Option Shares so purchased by wire transfer of immediately available funds to an
account designated by Ramapo, (b) Ramapo will deliver to Valley a stock
certificate or certificates representing the number of Option Shares so
purchased, free and clear of all liens, claims, charges and encumbrances of any
kind or nature whatsoever created by or through Ramapo, registered in the name
of Valley or its designee, in such denominations as were specified by Valley in
its notice of exercise and bearing a legend as set forth below and (c) Valley
shall pay any transfer or other taxes required by reason of the issuance of the
Option Shares so purchased.
Unless a registration statement is filed and declared
effective under Section 4 hereof, a legend will be placed on each stock
certificate evidencing Option Shares issued pursuant to this Agreement, which
legend will read substantially as follows:
"The transfer of shares represented by this
certificate is subject to certain provisions of an agreement, dated as
of December 17, 1998, between the registered holder hereof and Ramapo
and to resale restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the principal office of
Ramapo and will be provided to the holder hereof without charge upon
receipt by Ramapo of a written request therefore."
It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933, as amended (the "1933 Act")
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if Valley shall have delivered to Ramapo a copy of a
letter from the staff of the SEC, or an opinion of counsel, in form and
substance reasonably satisfactory to Ramapo, to the effect that such legend is
not required for purposes of the 1933 Act; (ii) the reference to the provisions
of this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference in the opinion
of counsel to Ramapo; and (iii) the legend shall be removed in its entirety if
the conditions in the preceding clauses (i) and (ii) are both satisfied. In
addition, such certificates shall bear any other legend as may be required by
law.
4. Registration Rights. Upon or after the occurrence of a
Triggering Event and upon receipt of a written request from Valley, Ramapo shall
prepare and file a registration statement with the Securities and Exchange
Commission and any state securities bureau, covering the Option and such number
of Option Shares as Valley shall specify in its request, and Ramapo shall use
its best efforts to cause such registration statement to be declared effective
in order to permit the sale or other disposition of the Option and the Option
Shares (it being understood and agreed that Valley will use reasonable efforts
to effect any such sale or other disposition on a widely distributed basis),
provided that Valley shall in no event have the right to have more than one such
registration statement become effective and further provided that Ramapo shall
have the right to delay for up to six months such registration if the Option
Shares can and will be registered in connection with the filing of a
Registration Statement on Form S-4 (or a successor form) by any person acquiring
Ramapo.
In connection with such filing, Ramapo shall use its best
efforts to cause to be delivered to Valley such certificates, opinions,
accountant's letters and other documents as Valley shall reasonably request and
as are customarily provided in connection with registrations of securities under
the Securities Act of 1933, as amended. All expenses incurred by Ramapo in
complying with the provisions of this Section 4, including without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for Ramapo and blue sky fees and expenses shall be paid by Ramapo.
Underwriting discounts and commissions to brokers and dealers relating to the
Option Shares, fees and disbursements of counsel to Valley and any other
expenses incurred by Valley in connection with such registration shall be borne
by Valley. In connection with such filing, Ramapo shall indemnify and hold
harmless Valley against any losses, claims, damages or liabilities, joint or
several, to which Valley may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement with respect to Ramapo or alleged untrue statement
with respect to Ramapo of any material fact with respect to Ramapo contained in
any preliminary or final registration statement or any amendment or supplement
thereto, or arise out of a material fact with respect to Ramapo required to be
stated therein or necessary to make the statements therein with respect to
Ramapo not misleading; and Ramapo will reimburse Valley for any legal or other
expense reasonably incurred by Valley in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that Ramapo will not be liable in any case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
preliminary or final registration statement or such amendment or supplement
thereto in reliance upon and in conformity with written information furnished by
or on behalf of Valley specifically for use in the preparation thereof
concerning Valley or its plans or intentions. Valley will indemnify and hold
harmless Ramapo to the same extent as set forth in the immediately preceding
sentence but only with reference to written information specifically furnished
by or on behalf of Valley concerning Valley or its plans or intentions for use
in the preparation of such preliminary or final registration statement or such
amendment or supplement thereto; and Valley will reimburse Ramapo for any legal
or other expense reasonably incurred by Ramapo in connection with investigating
or defending any such loss, claim, damage, liability or action. Notwithstanding
anything to the contrary herein, no indemnifying party shall be liable for any
settlement effected without its prior written consent.
5. Adjustment Upon Changes in Capitalization. In the event of
any change in the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, conversions, exchanges of shares or the like,
then the number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
In the event any capital reorganization or reclassification of
the Common Stock, or any consolidation, merger or similar transaction of Ramapo
with another entity, or in the event any sale of all or substantially all of the
assets of Ramapo shall be effected in such a way that the holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
(in form reasonably satisfactory to the holder hereof) shall be made whereby the
holder hereof shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified herein and in lieu of the
Common Stock immediately theretofore purchasable and receivable upon exercise of
the rights represented by this Option, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock immediately theretofore purchasable and receivable
upon exercise of the rights represented by this Option had such reorganization,
reclassification, consolidation, merger or sale not taken place; provided,
however, that if such transaction results in the holders of Common Stock
receiving only cash, the holder hereof shall be paid the difference between the
Option Price and such cash consideration without the need to exercise the
Option.
6. Filings and Consents. Each of Valley and Ramapo will use
its best efforts to make all filings with, and to obtain consents of, all third
parties and governmental authorities necessary to the consummation of the
transactions contemplated by this Agreement.
Exercise of the Option herein provided shall be subject to
compliance with all applicable laws including, in the event Valley is the holder
hereof, approval of the Board of Governors of the Federal Reserve System and
Ramapo agrees to cooperate with and furnish to the holder hereof such
information and documents as may be reasonably required to secure such
approvals.
7. Representations and Warranties of the Parties.
a. Ramapo. Ramapo hereby represents and warrants to Valley as
follows:
i. Due Authorization. Ramapo has full corporate power and
authority to execute, deliver and perform this Agreement and all corporate
action necessary for execution, delivery and performance of this Agreement has
been duly taken by Ramapo.
ii. Authorized Shares. Ramapo has taken and, as long as the
Option is outstanding, will take all necessary corporate action to authorize and
reserve for issuance all shares of Common Stock that may be issued pursuant to
any exercise of the Option.
iii. No Conflicts. Neither the execution and delivery of this
Agreement nor consummation of the transactions contemplated hereby (assuming all
appropriate regulatory approvals) will violate or result in any violation or
default of or be in conflict with or constitute a default under any term of the
certificate of incorporation or by-laws of Ramapo or, to its knowledge, any
agreement, instrument, judgment, decree, statute, rule or order applicable to
Ramapo.
iv. Binding Obligation. This Agreement has been duly and
validly executed by Ramapo and represents a valid and binding obligation of
Ramapo enforceable against Ramapo in accordance with its terms.
b. Valley. Valley hereby represents and warrants to Ramapo as
follows:
i. Due Authorization. Valley has full corporate power and
authority to execute and deliver this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated hereby.
ii. Requisite Corporate Action. The execution and delivery of
this Agreement have been authorized by all requisite corporate action by Valley,
and no other corporate proceedings are necessary therefor.
iii. Binding Obligation. This Agreement has been duly and
validly executed and delivered by Valley and represents a valid and legally
binding obligation of Valley, enforceable against Valley in accordance with its
terms.
8. Specific Performance. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement and that
the obligations of the parties hereto shall be specifically enforceable.
Notwithstanding the foregoing, Valley shall have the right to seek money damages
against Ramapo for a breach of this Agreement.
9. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof.
10. Assignment or Transfer. Valley may not sell, assign or
otherwise transfer its rights and obligations hereunder, in whole or in part, to
any person or group of persons other than to an affiliate of Valley. Valley
represents that it is acquiring the Option for Valley's own account and not with
a view to or for sale in connection with any distribution of the Option. Valley
is aware that presently neither the Option nor the Option Shares are being
offered by a registration statement filed with, and declared effective by, the
Securities and Exchange Commission, but instead are being offered in reliance
upon the exemption from the registration requirements pursuant to Section 4(2)
of the Securities Act of 1933, as amended.
11. Amendment of Agreement. By mutual consent of the parties
hereto, this Agreement may be amended in writing at any time, for the purpose of
facilitating performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any court or for any
other purpose.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
13. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered personally, by express service,
cable, telegram or telex, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
If to Valley, to:
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07474
Attn.: Gerald H. Lipkin
Chairman and Chief Executive Officer
Telecopier No. (973) 305-0024
Copy to:
Pitney, Hardin, Kipp & Szuch
Attn.: Ronald H. Janis, Esq.
Delivery:
200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Telecopier No. (973) 966-1550
If to Ramapo, to:
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
Attn.: Mortimer J. O'Shea, President
Telecopier No. (973) 305-4089
Copy to:
Williams, Caliri, Miller & Otley
Attn.: Richard S. Miller, Esq.
Delivery:
1428 Route 23
Wayne, New Jersey 07470
Mail:
P.O. Box 995
Wayne, New Jersey 07474-0995
Telecopier No. (973) 694-0302
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
15. Captions. The captions in the Agreement are inserted for
convenience and reference purposes, and shall not limit or otherwise affect any
of the terms or provisions hereof.
16. Waivers and Extensions. The parties hereto may, by mutual
consent, extend the time for performance of any of the obligations or acts of
either party hereto. Each party may waive (i) compliance with any of the
covenants of the other party contained in this Agreement and/or (ii) the other
party's performance of any of its obligations set forth in this Agreement.
17. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement, except as provided in Section 10 permitting Valley to assign its
rights and obligations hereunder only to an affiliate of Valley.
18. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
19. Termination. The Option granted hereby, to the extent not
previously exercised, shall terminate upon either the termination of the Merger
Agreement as provided therein or the consummation of the transactions
contemplated by the Merger Agreement; provided, however, that if termination of
the Merger Agreement occurs after the occurrence of a Triggering Event, this
Agreement and the Option granted hereby shall not terminate until the later of
one month after the consummation of the transaction constituting the Triggering
Event or 18 months following the date of the termination of the Merger
Agreement.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to
resolutions adopted by its Board of Directors, has caused this Agreement to be
executed by its duly authorized officer, all as of the day and year first above
written.
RAMAPO FINANCIAL CORPORATION
By: MORTIMER J. O'SHEA
____________________________________
Mortimer J. O'Shea, President and
Chief Executive Officer
VALLEY NATIONAL BANCORP
By: GERALD H. LIPKIN
____________________________________
Gerald H. Lipkin, Chairman, President
and Chief Executive Officer
<PAGE>
Appendix C
March ___, 1999
Board of Directors
Ramapo Financial Corporation
64 Mountain View Blvd.
Wayne, New Jersey 07470
Dear Members of the Board:
Set forth herein is the updated opinion of Danielson Associates Inc.
("Danielson Associates") as to the "fairness" of the offer by Valley National
Bancorp ("Valley") of Wayne, New Jersey to acquire all of the common stock of
Ramapo Financial Corporation ("Ramapo") of Wayne, New Jersey. The "fair" sale
value is defined as the price at which all of the shares of Ramapo's common
stock would change hands between a willing seller and a willing buyer, each
having reasonable knowledge of the relevant facts. In opining as to the
"fairness" of the offer, it also must be determined if the Valley common stock
that is to be exchanged for Ramapo stock is "fairly" valued.
In preparing the original opinion, Ramapo's market was analyzed and its
business and prospects were reviewed. We also conducted such other financial
analyses as we deemed appropriate such as comparable company analyses,
comparable transactions and pro forma dilution. Any unique characteristics also
were considered.
This opinion was based partly on data supplied to Danielson Associates
by Ramapo, but it relied on some public information all of which was believed to
be reliable, but neither the completeness nor accuracy of such information could
be guaranteed. In particular, the opinion assumed, based on the representation
of Ramapo's management, that there were no significant asset quality problems
beyond what was stated in recent reports to regulatory agencies and in the
monthly report to the directors.
In determining the "fair" sale value of Ramapo, the primary emphasis
was on prices paid relative to earnings for New Jersey and Northeast banks that
had similar financial, structural and market characteristics. These prices were
then related to assets and equity capital, also referred to as "book."
The "fair" market value of Valley's common stock to be exchanged for
Ramapo stock was determined by a comparison with other similar bank holding
companies and included no in person due diligence of Valley. This comparison
showed Valley stock to be valued consistent with the comparable banks.
In the original opinion, based on the analysis of Ramapo's recent
performance and its future potential, comparisons with similar transactions and
unique characteristics, it was determined that its "fair" sale value was between
$90 and $100 million, or $10.34 to $11.52 per share. Thus, Valley's offer of
$107.5 million in Valley common stock, or $12.33 per share, was a "fair" offer
from a financial point of view for Ramapo and its shareholders.
There has been no subsequent change in Valley's performance, but its
stock price has declined by about 10%, which is consistent with most other
regional banks at the time of the offer. The value of the offer, even with the
decline in Valley's stock price is still "fair" from a financial point of view
to Ramapo and its shareholders.
Respectfully submitted,
Arnold G. Danielson
Chairman
Danielson Associates Inc.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Indemnification. Article VI of the certificate of
incorporation of Valley National Bancorp provides that the corporation shall
indemnify its present and former officers, directors, employees, and agents and
persons serving at its request against expenses, including attorney's fees,
judgments, fines or amounts paid in settlement, incurred in connection with any
pending or threatened civil or criminal proceeding to the full extent permitted
by the New Jersey Business Corporation Act. The Article also provides that such
indemnification shall not exclude any other rights to indemnification to which a
person may otherwise be entitled, and authorizes the corporation to purchase
insurance on behalf of any of the persons enumerated against any liability
whether or not the corporation would have the power to indemnify him under the
provisions of Article VI.
The New Jersey Business Corporation Act empowers a corporation
to indemnify a corporate agent against his expenses and liabilities incurred in
connection with any proceeding (other than a derivative lawsuit) involving the
corporate agent by reason of his being or having been a corporate agent if (a)
the agent acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and (b) with respect to
any criminal proceeding, the corporate agent had no reasonable cause to believe
his conduct was unlawful. For purposes of the Act, the term "corporate agent"
includes any present or former director, officer, employee or agent of the
corporation, and a person serving as a "corporate agent" at the request of the
corporation for any other enterprise.
With respect to any derivative action, the corporation is
empowered to indemnify a corporate agent against his expenses (but not his
liabilities) incurred in connection with any proceeding involving the corporate
agent by reason of his being or having been a corporate agent if the agent acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation. However, only the court in which the
proceeding was brought can empower a corporation to indemnify a corporate agent
against expenses with respect to any claim, issue or matter as to which the
agent was adjudged liable for negligence or misconduct.
The corporation may indemnify a corporate agent in a specific
case if a determination is made by any of the following that the applicable
standard of conduct was met: (i) the Board of Directors, or a committee thereof,
acting by a majority vote of a quorum consisting of disinterested directors;
(ii) by independent legal counsel, if there is not a quorum of disinterested
directors or if the disinterested quorum empowers counsel to make the
determination; or (iii) by the shareholders.
A corporate agent is entitled to mandatory indemnification to
the extent that the agent is successful on the merits or otherwise in any
proceeding, or in defense of any claim, issue or matter in the proceeding. If a
corporation fails or refuses to indemnify a corporate agent, whether the
indemnification is permissive or mandatory, the agent may apply to a court to
grant him the requested indemnification. In advance of the final disposition of
a proceeding, the corporation may pay an agent's expenses if the agent agrees to
repay the expenses unless it is ultimately determined he is entitled to
indemnification.
Exculpation. Article VIII of the certificate of incorporation
of Valley National Bancorp provides:
A director or officer of the Corporation shall not be
personally liable to the Corporation or its shareholders for
damages for breach of any duty owed to the Corporation or its
shareholders, except that this provision shall not relieve a
director or officer from liability for any breach of duty
based upon an act or omission (i) in breach of such person's
duty of loyalty to the Corporation or its shareholders, (ii)
not in good faith or involving a knowing violation of law, or
(iii) resulting in receipt by such person of an improper
personal benefit. If the New Jersey Business Corporation Act
is amended after approval by the shareholders of this
provision to authorize corporate action further eliminating or
limiting the personal liability of directors or officers, then
the liability of a director and/or officer of the Corporation
shall be eliminated or limited to the fullest extent permitted
by the New Jersey Business Corporation Act as so amended.
Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation or otherwise shall not adversely affect any
right or protection of a director or officer of the Corporation existing at the
time of such repeal or modification.
The New Jersey Business Corporation Act, as it affects exculpation, has not been
changed since the adoption of this provision by Valley National Bancorp in 1987.
<PAGE>
Item 21.
A. Exhibits
Exhibit No. Description
2(a)* Agreement and Plan of Merger dated as of December 17, 1998
(the "Merger Agreement"), among Valley National Bancorp
("Valley"), Valley National Bank ("VNB"), Ramapo Financial
Corporation ("Ramapo"), and Ramapo's subsidiary, The Ramapo
Bank ("TRB") attached as Appendix A to the Proxy
Statement-Prospectus.
2(b)* Stock Option Agreement, dated as of December 17, 1998, by and
between Valley and Ramapo, included as Appendix B to the Proxy
Statement-Prospectus.
5 Opinion of Pitney, Hardin, Kipp & Szuch as to the legality of
the securities to be registered.
8 Opinion of Pitney, Hardin, Kipp & Szuch as to the tax
consequences of the Merger.
23(a) Consent of KPMG LLP with respect to Valley.
23(b) Consent of Arthur Andersen LLP with respect to Ramapo.
23(c) Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibits
5 and 8 hereto).
23(d) Consent of Danielson Associates, Inc. ("Danielson").
99(a) Form of Proxy Card to be utilized by the Board of Directors of
Ramapo.
- ----------------------
* Included elsewhere in this registration statement.
B. Financial Schedules
All financial statement schedules have been omitted because they are
not applicable or the required information is included in the financial
statements or notes thereto or incorporated by reference therein.
C. Report, Opinion or Appraisals
Form of Fairness Opinion of Danielson is included as Appendix C to the
Proxy Statement-Prospectus.
<PAGE>
Item 22. Undertakings
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(b) That for purposes of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
4. The registrant undertakes that every prospectus (i) that is filed pursuant to
paragraph 2 immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a) (3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
5. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
6. The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
7. Subject to appropriate interpretation, the undersigned registrant hereby
undertakes to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
becomes effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Town of Wayne,
State of New Jersey, on the 16th day of March, 1999.
VALLEY NATIONAL BANCORP
By: GERALD H. LIPKIN
-----------------------------------
Gerald H. Lipkin,
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
GERALD H. LIPKIN Chairman, President and Chief Executive March 16, 1999
- ------------------------------------------------------ Officer and Director
Gerald H. Lipkin
PETER SOUTHWAY Vice Chairman (Principal Financial March 16, 1999
- ------------------------------------------------------ Officer and Director
Peter Southway
ALAN D. ESKOW Corporate Secretary, Senior Vice March 16, 1999
- ------------------------------------------------------ President and Controller
Alan D. Eskow (Principal Accounting Officer)
ANDREW B. ABRAMSON
- ------------------------------------------------------ Director March 16, 1999
Andrew B. Abramson
PAMELA BRONANDER Director March 16, 1999
- -----------------------------------------------------
Pamela Bronander
JOSEPH COCCIA, JR. Director March 16, 1999
- -----------------------------------------------------
Joseph Coccia, Jr.
HAROLD P. COOK, III Director March 16, 1999
- -----------------------------------------------------
Harold P. Cook, III
AUSTIN C. DRUKKER Director March 16, 1999
- -----------------------------------------------------
Austin C. Drukker
WILLARD L. HEDDEN Director March 16, 1999
- -----------------------------------------------------
Willard L. Hedden
GRAHAM O. JONES
- ----------------------------------------------------- Director March 16, 1999
Graham O. Jones
WALTER H. JONES, III Director March 16, 1999
- -----------------------------------------------------
Walter H. Jones, III
GERALD KORDE Director March 16, 1999
- -----------------------------------------------------
Gerald Korde
JOLEEN J. MARTIN Director March 16, 1999
- -----------------------------------------------------
Joleen J. Martin
ROBERT E. McENTEE Director March 16, 1999
- -----------------------------------------------------
Robert E. McEntee
SAM P. PINYUH Director March 16, 1999
- -----------------------------------------------------
Sam P. Pinyuh
ROBERT RACHESKY Director March 16, 1999
- -----------------------------------------------------
Robert Rachesky
BARNETT RUKIN Director March 16, 1999
- -----------------------------------------------------
Barnett Rukin
Director _____ __, 1999
- -----------------------------------------------------
Richard F. Tice
LEONARD J. VORCHEIMER Director March 16, 1999
- -----------------------------------------------------
Leonard J. Vorcheimer
JOSEPH L. VOZZA Director March 16, 1999
- -----------------------------------------------------
Joseph L. Vozza
</TABLE>
<PAGE>
INDEX TO EXHIBITS
A. Exhibits
Exhibit No. Description
2(a)* Agreement and Plan of Merger dated as of December 17, 1998
(the "Merger Agreement"), among Valley National Bancorp
("Valley"), Valley National Bank ("VNB"), Ramapo Financial
Corporation ("Ramapo"), and Ramapo's subsidiary, The Ramapo
Bank ("TRB") attached as Appendix A to the Proxy
Statement-Prospectus.
2(b)* Stock Option Agreement, dated as of December 17, 1998, by and
between Valley and Ramapo, included as Appendix B to the Proxy
Statement-Prospectus.
5 Opinion of Pitney, Hardin, Kipp & Szuch as to the legality of
the securities to be registered.
8 Opinion of Pitney, Hardin, Kipp & Szuch as to the tax
consequences of the Merger.
23(a) Consent of KPMG LLP with respect to Valley.
23(b) Consent of Arthur Andersen LLP with respect to Ramapo.
23(c) Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibits
5 and 8 hereto).
23(d) Consent of Danielson Associates, Inc. ("Danielson").
99(a) Form of Proxy Card to be utilized by the Board of Directors of
Ramapo.
- ----------------------
* Included elsewhere in this registration statement.
March 17, 1999
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07474-0558
Re: Merger of Valley National Bancorp and Ramapo Financial Corporation
We have acted as counsel to Valley National Bancorp ("Valley") in
connection with its proposed issuance of its no par value common stock (the
"Common Stock"), pursuant to the Agreement and Plan of Merger among Valley,
Valley National Bank, Ramapo Financial Corporation and The Ramapo Bank dated as
of December 17, 1998. The Common Stock is being registered pursuant to a
Registration Statement on Form S-4 (the "Registration Statement") being filed
with the Securities and Exchange Commission on the date hereof.
We have examined originals, or copies certified or otherwise identified
to our satisfaction, of the Certificate of Incorporation and By-laws of Valley
currently in effect, relevant resolutions of the Board of Directors of Valley,
and such other documents as we deemed necessary in order to express the opinion
hereinafter set forth.
Based on the foregoing and assuming that the Registration Statement has
been declared effective under the Securities Act of 1933, as amended, we are of
the opinion that when issued as described in the Registration Statement,
including the Prospectus relating to the Common Stock (the "Prospectus"), the
Common Stock will be legally issued, fully paid and non-assessable.
We consent to use of this opinion as an Exhibit to the Registration
Statement and to the reference to this firm under the heading "Legal Opinion" in
the Prospectus.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH
March 17, 1999
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07474-0558
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey 07470
Dear Ladies and Gentlemen:
We have acted as counsel for Valley National Bancorp
("Valley"), a New Jersey corporation and registered bank holding company, in
connection with the planned merger (the "Merger") of Ramapo Financial
Corporation ("Ramapo"), a New Jersey corporation and registered bank holding
company, with and into Valley, pursuant to that certain Agreement and Plan of
Merger (the "Agreement"), dated as of December 17, 1998, by and among Valley,
Valley National Bank, a national banking association ("VNB"), Ramapo, and The
Ramapo Bank, a New Jersey-chartered commercial bank (the "Bank").
Capitalized terms used but not defined herein shall have the
meanings specified in the Proxy Statement-Prospectus pertaining to the Merger.
We have assumed with your consent that:
(a) the Merger will be effected in accordance with the
Agreement, and
(b) the representations contained in the letters of
representation from Valley and Ramapo to us dated March 16, 1999 will be true
at the Effective Time.
On the basis of the foregoing, and our consideration of such
other matters of fact and law as we have deemed necessary or appropriate, it is
our opinion, under presently applicable federal income tax law, that the Merger
will constitute a reorganization under Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"), and that:
(i) no gain or loss will be recognized for federal income tax
purposes by Valley or Ramapo in connection with the Merger;
(ii) no gain or loss will be recognized for federal income tax
purposes by Ramapo stockholders upon the exchange in the Merger of shares of
Ramapo Common Stock solely for Valley Common Stock (except with respect to cash
received in lieu of a fractional share interest in Valley Common Stock);
(iii) the basis of Valley Common Stock received in the Merger
by Ramapo stockholders (including the basis of any fractional share interest in
stock) will be the same as the basis of the shares of Ramapo Common Stock
surrendered in exchange therefor;
(iv) the holding period of Valley Common Stock received in the
Merger by Ramapo stockholders (including the holding period of any fractional
share interest in stock) will include the holding period during which the shares
of Ramapo Common Stock surrendered in exchange therefor were held by the Ramapo
stockholder, provided such shares of Ramapo Common Stock were held as capital
assets; and
(v) cash received by a holder of Ramapo Common Stock in lieu
of a fractional share interest in Valley Common Stock will be treated as
received in exchange for such fractional share interest and, provided the
fractional share would have constituted a capital asset in the hands of such
holder, the holder should in general recognize capital gain or loss in an amount
equal to the difference between the amount of cash received and the portion of
the adjusted tax basis in the Ramapo Common Stock allocable to the fractional
share interest.
The tax consequences described above may not be applicable to
Ramapo stockholders that acquired the stock of Ramapo pursuant to the exercise
of an employee stock option or right or otherwise as compensation, that hold
Ramapo Common Stock as part of a "straddle" or "conversion transaction" or that
are insurance companies, securities dealers, financial institutions or foreign
persons.
We hereby consent to the reference to us under the heading
"THE PROPOSED MERGER -- Federal Income Tax Consequences" in the Proxy
Statement-Prospectus pertaining to the Merger and to the filing of this opinion
as an exhibit to the related Registration Statement on Form S-4 filed with the
Securities and Exchange Commission. In giving this consent, we do not hereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Valley National Bancorp:
We consent to the use of our report dated January 20, 1999 relating to the
consolidated statements of financial condition of Valley National Bancorp and
subsidiaries as of December 31, 1998 and 1997 and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the years in the three-year period ended December 31, 1998, which report appears
in the December 31, 1998 Annual Report on Form 10-K of Valley National Bancorp,
incorporated by reference in the Registration Statement on Form S-4 of Valley
National Bancorp. We also consent to the reference to our Firm under the caption
"Experts".
KPMG LLP
Short Hills, New Jersey
March 17, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-4 of our report dated January
15, 1999 included in Ramapo Financial Corporation's annual report on Form 10-K
for the year ended December 31, 1998 and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 15, 1999
CONSENT OF DANIELSON ASSOCIATES, INC.
We hereby consent to the use of our firm's name in the Form S-4 Registration
Statement of Valley National Bancorp relating to the registration of shares of
Valley common stock to be issued in connection with the proposed acquisition of
Ramapo Financial Corporation. We also consent to the inclusion of our opinion
letter as an Appendix to the Proxy Statement-Prospectus included as part of the
Form S-4 Registration Statement, and to the references to our opinion included
in the Proxy Statement-Prospectus.
DANIELSON ASSOCIATES, INC.
By: JON D. HOLTAWAY
-------------------------
Jon D. Holtaway
Senior Vice President
Date: March 16, 1999
Exhibit 99(a)
REVOCABLE PROXY
RAMAPO FINANCIAL CORPORATION
P.O. Box 221, Wayne , New Jersey 07470
SOLICITED BY THE BOARD OF DIRECTORS for the Special Meeting of Stockholders at:
Ramapo Financial Corporation
64 Mountain View Boulevard
Wayne, New Jersey
Tuesday, April 27, 1999 4:00 p.m.
The undersigned hereby appoints Vincent R. D'Accardi, Louis D. March, Solomon W.
Masters and Arnold Speert each with the power to appont his substitute,and
hereby authorizes each of them to represent and to vote, as designated on the
reverse side, all shares of common stock of Ramapo Financial Corporation held of
record by the undersigned on March 15,1999, at the special meeting of
stockholders or any adjournment thereof, and to vote, in accordance with the
determination of a majority of the Board of Directors, upon such other business
as may properly come before the meeting.
The shares represented by this proxiy, when properly executed, will be voted as
directed by the stockholer. If no direction is given, such shares will be voted
"for" Proposal 1.
(Continued, and to be signed, on the other side)
PROPOSAL NO.1: APPROVAL OF MERGER OF RAMAPO FINANCIAL CORPORATION INTO
VALLEY NATIONAL BANCORP.
FOR AGAINST ABSTAIN
___ _______ _______
Please sign below exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a a
parternship or limited liability company plase sign by authorized person also
indicating that individual's capacity.
Signature___________________________________________
Signature___________________________________________
Date________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.