SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported) - May 23, 1995
UNITED COUNTIES BANCORPORATION
(Exact Name of Registrant as Specified in Charter)
NEW JERSEY
(State or Other Jurisdiction of Incorporation)
0-11282 22-2453041
(Commission File Number) (IRS Employer Identification No.)
Four Commerce Drive, Cranford, New Jersey 07016
(Address of Principal Executive Offices)
(908) 931-6600 (Registrant's Telephone Number)
<PAGE>
Item 5. Other Events
On May 24, 1995 United Counties Bancorporation ("UCB") announced
that it has signed a definitive merger agreement with Meridian
Bancorp, Inc. ("Meridian"), pursuant to which UCB will be acquired
in a tax-free, stock-for-stock merger. Pursuant to the merger,
each of the outstanding shares of UCB common stock will be
exchanged for five (5) shares of Meridian common stock. UCB will
be merged into Meridian and UCB's wholly-owned subsidiary, United
Counties Trust Company ("UCTC"), will be merged into Meridian's
wholly-owned subsidiary, Meridian Bank, New Jersey ("MBNJ").
The acquisition is conditioned upon necessary bank regulatory
approvals, shareholder approval, an updated fairness opinion from
UCB's financial advisor, Goldman Sachs & Co. when the proxy is mailed,
and other customary terms and conditions.
In connection with the merger agreement UCB also granted
Meridian an option to acquire 375,000 shares of UCB common stock at
$125 per share under certain circumstances.
UCB is a bank holding company whose principal operating
subsidiary is UCTC, a state-chartered commercial bank. The
corporate headquarters of UCB and the main office of UCTC are
located at Four Commerce Drive, Cranford, New Jersey 07016. UCTC
is a commercial bank which operates 35 branches in Middlesex,
Monmouth, Morris, Somerset and Union counties in New Jersey. As of
March 31, 1995, UCB's total assets were $1.6 billion.
Meridian is a $15 billion asset banking and financial services
holding company with 319 bank branches throughout the eastern half
of Pennsylvania, southern New Jersey and the state of Delaware.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) Exhibits
2.1 Merger Agreement, dated May 23, 1995, between
Meridian Bancorp, Inc. and United Counties
Bancorporation.
2.2 Stock Option Agreement, dated May 23, 1995,
between Meridian Bancorp, Inc. and United
Counties Bancorporation.
99.1 Joint Press Release of Meridian Bancorp, Inc. and
United Counties Bancorporation dated May 24,
1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
UNITED COUNTIES BANCORPORATION
Dated : June 1, 1995 By: NICHOLAS A. FRUNGILLO, JR.
_________________________
Nicholas A. Frungillo, Jr.
Treasurer and
Chief Financial Officer
EXHIBIT INDEX
Exhibit 2.1 Merger Agreement, dated May 23, 1995, between
Meridian Bancorp, Inc and United Counties
Bancorporation.
Exhibit 2.2 Stock Option Agreement, dated May 23, 1995, between
Meridian Bancorp, Inc and United Counties
Bancorporation.
Exhibit 99.1 Joint Press Release of Meridian Bancorp, Inc. and
United Counties Bancorporation dated May 24, 1995.
AGREEMENT AND PLAN
OF MERGER
between
MERIDIAN BANCORP, INC.
and
UNITED COUNTIES BANCORPORATION
May 23, 1995
<PAGE>
AGREEMENT
THIS AGREEMENT AND PLAN OF MERGER, dated as of May 23,
1995, is made by and between MERIDIAN BANCORP, INC. ("Meridian"),
a Pennsylvania corporation, having its principal place of business
at 35 North Sixth Street, Reading, Pennsylvania 19603, and UNITED
COUNTIES BANCORPORATION ("UCB"), a New Jersey corporation, having
its principal place of business at Four Commerce Drive, Cranford,
New Jersey 07016.
BACKGROUND
1. Meridian and UCB desire to cause the merger of UCB
with and into Meridian, with Meridian surviving such merger, in
accordance with the applicable laws of the Commonwealth of
Pennsylvania and the State of New Jersey, and in accordance with
the plan of merger set forth herein.
2. After approval by the Board of Directors of UCB and
prior to the execution and delivery of this Agreement, and as a
condition and inducement to Meridian's execution of this Agreement
(a) certain directors, officers and shareholders of UCB executed,
in favor of Meridian, a Letter Agreement dated May 23, 1995, in the
form attached hereto as Exhibit 1, and (b) UCB granted to Meridian
an option to acquire, under certain circumstances, UCB's common
stock (the "Meridian Option") pursuant to a Stock Option Agreement
between Meridian and UCB dated May 23, 1995, in the form attached
hereto as Exhibit 2.
3. Meridian desires to merge United Counties Trust
Company, a New Jersey banking corporation and a wholly-owned
subsidiary of UCB ("UCTC") into and with Meridian Bank, New Jersey,
a New Jersey banking corporation and a wholly-owned subsidiary of
Meridian ("MBNJ"), with MBNJ surviving such merger in accordance
with the Bank Plan of Merger in the form attached hereto as
Exhibit 3.
4. Meridian and UCB desire to provide the terms and
conditions governing the transactions contemplated herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto, intending to be legally
bound, do hereby agree as follows:
ARTICLE I
Section 1.01 DEFINITIONS. As used in this Agreement,
the following terms shall have the indicated meanings (such
meanings to be equally applicable to both the singular and plural
forms of the terms defined):
AFFILIATE means, with respect to any Person, any
Person who directly, or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such Person and, without limiting the
generality of the foregoing, includes any executive officer,
director or 5% equity owner of such Person.
AGREEMENT means this agreement, and any amendment or
supplement hereto, which constitutes a "plan of merger"
between Meridian and UCB.
APPLICATIONS means the applications for regulatory
approval which are required by the transactions contemplated
hereby.
ARTICLES OF MERGER means the articles of merger to
be executed by Meridian and UCB and to be filed in the PDS and
the NJDS, in accordance with the applicable laws of the
Commonwealth of Pennsylvania and the State of New Jersey.
BANK MERGER means the merger of UCTC with and into
MBNJ, with MBNJ surviving such merger, contemplated by
Section 1.03 of this Agreement.
BANK PLAN OF MERGER has the meaning given to that
term in Section 1.03 of this Agreement.
BANK REGULATORY AUTHORITY means any banking agency
or department of any federal or state government, including
without limitation the FRB, the FDIC, the PDB, the NJDB or the
respective staffs thereof.
BCL means the Pennsylvania Business Corporation Law
of 1988, as amended.
BHC ACT means the Bank Holding Company Act of 1956,
as amended.
CLOSING DATE means the seventh business day after
the last condition precedent pursuant to this Agreement has
been fulfilled or waived, or such other date as Meridian and
UCB shall agree.
COMPENSATION AND BENEFITS PACKAGE has the meaning
given to that term in Section 4.12 of this Agreement.
EFFECTIVE DATE means the date upon which the
Articles of Merger shall be filed with the PDS and the NJSOS.
ENVIRONMENTAL LAW means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any
Environmental Regulatory Authority relating to (i) the
protection, preservation or restoration of the environment
(including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural
resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, whether by
type or by quantity, including any material containing any
such substance as a component.
ENVIRONMENTAL REGULATORY AUTHORITY means,
individually and collectively, any one or more of the United
States Environmental Protection Agency, the Commonwealth of
Pennsylvania Department of Environmental Resources, the
NJDERE, the United States Occupational Safety and Health
Administration, the Commonwealth of Pennsylvania Department of
Labor and Industry, and United States Army Corps of Engineers
and any other federal, state or local administration, agency
or bureau charged with the establishment of regulations, or
the administration or enforcement of laws and regulations,
pertaining to the use, storage, transport or disposal of
hazardous or toxic substances, protection of wetlands or
worker safety, or otherwise pertaining to the protection of
the environment.
ERISA means the Employee Retirement Income Security
Act of 1974, as amended.
EXCHANGE ACT means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
from time to time thereunder.
EXCHANGE AGENT has the meaning given to the term in
Section 1.02(f)(iii) of this Agreement.
EXCHANGE RATIO has the meaning given to the term in
Section 1.02(e)(ii) of this Agreement.
FDIC means the Federal Deposit Insurance
Corporation.
FRB means the Federal Reserve Board.
GAAP means generally accepted accounting principles
as in effect at any particular time.
IRC means the Internal Revenue Code of 1986, as
amended.
IRS means the Internal Revenue Service.
MATERIAL ADVERSE CHANGE shall mean, with respect to
Meridian or UCB, any adverse change in financial condition or
results of operations which is material to such entity on a
consolidated basis.
MATERIAL ADVERSE EFFECT (only when such precise
phrase is used) shall mean, with respect to Meridian or UCB,
any adverse effect on assets, business, financial condition or
results of operations which is material to such entity on a
consolidated basis.
MERGER means the merger of UCB with and into
Meridian, with Meridian surviving such merger, contemplated by
this Agreement.
MERIDIAN BANK means Meridian Bank, a Pennsylvania
bank and trust company, all the outstanding capital stock of
which is owned by Meridian.
MERIDIAN COMMON STOCK has the meaning given to that
term in Section 3.02(a) of this Agreement.
MERIDIAN DISCLOSURE SCHEDULE means a disclosure
schedule delivered by Meridian to UCB pursuant to Article III
of this Agreement.
MERIDIAN ESOP means the Meridian Bancorp, Inc.
Employee Stock Ownership Plan.
MERIDIAN FINANCIALS means (i) the audited
consolidated financial statements of Meridian contained in
Meridian's annual report on Form 10-K for the year ended
December 31, 1994, and (ii) the unaudited interim consolidated
financial statements of Meridian as of each calendar quarter
thereafter included in Securities Documents filed by Meridian
prior to the Effective Date.
MERIDIAN OPTION means the option granted to Meridian
to acquire shares of UCB Common Stock referenced in the
Background Section of this Agreement.
MERIDIAN REGULATORY AGREEMENT has the meaning given
to that term in Section 3.11 of this Agreement.
MERIDIAN REGULATORY REPORTS means the Call Reports,
consolidated reports of condition and income, and accompanying
schedules, filed by Meridian Bank, Delaware Trust, MBNJ and
other current or prior Meridian banking subsidiaries, if any,
with any Regulatory Authority for each calendar quarter,
beginning with the quarter ended December 31, 1992, through
the Closing Date.
MERIDIAN RIGHTS AGREEMENT means the Rights Agreement
dated as of July 25, 1989, as amended, between Meridian and
Meridian Bank, as rights agent, relating to Meridian's
Series A Junior Participating Preferred Stock.
MERIDIAN STOCK PURCHASE RIGHTS means Rights to
purchase a unit of Meridian's Series A Junior Participating
Preferred Stock in accordance with the terms of the Meridian
Rights Agreement.
MERIDIAN SUBSIDIARIES means any Subsidiary of
Meridian.
NASD means the National Association of Securities
Dealers, Inc.
NJBCA means the New Jersey Business Corporation Act,
as amended.
NJDB means the Department of Banking of the State of
New Jersey.
NJDEPE means the New Jersey Department of
Environmental Protection and Energy.
NJSOS means the Office of the Secretary of State of
the State of New Jersey.
PDB means the Department of Banking of the
Commonwealth of Pennsylvania.
PDS means the Department of State of the
Commonwealth of Pennsylvania.
PERSON means any individual, corporation,
partnership, joint venture, association, trust, other entity
or "group" (as that term is defined under the Exchange Act).
PROSPECTUS/PROXY STATEMENT means the
prospectus/proxy statement, together with any supplements
thereto, to be transmitted to holders of UCB Common Stock in
connection with the transactions contemplated by this
Agreement.
REGISTRATION STATEMENT means the registration
statement on Form S-4, including any pre-effective or
post-effective amendments or supplements thereto, to be filed
with the SEC under the Securities Act with respect to the
Meridian Common Stock and Meridian Stock Purchase Rights to be
issued in connection with the transactions contemplated by
this Agreement.
REGULATORY AUTHORITY means any Bank Regulatory
Authority or Environmental Regulatory Authority.
RIGHTS means warrants, options, rights, convertible
securities and other capital stock equivalents which obligate
an entity to issue its securities.
SEC means the Securities and Exchange Commission.
SECURITIES ACT means the Securities Act of 1933, as
amended, and the rules and regulations promulgated from time
to time thereunder.
SECURITIES DOCUMENTS means all registration
statements, schedules, statements, forms, reports, proxy
material, and other documents required to be filed under the
Securities Laws.
SECURITIES LAWS means the Securities Act and the
Exchange Act and the rules and regulations promulgated from
time to time thereunder.
SUBSIDIARY OF ANY PERSON means any corporation or
other entity, 50% or more of the capital stock or equivalent
ownership interest of which is owned, either directly or
indirectly, by such Person, except any corporation or other
entity the stock or equivalent ownership interest of which is
held in the ordinary course of the lending activities of such
Person (if such Person is a bank) or is held in the ordinary
course of the lending activities of a bank Subsidiary of such
Person.
UCB COMMON STOCK means the common stock of UCB
described in Section 2.02(a).
UCB DISCLOSURE SCHEDULE means a disclosure schedule
delivered by UCB to Meridian pursuant to Article II of this
Agreement.
UCB FINANCIALS means (i) the audited consolidated
financial statements of UCB contained in UCB's annual report
on Form 10-K for the year ended December 31, 1994, and
(ii) the unaudited interim consolidated financial statements
of UCB as of each calendar quarter thereafter included in
Securities Documents filed by UCB.
UCB REGULATORY AGREEMENT has the meaning given to
that term in Section 2.11 of this Agreement.
UCB REGULATORY REPORTS means the Call Reports,
consolidated reports of condition and income, and accompanying
schedules, filed by UCTC and other prior UCB banking
subsidiaries, if any, with any Regulatory Authority for each
calendar quarter, beginning with the quarter ended
December 31, 1992, through the Closing Date.
UCB SUBSIDIARIES means any Subsidiary of UCB.
Section 1.02 THE MERGER.
(a) CLOSING. The Closing will take place at
10:00 a.m. on the Closing Date at the offices of counsel to
Meridian, unless another time and place are agreed to by the
parties hereto, provided in any case that all conditions to Closing
set forth in Article V have been satisfied or waived at or prior to
Closing. UCB and Meridian shall cause the Articles of Merger to be
duly executed at the Closing and to be filed in the PDS and the
NJSOS immediately after the Closing.
(b) THE MERGER. Subject to the terms and
conditions of this Agreement, on the Effective Date: UCB shall
merge with and into Meridian; the separate existence of UCB shall
cease; Meridian shall be the surviving corporation in the Merger;
and all of the property (real, personal and mixed), rights, powers
and duties and obligations of UCB shall be taken and deemed to be
transferred to and vested in Meridian, as the surviving corporation
in the Merger, without further act or deed; all debts, liabilities
and duties of each of UCB and Meridian shall thereafter be the
responsibility of Meridian as the surviving corporation; all in
accordance with the applicable laws of the Commonwealth of
Pennsylvania and the State of New Jersey.
(c) MERIDIAN'S ARTICLES OF INCORPORATION AND
BYLAWS. On and after the Effective Date, the articles of
incorporation and the bylaws of Meridian, as in effect immediately
prior to the Effective Date, shall automatically be and remain the
articles of incorporation and bylaws of Meridian, as the surviving
corporation in the Merger, until thereafter altered, amended or
repealed.
(d) BOARD OF DIRECTORS AND OFFICERS OF MERIDIAN AND
MBNJ.
(i) On the Effective Date, the Board of
Directors of Meridian, as the surviving corporation in
connection with the Merger, shall consist of those persons
holding such office immediately prior to the Effective Date
(after the changes in the Board made on or before the Closing
date in accordance with Section 5.01(l)).
(ii) On the Effective Date, the officers of
Meridian duly elected and holding office immediately prior to
the Effective Date shall be the officers of Meridian, as the
surviving corporation in the Merger.
(iii) On the effective date of the Bank
Merger, the officers of UCTC and MBNJ duly elected and holding
office immediately prior to such effective date shall be the
officers of MBNJ, as the surviving corporation in the Bank
Merger.
(iv) On the effective date of the Bank Merger,
the directors of MBNJ as the surviving institution in
connection with the Bank Merger shall consist of those persons
holding such office immediately prior to the Effective Date
after the appointment of additional directors pursuant to
Section 5.01(l).
(e) CONVERSION OF SHARES.
(i) MERIDIAN COMMON STOCK.
(A) Each share of Meridian Common Stock issued
and outstanding immediately prior to the Effective Date shall,
on and after the Effective Date, continue to be issued and
outstanding as an identical share of Meridian Common Stock.
(B) Each share of Meridian Common Stock issued
and held in the treasury of Meridian as of the Effective Date,
if any, shall, on and after the Effective Date, continue to be
issued and held in the treasury of Meridian.
(ii) UCB COMMON STOCK.
(A) Subject to the provisions of
subparagraphs (B), (C) and (D) of this
Section 1.02(e)(ii), each share of UCB Common Stock
issued and outstanding immediately prior to the Effective
Date (other than shares of such common stock described in
subparagraph (B) or (C) below) shall, on the Effective
Date, by reason of the Merger and without any action on
the part of the holder thereof, be converted into and
become a right to receive, subject to adjustment as
provided in Section 1.02(e)(iv), five (5.00) fully paid
and nonassessable shares of Meridian Common Stock and the
corresponding percentage of Meridian Stock Purchase
Rights pursuant to the Meridian Rights Agreement (the
"Exchange Ratio").
(B) Each share of UCB Common Stock owned by
Meridian or a Meridian Subsidiary (other than in a
fiduciary capacity) on the Effective Date, if any, shall
be cancelled.
(C) Each share of UCB Common Stock issued and
held in the treasury of UCB or owned by any UCB
Subsidiary (other than in a fiduciary capacity) as of the
Effective Date, if any, shall be cancelled, and no cash,
stock or other property shall be delivered in exchange
therefor.
(D) No fraction of a whole share of Meridian
Common Stock and no scrip or certificates therefor shall
be issued in connection with the Merger. Any former
holder of UCB Common Stock who would otherwise be
entitled to receive a fraction of a share of Meridian
Common Stock shall receive, in lieu thereof, cash in an
amount equal to such fraction of a share multiplied by
the market value of Meridian Common Stock (determined in
accordance with the provisions of Section 1.02(e)(iii)
hereof).
(E) Each option granted under the UCB's 1984
and 1989 Incentive Stock Option Plans to acquire a share
of UCB Common Stock which is outstanding and unexercised
on the Effective Date, shall, subject to adjustment as
provided in Sections 1.02(e)(iv), be converted into and
become an option to acquire that number of shares of
Meridian Common Stock equal to the Exchange Ratio, at the
present stated exercise price of such option divided by
the Exchange Ratio, such shares to be issuable upon the
exercise of such options in accordance with the terms of
the respective plans under which they were issued.
Shares of Meridian Common Stock issuable upon exercise of
such options shall be covered by an effective
registration statement on Form S-8.
(iii) VALUATION OF MERIDIAN COMMON STOCK. For
purposes of this Agreement, the term "Market Value" of a share
of Meridian Common Stock shall mean the average of the closing
sale price of a share of Meridian Common Stock, as reported on
the National Association of Securities Dealers Automated
Quotation System (NASDAQ) National Market System, for the
first 20 of the 25 consecutive trading days immediately prior
to the Closing Date.
(iv) ANTI-DILUTION PROVISIONS. If Meridian
shall, at any time before the Effective Date, (A) issue a
dividend in shares of Meridian Common Stock, (B) combine the
outstanding shares of Meridian Common Stock into a smaller
number of shares, (C) subdivide the outstanding shares of
Meridian Common Stock, or (D) reclassify the shares of
Meridian Common Stock, then, in any such or similar event, the
Exchange Ratio shall be adjusted so that each UCB shareholder
and optionholder shall be entitled to receive such number of
shares of Meridian Common Stock and such other rights,
privileges and securities as such shareholder or optionholder,
as the case may be, would have been entitled to receive if the
Effective Date had occurred prior to the happening of such
event. (By way of illustration, if Meridian shall declare a
stock dividend of 7% payable with respect to a record date on
or prior to the Effective Date, the Exchange Ratio shall be
increased by 7%). All changes in the Exchange Ratio pursuant
to this Section 1.02(e)(iv) shall be cumulative.
(f) SURRENDER AND EXCHANGE OF UCB STOCK CERTIFICATES.
(i) EXCHANGE OF CERTIFICATES. Each holder of
shares of UCB Common Stock who surrenders to Meridian the
certificate or certificates representing such shares will be
entitled to receive, as soon as practicable after the
Effective Date, in exchange therefor an unlegended certificate
or certificates for the number of whole shares of Meridian
Common Stock into which such holder's shares of UCB Common
Stock have been converted by the Merger, together with a check
for cash in lieu of any fractional share in accordance with
Section 1.02(e)(ii)(D) hereof.
(ii) RIGHTS EVIDENCED BY CERTIFICATES. Each
certificate representing shares of Meridian Common Stock
issued in exchange for certificates representing UCB Common
Stock pursuant to Section 1.02(f)(i) hereof will be dated the
Effective Date and be entitled to dividends and all other
rights and privileges pertaining to such shares of Meridian
Common Stock from the Effective Date. Until surrendered, each
certificate theretofore evidencing shares of UCB Common Stock
will, from and after the Effective Date, evidence solely the
right to receive certificates for shares of Meridian Common
Stock pursuant to Section 1.02(f)(i) hereof and a check for
cash in lieu of any fractional share in accordance with
Section 1.02(e)(ii)(D) hereof. If certificates for shares of
UCB Common Stock are exchanged for Meridian Common Stock at a
date following one or more record dates for the payment of
dividends or of any other distribution on the shares of
Meridian Common Stock, Meridian will pay cash in an amount
equal to dividends theretofore payable on such Meridian Common
Stock and pay or deliver any other distribution to which
holders of shares of Meridian Common Stock have theretofore
become entitled. No interest will accrue or be payable in
respect of dividends or cash otherwise payable under this
Section 1.02(f) upon surrender of certificates for shares of
UCB Common Stock. Notwithstanding the foregoing, no party
hereto will be liable to any holder of UCB Common Stock for
any amount paid in good faith to a public official or agency
pursuant to any applicable abandoned property, escheat or
similar law. Until such time as certificates for shares of
UCB Common Stock are surrendered by a UCB shareholder to
Meridian for exchange, Meridian shall have the right to
withhold dividends or any other distributions on the shares of
Meridian Common Stock issuable to such shareholder.
(iii) EXCHANGE PROCEDURES. Meridian shall
designate Meridian Bank as exchange agent hereunder (the
"Exchange Agent") and shall cause the Exchange Agent to follow
the procedures set forth herein. Each certificate for shares
of UCB Common Stock delivered for exchange under this
Section 1.02(f) must be endorsed in blank by the registered
holder thereof or be accompanied by a power of attorney to
transfer such shares endorsed in blank by such holder. Except
as set forth in the next sentence, if more than one
certificate is surrendered at one time and in one transmittal
package for the same shareholder account, the number of whole
shares of Meridian Common Stock for which certificates will be
issued pursuant to this Section 1.02(f) will be computed on
the basis of the aggregate number of shares represented by the
certificates so surrendered. Upon their request, former
shareholders of UCB (or any of them) shall be entitled to the
number of stock certificates they held representing shares of
Meridian Common Stock as equals the number of stock
certificates representing former shares of UCB Common Stock.
If shares of Meridian Common Stock or payments of cash are to
be issued or made to a person other than the one in whose name
the surrendered certificate is registered, the certificate so
surrendered must be properly endorsed in blank, with
signature(s) guaranteed, or otherwise in proper form for
transfer, and the person to whom certificates representing
shares of Meridian Common Stock is to be issued or to whom
cash is to be paid shall pay any transfer or other taxes
required by reason of such issuance or payment to a person
other than the registered holder of the certificate
representing shares of UCB Common Stock which are surrendered.
As promptly as practicable after the Closing Date has been
established, the Exchange Agent shall send or cause to be sent
to each shareholder of record of UCB Common Stock transmittal
materials, in form and substance satisfactory to Meridian and
UCB, for use in exchanging certificates representing UCB
Common Stock for certificates representing Meridian Common
Stock into which the former have been converted in the Merger.
Certificates representing shares of Meridian Common Stock
shall be mailed to former shareholders of UCB (or made
available for pickup, if the former shareholder of UCB so
requests) as soon as reasonably possible but in no event later
than seven (7) business days following the receipt of
certificates representing former shares of UCB Common Stock
duly endorsed or accompanied by the materials referenced
herein (but in no event earlier than the second business day
following the Effective Date).
(iv) CLOSING OF STOCK TRANSFER BOOKS;
CANCELLATION OF UCB CERTIFICATES. Upon the Effective Date,
the stock transfer books for UCB Common Stock will be closed
and no further transfers of shares of UCB Common Stock will
thereafter be made or recognized. All certificates for shares
of UCB Common Stock surrendered pursuant to this
Section 1.02(f) will be cancelled by Meridian.
(g) PAYMENT PROCEDURES. As soon as practicable
after the Effective Date, Meridian shall make payment of the cash
consideration provided for in Section 1.02(e)(ii)(D) to each person
entitled thereto.
(h) MERIDIAN OPTION. Upon the Effective Date, the
Meridian option shall be automatically cancelled and shall be of no
further force and effect.
Section 1.03 THE BANK MERGER. Meridian and UCB shall
use their best efforts to cause UCTC to merge with and into MBNJ,
with MBNJ surviving such merger, simultaneously with or as soon as
practicable after the Effective Date. Concurrently with the
execution and delivery of this Agreement, Meridian shall cause
MBNJ, and UCB shall cause UCTC, to execute and deliver the Bank
Plan of Merger attached hereto as Exhibit 3.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF UCB
UCB hereby represents and warrants to Meridian that,
except as specifically set forth herein or in the UCB Disclosure
Schedule delivered to Meridian by UCB on May 23, 1995:
Section 2.01 ORGANIZATION.
(a) UCB is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey. UCB is a bank holding company duly registered under the
BHC Act. UCB has the corporate power and authority to carry on its
business and operations as now being conducted and to own and
operate the properties and assets now owned and being operated by
it. UCB is not qualified or licensed to do business as a foreign
corporation in any other jurisdiction and is not required to be so
qualified or licensed as the result of the ownership or leasing of
property or the conduct of its business, except in such
jurisdictions where failure to be so qualified or licensed will not
have a Material Adverse Effect on UCB.
(b) UCTC is a banking corporation duly organized
and validly existing under the laws of the State of New Jersey.
UCTC is not a member of the Federal Reserve System. UCTC has the
corporate power and authority to carry on its business and
operations as now being conducted and to own and operate the
properties and assets now owned and being operated by it. UCTC is
not qualified or licensed to do business as a foreign corporation
in any other jurisdiction and is not required to be so qualified or
licensed as the result of the ownership or leasing of property or
the conduct of its business, except in such jurisdictions where
failure to be so qualified or licensed will not have a material
adverse effect on the assets, business, financial condition or
results of operations of UCTC.
(c) UCB has no Subsidiaries other than UCTC, United
Capital Corporation, Unitrust Financial Corporation, United
Counties Service Corporation, Scarlett O'Hara's, Inc. and those
identified in the UCB Disclosure Schedule.
(d) UCTC is a commercial bank the deposits of which
are insured by the Bank Insurance Fund of the FDIC to the extent
provided in the Federal Deposit Insurance Act.
(e) The respective minute books of UCB and UCTC and
each other UCB Subsidiary accurately record, in all material
respects, all material corporate actions of their respective
shareholders and boards of directors (including committees) through
the date of this Agreement.
(f) UCB has delivered to Meridian, or will deliver
within five business days of the date hereof, true and correct
copies of the articles of incorporation and bylaws of UCB and of
UCTC, respectively, as in effect on the date hereof.
Section 2.02 CAPITALIZATION.
(a) As of April 30, 1995, the authorized capital
stock of UCB consists of (a) 6,000,000 shares of common stock, with
a stated value of $1.00 ("UCB Common Stock"), of which:
(i) 2,142,738 shares are outstanding, validly issued, fully paid
and nonassessable and free of preemptive rights and
(ii) 381,438 shares are held by UCB as treasury stock, and
(b) 3,000,000 shares of no par, no stated value preferred stock,
none of which are issued or outstanding. Except as set forth in
the UCB Disclosure Schedule, there has been no change in the
authorized, issued or outstanding shares of UCB. Neither UCB nor
UCTC nor any other UCB or UCTC Subsidiary has or is bound by any
subscription, option, warrant, call, commitment, agreement, plan or
other Right of any character relating to the purchase, sale or
issuance or voting of, or right to receive dividends or other
distributions on any shares of UCB Common Stock, UCB Preferred
Stock or any other security of UCB or any securities representing
the right to vote, purchase or otherwise receive any shares of UCB
Common Stock, UCB Preferred Stock or any other security of UCB,
other than for (i) shares issuable under the Meridian Option and
(ii) 64,032 shares which UCB is obligated to issue, at an average
exercise price of approximately $60, under UCB's 1984 Incentive
Stock Option Plan and UCB's 1989 Stock Option Plan to its employees
and employees of UCB Subsidiaries, including UCTC.
(b) The authorized capital stock of UCTC consists
of 2,425,900 shares of common stock, par value $5.00 per share
("UCTC Common Stock"), of which 2,425,900 shares are outstanding,
validly issued, fully paid, nonassessable, free of preemptive
rights and owned by UCB. Neither UCB nor any other UCB Subsidiary
has or is bound by any subscription, option, warrant, call,
commitment, agreement or other Right of any character relating to
the purchase, sale or issuance or voting of, or right to receive
dividends or other distributions on any shares of the capital stock
of any UCB Subsidiary or any other security of any UCB Subsidiary
or any securities representing the right to vote, purchase or
otherwise receive any shares of the capital stock or any other
security of any UCB Subsidiary. Either UCB or UCTC owns all of the
outstanding shares of capital stock of each UCB Subsidiary free and
clear of all liens, security interests, pledges, charges,
encumbrances, agreements and restrictions of any kind or nature.
There are no subscriptions, options, warrants, calls, commitments,
agreements or other Rights outstanding with respect to the capital
stock of UCTC or any other UCB Subsidiary.
(c) Neither (i) UCB nor, (ii) UCTC nor (iii) any
other UCB or UCTC Subsidiary owns any equity interest, directly or
indirectly, in any other company or controls any other company,
except for equity interests identified in Section 2.01(c) hereof,
equity interests held in the investment portfolios of UCB or UCB
Subsidiaries, equity interests held by UCB Subsidiaries in a
fiduciary capacity, and equity interests held in connection with
the commercial loan and ancillary real estate activities of UCB
Subsidiaries. As used in this paragraph, "equity interests"
include any subscriptions, options, warrants, calls, commitments,
agreements or other Rights.
(d) No Person is known to UCB to be the beneficial
owner (as defined in Section 13(d) of the Exchange Act) of 5% or
more of the outstanding shares of UCB Common Stock, except as
disclosed in UCB's proxy statement used in connection with its 1995
meeting of shareholders, previously delivered to Meridian.
(e) UCB does not maintain a dividend reinvestment
or similar plan providing for the reinvestment of dividends to
purchase additional shares of UCB Common Stock.
Section 2.03 AUTHORITY; NO VIOLATION.
(a) UCB has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. UCTC has full corporate power
and authority to execute and deliver the Bank Plan of Merger and to
consummate the Bank Merger. The execution and delivery of this
Agreement by UCB and the completion by UCB of the transactions
contemplated hereby have been duly and validly approved by the
Board of Directors of UCB and, except for approval by the
shareholders of UCB as required under the NJBCA, UCB's articles of
incorporation and bylaws and NASDAQ requirements applicable to it,
no other corporate proceedings on the part of UCB are necessary to
complete the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by UCB and, subject to
approval of the shareholders of UCB as required under the NJBCA,
UCB's articles of incorporation and bylaws and NASDAQ requirements
applicable to it and receipt of the required approvals of
Regulatory Authorities referred to in Section 3.04 hereof, and
constitutes the valid and binding obligation of UCB, enforceable
against UCB in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles
of equity. Subject to UCB shareholder approval of this Agreement,
the Bank Plan of Merger, upon its execution and delivery by UCTC
concurrently with the execution and delivery of this Agreement,
will constitute the valid and binding obligation of UCTC,
enforceable against UCTC in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity.
(b) (A) The execution and delivery of this
Agreement by UCB, (B) the execution and delivery of the Bank Plan
of Merger by UCTC, (C) subject to receipt of approvals from the
Bank Regulatory Authorities referred to in Section 3.04 hereof and
UCB's and Meridian's compliance with any conditions contained
therein, the completion of the transactions contemplated hereby,
and (D) compliance by UCB or UCTC with any of the terms or
provisions hereof or of the Bank Plan of Merger will not
(i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of UCB or any UCB
Subsidiary; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable
to UCB or any UCB Subsidiary or any of their respective properties
or assets; or (iii) 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 a right of termination or acceleration or
the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of UCB or any UCB
Subsidiary under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease,
agreement, commitment or other instrument or obligation to which
UCB or any UCB Subsidiary is a party, or by which they or any of
their respective properties or assets may be bound or affected,
except for such violations, conflicts, breaches or defaults under
clause (ii) or (iii) hereof which, either individually or in the
aggregate, will not have a Material Adverse Effect on UCB, or a
Material Adverse Effect on the ability of UCB to perform any of its
obligations under this Agreement.
Section 2.04 CONSENTS; DISSENTERS' RIGHTS. Except for
the consents, approvals, filings and registrations from or with the
Bank Regulatory Authorities referred to in Section 3.04 hereof and
compliance with any conditions contained therein, and the approval
of this Agreement by the shareholders of UCB under the NJBCA, and
the approval of the NJDEPE under ISRA, if necessary, no consents or
approvals of, or filings or registrations with, any public body or
authority are necessary, and no consents or approvals of any third
parties are necessary, or will be, in connection with (a) the
execution and delivery of this Agreement by UCB or the Bank Plan of
Merger by UCTC, or (b) the completion by UCB of the transactions
contemplated hereby or by UCTC of the Bank Merger. UCB has no
reason to believe that any required consents or approvals will not
be received or will be received with conditions, limitations or
restrictions unacceptable to it or which would adversely impact
UCB's ability to complete the transactions contemplated by this
Agreement. Shareholders of UCB are not entitled to dissenters'
rights in connection with the transactions contemplated hereby
under federal or New Jersey law.
Section 2.05 FINANCIAL STATEMENTS.
(a) UCB has previously delivered, or will deliver,
to Meridian the UCB Regulatory Reports. The UCB Regulatory Reports
have been, or will be, prepared in accordance with applicable
regulatory accounting principles and practices applied on a
consistent basis throughout the periods covered by such statements,
and fairly present, or will fairly present, the financial position,
results of operations and changes in shareholder's equity of UCB as
of and for the periods ended on the dates thereof, in accordance
with applicable regulatory accounting principles applied on a
consistent basis.
(b) UCB has previously delivered to Meridian the
UCB Financials. The UCB Financials have been, or will be, prepared
in accordance with GAAP applied on a consistent basis throughout
the periods covered by such statements, and fairly present, or will
fairly present, the consolidated financial position, results of
operations and cash flows of UCB as of and for the periods ending
on the dates thereof, in accordance with GAAP applied on a
consistent basis.
(c) At the date of each balance sheet included in
the UCB Financials or the UCB Regulatory Reports, neither UCB nor
UCTC nor any other prior banking subsidiary of UCB (as the case may
be) had any liabilities, obligations or loss contingencies of any
nature (whether absolute, accrued, contingent or otherwise)
required to be reflected in such UCB Financials or UCB Regulatory
Reports or in the footnotes thereto which are not fully reflected
or reserved against therein or fully disclosed in a footnote
thereto, except for liabilities, obligations and loss contingencies
which are not material in the aggregate and except for liabilities,
obligations and loss contingencies which are within the subject
matter of a specific representation and warranty herein and
subject, in the case of any unaudited statements, to normal,
recurring audit adjustments and the absence of footnotes.
Section 2.06 TAXES.
(a) UCB and the UCB Subsidiaries are members of the
same affiliated group within the meaning of IRC Section 1504(a).
UCB has duly filed, and will file, in correct form all federal,
state and local tax returns then required to be filed by or with
respect to UCB and all UCB Subsidiaries on or prior to the Closing
Date (all such returns being accurate and correct in all material
respects) and has duly paid or will pay, or made or will make,
provisions for the payment of all federal, state and local taxes
which have been incurred by or are due or claimed to be due from
UCB and any UCB Subsidiary by any taxing authority or pursuant to
any tax sharing agreement or arrangement (written or oral) on or
prior to the Closing Date other than as set forth on the UCB
Disclosure Schedule or taxes which (i) are not delinquent or
(ii) are being contested in good faith.
(b) No consent pursuant to IRC Section 341(f) has
been filed (or will be filed prior to the Closing Date) by or with
respect to UCB or any UCB Subsidiary.
Section 2.07 NO MATERIAL ADVERSE CHANGE.
Except as set forth in the UCB Disclosure Schedule, UCB
has not sustained any Material Adverse Change since March 31, 1995.
Section 2.08 CONTRACTS.
(a) Except as described in UCB's proxy statement
for its 1995 annual meeting of shareholders previously delivered to
Meridian, in the footnotes to the audited consolidated financial
statements of UCB as of December 31, 1994 and 1993 and for the
three years ended December 31, 1994, in the UCB Disclosure Schedule
or in Section 2.08(c) or (d), neither UCB nor any UCB Subsidiary is
a party to or subject to: (i) any employment, consulting or
severance contract or arrangement with any past or present officer,
director or employee of UCB or any UCB Subsidiary, except for "at
will" arrangements; (ii) any plan, arrangement or contract
providing for bonuses, pensions, options, deferred compensation,
retirement payments, profit sharing or similar arrangements for or
with any past or present officers, directors or employees of UCB or
any UCB Subsidiary; (iii) any collective bargaining agreement with
any labor union relating to employees of UCB or any UCB Subsidiary;
(iv) any agreement which by its terms limits the payment of
dividends by any UCB Subsidiary; (v) any instrument evidencing or
related to indebtedness for borrowed money whether directly or
indirectly, by way of purchase money obligation, conditional sale,
lease purchase, guaranty or otherwise, in respect of which UCB or
any UCB Subsidiary is an obligor to any person, which instrument
evidences or relates to indebtedness other than deposits,
repurchase agreements, bankers acceptances and "treasury tax and
loan" accounts established in the ordinary course of business and
transactions in "federal funds"; (vi) any contract (other than this
Agreement) limiting the freedom of any UCB Subsidiary to engage in
any type of banking or bank-related business permissible under law;
or (vii) any contract, plan or arrangement which provides for
payments or benefits in certain circumstances which, together with
other payments or benefits payable to any participant therein or
party thereto, might render any portion of any such payments or
benefits subject to disallowance of deduction therefor as a result
of the application of Section 280G of the Code.
(b) Except as set forth in the UCB Disclosure
Schedule, true and correct copies of agreements, plans,
arrangements and instruments referred to in Section 2.08(a) or
described in the UCB proxy statement for its 1995 annual meeting of
shareholders or in a footnote to such audited consolidated
financial statements have been or will be provided to Meridian on
or before the date specified in the preamble to this Article II and
are in full force and effect on the date hereof and neither UCB nor
any UCB Subsidiary (nor, to the knowledge of UCB, any other party
to any such contract, plan, arrangement or instrument) has breached
any provision of, or is in default in any respect under any term
of, any such contract, plan, arrangement or instrument, except
where such breach or default is unlikely to have a Material Adverse
Effect on UCB or a material adverse effect on the assets, business,
financial condition or results of operations of UCTC. Except as
set forth in the UCB Disclosure Schedule, no party to any contract,
plan, arrangement or instrument material to UCB that requires
annual payments to UCB or any UCB subsidiary in excess of $250,000
will have the right to terminate any or all of the provisions of
any such contract, plan, arrangement or instrument as a result of
the transactions contemplated by this Agreement. Except as set
forth in the UCB Disclosure Schedule, no employee benefit plan,
employment agreement, termination agreement, or similar agreement
or arrangement to which UCB or any UCB Subsidiary is a party or
under which UCB or any UCB Subsidiary may be liable contains
provisions which permit an employee or independent contractor to
terminate it without cause and continue to accrue future benefits
thereunder. Except as set forth in the UCB Disclosure Schedule or
the employment contracts referred to in Section 2.08(c), no such
agreement, plan or arrangement (x) provides for acceleration in the
vesting of benefits or payments due thereunder upon the occurrence
of a change in ownership or control of UCB or any UCB Subsidiary
absent the occurrence of a subsequent event, (y) provides for
benefits which may cause the disallowance of a federal income tax
deduction under IRC Section 280G; or (z) requires UCB or any UCB
Subsidiary to provide a benefit in the form of UCB Common Stock or
determined by reference to the value of UCB Common Stock.
(c) UCB and UCTC are parties to employment
contracts only with Eugene H. Bauer, Nicholas Frungillo, Donald S.
Nowicki, Robert W. Dowens, Sr., J. Richard Pierce, and Theodore E.
Zuczek. True and correct copies of such contracts have been
delivered to Meridian prior to the execution of this Agreement and
Meridian acknowledges receipt and acceptance thereof. Such
contracts as delivered have not been amended or modified.
(d) UCTC has negotiated two employment severance
contracts, copies of which contracts have been delivered to
Meridian, and real estate contracts as set forth in the UCB
Disclosure Schedule.
(e) Except as set forth in the UCB Disclosure
Schedule, since December 31, 1994, UCB has not increased the salary
or wages of any employee of UCB or UCTC by more than 5%.
Section 2.09 OWNERSHIP OF PROPERTY; INSURANCE COVERAGE.
(a) UCB and the UCB Subsidiaries have, or will have
as to property acquired after the date hereof, good and, as to real
property, marketable title to all assets and properties owned by
UCB or any UCB Subsidiary in the conduct of their businesses,
whether such assets and properties are real or personal, tangible
or intangible, including assets and property reflected in the
balance sheets contained in the UCB Regulatory Reports and in the
UCB Financials or 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 the date of such
balance sheets), subject to no encumbrances, liens, mortgages,
security interests or pledges, except (i) those items that secure
liabilities that are reflected in such balance sheets or the notes
thereto or that secure liabilities incurred in the ordinary course
of business after the date of the last 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 UCB and its Subsidiaries taken as
a whole, and (iv) items permitted under Article IV. UCB and the
UCB Subsidiaries, as lessee, have the right under valid and
subsisting leases of real and personal properties used by UCB and
its Subsidiaries in the conduct of their businesses to occupy or
use all such properties as presently occupied and used by each of
them. A list of such existing leases and commitments to lease and
the lease expense and minimum rental commitments with respect to
such leases and lease commitments are set forth in the UCB
Disclosure Schedule.
(b) UCB and the UCB Subsidiaries currently maintain
insurance similar in amounts, scope and coverage to that maintained
by other peer banks and peer bank holding companies. Except as set
forth in the UCB Disclosure Schedule, neither UCB nor any UCB
Subsidiary has received notice from any insurance carrier that
(i) such insurance will be cancelled or that coverage thereunder
will be reduced or eliminated, or (ii) premium costs with respect
to such policies of insurance will be substantially increased.
Except as set forth in the UCB Disclosure Schedule, there are
presently no claims pending under such policies of insurance and no
notices have been given by UCB or UCTC under such policies. All
such insurance is valid and enforceable and in full force and
effect, and within the last three years UCB has received each type
of insurance coverage for which it has applied and during such
periods has not been denied indemnification for any material claims
submitted under any of its insurance policies, except as set forth
in the UCB Disclosure Schedule.
Section 2.10 LEGAL PROCEEDINGS. Except as set forth in
the UCB Disclosure Schedule, neither UCB nor any UCB Subsidiary is
a party to any, and there are no pending or, to the best of UCB's
knowledge, threatened legal, administrative, arbitration or other
proceedings, claims, actions or governmental investigations or
inquiries of any nature (i) against UCB or any UCB Subsidiary,
(ii) to which UCB or any UCB Subsidiary's assets are subject,
(iii) challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which could
adversely affect the ability of UCB to perform under this
Agreement, except for any proceedings, claims, actions,
investigations or inquiries referred to in clauses (i) or (ii)
which, if adversely determined, individually or in the aggregate,
should not be reasonably expected to materially and adversely
affect the assets, business, financial condition or results of
operations of UCB and its Subsidiaries taken as a whole.
Section 2.11 COMPLIANCE WITH APPLICABLE LAW.
(a) UCB and the UCB Subsidiaries hold all licenses,
franchises, permits and authorizations necessary for the lawful
conduct of their businesses under, and have complied in all
material respects with, applicable laws, statutes, orders, rules or
regulations of any federal, state or local governmental authority
relating to them, other than where such failure to hold or such
noncompliance will neither result in a limitation in any material
respect on the conduct of their businesses nor otherwise have a
material adverse effect on the assets, business, financial
condition, the results of operations or prospects of UCB and its
Subsidiaries taken as a whole.
(b) Neither UCB nor any UCB Subsidiary has received
any notification or communication from any Bank Regulatory
Authority (i) asserting that UCB or any UCB Subsidiary is not in
substantial compliance with any of the statutes, regulations or
ordinances which such Bank Regulatory Authority enforces;
(ii) threatening to revoke any license, franchise, permit or
governmental authorization which is material to UCB or any UCB
Subsidiary; (iii) requiring or threatening to require UCB or any
UCB Subsidiary, or indicating that UCB or any UCB Subsidiary may be
required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement restricting or
limiting, or purporting to restrict or limit, in any manner the
operations of UCB or any UCB Subsidiary, including without
limitation any restriction on the payment of dividends; or
(iv) directing, restricting or limiting, or purporting to direct,
restrict or limit, in any manner the operations of UCB or any UCB
Subsidiary, including without limitation any restriction on the
payment of dividends (any such notice, communication, memorandum,
agreement or order described in this sentence herein referred to as
a "UCB Regulatory Agreement"). Neither UCB nor any UCB Subsidiary
has consented to or entered into any UCB Regulatory Agreement,
except as heretofore disclosed to Meridian.
Section 2.12 ERISA. UCB has previously delivered, or
will deliver, to Meridian true and complete copies of all employee
pension benefit plans within the meaning of ERISA Section 3(2),
profit sharing plans, stock purchase plans, deferred compensation
and supplemental income plans, supplemental executive retirement
plans, employment agreements, annual or long term incentive plans,
settlement plans, policies and agreements, group insurance plans,
and all other employee welfare benefit plans within the meaning of
ERISA Section 3(1) (including vacation pay, sick leave, short-term
disability, long-term disability, and medical plans) and all other
employee benefit plans, policies, agreements and arrangements, all
of which are set forth in the UCB Disclosure Schedule, maintained
or contributed to for the benefit of the employees or former
employees (including retired employees) and any beneficiaries
thereof or directors or former directors of UCB or any UCB
Subsidiary, together with (i) the most recent actuarial (if any)
and financial reports relating to those plans which constitute
"qualified plans" under IRC Section 401(a), (ii) the most recent
annual reports relating to such plans filed by them, respectively,
with any government agency, and (iii) all rulings and determination
letters which pertain to any such plans. Except as set forth in
the UCB Disclosure Schedule, no such plan, policy, agreement or
arrangement has been amended or adopted since January 1, 1993,
except to the extent required by law. Neither UCB nor any UCB
Subsidiary, and no pension plan maintained by UCB or any UCB
Subsidiary, has incurred, directly or indirectly, any liability
under Title IV of ERISA (including to the Pension Benefit Guaranty
Corporation) or to the IRS with respect to any pension plan
qualified under IRC Section 401(a), except liabilities to the
Pension Benefit Guaranty Corporation pursuant to ERISA
Section 4007, all of which have been fully paid, nor has any
reportable event under ERISA Section 4043(b) occurred with respect
to any such pension plan. With respect to each of such plans that
is subject to Title IV of ERISA, the present value of the accrued
benefits under such plan, based upon the actuarial assumptions used
for funding purposes in the plan's most recent actuarial report,
did not, as of its latest valuation date, exceed the then current
value of the assets of such plan allocable to such accrued
benefits. Neither UCB nor any UCB Subsidiary has incurred or is
subject to any liability under ERISA Section 4201 for a complete or
partial withdrawal from a multi-employer plan. All "employee
benefit plans," as defined in ERISA Section 3(3), comply and, at
all times in the past, have complied in all material respects with
(i) relevant provisions of ERISA and (ii) in the case of plans
intended to qualify for favorable income tax treatment, provisions
of the IRC relevant to such treatment. Except as disclosed in the
UCB Disclosure Schedule, neither UCB nor any UCB Subsidiary has a
material liability under any such plan which pursuant to GAAP is
required to be reflected on or disclosed in (pursuant to a footnote
or otherwise) the UCB Financials and which is not so reflected or
disclosed thereon. To the best knowledge of UCB, except as
disclosed in the UCB Disclosure Schedule, no prohibited
transaction, breach of fiduciary duty or other transaction has
occurred with respect to any employee benefit plan maintained by
UCB or any UCB Subsidiary which would result in the imposition,
directly or indirectly, of an excise tax or other penalty under
ERISA or the IRC. UCB and the UCB Subsidiaries provide
continuation coverage under group health plans for separating
employees and "qualified beneficiaries" in accordance with the
provisions of IRC Section 4980B(f). Such group health plans are in
compliance with Section 1862(b)(1) of the Social Security Act.
Section 2.13 BROKERS AND FINDERS. Except for UCB's
engagement of Goldman, Sachs & Co., neither UCB nor any UCB
Subsidiary, nor any of their respective officers, directors,
employees or agents, has employed any broker, finder or financial
advisor, or except for a commitment to pay Goldman, Sachs & Co.,
incurred any liability or commitment for any fees or commissions to
any such person in connection with the transactions contemplated by
this Agreement.
Section 2.14 ENVIRONMENTAL MATTERS. To the knowledge of
UCB, except as set forth in the UCB Disclosure Schedule, neither
UCB nor any UCB Subsidiary, nor any properties owned or operated by
UCB or any UCB Subsidiary has been or is in violation of or liable
under any Environmental Law. There are no actions, suits or
proceedings, or demands, claims, notices or investigations
(including without limitation notices, demand letters or requests
for information from any environmental agency) instituted or
pending, or to the knowledge of UCB, threatened relating to the
liability of any property owned or operated by UCB or any UCB
Subsidiary under any Environmental Law.
Section 2.15 LOAN PORTFOLIO. The allowance for loan
losses reflected, or to be reflected, in the UCB Regulatory
Reports, and shown, or to be shown, on the balance sheets contained
in the UCB Financials were, at the dates of such UCB Regulatory
Reports or UCB Financials, adequate, in accordance with the
requirements of GAAP and all applicable regulatory criteria. No
Bank Regulatory Authority has requested UCB or UCTC to increase the
allowance for loan losses during 1991, 1992, 1993 or 1994 beyond
the allowance actually set with respect to such periods.
Section 2.16 INFORMATION TO BE SUPPLIED. The
information to be supplied by UCB and UCTC for inclusion in the
Registration Statement (including information to be incorporated by
reference therein) will not, at the time the Registration Statement
is declared effective pursuant to the Securities Act, contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not
misleading. The information supplied, or to be supplied, by UCB
for inclusion in the Applications will, at the time such documents
are filed with any Bank Regulatory Authority, be accurate in all
material aspects.
Section 2.17 SECURITIES DOCUMENTS. UCB has delivered,
or will deliver, to Meridian copies of its (i) annual reports on
SEC Form 10-K for the years ended December 31, 1994, 1993 and 1992,
(ii) quarterly reports on SEC Form 10-Q for the quarters ended
March 31, 1995 and March 31, June 30, and September 30, 1993 and
1994, and (iii) proxy materials used or for use in connection with
its meetings of shareholders held in 1995, 1994 and 1993. At the
time of their filing with the SEC, such reports and such proxy
materials complied, in all material respects, with the Exchange Act
and all applicable rules and regulations of the SEC and did not
contain a misstatement or omission of a material fact.
Section 2.18 RELATED PARTY TRANSACTIONS. Except as
disclosed in the UCB Disclosure Schedule or in the proxy statement
for use in connection with UCB's 1995 annual meeting of
shareholders or in the footnotes to the UCB Financials, UCB is not
a party to any transaction (including any loan or other credit
accommodation) with any director, officer, associate or 5%
shareholder (each, an "Insider") of UCB. All such transactions
(a) were made in the ordinary course of business, (b) were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more than
the normal risk of collectability or present other unfavorable
features. Except as set forth in the UCB Disclosure Schedule, no
loan or credit accommodation to any Insider of UCB is presently in
default or, during the one-year period prior to the date of this
Agreement, has been in default or has been restructured, modified
or extended. Neither UCB nor UCTC has any reason to believe that
principal and interest with respect to any such loan or other
credit accommodation will not be paid when due or that the loan
grade classification accorded such loan or credit accommodation by
UCTC is inappropriate.
Section 2.19 INVESTMENT BANKING OPINION. The Board of
Directors of UCB has received an opinion, dated as of the date of
approval of the Merger by the Board, from Goldman, Sachs & Co.,
that the Exchange Ratio is fair to the shareholders of UCB from a
financial point of view.
Section 2.20 ANTITAKEOVER PROVISIONS INAPPLICABLE. The
provisions of Sections 14A:10A-4 and 14A:10-5 of the NJBCA do not
and will not apply to this agreement or the transactions
contemplated hereby.
Section 2.21 QUALITY OF REPRESENTATIONS. No
representations made by UCB in this Agreement contain any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements made not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MERIDIAN
Meridian hereby represents and warrants to UCB that,
except as specifically set forth herein or in the Meridian
Disclosure Schedule delivered to UCB by Meridian on May 23, 1995:
Section 3.01 ORGANIZATION.
(a) Meridian is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Each Meridian Subsidiary is duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation and each possesses full
corporate power and authority to carry on its respective business
and to own, lease and operate its properties as presently
conducted. Neither Meridian nor any Meridian Subsidiary is
required by the conduct of its business or the ownership or leasing
of its assets to qualify to do business as a foreign corporation in
any jurisdiction, where the failure to be so qualified would be
material to the assets, business, financial condition or results of
operations of Meridian and its Subsidiaries taken as a whole.
Meridian is a multi-bank holding company duly registered under the
BHC Act.
(b) MBNJ is a bank and trust company, duly
organized and validly existing under the laws of the state of New
Jersey. MBNJ is not a member of the Federal Reserve System. MBNJ
has the corporate power and authority to carry on its business and
operations as now being conducted and to own and operate the
properties and assets now owned and being operated by it.
(c) There are no Meridian Subsidiaries other than
those identified in the Meridian Disclosure Schedule.
(d) MBNJ is a commercial bank the deposits of which
are insured by the Bank Insurance Fund of the FDIC to the extent
provided in the Federal Deposit Insurance Act.
(e) The respective minute books of Meridian and
MBNJ accurately record, in all material respects, all material
corporate actions of their respective shareholders and boards of
directors (including committees) through the date of this
Agreement.
(f) Prior to the execution of this Agreement,
Meridian has delivered to UCB true and correct copies of the
articles of incorporation and bylaws of Meridian and MBNJ.
Section 3.02 CAPITAL STRUCTURE.
(a) As of April 30, 1995, Meridian is authorized,
by its articles of incorporation, to issue (a) 200,000,000 shares
of common stock, par value $5.00 per share ("Meridian Common
Stock"), of which 2,469,678 shares are issued and held by Meridian
as treasury stock and 55,847,300 shares are issued and outstanding,
and (b) 25,000,000 shares of preferred stock, par value $25.00 per
share, none of which are issued and outstanding. Except as set
forth in the Meridian Disclosure Schedule, there has been no change
in the shares of authorized, issued or outstanding shares of
Meridian Common Stock. All shares of Meridian Common Stock issued
and outstanding are fully paid and nonassessable and none were
issued in violation of any preemptive rights. Meridian has no
Rights authorized, issued or outstanding, other than (i) the
Meridian Stock Purchase Rights, (ii) as authorized under the
Meridian ESOP and other employee benefit plans, stock option plan,
and dividend reinvestment plan, and (iii) 500,000 shares of
Meridian Common Stock issuable to former shareholders of McGlinn
Capital Management, Inc. Since December 31, 1993, Meridian has
repurchased (i) 2,240,738 shares of Meridian Common Stock for
issuance in connection with Meridian's employee benefit plans,
stock option plan and dividend reinvestment plan and
(ii) 500,000 shares in connection with providing for the McGlinn
acquisition. As of April 30, 1995, Meridian had approximately
27,000 shareholders of record. The Meridian Disclosure Schedule
lists the timing and number of purchases of Meridian Common Stock
by the Meridian ESOP and other employee benefit plans, stock option
plan and dividend reinvestment plan between January 1, 1994 and the
date of this Agreement.
(b) No Person is known to Meridian to be the
beneficial owner (as defined in Section 13(d) of the Exchange Act)
of 5% or more of the outstanding shares of Meridian Common Stock,
except as disclosed in Meridian's proxy statement used in
connection with its 1995 annual meeting of shareholders, previously
delivered to UCB.
(c) Meridian owns all of the capital stock of
Meridian Bank, Delaware Trust Company, and MBNJ free and clear of
any lien or encumbrance. Neither (i) Meridian nor, (ii) MBNJ nor
(iii) any other Meridian Subsidiary owns any equity interest,
directly or indirectly, in any other company, except for equity
interests identified on the Meridian Disclosure Schedule, equity
interests identified pursuant to Section 3.01(c) hereof, equity
interests held in the investment portfolios of Meridian or Meridian
Subsidiaries, equity interests held by Meridian Subsidiaries in a
fiduciary capacity and equity interests held in connection with the
commercial loan and ancillary real estate activities of Meridian
Subsidiaries. As used in this paragraph, "equity interests"
include any subscriptions, options, warrants, calls, commitments,
agreements or other Rights.
(d) The authorized capital stock of MBNJ consists
of (a) 6,000,000 shares of common stock, par value $5.00 per share,
of which, no shares are held by MBNJ as treasury stock and
1,000,000 shares were issued and outstanding and (b) 25,000,000
shares of preferred stock, par value $25.00 per share, none of
which are issued and outstanding. All shares of capital stock of
MBNJ issued and outstanding are fully paid and nonassessable and
owned by Meridian, and none were issued in violation of any
preemptive rights. MBNJ has no Rights authorized, issued or
outstanding.
Section 3.03 AUTHORITY; NO VIOLATION.
(a) Meridian has full corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. MBNJ has full corporate power
and authority to execute and deliver the Bank Plan of Merger and to
complete the Bank Merger. The execution and delivery of this
Agreement by Meridian and the completion by Meridian of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of Meridian and, except for
approval by the shareholders of Meridian under NASD rules
applicable to it, no other corporate proceedings on the part of
Meridian are necessary to complete the transactions contemplated
hereby. The execution and delivery of the Bank Plan of Merger by
MBNJ and the completion by MBNJ of the Bank Merger have been duly
and validly approved by the Board of Directors of MBNJ and by
Meridian as sole shareholder of MBNJ, and no other corporate
proceedings on the part of MBNJ are necessary to consummate the
transactions contemplated by the Bank Plan of Merger. This
Agreement has been duly and validly executed and delivered by
Meridian and, subject to approval by the shareholders of Meridian
under the rules of the NASD applicable to it, and receipt of the
required approvals of Regulatory Authorities described in
Section 3.04 hereof, constitutes the valid and binding obligation
of Meridian, enforceable against Meridian in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity. The Bank Plan of
Merger, upon its execution and delivery by MBNJ concurrently with
the execution and delivery of this Agreement, will constitute the
valid and binding obligation of MBNJ, enforceable against MBNJ in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of equity.
(b) (A) The execution and delivery of this
Agreement by Meridian, (B) the execution and delivery of the Bank
Plan of Merger by MBNJ, (C) subject to receipt of approvals from
the Regulatory Authorities referred to in Section 3.04 hereof and
UCB's and Meridian's compliance with any conditions contained
therein, the consummation of the transactions contemplated hereby,
and (D) compliance by Meridian or MBNJ with any of the terms or
provisions hereof or of the Bank Plan of Merger will not
(i) conflict with or result in a breach of any provision of the
articles of incorporation or bylaws of Meridian or MBNJ;
(ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Meridian
or MBNJ or any of their respective properties or assets; or
(iii) 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 a right of termination or acceleration or the creation of any
lien, security interest, charge or other encumbrance upon any of
the properties or assets of Meridian or MBNJ under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
investment or obligation to which Meridian or is a party, or by
which they or any of their respective properties or assets may be
bound or affected, except for such violations, conflicts, breaches
or defaults under clause (ii) or (iii) hereof which, either
individually or in the aggregate, will not have a material adverse
effect on Meridian or a material adverse effect on Meridian's
ability to perform hereunder.
Section 3.04 CONSENTS. Except for the consents,
approvals, filings and registrations with the FRB, the FDIC, the
NJDB, the PDB, the SEC, and state "blue sky" authorities and
compliance with any conditions contained therein, and the approval
of this Agreement by the shareholders of Meridian under the rules
of the NASD and of the Bank Plan of Merger by Meridian as the sole
shareholder of MBNJ, no consents or approvals of, or filings or
registrations with, any public body or authority are necessary, and
no consents or approvals of any third parties are necessary, or
will be, in connection with (a) the execution and delivery of this
Agreement by Meridian or the Bank Plan of Merger by MBNJ, or
(b) the completion by Meridian of the transactions contemplated
hereby or by MBNJ of the Bank Merger. Meridian has no reason to
believe that any required consents or approvals will not be
received or will be received with conditions, limitations or
restrictions unacceptable to it or which would adversely impact
Meridian's ability to complete the transactions contemplated by
this Agreement.
Section 3.05 FINANCIAL STATEMENTS.
(a) Meridian has previously delivered, or will
deliver, to UCB the Meridian Regulatory Reports. The Meridian
Regulatory Reports have been, or will be, prepared in accordance
with applicable regulatory accounting principles and practices
applied on a consistent basis throughout the periods covered by
such statements, and fairly present, or will fairly present, the
financial position, results of operations and changes in
shareholders' equity of Meridian as of and for the periods ended on
the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) Meridian has previously delivered, or will
deliver, to UCB the Meridian Financials. The Meridian Financials
have been, or will be, prepared in accordance with GAAP applied on
a consistent basis throughout the periods covered by such
statements, and fairly present, or will fairly present, the
consolidated financial position, results of operations and cash
flows of Meridian as of and for the periods ending on the dates
thereof, in accordance with GAAP applied on a consistent basis.
(c) At the date of any balance sheet included in
the Meridian Financials, Meridian did not have any liabilities or
obligations of any nature (whether absolute, accrued, contingent or
otherwise) of a type required to be reflected in such Meridian
Financials or in the footnotes thereto which are not fully
reflected or reserved against therein or disclosed in a footnote
thereto, except for liabilities and obligations which are not
material in the aggregate and which are incurred in the ordinary
course of business, consistent with past practice, and except for
liabilities and obligations which are within the subject matter of
a specific representation and warranty herein and subject, in the
case of any unaudited statements, to normal, recurring adjustments
and the absence of footnotes.
Section 3.06 TAXES.
(a) Meridian and the Meridian Subsidiaries are
members of the same affiliated group within the meaning of IRC
Section 1504(a). Meridian has duly filed, and will file, in
correct form all federal, state and local tax returns then required
to be filed by or with respect to Meridian and all Meridian
Subsidiaries on or prior to the Closing Date (all such returns
being accurate and correct in all material respects) and has duly
paid or will pay, or made or will make, provisions for the payment
of all federal, state and local taxes which have been incurred by
or are due or claimed to be due from Meridian and any Meridian
Subsidiary by any taxing authority or pursuant to any tax sharing
agreement or arrangement (written or oral) on or prior to the
Closing Date other than taxes which (i) are not delinquent or
(ii) are being contested in good faith.
(b) No consent pursuant to IRC Section 341(f) has
been filed (or will be filed prior to the Closing Date) by or with
respect to Meridian or any Meridian Subsidiary.
Section 3.07 NO MATERIAL ADVERSE CHANGE. Except as set
forth in the Meridian Disclosure Schedule, Meridian has not
suffered any Material Adverse Change since March 31, 1995.
Section 3.08 CONTRACTS.
(a Except as described in Meridian's proxy
statement for its 1995 annual meeting of shareholders previously
delivered to UCB, in the footnotes to the audited consolidated
financial statements of Meridian as of December 31, 1994 and 1993
and for the three years ended December 31, 1994, in the Meridian
Disclosure Schedule or in Section 3.08(c) or (d), neither Meridian
nor any Meridian Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract or arrangement with
any named executive officer identified in the Compensation Table
included in Meridian's proxy statement used in connection with its
1995 annual meetings of shareholders, except for "at will"
arrangements; (ii) any plan, arrangement or contract providing for
bonuses, pensions, options, deferred compensation, retirement
payments, profit sharing or similar arrangements for or with any
named executive officer identified in the Compensation Table
included in Meridian's proxy statement used in connection with its
1995 annual meeting of shareholders; (iii) any collective
bargaining agreement with any labor union relating to employees of
Meridian or any Meridian Subsidiary; (iv) any agreement which by
its terms limits the payment of dividends by any Meridian
Subsidiary; or (v) any contract (other than this Agreement)
limiting the freedom of any Meridian Subsidiary to engage in any
type of banking or bank-related business permissible under law.
(b) The agreements, plans, arrangements and
instruments referred to in Section 3.08(a) or described in
Meridian's proxy statement for its 1995 annual meeting of
shareholders or in a footnote to Meridian's audited consolidated
financial statements are in full force and effect on the date
hereof and neither Meridian nor any Meridian Subsidiary (nor, to
the knowledge of Meridian, any other party to any such contract,
plan, arrangement or instrument) has breached any provision of, or
is in default in any respect under any term of, any such contract,
plan, arrangement or instrument. Except as set forth in the
Meridian Disclosure Schedule or in Meridian's Proxy Statement for
its 1995 meeting of shareholders, no party to any material
contract, plan, arrangement or instrument that requires annual
payments in excess of $250,000 will have the right to terminate any
or all of the provisions of any such contract, plan, arrangement or
instrument as a result of the transactions contemplated by this
Agreement and none of the employees of Meridian or any Meridian
Subsidiary possess the right to terminate their employment as a
result of the execution of this Agreement. Except as set forth in
the Meridian Disclosure Schedule or in Meridian's proxy statement
for its 1995 meeting of shareholders, no plan, employment
agreement, termination agreement, or similar agreement or
arrangement to which Meridian or any Meridian Subsidiary is a party
or under which Meridian or any Meridian Subsidiary may be liable
contains provisions which permit an employee or independent
contractor to terminate it without cause and continue to accrue
future benefits thereunder.
Section 3.09 OWNERSHIP OF PROPERTY; INSURANCE COVERAGE.
(a) Meridian and the Meridian Subsidiaries have, or
will have as to property acquired after the date hereof, good and,
as to real property, marketable title to all assets and properties
owned by Meridian or any Meridian Subsidiary in the conduct of
their businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and property
reflected in the balance sheets contained in the Meridian
Regulatory Reports and in the Meridian Financials or 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 the date of such balance sheets).
Meridian and the Meridian Subsidiaries, as lessee, have the right
under valid and subsisting leases of real and personal properties
used by Meridian and its Subsidiaries in the conduct of their
businesses to occupy or use all such properties as presently
occupied and used by each of them.
(b) Meridian and the Meridian Subsidiaries
currently maintain insurance similar in amounts, scope and coverage
to that maintained by other peer banks and peer bank holding
companies. All such insurance is valid and enforceable and in full
force and effect, and within the last three years Meridian has
received each type of insurance coverage for which it has applied
and during such periods has not been denied indemnification for any
material claims submitted under any of its insurance policies,
except as set forth on the Meridian Disclosure Schedule.
Section 3.10 LEGAL PROCEEDINGS. Except as disclosed in
the Meridian Disclosure Schedule, neither Meridian nor any Meridian
Subsidiary is a party to any, and there are no pending or, to the
best of Meridian's knowledge, threatened legal, administrative,
arbitration or other proceedings, claims, actions or governmental
investigations or inquiries of any nature (i) against Meridian or
any Meridian Subsidiary, (ii) to which Meridian's or any Meridian
Subsidiary's assets are subject, (iii) challenging the validity or
propriety of any of the transactions contemplated by this
Agreement, or (iv) which could adversely affect the ability of
Meridian to perform under this Agreement, except for any
proceedings, claims, actions, investigations or inquiries referred
to in clauses (i) or (ii) which, if adversely determined,
individually or in the aggregate, should not be reasonably expected
to materially and adversely affect the assets, business, financial
condition or results of operations of Meridian and its Subsidiaries
taken as a whole.
Section 3.11 COMPLIANCE WITH APPLICABLE LAW.
(a) Meridian and the Meridian Subsidiaries hold all
licenses, franchises, permits and authorizations necessary for the
lawful conduct of their businesses under, and have complied in all
material respects with, applicable laws, statutes, orders, rules or
regulations of any federal, state or local governmental authority
relating to them, other than where such failure to hold or such
noncompliance will neither result in a limitation in any material
respect on the conduct of their businesses nor otherwise have a
material adverse effect on the assets, business, financial
condition or results of operations of Meridian and its Subsidiaries
taken as a whole.
(b) Except as set forth in the Meridian Disclosure
Schedule, neither Meridian nor any Meridian Subsidiary has received
any notification or communication from any Regulatory Authority or
the SEC or any state securities law regulatory authority
(i) asserting that Meridian or any Meridian Subsidiary is not in
substantial compliance with any of the statutes, regulations or
ordinances which such Bank Regulatory Authority enforces;
(ii) threatening to revoke any license, franchise, permit or
governmental authorization which is material to Meridian or any
Meridian Subsidiary; (iii) requiring or threatening to require
Meridian or any Meridian Subsidiary, or indicating that Meridian or
any Meridian Subsidiary may be required, to enter into a cease and
desist order, agreement or memorandum of understanding or any other
agreement restricting or limiting, or purporting to restrict or
limit, in any manner the operations of Meridian or any Meridian
Subsidiary, including without limitation any restriction on the
payment of dividends; or (iv) directing, restricting or limiting,
or purporting to direct, restrict or limit, in any manner the
operations of Meridian or any Meridian Subsidiary, including
without limitation any restriction on the payment of dividends (any
such notice, communication, memorandum, agreement or order
described in this sentence herein referred to as a "Meridian
Regulatory Agreement"). Neither Meridian nor any Meridian
Subsidiary has consented to or entered into any Meridian Regulatory
Agreement, except as heretofore disclosed to UCB.
Section 3.12 ERISA. Neither Meridian nor any Meridian
Subsidiary, and no pension plan maintained by Meridian or any
Meridian Subsidiary, has incurred, directly or indirectly, any
liability under Title IV of ERISA (including to the Pension Benefit
Guaranty Corporation) or to the IRS with respect to any pension
plan qualified under IRC Section 401(a), except liabilities to the
Pension Benefit Guaranty Corporation pursuant to ERISA
Section 4007, all of which have been fully paid, nor has any
reportable event under ERISA Section 4043(b) occurred with respect
to any such pension plan. With respect to each of such plans that
is subject to Title IV of ERISA, the present value of the accrued
benefits under such plan, based upon the actuarial assumptions used
for funding purposes in the plan's most recent actuarial report,
did not, as of its latest valuation date, exceed the then current
value of the assets of such plan allocable to such accrued
benefits. Neither Meridian nor any Meridian Subsidiary has
incurred or is subject to any liability under ERISA Section 4201
for a complete or partial withdrawal from a multi-employer plan.
All "employee benefit plans," as defined in ERISA Section 3(3),
comply and, at all times in the past, have complied in all material
respects with (i) relevant provisions of ERISA and (ii) in the case
of plans intended to qualify for favorable income tax treatment,
provisions of the IRC relevant to such treatment. Except as
disclosed in the Meridian Disclosure Schedule, neither Meridian nor
any Meridian Subsidiary has a material liability under any such
plan which pursuant to GAAP is required to be reflected on or
disclosed in (pursuant to a footnote or otherwise) the Meridian
Financials and which is not so reflected or disclosed thereon. To
the best knowledge of Meridian, except as disclosed in the Meridian
Disclosure Schedule, no prohibited transaction, breach of fiduciary
duty or other transaction has occurred with respect to any employee
benefit plan maintained by Meridian or any Meridian Subsidiary
which would result in the imposition, directly or indirectly, of an
excise tax or other penalty under ERISA or the IRC. Meridian and
the Meridian Subsidiaries provide continuation coverage under group
health plans for separating employees and "qualified beneficiaries"
in accordance with the provisions of IRC Section 4980B(f). Such
group health plans are in compliance with Section 1862(b)(1) of the
Social Security Act.
Section 3.13 BROKERS AND FINDERS. Except for Meridian's
engagement of Keefe, Bruyette & Woods, Inc. and Lehman Brothers,
Inc., neither Meridian nor any Meridian Subsidiary, nor any of
their respective officers, directors, employees or agents, has
employed any broker, finder or financial advisor, or except for
commitments to pay Keefe, Bruyette & Woods, Inc. and Lehman
Brothers, Inc., incurred any liability or commitment for any fees
or commissions to any such person in connection with the
transactions contemplated by this Agreement.
Section 3.14 ENVIRONMENTAL MATTERS. To the knowledge of
Meridian, except as set forth on the Meridian Disclosure Schedule,
neither Meridian nor any Meridian Subsidiary, nor any properties
owned or operated by Meridian or any Meridian Subsidiary has been
or is in violation of or liable under any Environmental Law.
Except as set forth on the Meridian Disclosure Schedule, there are
no actions, suits or proceedings, or demands, claims, notices or
investigations (including without limitation notices, demand
letters or requests for information from any environmental agency)
instituted or pending, or to the knowledge of Meridian, threatened
relating to the liability of any property owned or operated by
Meridian or any Meridian Subsidiary under any Environmental Law.
Section 3.15 LOAN PORTFOLIO. The allowance for loan
losses reflected, or to be reflected, in the Meridian Regulatory
Reports, and shown, or to be shown, on the balance sheets contained
in the Meridian Financials were, at the dates of such Meridian
Regulatory Reports or Meridian Financials, adequate, in accordance
with the requirements of GAAP and all applicable regulatory
criteria. No Regulatory Authority has requested Meridian or any
Meridian Subsidiary to increase its allowance for loan losses
during 1991, 1992, 1993 or 1994 beyond the allowance actually set
with respect to such periods.
Section 3.16 INFORMATION TO BE SUPPLIED. The
information to be supplied by Meridian for inclusion in the
Registration Statement (including information to be incorporated by
reference therein) will not, at the time the Registration Statement
is declared effective pursuant to the Securities Act, contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not
misleading. The Registration Statement will comply, in all
material respects, as to form with the requirements of the
Securities Act. The information supplied, or to be supplied, by
Meridian for inclusion in the Applications will, at the time such
documents are filed with any Bank Regulatory Authority, be accurate
in all material aspects.
Section 3.17 SECURITIES DOCUMENTS. Meridian has
delivered, or will deliver, to UCB copies of its (i) annual reports
on SEC Form 10-K for the years ended December 31, 1994, 1993, and
1992, (ii) quarterly reports on SEC Form 10-Q for the quarters
ended March 31, 1995 and March 31, June 30, and September 30, 1993
and 1994, and (iii) proxy materials used in connection with its
annual meeting of shareholders held in April 1995. At the time of
their filing with the SEC, such reports and such proxy materials
complied, in all material respects, with the Exchange Act and the
applicable rules and regulations of the SEC and did not contain an
untrue statement or omission of a material fact.
Section 3.18 RELATED PARTY TRANSACTIONS. Except as
disclosed in the Meridian Disclosure Schedule or the proxy
statement for use in connection with Meridian's 1995 annual meeting
of shareholders or in the footnotes to the Meridian Financials,
Meridian is not a party to any transaction (including any loan or
other credit accommodation) with any director, officer, associate
or 5% shareholder (each an "Insider") of Meridian (except a
Meridian Subsidiary). All such transactions (a) were made in the
ordinary course of business, (b) were made on substantially the
same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
Persons, and (c) did not involve more than the normal risk of
collectability or present other unfavorable features. Except as
set forth on the Meridian Disclosure Schedule, no loan or credit
accommodation to any Insider of Meridian is presently in default
or, during the three-year period prior to the date of this
Agreement, has been in default or has been restructured, modified
or extended. Neither Meridian nor any Meridian Subsidiary has any
reason to believe that principal and interest with respect to any
such loan or other credit accommodation will not be paid when due
or that the loan grade classification accorded such loan or credit
accommodation by any Meridian Subsidiary is inappropriate.
Section 3.19 INVESTMENT BANKING OPINION. Meridian has
received an opinion from Lehman Brothers, Inc. to the effect that
the transaction is fair to Meridian from a financial point of view.
Section 3.20 QUALITY OF REPRESENTATIONS. No
representation made by Meridian in this Agreement contains any
untrue statement of a material fact or omits to state a material
fact necessary to make the statements made not misleading.
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 CONDUCT OF UCB'S BUSINESS.
(a) From the date of this Agreement to the Closing
Date, UCB and each UCB Subsidiary will conduct its business and
engage in transactions, including extensions of credit and pricing
deposit liabilities, only in the ordinary course and consistent
with past practice and policies, except as otherwise required or
permitted by this Agreement, as set forth in the UCB Disclosure
Schedule or with the written consent of Meridian. UCB will use its
best efforts, and will cause UCTC to use its best efforts, to
(i) preserve its business organizations intact, (ii) maintain good
relationships with employees, and (iii) preserve for itself the
good will of customers of UCB and UCB Subsidiaries and others with
whom business relationships exist. From the date hereof to the
Closing Date, except as otherwise consented to or approved by
Meridian in writing or as permitted or required by this Agreement,
UCB will not, and UCB will not permit any UCB Subsidiary to:
(i) change any provision of its articles of
incorporation or bylaws;
(ii) change the number of authorized or issued
shares of its capital stock or issue or grant any option,
warrant, call, commitment, subscription, Right or agreement of
any character relating to its authorized or issued capital
stock or any securities convertible into shares of such stock,
or split, combine or reclassify any shares of capital stock,
or declare, set aside or pay any dividend or other
distribution in respect of capital stock, or redeem or
otherwise acquire any shares of capital stock except that UCB
may continue to declare and pay regular quarterly cash
dividends on March 1, June 1, September 1, and December 1 of
each year, not to exceed $1.85 per share of UCB Common Stock
outstanding, provided that each of Meridian and UCB shall have
received from KPMG Peat Marwick a letter reasonably
satisfactory to each of them to that effect that the payment
of any such dividend would not prevent Meridian from
accounting for the Merger as a pooling of interests.
Notwithstanding the foregoing, UCB shall not, without the
prior written consent of Meridian, declare or pay any such
cash dividend on shares of UCB Common Stock in or for any
calendar quarter in which Meridian reasonably anticipates that
the Effective Date will occur on or prior to the record date
for the payment by Meridian, during such quarter, of a regular
cash dividend on shares of Meridian Common Stock;
(iii) except as set forth on the UCB
Disclosure Schedule, grant any severance or termination pay
(other than pursuant to written policies or written agreements
of UCB or UCB Subsidiaries in effect on the date hereof and
provided to Meridian prior to the date hereof) to, or enter
into or amend any employment agreement with, or increase the
compensation of, any employee, officer or director of UCB or
any UCB Subsidiary, except for routine periodic increases,
individually and in the aggregate, in accordance with past
practice;
(iv) except as set forth on the UCB
Disclosure Schedule, merge or consolidate UCB or any UCB
Subsidiary with any other corporation; sell or lease all
or any substantial portion of the assets or business of UCB
or any UCB Subsidiary; make any acquisition of all or any
substantial portion of the business or assets of any other
person, firm, association, corporation or business organization
other than in connection with the collection of any loan or
credit arrangement between any UCB Subsidiary and any other
person; enter into a purchase and assumption transaction with
respect to deposits and liabilities; permit the revocation or
surrender by any UCB Subsidiary of its certificate of authority
to maintain, or file an application for the relocation of, any
existing branch office, or file an application for a certificate
of authority to establish a new branch office;
(v) except as set forth in the UCB Disclosure
Schedule, sell or otherwise dispose of the capital stock of
UCTC or sell or otherwise dispose of any asset of UCB or of
any UCB Subsidiary other than in the ordinary course of
business consistent with past practice; subject any asset of
UCB or of any UCB Subsidiary to a lien, pledge, security
interest or other encumbrance (other than in connection with
deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary
course of business and transactions in "federal funds" and the
satisfaction of legal requirements in the exercise of trust
powers) other than in the ordinary course of business
consistent with past practice; modify in any material manner
the manner in which UCB or any UCB Subsidiary has heretofore
conducted its business or enter into any new line of business;
incur any indebtedness for borrowed money (or guarantee any
indebtedness for borrowed money), except in the ordinary
course of business consistent with past practice; provided,
however, that UCTC may undertake the activities listed on the
UCB Disclosure Schedule;
(vi) take any action which would result in any
of the representations and warranties of UCB set forth in this
Agreement becoming untrue as of the Closing Date or in any of
the conditions set forth in Article V hereof not being
satisfied;
(vii) change any method, practice or principle
of accounting except for implementation of SFAS No. 112, SFAS
No. 114 and SFAS No. 115 and any new SFAS standard;
(viii) waive, release, grant or transfer any
rights of value or modify or change in any material respect
any existing agreement to which UCB or any UCB Subsidiary is
a party, other than in the ordinary course of business,
consistent with past practice;
(ix) except as set forth in the UCB Disclosure
Schedule, implement any pension, retirement, profit sharing,
bonus, welfare benefit or similar plan or arrangement that was
not in effect on the date of this Agreement, or amend any
existing plan or arrangement except to the extent such
amendments do not result in an increase in cost or are
required by law or are contemplated hereunder;
(x) compromise, extend or restructure any loan
with an unpaid principal balance exceeding $1 million
individually or $10 million in the aggregate, except as set
forth in the UCB Disclosure Schedule;
(xi) except in accordance with UCB policies
existing on November 1, 1994 (as the same may be amended with
the consent of Meridian), and except consistent with UCB's
practices on November 1, 1994 (as the same may be changed with
the consent of Meridian), sell, exchange or otherwise dispose
of any investment securities or loans that are held for sale,
prior to scheduled maturity;
(xii) except in accordance with UCB policies
existing on November 1, 1994 (as the same may be amended with
the consent of Meridian), and except consistent with UCB's
practices existing on November 1, 1994 (as the same may be
changed with the consent of Meridian), purchase any security
for its investment portfolio;
(xiii) purchase or sell, exchange or otherwise
dispose of any investment securities which would result in the
creation of undue risk with respect to such portfolio or sell
or otherwise dispose of any equity securities included in the
investment portfolio;
(xiv) except as set forth in the UCB
Disclosure Schedule and consistent with prudent banking
practice and UCB's current underwriting standards, make or
modify any loan or other credit facility commitment;
(xv) except as set forth in the UCB Disclosure
Schedule and consistent with past practice, enter into, renew,
extend or modify any other transaction with any Affiliate;
(xvi) enter into any swap or similar
commitment, agreement or arrangement;
(xvii) take any further action (other than
continuation of employment in accordance with past practice)
that would give rise to a right of payment to any individual
under any employment agreement or any bonus or performance
award arrangement;
(xviii) take any action that UCB knows would
preclude satisfaction of the condition to closing contained in
Section 5.02(k) relating to financial accounting treatment of
the Merger;
(xix) amend its articles of incorporation,
charter or bylaws or permit the amendment of the articles of
incorporation, charter or bylaws of any UCB Subsidiary;
(xx) materially change its interest rate
composition for purposes of asset/liability management or
manage its interest rate risk otherwise than consistent with
past practice; or
(xxi) agree to do any of the foregoing.
For purposes of this Section 4.01, it shall not be
considered in the ordinary course of business for UCB or any UCB
Subsidiary to do any of the following: (i) make any capital
expenditures of more than $1,000,000 in any calendar year in the
aggregate, without the prior written consent of Meridian;
(ii) except as set forth in the UCB Disclosure Schedule, make any
sale, assignment, transfer, pledge, hypothecation or other
disposition of any assets having a book or market value, whichever
is greater, in the aggregate, in excess of $1,000,000, other than
a pledge of assets to secure government deposits, the exercise of
trust powers, sale of assets received in satisfaction of debts
previously contracted in the normal course of business, issuance of
loans, or transactions in investment securities by a UCB Subsidiary
or repurchase agreements made, in each case, in the ordinary course
of business; (iii) undertake or enter any lease, contract or other
commitment for its account, other than in the normal course of
providing credit to customers as part of its banking business,
involving a payment by UCB or any UCB Subsidiary in excess of
$1,000,000 or a payment to an affiliate of UCB or containing a
material financial commitment and extending beyond 12 months from
the date hereof; or (iv) initiate or implement any loan marketing
programs at other than market rates.
Section 4.02 ACCESS; CONFIDENTIALITY.
(a) From the date of this Agreement through the
Closing Date, UCB shall afford to, and shall cause each UCB
Subsidiary to afford to, Meridian and its authorized agents and
representatives, complete access to its respective properties,
assets, books and records and personnel, at reasonable hours and
after reasonable notice; and the officers of UCB will furnish any
person making such investigation on behalf of Meridian with such
financial and operating data and other information with respect to
the businesses, properties, assets, books and records and personnel
as Meridian shall from time to time reasonably request.
(b) During the 30 day period immediately prior to
the estimated Closing Date under this Agreement, Meridian shall
afford to, and shall cause each Meridian Subsidiary to afford to,
UCB and its authorized agents and representatives, continuing
access to Meridian's properties, assets, books and records and
personnel, at reasonable hours and after reasonable notice. Such
due diligence shall be consistent in scope to the due diligence
conducted by UCB in connection with the execution of this
Agreement.
(c) UCB and Meridian each agree to conduct such
investigation and discussions hereunder in a manner so as not to
interfere unreasonably with normal operations and customer and
employee relationships of the other party.
(d) If the transactions contemplated by this
Agreement shall not be consummated, UCB and Meridian will each
destroy or return all documents and records obtained from the other
party or its representatives, during the course of its
investigation and will cause all information with respect to the
other party obtained pursuant to this Agreement or preliminarily
thereto to be kept confidential, except to the extent such
information becomes public through no fault of the party to whom
the information was provided or any of its representatives or
agents and except to the extent disclosure of any such information
is legally required. UCB and Meridian shall each give prompt
notice to the other party of any contemplated disclosure where such
disclosure is so legally required.
(e) UCB and Meridian each agree not to hire the
other's employees during the term of this Agreement, and if this
Agreement terminates, for a period of six months thereafter.
(f) Meridian shall permit for a period of 2 years
after Closing access to the minute books of UCTC and its affiliates
for purposes of historical research.
Section 4.03 REGULATORY MATTERS AND CONSENTS.
(a) Meridian will prepare all Applications and make
all filings for, and use their best efforts to obtain as promptly
as practicable after the date hereof, all necessary permits,
consents, approvals, waivers and authorizations of all Bank
Regulatory Authorities necessary or advisable to complete the
transactions contemplated by this Agreement.
(b) UCB will furnish Meridian with all information
concerning UCB and UCB Subsidiaries as may be necessary in
connection with any Application or filing made by or on behalf of
Meridian to any Regulatory Authority in connection with the
transactions contemplated by this Agreement as promptly as
practicable.
(c) Meridian will promptly furnish UCB with copies
of written communications to, or received by Meridian or any
Meridian Subsidiary from, any Regulatory Authority in respect of
the transactions contemplated hereby.
(d) UCB will cooperate with Meridian in the
foregoing matters and will furnish Meridian with all information
concerning UCB and UCB Subsidiaries as may be necessary in
connection with any Application or filing (including the
Registration Statement and any report filed with the SEC) made by
or on behalf of Meridian to any Regulatory Authority in connection
with the transactions contemplated by this Agreement, and such
information will be accurate and complete in all material respects.
In connection therewith, UCB will provide certificates and other
documents reasonably requested by Meridian.
Section 4.04 TAKING OF NECESSARY ACTION.
(a) Meridian and UCB shall each use its best
efforts in good faith, and each of them shall cause its
Subsidiaries to use their best efforts in good faith, to
(i) furnish such information as may be required in connection with
the preparation of the documents referred to in Section 4.03 of
this Agreement and (ii) take or cause to be taken all action
necessary or desirable on its part so as to permit completion of
the Merger and the Bank Merger at the earliest possible date,
including, without limitation, (1) obtaining the consent or
approval of each Person whose consent or approval is required for
consummation of the transactions contemplated hereby, provided that
neither UCB nor any UCB Subsidiary shall agree to make any payments
or modifications to agreements in connection therewith without the
prior written consent of Meridian and (2) requesting the delivery
of appropriate opinions, consents and letters from its counsel and
independent auditors. No party hereto shall take, or cause, or to
the best of its ability permit to be taken, any action that would
substantially impair the prospects of completing the Merger and the
Bank Merger pursuant to this Agreement and the Bank Plan of Merger;
provided that nothing herein contained shall preclude Meridian or
UCB or from exercising its rights under this Agreement or the
Option Agreement.
(b) UCB and Meridian shall prepare a
Prospectus/Proxy Statement to be mailed to shareholders of UCB in
connection with the meeting of UCB shareholders and transactions
contemplated hereby and to be filed by Meridian with the SEC in the
Registration Statement, which Prospectus/Proxy statement shall
conform in the reasonable judgment of Meridian and UCB and their
respective counsel to all applicable legal requirements. Meridian
shall, as promptly as practicable following the preparation
thereof, in a form consented to by both Meridian and UCB, file the
Registration Statement with the SEC and UCB and Meridian shall use
all reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after
such filing. Meridian will advise UCB, promptly after Meridian
receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order or the suspension of
the qualification of the shares of capital stock issuable pursuant
to the Registration Statement, or the initiation or threat of any
proceeding for any such purpose, or of any request by the SEC for
the amendment or supplement of the Registration Statement or for
additional information. Meridian shall use its best efforts to
obtain, prior to the effective date of the Registration Statement,
all necessary state securities laws or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by
this Agreement.
Section 4.05 CERTAIN AGREEMENTS.
(a) Subject to Section 4.13 hereof, as soon as
practicable after the Effective Date, all employees of UCB and UCB
Subsidiaries whose employment is continued shall be employed upon
their existing terms and conditions, provided that this Section
4.05(a) shall not be construed (i) to limit the ability of Meridian
and Meridian Subsidiaries to terminate the employment of any
employee or to review and adjust employee salary levels and
employee benefit programs from time to time and to make such
changes as they deem appropriate, (ii) to require Meridian or any
Meridian Subsidiaries to provide employees or former employees with
any specific benefits, or (iii) to constitute UCB employees or
former employees as third party beneficiaries of this
Section 4.05(a).
(b) For a period of six years from and after the
Effective Date, Meridian shall indemnify, and advance expenses in
matters that may be subject to indemnification to, persons who
served as directors and officers of UCB or any UCB Subsidiary on or
before the Effective Date with respect to liabilities and claims
(and related expenses) made against them resulting from their
service as such prior to the Effective Date in accordance with and
subject to the requirements and other provisions of Meridian's
articles of incorporation and bylaws in effect on the date of this
Agreement and applicable provisions of law to the same extent as
Meridian is obliged thereunder to indemnify and advance expenses to
its own directors and officers with respect to liabilities and
claims made against them resulting from their service as such for
Meridian.
(c) Meridian, from and after the Effective Date,
will provide to the persons who served as directors or officers of
UCB or any UCB Subsidiary on or before the Effective Date insurance
against liabilities and claims (and related expenses) made against
them resulting from their service as such prior to the Effective
Date. Such coverage shall be provided by means of an extended
reporting period endorsement to the policy presently issued to UCB
by the present carrier for UCB. Such insurance coverage will be
provided for a policy period of six years after the Effective Date.
Section 4.06 NO OTHER BIDS AND RELATED MATTERS. UCB
shall not, nor shall it permit any UCB Subsidiary or any other
Affiliate of UCB or any officer, director or employee of any of
them, or any investment banker, attorney, accountant or other
representative retained by UCB, any UCB Subsidiary or any other UCB
Affiliate to, directly or indirectly, solicit, encourage, initiate
or, except as may be legally required for the discharge by UCB's
Board of Directors of its fiduciary duty but only prior to the
effectiveness of the Registration Statement, engage in discussions
or negotiations with, or respond to requests for information,
inquiries, or other communications from, any person other than
Meridian concerning the fact of, or the terms and conditions of,
this Agreement, or concerning any acquisition of UCB, any UCB
Subsidiary, or any assets or business thereof (except that UCB's
officers may respond to inquiries from analysts, Regulatory
Authorities and holders of UCB Common Stock in the ordinary course
of business). UCB shall notify Meridian immediately if any such
discussions or negotiations are sought to be initiated with UCB by
any person other than Meridian or if any such requests for
information, inquiries, proposals or communications are received
from any person other than Meridian. In the event of a response or
discussions by UCB in accordance with this Section 4.06, UCB shall
keep Meridian advised of all developments which could reasonably be
expected to result in the UCB Board of Directors withdrawing,
modifying or amending its recommendation of the Merger.
Section 4.07 CORE DEPOSITS. UCB shall, and shall cause
each UCB Subsidiary to, use commercially reasonable efforts to
maintain and increase core deposits (other than certificates of
deposit of $100,000 and over).
Section 4.08 DUTY TO ADVISE; DUTY TO UPDATE UCB'S
DISCLOSURE SCHEDULE. UCB shall promptly advise Meridian of any
change or event having a Material Adverse Effect on it or which it
believes would or would be reasonably likely to cause or constitute
a material breach of any of its representations, warranties or
covenants set forth herein. UCB shall update UCB's Disclosure
Schedule as promptly as practicable after the occurrence of an
event or fact which, if such event or fact had occurred prior to
the date of this Agreement, would have been disclosed in such
Disclosure Schedule. The delivery of such updated Disclosure
Schedule shall not relieve UCB from any breach or violation of this
Agreement and shall not have any effect for the purposes of
determining the satisfaction of the condition set forth in
Sections 5.02(b) hereof.
Section 4.09 CONDUCT OF MERIDIAN'S BUSINESS. From the
date of this Agreement to the Closing Date, Meridian will use its
best efforts to (x) preserve its business organizations intact,
(y) maintain good relationships with employees, and (z) preserve
for itself the goodwill of customers of Meridian and Meridian
Subsidiaries and others with whom business relationships exist. In
addition, Meridian shall not take any action that Meridian knows
would preclude satisfaction of the condition to closing contained
in Section 5.02(k) relating to financial accounting treatment.
Section 4.10 BOARD AND COMMITTEE MINUTES AND MEETINGS.
UCB shall provide to Meridian, within 15 business days after any
meeting of the Board of Directors of UCB or UCTC, a copy of the
minutes of such meeting. UCB shall also provide to Meridian as
soon as available prior to any meeting of the Board of Directors of
UCB, any committee of the Board of Directors of UCB, or any senior
management committee of UCB copies of materials, including the
agenda, distributed to such UCB directors or officers in connection
with any such meeting.
Section 4.11 UNDERTAKINGS BY MERIDIAN AND UCB.
(a) UCB shall:
(i) VOTING BY DIRECTORS. Use reasonable
efforts to cause all members of UCB's Board of Directors to
vote all shares of UCB's Common Stock over which they hold
sole voting power, and to cause all shares over which they
hold shared voting power to be voted, in favor of this
Agreement;
(ii) APPROVAL OF BANK PLAN OF MERGER. If all
other conditions to UCB's obligation to complete these
transactions have been met or waived, approve the Bank Plan of
Merger as sole shareholder of UCTC and obtain the approval of,
and cause the execution and delivery of, the Bank Plan of
Merger by UCTC; and
(iii) PROXY SOLICITOR. If Meridian requests
and agrees to bear the expense thereof, retain a proxy
solicitor in connection with the solicitation of UCB
shareholder approval of this Agreement; or
(b) Meridian and UCB shall each:
(i) SHAREHOLDER MEETINGS. Submit this
Agreement to their respective shareholders for approval at a
meeting to be held as soon as practicable, and use their
respective best efforts to cause their respective Boards of
Directors to unanimously recommend approval of this Agreement
to their respective shareholders, and, if there are not
sufficient votes at the time of such meeting to constitute a
quorum or to approve this Agreement, adjourn such meetings for
a period not to exceed 30 days to permit further solicitation
of proxies;
(ii) FILINGS AND APPROVALS. Cooperate with
the other in the prompt preparation and filing, as soon as
practicable, of (A) the Applications, (B) the Registration
Statement and related filings under state securities laws
covering the Meridian Common Stock and related Meridian Stock
Purchase Rights to be issued pursuant to the Merger, (C) all
other documents necessary to obtain any other approvals and
consents required to effect the completion of the Merger and
the Bank Merger, and (D) all other documents contemplated by
this Agreement;
(iii) IDENTIFICATION OF UCB'S AFFILIATES.
Cooperate with the other and use its best efforts to identify
those persons who may be deemed to be Affiliates of UCB;
(iv) PUBLIC ANNOUNCEMENTS. Meridian and UCB
and their respective officers, directors, employees and agents
will cooperate with each other in good faith, consistent with
their respective legal obligations, in the preparation and
distribution of any and all press releases, announcements and
other public disclosures concerning the transactions
contemplated hereby. Neither party will make a public
announcement concerning without first giving the other party
reasonable opportunity to review and comment on such
announcement.
(v) MAINTENANCE OF INSURANCE. Maintain, and
cause their respective Subsidiaries to maintain, insurance in
such amounts as are reasonable to cover such risks as are
customary in relation to the character and location of its
properties and the nature of its business;
(vi) MAINTENANCE OF BOOKS AND RECORDS.
Maintain, and cause their respective Subsidiaries to maintain,
books of account and records in accordance with generally
accepted accounting principles applied on a basis consistent
with those principles used in preparing the financial
statements heretofore delivered;
(vii) DELIVERY OF SECURITIES DOCUMENTS.
Deliver to the other, copies of all Securities Documents
immediately after the filing thereof;
(viii) TAXES. File all federal, state, and
local tax returns required to be filed by them or their
respective Subsidiaries on or before the date such returns are
due (including any extensions) and pay all taxes shown to be
due on such returns on or before the date such payment is due;
or
(ix) DELIVERY OF INTERIM FINANCIAL STATEMENTS.
Deliver as soon as practicable after the end of each month and
each fiscal quarter prior to the Effective Date, (but in any
event during the 5 business day period following UCB Board of
Director approval thereof) commencing with the month during
which this Agreement is executed, an unaudited consolidated
balance sheet as of such date and related unaudited
consolidated statements of income and cash flows for the
period then ended, which financial statements shall be
prepared in accordance with generally accepted accounting
principles consistently applied and shall fairly reflect its
consolidated financial condition and consolidated results of
operations and cash flows for the periods then ended. Monthly
financial statements shall be kept confidential in accordance
with Section 4.02.
Section 4.12 EMPLOYEE BENEFITS.
(a) Except as provided in Section 4.12(b), the
employee benefit plans, arrangements and related policies of UCB,
UCTC and Meridian shall initially be unaffected by the Merger.
Following the Merger, Meridian will review such plans, arrangements
and policies with a view toward consolidating the same to the
extent feasible and economical. In this regard, UCB and Meridian
contemplate that, subject to Internal Revenue Service and Pension
Benefit Guaranty Corporation approval, the defined benefit pension
plans of UCTC and Meridian will be merged as soon as
administratively feasible. To the extent former employees of UCB
or a UCB Subsidiary become participants in a plan of Meridian, they
will be given past service credit for eligibility, participation,
and vesting purposes, but not for benefit accrual purposes. For
purposes of benefit accrual, credited service under the Meridian
plan will commence on the day following the date of plan merger.
When a former UCTC plan participant retires, he or she will receive
a benefit which consists of the sum of (i) the benefit determined
under the UCTC plan as it existed as of the date of plan merger for
years of service based on an employee's original employment date
with UCB through the date of plan merger utilizing actual current
compensation earned as of retirement date and (ii) the benefit
calculated under the Meridian plan from the day following the date
of plan merger through retirement date.
(b) Employees of UCB and the UCB Subsidiaries
immediately prior to the Effective Date, who become employees of
Meridian or a Meridian Subsidiary, will receive Compensation and
Benefit Packages no less favorable, in the aggregate, than the
Compensation and Benefits Packages to which they were entitled
immediately prior to the Effective Date. For purposes of the
preceding sentence, the term "Compensation and Benefit Package"
means an employee's total salary, wage, bonus and benefits,
including, without limitation, benefits under the UCTC Profit
Sharing Plan proposed to be terminated under Section 4.12(c).
Neither UCB nor a UCB Subsidiary maintains a severance policy or
arrangement for terminated employees generally. Employees of UCB
and the UCB Subsidiaries immediately prior to the Effective Date,
who become employees of Meridian or a Meridian Subsidiary and are
involuntarily terminated within one year thereafter, will receive
a severance benefit equal to one week of pay in effect immediately
prior to termination times the number of whole years of service
with UCB, a UCB Subsidiary, Meridian, and a Meridian Subsidiary,
subject to a minimum of 4 weeks of pay and maximum of 30 weeks of
pay.
(c) Notwithstanding the provisions of
Section 4.12(a), UCB will take such steps as may be necessary to
cause the UCTC Profit Sharing Plan to be terminated as of the
Effective Date. The employer contribution (if any) for the year of
plan termination shall be appropriately pro rated to take into
account the portion of the plan year transpiring prior to its
termination date. Provision shall be made for the distribution of
assets to participants, subject to IRS approval. Meridian will
cooperate with the proper funding and disbursement of funds to UCTC
employees entitled to a distribution.
(d) Subject to Section 4.12(a) and (b) and
Section 5.01(l), Meridian may at any time and from time to time
following the Merger (i) amend, freeze or terminate an employee
benefit plan of Meridian, UCB or a UCB Subsidiary, or (ii) adopt a
new employee benefit plan, either to replace a prior plan or
otherwise. Nothing in this Section 4.12 shall be deemed to give
Meridian the right to amend or affect in any way the employment
agreements referred to in Section 2.08(c).
(e) Meridian will honor and discharge the
obligations of UCTC under the Benefit Equalization Plan which have
accrued immediately prior to the Effective Date and which may
thereafter accrue by reason of Meridian's compliance with the terms
of this Agreement.
(f) Meridian will honor and discharge the
obligations of UCTC to its retirees under its post-retirement
health care and life insurance plan. Meridian will honor and
discharge the obligations of UCTC, if any, to its employees who are
not retired under its post-retirement health care and life
insurance plan to the extent such rights are not defeasible, either
immediately prior to or after the Effective Date.
Section 4.13 EMPLOYEE RELATIONS.
(a) To the extent any employees of UCB may be
displaced from their current positions as a result of the Merger,
Meridian shall endeavor to offer employment to such persons at
their then current location or at other Meridian locations where
employment is then available.
(b) The UCTC Profit Sharing Plan shall be
terminated as of the Effective Date. The annual UCB contribution
for the calendar year in which the closing occurs, shall be pro
rated to the date of termination according to the formula set forth
in the Plan and paid by UCTC to the Plan as soon as practicable
after the Effective Date. In addition, prior to the termination of
the UCB Profit Sharing Plan, it shall be amended, effective as of
the first day of the plan year in which the Effective Date occurs,
to modify the definition of "Adjusted Net Operating earnings" so as
not to include as an expense the costs incurred by UCB and the UCB
Subsidiaries which are directly attributable to the Merger.
Section 4.14 RELOCATION OF CORPORATE HEADQUARTERS.
Meridian shall, effective as of the Effective Date, cause MBNJ to
relocate its corporate headquarters to the address of UCB's present
corporate headquarters in Cranford, New Jersey and cause the
certificate of incorporation of MBNJ to be amended to reflect such
relocation.
Section 4.15 POST-CLOSING BOARD MEMBERSHIP.
(a) Meridian shall maintain the existing membership
of the two regional Boards of Directors of UCTC on the date hereof
until at least December 31, 1996 at the same fee schedule existing
on the date hereof.
(b) In the event that MBNJ is merged out of
existence, former UCTC directors who become directors of MBNJ shall
become, at least until December 31, 1996, a regional board of
directors at the same fee schedule (including any retainers paid by
UCTC on the date hereof).
ARTICLE V
CONDITIONS
Section 5.01 CONDITIONS TO UCB'S OBLIGATIONS UNDER THIS
AGREEMENT. The obligations of UCB hereunder shall be subject to
satisfaction at or prior to the Closing Date of each of the
following conditions, unless waived by UCB pursuant to Section 7.03
hereof:
(a) CORPORATE PROCEEDINGS. All action required to
be taken by, or on the part of, Meridian and MBNJ to authorize the
execution, delivery and performance of this Agreement and the Bank
Plan of Merger, respectively, and the consummation of the
transactions contemplated hereby, shall have been duly and validly
taken by Meridian and MBNJ; and UCB shall have received certified
copies of the resolutions evidencing such authorizations;
(b) COVENANTS; REPRESENTATIONS. The obligations of
Meridian required by this Agreement to be performed by Meridian at
or prior to the Closing Date shall have been duly performed and
complied with in all material respects; and the representations and
warranties of Meridian set forth in this Agreement shall be true
and correct in all material respects, as of the date of this
Agreement, and as of the Closing Date as though made on and as of
the Closing Date, provided however that UCB has given Meridian
written notice and a reasonable opportunity to cure, and, in each
case, except as to any representation or warranty (i) where the
facts which cause the failure of such representation or warranty to
be true and correct would not, either individually or in the
aggregate, result in a Material Adverse Effect on the consolidated
assets, financial condition or results of operation of Meridian and
its subsidiaries taken as a whole; or (ii) which specifically
relates to a time other than the Closing Date which was or shall be
true in all material respects at such time or times;
(c) APPROVALS OF REGULATORY AUTHORITIES. Meridian
shall have received all approvals of Regulatory Authorities of the
Merger, including without limitation the approval of the FDIC, the
FRB and NJDOB, and delivered copies thereof to UCB; and all notice
and waiting periods required thereunder shall have expired or been
terminated;
(d) NO INJUNCTION. There shall not be in effect
any order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits consummation of the
transactions contemplated hereby;
(e) NO MATERIAL ADVERSE CHANGE. Since March 31,
1995, there shall not have occurred any material adverse change in
the consolidated assets, business, consolidated financial condition
or consolidated results of operation, taken as a whole, of Meridian
and its Subsidiaries;
(f) OFFICER'S CERTIFICATE. Meridian shall have
delivered to UCB a certificate, dated the Closing Date and signed,
without personal liability, by its chairman or president, to the
effect that the conditions set forth in subsections (a) through (e)
of this Section 5.01 have been satisfied, to the best knowledge of
the officer executing the same;
(g) OPINION OF MERIDIAN'S COUNSEL. UCB shall have
received an opinion of Stevens & Lee, counsel to Meridian, dated
the Closing Date, in form and substance reasonably satisfactory to
UCB and its counsel to the effect set forth on Exhibit 4 attached
hereto;
(h) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the Securities Act and no
proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; and all required
approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement, deemed
necessary by Meridian's counsel, shall have been obtained;
(i) TAX OPINION. UCB shall have received an
opinion of Stevens & Lee, substantially to the effect set forth on
Exhibit 5 attached hereto and reasonably acceptable to counsel to
UCB;
(j) APPROVAL OF UCB'S SHAREHOLDERS. This Agreement
shall have been approved by the holders of at least 66% of the
shares of UCB's Common Stock entitled to vote at the meeting at
which the Merger is considered;
(k) EMPLOYMENT CONTRACTS. MBNJ and Meridian,
jointly and severally, shall have specifically acknowledged,
accepted and assumed the employment contracts referred to in
Section 2.08(c) in a writing delivered to the employees covered
thereby, and UCB shall have received an opinion of Stevens & Lee
substantially to the effect that such employment contracts will
constitute binding obligations of Meridian and MBNJ enforceable in
accordance with their respective terms, except as the same may be
limited by insolvency, reorganization, moratorium, receivership,
conservatorship or other laws affecting creditors' rights generally
or as may be limited by the exercise of judicial discretion in
applying principles of equity;
(l) DIRECTORS/OFFICERS. (i) Two nominees,
designated by UCB and reasonably acceptable to Meridian shall be
duly appointed by the Board of Directors of Meridian, one to fill
a vacancy in the class of Meridian directors which serves until the
Annual Meeting of Meridian shareholders in 1997 and one to fill a
vacancy in the class of Meridian directors which serves until the
Annual Meeting of Meridian shareholders in either 1996 or 1998,
respectively; and (ii) Albert W. Bossert, Anton J. Campanella,
Edward J. Hobbie, John E. Holobinko, William C. Johnson, Jr.,
Robert G. Kenney, Henry G. Largey, Donald S. Nowicki and Maureen E.
Staub shall be duly appointed as directors of MBNJ, joining
Samuel A. McCullough, David E. Sparks, P. Sue Perrotty, Wayne
Huey, Jr. and Paul W. McGloin. The Board of Directors of MBNJ,
with the consent of Meridian, may also appoint other current
officers or directors of UCB and/or UCTC as officers and/or
directors of Meridian and/or MBNJ, in Meridian's discretion.
Meridian presently intends to keep, as officers of MBNJ, as many
officers of UCTC as is practicable;
(m) D&O INSURANCE. UCB shall have received
evidence, reasonably satisfactory to it, that Meridian shall have
obtained the insurance referred to in Section 4.05(c);
(n) POOLING LETTER. UCB shall have received a copy
of the letter provided for in Section 5.02(k);
(o) NASDAQ LISTING. The shares of Common Stock of
Meridian issuable in exchange for shares of UCB Common Stock and
for the exercise of options shall be approved for listing on the
Nasdaq Stock Market; and
(p) DEFINED BENEFIT PLAN MERGER DOCUMENTS. UCB
shall have approved the plan merger documents for the merger of the
UCB and Meridian defined benefit pension plans, which approval
shall not be unreasonably withheld.
(q) INVESTMENT BANKING OPINION. UCB shall have
received an updated written opinion from Goldman, Sachs & Co.,
dated not earlier than three business days before the mailing date
of the Prospectus/Proxy Statement, to the effect the Exchange Ratio
is fair to the shareholders of UCB.
Section 5.02 CONDITIONS TO MERIDIAN'S OBLIGATIONS UNDER
THIS AGREEMENT. The obligations of Meridian hereunder shall be
subject to satisfaction at or prior to the Closing Date of each of
the following conditions, unless waived by Meridian pursuant to
Section 7.03 hereof:
(a) CORPORATE PROCEEDINGS. All action required to
be taken by, or on the part of, UCB and UCTC to authorize the
execution, delivery and performance of this Agreement and the Bank
Plan of Merger, respectively, and the consummation of the
transactions contemplated hereby, shall have been duly and validly
taken by UCB and UCTC; and Meridian shall have received certified
copies of the resolutions evidencing such authorizations;
(b) COVENANTS; REPRESENTATIONS. The obligations of
UCB, required by this Agreement to be performed by it at or prior
to the Closing Date shall have been duly performed and complied
with in all material respects; and the representations and
warranties of UCB set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement,
and as of the Closing Date as though made on and as of the Closing
Date, provided, however, that Meridian has given UCB written notice
and a reasonable opportunity to cure, and, in each case, except as
to any representation or warranty (i) where the facts which cause
the failure of such representation or warranty to be true and
correct would not, either individually or in the aggregate, results
in a Material Adverse Effect on the consolidated assets, financial
condition or results of operation of UCB and its subsidiaries taken
as a whole; or (ii) which specifically relates to a time other than
the Closing Date which was or shall be true in all material
respects at such time or times;
(c) APPROVALS OF REGULATORY AUTHORITIES. Meridian
shall have received all approvals of Regulatory Authorities for the
Merger, including without limitation the approvals of the FRB, the
FDIC, the NJDB and the PDB, without the imposition of any term or
condition that would have a material adverse effect on Meridian and
its Subsidiaries, taken as a whole, upon completion of the Merger;
and all notice and waiting periods required thereunder shall have
expired or been terminated;
(d) NO INJUNCTION. There shall not be in effect
any order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits consummation of the
transactions contemplated hereby;
(e) NO MATERIAL ADVERSE CHANGE. Since March 31,
1995, there shall not have occurred any material adverse change in
the consolidated assets, business, consolidated financial condition
or consolidated results of operation, taken as a whole, of UCB and
the UCB Subsidiaries;
(f) OFFICER'S CERTIFICATE. UCB shall have
delivered to Meridian a certificate, dated the Closing Date and
signed, without personal liability, by its chairman of the board or
president, to the effect that the conditions set forth in
subsections (a) through (e) of this Section 5.02 have been
satisfied, to the best knowledge of the officer executing the same;
(g) OPINIONS OF UCB'S COUNSEL. Meridian shall have
received an opinion of counsel to UCB dated the Closing Date, in
form and substance reasonably satisfactory to Meridian and its
counsel to the effect set forth on Exhibit 6 attached hereto;
(h) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the Securities Act and no
proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; and all required
approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement, deemed
necessary by Meridian's counsel, shall have been obtained;
(i) TAX OPINION. Meridian shall have received an
opinion of Stevens & Lee, its counsel, substantially to the effect
set forth on Exhibit 5 attached hereto;
(j) APPROVAL OF MERIDIAN'S SHAREHOLDERS. This
Agreement shall have been approved by the affirmative vote of at
least a majority of the votes cast by holders of shares of Meridian
Common Stock voted at the meeting at which the Merger is
considered; and
(k) POOLING LETTER. Meridian shall have received
a letter from KPMG Peat Marwick to the effect that the Merger will
be treated as a "pooling of interests" for financial accounting
purposes.
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 TERMINATION. This Agreement may be
terminated on or at any time prior to the Closing Date:
(a) By the mutual written consent of the parties
hereto; or
(b) By Meridian or UCB:
(i) if the Closing Date shall not have
occurred within one (1) year from the date of this Agreement,
unless the failure of such occurrence shall be due to the
failure of the party seeking to terminate this Agreement to
perform or observe its agreements set forth in this Agreement
required to be performed or observed by such party on or
before the Closing Date; or
(ii) if either party has been informed in
writing by a Bank Regulatory Authority whose approval or
consent has been requested that such approval or consent is
unlikely to be granted, unless the failure of such occurrence
shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe its agreements set forth
herein required to be performed or observed by such party on
or before the Closing Date; or
(c) By Meridian or UCB if the respective
shareholders of Meridian or UCB fail to approve this Agreement at
the meetings (including any adjournments 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 at or before the Effective Date
(including in the case of UCB the failure by any of the persons who
executed the letter agreement in the form attached hereto as
Exhibit 1 to perform or observe the agreements set forth therein).
(d) By Meridian or UCB if any condition to Closing
specified under Article V of this Agreement applicable to such
party cannot reasonably be met on or before the Effective Date and
both parties reasonably agree that such condition cannot be met.
Section 6.02 EFFECT OF TERMINATION. If this Agreement
is terminated pursuant to Section 6.01 hereof, this Agreement shall
forthwith become void (other than Section 4.02(d), 4.02(e), Section
4.11(b)(iv) and Section 7.01 hereof, which shall remain in full
force and effect), and there shall be no further liability on the
part of Meridian or UCB to the other, except for any liability of
Meridian or UCB under such sections of this Agreement and except
for any liability arising out of any uncured willful breach of any
covenant or other agreement contained in this Agreement or any
fraudulent breach of a representation or warranty.
ARTICLE VII
MISCELLANEOUS
Section 7.01 EXPENSES. Except for the cost of printing
and mailing the Proxy Statement/Prospectus which shall be shared
equally, each party hereto shall bear and pay all costs and
expenses incurred by it in connection with the transactions
contemplated hereby, including fees and expenses of its own
financial consultants, accountants and counsel.
Section 7.02 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations, warranties and, except to the
extent specifically provided otherwise herein, agreements and
covenants shall terminate on the Closing Date. The covenants
contained in Sections 4.05 and 4.15 shall survive the Closing Date
and the Effective Date.
Section 7.03 AMENDMENT, EXTENSION AND WAIVER. Subject
to applicable law, at any time prior to the consummation of the
transactions contemplated by this Agreement, the parties may
(a) amend this Agreement, (b) extend the time for the performance
of any of the obligations or other acts of either party hereto,
(c) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or
(d) waive compliance with any of the agreements or conditions
contained herein. This Agreement may not be amended except by an
instrument in writing authorized by the respective Boards of
Directors and signed, by duly authorized officers, on behalf of the
parties hereto. Any agreement on the part of a party hereto to
any extension or waiver shall be valid only if set forth in an
instrument in writing signed by a duly authorized officer on behalf
of such party, but such waiver or failure to insist on strict
compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
Section 7.04 ENTIRE AGREEMENT. This Agreement,
including the documents and other writings referred to herein or
delivered pursuant hereto, contains the entire agreement and
understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior arrangements and understandings
between the parties, both written or oral with respect to its
subject matter. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors;
provided, however, that nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the
parties hereto and their respective successors, any rights,
remedies, obligations or liabilities other than pursuant to Section
4.05(b), (c) and (d) with respect to indemnification and directors
and officers liability insurance.
Section 7.05 NO ASSIGNMENT. Neither party hereto may
assign any of its rights or obligations hereunder to any other
person, without the prior written consent of the other party
hereto.
Section 7.06 NOTICES. All notices or other
communications hereunder shall be in writing and shall be deemed
given if delivered personally, mailed by prepaid registered or
certified mail (return receipt requested), or sent by telecopy,
addressed as follows:
(a) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief Financial
Officer
and
Michael J. Hughes
Senior Vice President, Corporate
Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
Attention: Joseph M. Harenza, Esquire, and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(b) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey
Attention: Eugene H. Bauer, Chairman
and Chief Executive Officer
and
Alice Cadby, Corporate Secretary
Telecopy No.: (908) 709-1583
(marked "CONFIDENTIAL")
with a copy to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-0950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
Section 7.07 CAPTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this
Agreement.
Section 7.08 COUNTERPARTS. This Agreement may be
executed in any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 7.09 SEVERABILITY. If any provision of this
Agreement or the application thereof to any person or circumstance
shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
Section 7.10 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the domestic internal
law (including the law of conflicts of law) of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
MERIDIAN BANCORP, INC.
(CORPORATE SEAL) By: SAMUEL A. MCCULLOUGH
_____________________________
Samuel A. McCullough,
Chairman and Chief
Executive Officer
Attest: WILLIAM L. GAUNT
______________________________
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
(CORPORATE SEAL) By: DONALD S. NOWICKI
______________________________
Donald S. Nowicki,
President
Attest: ALICE R. CADBY
______________________________
Alice R. Cadby,
Corporate Secretary
<PAGE>
Exhibits
Exhibit 1 - UCB Affiliate Agreement
Exhibit 2 - Stock Option Agreement
Exhibit 3 - Bank Plan of Merger
Exhibit 4 - Form of Opinion of Meridian's Counsel
Exhibit 5 - Form of Tax Opinion of Meridian's Counsel
Exhibit 6 - Form of Opinion of UCB's Counsel
<PAGE>
Exhibit 1
May 23, 1995
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19601
Ladies and Gentlemen:
Meridian Bancorp, Inc. ("Meridian") and United Counties
Bancorporation ("UCB") desire to enter into a business combination pursuant
to which (a) UCB will merge with and into Meridian, with Meridian surviving
the merger, and (b) shareholders of UCB will receive common stock of
Meridian in exchange for common stock of UCB outstanding on the closing
date (the foregoing, collectively, referred to herein as the "Merger").
The undersigned, being directors and executive officers or significant
shareholders of UCB, execute and deliver to Meridian this Letter Agreement
in connection with the Merger.
Each of the undersigned hereby jointly, severally and
irrevocably:
(a) Agrees to be present (in person or by proxy) at all
meetings of shareholders of UCB called to vote for approval of the Merger,
so that all shares of common stock or UCB then owned by him will be counted
for the purpose of determining the presence of a quorum at such meetings
and to vote all such shares (i) in favor of approval and adoption of the
Merger and (ii) against approval or adoption of any other merger, business
combination, recapitalization, partial liquidation or similar transaction
involving UCB, provided, however, that this obligation shall terminate
concurrently with any termination of the Merger;
(b) Agrees to use his or her best efforts to cause the
Merger to be completed;
(c) Agrees not to sell, transfer or otherwise dispose of any
common stock of UCB except for family gifts or charitable contributions
prior to closing of the Merger or any shares of Meridian Common Stock after
closing of the Merger until such time as financial results covering at
least 30 days of post-merger combined operating results of Meridian and UCB
have been published as required by applicable securities laws.
(d) If the undersigned is the holder of stock options to
acquire UCB common stock, acknowledges that, in the Merger, options, if
any, to acquire UCB common stock held by him or her will be exchanged for
options to acquire Meridian Common Stock, and agrees to such exchange;
(e) Agrees not to solicit, initiate or engage in any
negotiations or discussions with any party other than Meridian with respect
to any offer, sale, transfer or other disposition of, any shares of common
stock of UCB now or hereafter owned by him or to support any such offer,
sale, transfer, or other disposition, unless advised in writing to the
contrary by the Board of Directors of UCB;
(f) Agrees not to offer, sell, transfer or otherwise
dispose of any shares of Meridian Common Stock received in the Merger,
except in accordance with Rule 145 under the Securities Act, which is
applicable to all sales of securities received by affiliates of the
corporation required in a business combination; and further understands and
agrees that Meridian's stock transfer agent will be given appropriate stop
transfer instructions with respect to the foregoing;
(g) Acknowledges and agrees that the provisions of
subparagraphs (c) and (f) hereof also apply to shares of Meridian Common
Stock received in the Merger (or any shares of UCB common stock or of
Meridian Common Stock, whether or not received in the Merger, for the
period referred to in subparagraph (c) above, owned by (i) his or her
spouse, (ii) any of his or her relatives or relatives of his or her spouse
occupying his home, and (iii) any other of his or her affiliates or
associates;
(h) Represents that he or she has the capacity to enter into
this Letter Agreement, and, if signing on behalf of a corporation or other
organization, has authority to bind such corporation or other organization,
and that it is a valid and binding obligation.
_________________________
This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but
all of which together shall constitute one and the same Letter Agreement.
_________________________
This Letter Agreement shall be effective upon execution by two or
more persons listed below.
_________________________
This Letter Agreement shall terminate concurrently with any
termination of the Merger in accordance with its terms.
_________________________
The undersigned intend to be legally bound hereby.
Very truly yours,
__________________________________
Eugene H. Bauer
__________________________________
Anton J. Campanella
__________________________________
John E. Holobinko
__________________________________
William C. Johnson, Jr.
__________________________________
Henry G. Largey
__________________________________
Donald S. Nowicki
__________________________________
Robert J. Bauer, individually and
on behalf of C. H. Winans Company
__________________________________
Robert W. Dowens, Sr.
__________________________________
Theodore E. Zuczek
__________________________________
J. Richard Pierce
__________________________________
Janice H. Levin, individually and
on behalf of Levin Properties
__________________________________
Raymond W. Bauer, individually and
on behalf of C.H. Winans Company
__________________________________
Nicholas A. Frungillo, Jr.
__________________________________
Albert W. Bossert
__________________________________
Walter W. Gauer
__________________________________
William G. Palmero
__________________________________
Maureen Staub
__________________________________
Robert G. Kenney
<PAGE>
Exhibit 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option Agreement")
dated May 23, 1995, is by and between MERIDIAN BANCORP, INC., a
Pennsylvania corporation ("Meridian"), and UNITED COUNTIES
BANCORPORATION, a New Jersey corporation ("UCB").
BACKGROUND
1. Meridian and UCB desire to enter into an agreement,
dated May 23, 1995 (the "Agreement"), providing, among other
things, for the merger of UCB and Meridian, with Meridian surviving
the merger (the "Merger").
2. As a condition of Meridian entering into the
Agreement on the terms and conditions relating to price set forth
in the Agreement, UCB is granting to Meridian an option to purchase
up to 375,000 shares of common stock of UCB, subject to adjustment
as provided in Section 5, on the terms and conditions hereinafter
set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, Meridian and UCB,
intending to be legally bound hereby, agree:
1. GRANT OF OPTION. UCB hereby grants to Meridian, on
the terms and conditions set forth herein, the option to purchase
(the "Option") up to 375,000 shares (the "Option Shares") of common
stock, stated value $1.00 per share (the "Common Stock"), of UCB,
subject to adjustment as provided in Section 5, at a price per
share (the "Option Price") equal to $125.00; provided, however,
that in the event UCB issues or agrees to issue (including through
the issuance of any Rights (as defined in the Agreement)) any
shares of Common Stock, except for shares issuable under
outstanding stock options, at a price less than $125.00 per share
(as adjusted pursuant to Section 5 of this Stock Option Agreement),
such $125.00 per share price shall be reduced to such lesser price.
2. EXERCISE OF OPTION. Upon or after the occurrence of
a Triggering Event (as such term is hereinafter defined) and until
termination of this Stock Option Agreement in accordance with the
provisions of Section 21, Meridian may exercise the Option, in
whole or in part, at any time or one or more times, from time to
time. As used herein, the term "Triggering Event" means the
occurrence of any of the following events:
(a) 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
Meridian, an affiliate of Meridian or any present shareholder
of UCB which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock, acquires
beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of more than 9.9% of the then outstanding
shares of Common Stock; provided, however that a Triggering
Event shall occur under this Section 2(a) in the event any
present shareholder of UCB which or who presently owns more
than 9.9% of the presently outstanding shares of Common Stock
increases such shareholder's beneficial ownership to greater
than 14.9% of the then outstanding shares of Common Stock;
(b) a person or group, other than Meridian or an
affiliate of Meridian, enters into an agreement or letter of
intent with UCB pursuant to which such person or group or any
affiliate of such person or group would (i) merge or
consolidate, or enter into any similar transaction, with UCB
or United Counties Trust Company ("UCTC"), (ii) acquire all or
substantially all of the assets of UCB or all or substantially
all of the assets or liabilities of UCTC, or (iii) acquire
beneficial ownership of securities representing, or the right
to acquire beneficial ownership or to vote securities
representing, more than 9.9% of the then outstanding shares of
Common Stock or the then outstanding shares of common stock of
UCTC; or
(c) a person or group, other than Meridian or an
affiliate of Meridian, publicly announces a bona fide proposal
(including a written communication that is or becomes the
subject of public disclosure) for (i) any merger,
consolidation or acquisition of all or substantially all the
assets of UCB or all or substantially all of the assets or
liabilities of UCTC, or any other business combination
involving UCB or UCTC, 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, more than 9.9% of the then
outstanding shares of Common Stock, or any of the then
outstanding shares of common stock of UCTC (collectively, a
"Proposal"), and thereafter, if such Proposal has not been
Publicly Withdrawn (as such term is hereinafter defined) at
least 30 days prior to the meeting of shareholders of UCB
called to vote on the Merger, UCB's shareholders fail to
approve the Merger by the vote required by applicable law at
the meeting of shareholders called for such purpose or such
meeting has been postponed or cancelled; or
(d) a person or group, other than Meridian or an
affiliate of Meridian, makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly
Withdrawn, UCB willfully takes any action in a manner which
would materially interfere with UCB's ability to consummate
the Merger or materially reduce the value of the transaction
to Meridian;
(e) UCB breaches the covenant set forth at
Section 4.06 of the Agreement; or
(f) UCB breaches, in any material respect, any
binding terms of the Agreement or any provision of this Stock
Option Agreement or the Agreement after a Proposal is made and
before it is Publicly Withdrawn or publicly announces an
intention to authorize, recommend or accept any such Proposal;
or
(g) any affiliate of UCB breaches any material
provision of the UCB Affiliate Agreement attached as Exhibit 1
to the Merger Agreement or breaches in any material respect
the covenant set forth in Section 4.06 of the Agreement.
"Publicly Withdrawn" for purposes of this Section 2 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 UCB or in
soliciting or inducing any other person (other than Meridian or an
affiliate of Meridian) to do so.
Notwithstanding the foregoing, the obligation of UCB to
issue Option Shares upon exercise of the Option shall be deferred
(but shall not terminate) (i) until the receipt of all required
governmental or regulatory approvals or consents necessary for UCB
to issue the Option Shares, or Meridian to exercise the Option, or
until 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, and, in each case, notwithstanding any provision
to the contrary set forth herein, the Option shall not expire or
otherwise terminate.
UCB shall notify Meridian promptly in writing of the
occurrence of any Triggering Event known to it, it being understood
that the giving of such notice by UCB shall not be a condition to
the right of Meridian to exercise the Option. UCB will not take
any action which would have the effect of preventing or disabling
UCB from delivering the Option Shares to Meridian upon exercise of
the Option or otherwise performing its obligations under this Stock
Option Agreement. In the event Meridian wishes to exercise the
Option, Meridian shall send a written notice to UCB (the date of
which is hereinafter referred to as the "Notice Date") specifying
the total number of Option Shares it desires to purchase and a
place and date between two and ten business days inclusive from the
Notice Date for the closing of such a purchase (a "Closing");
provided, however, that a Closing shall not occur prior to two days
after the later of receipt of any necessary regulatory approvals or
the expiration of any legally required notice or waiting period, if
any.
3. PAYMENT AND DELIVERY OF CERTIFICATES. At any
Closing hereunder, (a) Meridian will make payment to UCB of the
aggregate price for the Option Shares so purchased by wire transfer
of immediately available funds to an account designated by UCB,
(b) UCB will deliver to Meridian a stock certificate or
certificates representing the number of Option Shares so purchased,
registered in the name of Meridian or its designee, in such
denominations as were specified by Meridian in its notice of
exercise and bearing a legend as set forth below, and (c) Meridian
will pay any transfer or other taxes required by reason of the
issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock represented by this
certificate have not been the subject of a registration
statement filed under the Securities Act of 1933, as
amended (the "Act"), and declared effective by the
Securities and Exchange Commission. These shares may not
be sold, transferred or otherwise disposed of prior to
such time unless United Counties Bancorporation receives
an opinion of counsel stating that an exemption from the
registration provisions of the Act is available for such
transfer."
4. REGISTRATION RIGHTS. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
Meridian, UCB shall promptly prepare and file a registration
statement under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission covering the Option and such
number of Option Shares as Meridian shall specify in its request,
and UCB 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 or the Option Shares, provided that
Meridian shall in no event have the right to have more than one
such registration statement become effective, and provided further
that UCB shall not be required to prepare and file any such
registration statement in connection with any proposed sale with
respect to which UCB's counsel delivers to UCB and to Meridian its
unqualified opinion to the effect that no such filing is required
under applicable laws and regulations with respect to such sale or
disposition. In connection with such filing, UCB shall use its
best efforts to cause to be delivered to Meridian such
certificates, opinions, accountant's letters and other documents as
Meridian shall reasonably request and as are customarily provided
in connection with registrations of securities under the Securities
Act of 1933, as amended. UCB shall provide to Meridian such number
of copies of the preliminary prospectus and final prospectus and
any amendments and supplements thereto as Meridian may reasonably
request. All reasonable expenses incurred by UCB in complying with
the provisions of this Section 4, including, without limitation,
all registration and filing fees, reasonable printing expenses,
reasonable fees and disbursements of counsel for UCB and blue sky
fees and expenses, shall be paid by UCB. Underwriting discounts
and commissions to brokers and dealers relating to the Option or
the Option Shares, fees and disbursements of counsel to Meridian
and any other expenses incurred by Meridian in connection with such
filing shall be borne by Meridian. In connection with such filing,
UCB shall indemnify and hold harmless Meridian against any losses,
claims, damages or liabilities, joint or several, to which Meridian
may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in any preliminary or final registration
statement or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading; and UCB will reimburse
Meridian for any legal or other expense reasonably incurred by
Meridian in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
UCB 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
Meridian specifically for use in the preparation thereof. Meridian
will indemnify and hold harmless UCB to the same extent as set
forth in the immediately preceding sentence but only with reference
to written information furnished by or on behalf of Meridian for
use in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and Meridian
will reimburse UCB for any legal or other expense reasonably
incurred by UCB in connection with investigating or defending any
such loss, claim, damage, liability or action.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
6. FILINGS AND CONSENTS. Each of Meridian and UCB 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 Stock Option Agreement.
7. REPRESENTATIONS AND WARRANTIES OF UCB. UCB hereby
represents and warrants to Meridian as follows:
(a) DUE AUTHORIZATION. UCB has full corporate
power and authority to execute, deliver and perform this Stock
Option Agreement and all corporate action necessary for
execution, delivery and performance of this Stock Option
Agreement has been duly taken by UCB. This Stock Option
Agreement constitutes a legal, valid and binding obligation of
UCB, enforceable against UCB in accordance with its terms.
(b) AUTHORIZED SHARES. UCB has taken all necessary
corporate action to authorize and reserve for issuance all
shares of Common Stock which may be issued pursuant to any
exercise of the Option.
8. SPECIFIC PERFORMANCE. The parties hereto
acknowledge that damages would be an inadequate remedy for a breach
of this Stock Option Agreement and that the obligations of the
parties hereto shall be specifically enforceable.
9. ENTIRE AGREEMENT. This Stock Option Agreement and
the Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede 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. Meridian represents that it
is acquiring the Option for Meridian's own account and not with a
view to, or for sale in connection with, any distribution of the
Option or the Option Shares. Meridian is aware that neither the
Option nor the Option Shares are the subject of a registration
statement filed with, and declared effective by, the Securities and
Exchange Commission pursuant to Section 5 of the Securities Act of
1933, as amended, but instead are being offered in reliance upon
the exemption from the registration requirement provided by
Section 4(2) thereof.
11. AMENDMENT OF STOCK OPTION AGREEMENT. By mutual
consent of the parties hereto, this Stock Option 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 Stock Option Agreement shall not affect the
validity or enforceability of any other provisions of this Stock
Option 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 telegram or telecopy, or by registered or certified
mail (postage prepaid, return receipt requested) to the respective
parties as follows:
(i) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief Financial
Officer
and
Michael J. Hughes
Senior Vice President, Corporate Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
Reading, Pennsylvania 19601
Attention: Joseph M. Harenza, Esquire, and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(ii) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Attention: Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
and
Alice Cadby,
Corporate Secretary
Telecopy No.: (908) 709-1583
(Marked "Confidential")
with copies to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-8950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
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 Stock Option Agreement shall be
governed by and construed in accordance with the domestic internal
law (but not the law of conflicts of law) of the Commonwealth of
Pennsylvania.
15. CAPTIONS. The captions in this Stock Option
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 Stock Option Agreement and/or (ii) the other
party's performance of any of its obligations set forth in this
Stock Option Agreement.
17. PARTIES IN INTEREST. This Stock Option Agreement
shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Stock Option 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 Stock
Option Agreement.
18. COUNTERPARTS. This Stock Option 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. EXPENSES. Except as otherwise provided herein, all
costs and expenses incurred by the parties hereto in connection
with the transactions contemplated by this Stock Option Agreement
or the Option shall be paid by the party incurring such cost or
expense.
20. REPRESENTATIONS RELATING TO AUTHORIZATIONS. UCB and
Meridian each represent and warrant that executions, delivery and
performance of this agreement have been authorized by their
respective boards of directors and constitutes a legal and valid
obligation enforceable in accordance with its terms.
21. TERMINATION. This Stock Option Agreement shall
terminate and be of no further force or effect upon termination of
the Agreement in accordance with the provisions thereof; provided,
however, that, if the termination of the Agreement occurs after a
Triggering Event, this Stock Option Agreement shall not terminate
until expiration of twelve (12) months following the later of the
termination of the Agreement or the completion or abandonment of
any Proposal or any acquisition transaction relating to the
Triggering Event.
22. SEVERABILITY. If any term, provision, covenant or
restriction contained in this Stock Option Agreement is held by a
court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained inn
this Option Agreement shall remain in full force and effect, and
shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option
will not permit the holder to acquire the full number of shares of
the Common Stock provided in Section 2 hereof (as adjusted pursuant
to Section 6 hereof), it is the express intention of UCB to allow
the holder to acquire such lesser number of shares as may be
permissible at such lesser price or on such other repurchase terms
as such court or regulatory agency may indicate to be reasonable,
without any amendment or modification hereof.
IN WITNESS WHEREOF, each of the parties hereto, pursuant
to resolutions adopted by its Board of Directors, has caused this
Stock Option Agreement to be executed by its duly authorized
officer and has caused its corporate seal to be affixed hereunto
and to be duly attested, all as of the day and year first above
written.
MERIDIAN BANCORP, INC.
By_____________________________
Samuel A. McCullough,
Chairman and
Chief Executive Officer
(CORPORATE SEAL)
Attest:________________________
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
By_____________________________
Eugene H. Bauer,
Chairman of the Board and
Chief Executive Officer
(CORPORATE SEAL)
Attest:________________________
Alice Cadby,
Secretary
<PAGE>
Exhibit 3
BANK
PLAN OF MERGER
THIS PLAN OF MERGER ("Plan of Merger") dated as of
May 23, 1995, is by and between MERIDIAN BANK, NEW JERSEY, a New
Jersey banking corporation ("MBNJ"), and UNITED COUNTIES TRUST
COMPANY, a New Jersey banking corporation ("UCTC").
BACKGROUND
1. MBNJ is a wholly-owned subsidiary of Meridian
Bancorp, Inc., a Pennsylvania corporation ("Meridian"). The
authorized capital stock of MBNJ consists of 6,000,000 shares of
common stock, par value $5.00 per share ("MBNJ Common Stock"), of
which at the date hereof 1,000,000 shares are issued and
outstanding.
2. UCTC is a wholly-owned subsidiary of United Counties
Bancorporation, a New Jersey corporation ("UCB"). The authorized
capital stock of UCTC consists of shares of common stock, with a
stated value $5.00 per share ("UCTC Common Stock"), of which at the
date hereof 2,425,900 shares are issued and outstanding.
3. The respective Boards of Directors of MBNJ and UCTC
deem the merger of UCTC with and into MBNJ, pursuant to the terms
and conditions set forth or referred to herein, to be desirable and
in the best interests of the respective corporations and their
respective shareholders.
4. The respective Boards of Directors of MBNJ and UCTC
have adopted resolutions approving this Plan of Merger. The
respective Boards of Directors of Meridian and UCB have adopted
resolutions approving an Agreement and Plan of Merger (dated as of
May 23, 1995) (the "Agreement"), pursuant to which this Plan of
Merger is being executed by MBNJ and UCTC.
AGREEMENT
In consideration of the premises and of the mutual
covenants and agreements herein contained, and in accordance with
the applicable laws and regulations of the State of New Jersey,
MBNJ and UCTC, intending to be legally bound hereby, agree as
follows:
ARTICLE I
MERGER
Subject to the terms and conditions of this Plan of
Merger and in accordance with the applicable laws of the
Commonwealth of Pennsylvania and the State of New Jersey, on the
Effective Date (as that term is defined in Article V hereof): UCTC
shall merge with and into MBNJ; the separate existence of UCTC
shall cease; and MBNJ shall be the surviving corporation (such
transaction referred to herein as the "Merger" and MBNJ, as the
surviving corporation in the Merger, referred to herein as the
"Surviving Bank").
ARTICLE II
ARTICLES OF INCORPORATION AND BYLAWS
On and after the Effective Date, the articles of
incorporation and bylaws of MBNJ, as in effect immediately prior to
the Effective Date, shall automatically be and remain the articles
of incorporation and bylaws of the Surviving Bank, until altered,
amended or repealed.
ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
3.1. BOARD OF DIRECTORS. On and after the Effective
Date, the directors of MBNJ shall consist of (a) those persons duly
elected and holding office immediately prior to the Effective Date,
and (b) Albert W. Bossert, Anton J. Camponella, Edward J. Hobbie,
John E. Holobinko, William C. Johnson, Jr., Robert G. Kenney,
Henry G. Largey, Donald S. Nowicki and Maureen E. Staub. Each such
director shall hold office until his or her successor is elected
and qualified or otherwise in accordance with the Bylaws of the
Surviving Bank.
3.2. OFFICERS. On and after the Effective Date, the
officers of MBNJ duly elected and holding office immediately prior
to the Effective Date shall be the officers of the Surviving Bank,
except for such former officers of UCTC as shall be designated as
officers of MBNJ, and at MBNJ's election, each to hold office until
his or her successor is elected and qualified or otherwise in
accordance with the bylaws of the Surviving Bank.
ARTICLE IV
CONVERSION OF SHARES
4.1. STOCK OF MBNJ. Each share of MBNJ Common Stock
issued and outstanding immediately prior to the Effective Date
shall, on and after the Effective Date, continue to be issued and
outstanding as a share of common stock of the Surviving Bank.
4.2. STOCK OF UCTC. Each share of UCTC Common Stock
issued and outstanding immediately prior to the Effective Date
shall, on the Effective Date, be cancelled, and no cash, stock or
other property shall be delivered in exchange therefor.
ARTICLE V
EFFECTIVE DATE OF THE MERGER
Subject to the terms and upon satisfaction of all
requirements of law and the conditions specified in this Plan of
Merger, the Merger shall become effective, and the effective date
of the Merger (the "Effective Date") shall occur, at the time
specified in the certificate of merger to be issued by the New
Jersey Department of Banking, but shall not be effective prior to
the effective date of the merger of UCB with and into Meridian as
provided in the Agreement.
ARTICLE VI
EFFECT OF THE MERGER
On the Effective Date, the separate existence of UCTC
shall cease; and all of the property (real, personal and mixed),
rights, powers, duties and obligations of MBNJ and UCTC shall be
taken and deemed to be transferred to and vested in the Surviving
Bank, without further act or deed, as provided by applicable laws
and regulations.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of MBNJ and UCTC to effect the Merger
shall be subject to the satisfaction, unless duly waived by the
party permitted to do so, of the conditions precedent set forth in
the Agreement.
ARTICLE VIII
TERMINATION
This Plan of Merger shall terminate upon any termination
of the Agreement in accordance with its terms; provided, however,
that any such termination of this Plan of Merger shall not relieve
any party hereto from liability on account of a breach by such
party of any of the terms hereof or thereof.
ARTICLE IX
AMENDMENT
Subject to applicable law, this Plan of Merger may be
amended, by action of the respective Boards of Directors of the
parties hereto, at any time prior to consummation of the Merger,
but only by an instrument in writing signed by duly authorized
officers on behalf of the parties hereto.
ARTICLE X
MISCELLANEOUS
10.1. EXTENSIONS; WAIVERS. Each party, by a written
instrument signed by a duly authorized officer, may extend the time
for the performance of any of the obligations or other acts of the
other party hereto and may waive compliance with any of the
obligations of the other party contained in this Plan of Merger.
10.2. NOTICES. Any notice or other communication
required or permitted under this Plan of Merger shall be given, and
shall be effective, in accordance with the provisions of the
New Jersey Banking Code, as amended.
10.3. CAPTIONS. The headings of the several Articles
herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation
of, this Plan of Merger.
10.4. COUNTERPARTS. For the convenience of the parties
hereto, this Plan of Merger may be executed in several
counterparts, each of which shall be deemed the original, but all
of which together shall constitute one and the same instrument.
10.5. GOVERNING LAW. This Plan of Merger shall be
governed by and construed in accordance with the laws of the State
of New Jersey, without reference to the choice of law principles of
such laws.
IN WITNESS WHEREOF, MBNJ and UCTC have caused this Plan
of Merger to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed on the date first
written above.
MERIDIAN BANK, NEW
JERSEY, a New Jersey bank
By________________________________
Samuel A. McCullough,
Chairman
(CORPORATE SEAL)
Attest:___________________________
Michael J. Hughes,
Secretary
UNITED COUNTIES TRUST
COMPANY, a New Jersey
bank
By________________________________
(CORPORATE SEAL) Eugene H. Bauer,
Chairman
Attest:___________________________
Alice R. Cadby,
Secretary
<PAGE>
Exhibit 4
FORM OF OPINION OF COUNSEL TO MERIDIAN
UCB shall have received from counsel to Meridian, an
opinion, dated as of the Closing Date, substantially to the effect
that, subject to normal exceptions and qualifications:
(a) Meridian and Meridian Bank New Jersey have full
corporate power to carry out the transactions contemplated in the
Agreement and the Bank Plan of Merger (the "Plan"), respectively.
The execution and delivery of the Agreement and the Plan and the
consummation of the transactions contemplated thereunder have been
duly and validly authorized by all necessary corporate action on
the part of Meridian and Meridian Bank New Jersey, and the
Agreement and the Plan constitute valid and legally binding
obligations, in accordance with their respective terms, of Meridian
and Meridian Bank New Jersey, respectively, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws affecting creditors'
rights generally and as may be limited by the exercise of judicial
discretion in applying principles of equity. Subject to
satisfaction of the conditions set forth in the Agreement, neither
the merger of Meridian and UCB nor the merger of Meridian Bank New
Jersey and UCTC, nor compliance by Meridian and Meridian Bank New
Jersey with any of the respective provisions of the Agreement and
the Plan, will (A) conflict with or result in a breach or default
under (i) the Articles of Incorporation or Bylaws of Meridian or
Meridian Bank New Jersey, or, (ii) to the knowledge of such
counsel, any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which Meridian or Meridian Bank
New Jersey is a party, or (B) to the knowledge of such counsel,
result in the creation or imposition of any material lien or
encumbrance upon the property of Meridian or Meridian Bank New
Jersey, except such material lien, instrument or obligation as has
been disclosed pursuant to the Agreement and the Plan, or
(C) violate in any material respect any order, writ, injunction, or
decree known to such counsel, or any statute, rule or regulation
applicable to Meridian or Meridian Bank New Jersey.
(b) Meridian Bank New Jersey is a validly existing
state-chartered banking institution organized and in good standing
under the laws of the State of New Jersey. The deposits of
Meridian Bank New Jersey are insured to the maximum extent provided
by law by the Federal Deposit Insurance Corporation.
(c) There is to the knowledge of such counsel no legal,
administrative, arbitration or governmental proceeding or
investigation pending or threatened to which Meridian or Meridian
Bank New Jersey is a party which would, if determined adversely to
Meridian or Meridian Bank New Jersey, have a material adverse
effect on the financial condition or results of operations of
Meridian and Meridian Bank New Jersey taken as a whole or which
presents a claim to restrain or prohibit the transactions
contemplated by the Agreement and the Plan, respectively.
(d) No consent, approval, authorization, or order of any
federal or state court or federal or state governmental agency or
body is required for the consummation by Meridian or Meridian Bank
New Jersey of the transactions contemplated by the Agreement and
the Plan, except for such consents, approvals, authorizations or
orders as have been obtained.
(e) The mergers of Meridian and UCB and Meridian Bank
New Jersey and UCTC contemplated by the Agreement and the Plan,
respectively, have been effected in compliance with all applicable
federal and state laws and regulations in all material respects.
(f) The shares of Meridian Common Stock to be issued in
connection with the merger of UCB and Meridian contemplated by the
Agreement have been duly authorized and will, when issued in
accordance with the terms of the Agreement, be validly issued,
fully paid and nonassessable.
(g) On the sole basis of such counsel's participation in
conferences with officers and employees of Meridian in connection
with the Prospectus/Proxy Statement, and without other independent
investigation or inquiry, such counsel has no reason to believe
that the Prospectus/Proxy Statement, including any amendments or
supplements thereto (except for the financial information,
financial schedules and other financial or statistical data
contained therein and except for any information supplied by UCB or
UCTC for inclusion therein, as to which counsel need express no
belief), as of the date of mailing thereof and as of the date of
the meeting of shareholders of Meridian to approve the merger,
contained any untrue statement of a material fact with respect to
Meridian or omitted to state any material fact with respect to
Meridian or omitted to state any material fact with respect to
Meridian necessary to make any statement therein with respect to
Meridian, in light of the circumstances under which it was made,
not misleading. Such counsel may state that in rendering such
opinion, they have no independently verified and do not assume the
responsibility for the accuracy, completeness or fairness of any
information or statements contained in the Prospectus/Proxy
Statement, except with respect to identified statements of law or
regulations or legal conclusions relating to Meridian or the
transactions contemplated in the Agreement and the Plan.
<PAGE>
Exhibit 5
FORM OF TAX OPINION OF STEVENS & LEE
Meridian and UCB shall have received an opinion of
Stevens & Lee substantially to the effect that, under the provisions
of the IRC:
1. The Merger, pursuant to which UCB will transfer
all of its assets to Meridian in exchange for Meridian Common Stock
(including fractional share interests) and the assumption by Meridian
of all of UCB's liabilities will constitute a reorganization within
the meaning of IRC Section 368(a)(1)(A).
2. UCB and Meridian will each be "a party to a
reorganization" within the meaning of IRC Section 368(b).
3. Neither UCB nor Meridian will recognize any gain
or loss upon the transfer of UCB's assets to Meridian in exchange
solely for Meridian Common Stock (including fractional share
interests) and the assumption by Meridian of the liabilities of UCB.
4. The basis of the UCB assets in the hands of
Meridian will be the same as the basis of such assets in the hands
of UCB immediately prior to the Merger.
5. The holding period of the assets of UCB to be
received by Meridian will include the period during which the assets
were held by UCB.
6. No gain or loss will be recognized by the
shareholders of UCB on the receipt of Meridian Common Stock
(including fractional share interests) solely in exchange for their
shares of UCB Common Stock.
7. The basis of the Meridian Common Stock (including
fractional share interests) to be received by the UCB shareholders in
the Merger will be the same as the basis of the UCB Common Stock
surrendered in exchange therefor.
8. The holding period of the Meridian Common Stock
(including fractional share interests) to be received by the UCB
shareholders in the Merger will include the period during which the
UCB shareholders held their UCB Common Stock, provided the shares of
UCB Common Stock are held as a capital asset on the Effective Date
of the Merger.
9. The payment of cash in lieu of fractional share
interests of Meridian Common Stock will be treated as if the
fractional share interests were distributed as part of the Merger
and then redeemed by Meridian. Such cash payments will be treated
as having been received as distributions in full payment in exchange
for the fractional share interests redeemed, as provided in IRC
Section 302(a). Any gain or loss recognized by a UCB shareholder
will be a capital gain or loss, provided the shares of UCB Common
Stock are held as a capital asset on the Effective Date of the Merger.
10. The Meridian Stock Purchase Rights transferred
with the shares of Meridian Common Stock will not constitute "other
property" within the meaning of IRC Section 356(a)(1)(B).
11. As provided in IRC Section 381(c)(2) and related
Treasury regulations, Meridian will succeed to and take into account
the earnings and profits, or deficit in earnings and profits, of UCB
as of Effective Date of the Merger. Any deficit in the earnings and
profits of Meridian or UCB will be used only to offset the earnings
and profits accumulated after the Merger.
12. Pursuant to IRC Section 381(a) and related Treasury
regulations, Meridian will succeed to and take into account the items
of UCB described in IRC Section 381(c). Such items will be taken into
account by Meridian subject to the conditions and limitations of IRC
Sections 381, 382, 282, and 384 and the Treasury regulations thereafter.
13. The Bank Merger will constitute a reorganization
within the meaning of IRC section 368(a)(1)(A).
14. UCTC and MBNJ will each be a "party to a
reorganization" within the meaning of IRC Section 368(b).
15. Neither UCTC nor MBNJ will recognize any gain or
loss upon the transfer of UCTC's assets to MBNJ in constructive exchange
solely for MBNJ Common Stock and the assumption by MBNJ of the
liabilities of UCTC.
16. The basis of the UCTC assets in the hands of MBNJ
will be the same as the basis of such assets in the handds of UCTC
immediately prior to the the Bank Merger.
17. The holding period of the UCTC assets in the hands
of MBNJ will include the period during which such assets were held by
UCTC.
18. No gain or loss will be recognized by Meridian, as
the shareholder of UCTC, upon the constructive receipt of shares of MBNJ
Common Stock in exchange for the UCTC Common Stock surrendered in
exchange therefor in the Bank Merger.
19. The basis of the MBNJ Common Stock to be held by
Meridian after the Bank Merger will equal the basis of such stock
immediately before the Bank Merger, increased by the basis of the UCTC
Common Stock surrendered in the constructive exchange.
20. As provided in IRC Section 381(c)(2) and related
Treasury regulations, MBNJ will succeed to and take into account the
earnings and profits, or deficit in earnings and profits, of UCTC as
of the Effective Date of the Bank Merger. Any deficit in the earnings
and profits of MBNJ or UCTC will be used only to offset the earnings
and profits accumulated after the Bank Merger.
2l. Pursuant to IRC Section 381(a) and related Treasury
regulations, MBNJ will succeed to and take into account the items of
UCTC described in IRC Section 381(c). Such items will be taken into
account by MBNJ subject to the conditions and limitations of IRC
Sections 381, 382, 383, and 384 and the Treasury regulations thereunder.
<PAGE>
Exhibit 6
FORM OF OPINION
OF COUNSEL TO UCB
Meridian shall have received from counsel to UCB, an
opinion, dated as of the Closing Date, substantially to the effect
that, subject to normal exceptions and qualifications:
(a) UCB and UCTC have full corporate power to carry out
the transactions contemplated in the Agreement and the Bank Plan of
Merger (the "Plan"), respectively. The execution and delivery of
the Agreement and the Plan and the consummation of the transactions
contemplated thereunder have been duly and validly authorized by
all necessary corporate action on the part of UCB and UCTC, and the
Agreement and the Plan constitute valid and legally binding
obligations, in accordance with their respective terms, of UCB and
UCTC, respectively, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws affecting creditors' rights
generally and as may be limited by the exercise of judicial
discretion in applying principles of equity. Subject to
satisfaction of the conditions set forth in the Agreement, neither
the transactions contemplated in the Agreement and the Pan, nor
compliance by UCB and UCTC with any of the respective provisions
thereof, will (A) conflict with or result in a breach or default
under (i) the Articles of Incorporation or Bylaws of UCB, or UCTC,
or (ii) to the knowledge of such counsel, any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to
which UCB or UCTC is a party, or (B) result in the creation or
imposition of any material lien or encumbrance upon the property of
UCB or UCTC, except such material lien, instrument or obligation as
has been disclosed pursuant to the Agreement and the Plan, or
(C) violate in any material respect any order, writ, injunction, or
decree known to such counsel, or any statute, rule or regulation
applicable to UCB or UCTC.
(b) UCTC is a validly existing state-chartered banking
institution organized and in good standing under the laws of the
State of New Jersey. The deposits of UCTC are insured to the
maximum extent provided by law by the Federal Deposit Insurance
Corporation.
(c) There is no legal, administrative, arbitration or
governmental proceeding or investigation pending or, to the
knowledge of such counsel, threatened to which UCB or UCTC is a
party which would, if determined adversely to UCB or UCTC, have a
material adverse effect on the business, properties, results of
operations, or condition, financial or otherwise, of UCB or UCTC or
which questions the validity of the Agreement or the Plan, or any
other action to be taken by UCB or UCTC under the Agreement and the
Plan, respectively.
(d) No consent, approval, authorization, or order of any
federal or state court or federal or state governmental agency or
body is required for the consummation by UCB or UCTC of the
transactions contemplated by the Agreement and the Plan, except for
such consents, approvals, authorizations or orders as have been
obtained and except for consents or approvals under state
securities laws as to which we express no opinion.
(e) The mergers of Meridian and UCB and Meridian Bank
New Jersey and UCTC contemplated by the Agreement and the Plan,
respectively, have been effected in compliance with all applicable
federal and Pennsylvania and New Jersey laws and regulations in all
material respects.
(f) On the basis of such counsel's participation in
conferences with officers and employees of UCB in connection with
the preparation of the Prospectus/Proxy Statement and without other
independent investigation or inquiry, such counsel has no reason to
believe that (i) the Prospectus/Proxy Statement, including any
amendments or supplements thereto (except for the financial
information, financial statements, financial schedules and other
financial or statistical data contained therein and except for any
information supplied by Meridian for inclusion therein, as to which
counsel need express no belief), as of the date of mailing thereof
and as of the date of the meeting of shareholders of UCB to approve
the merger, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make any statement
therein, in light of the circumstances under which it was made, not
misleading. Such counsel may state that they have no independently
verified and do not assume any responsibility for the accuracy,
completeness or fairness of any information or statements contained
in the Prospectus/Proxy Statement, except with respect to
identified statements of law or regulations or legal conclusions
relating to UCB or UCTC or the transactions contemplated in the
Agreement and the Plan.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option Agreement")
dated May 23, 1995, is by and between MERIDIAN BANCORP, INC., a
Pennsylvania corporation ("Meridian"), and UNITED COUNTIES
BANCORPORATION, a New Jersey corporation ("UCB").
BACKGROUND
1. Meridian and UCB desire to enter into an agreement,
dated May 23, 1995 (the "Agreement"), providing, among other
things, for the merger of UCB and Meridian, with Meridian surviving
the merger (the "Merger").
2. As a condition of Meridian entering into the
Agreement on the terms and conditions relating to price set forth
in the Agreement, UCB is granting to Meridian an option to purchase
up to 375,000 shares of common stock of UCB, subject to adjustment
as provided in Section 5, on the terms and conditions hereinafter
set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, Meridian and UCB,
intending to be legally bound hereby, agree:
1. GRANT OF OPTION. UCB hereby grants to Meridian, on
the terms and conditions set forth herein, the option to purchase
(the "Option") up to 375,000 shares (the "Option Shares") of common
stock, stated value $1.00 per share (the "Common Stock"), of UCB,
subject to adjustment as provided in Section 5, at a price per
share (the "Option Price") equal to $125.00; provided, however,
that in the event UCB issues or agrees to issue (including through
the issuance of any Rights (as defined in the Agreement)) any
shares of Common Stock, except for shares issuable under
outstanding stock options, at a price less than $125.00 per share
(as adjusted pursuant to Section 5 of this Stock Option Agreement),
such $125.00 per share price shall be reduced to such lesser price.
2. EXERCISE OF OPTION. Upon or after the occurrence of
a Triggering Event (as such term is hereinafter defined) and until
termination of this Stock Option Agreement in accordance with the
provisions of Section 21, Meridian may exercise the Option, in
whole or in part, at any time or one or more times, from time to
time. As used herein, the term "Triggering Event" means the
occurrence of any of the following events:
(a) 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
Meridian, an affiliate of Meridian or any present shareholder
of UCB which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock, acquires
beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of more than 9.9% of the then outstanding
shares of Common Stock; provided, however that a Triggering
Event shall occur under this Section 2(a) in the event any
present shareholder of UCB which or who presently owns more
than 9.9% of the presently outstanding shares of Common Stock
increases such shareholder's beneficial ownership to greater
than 14.9% of the then outstanding shares of Common Stock;
(b) a person or group, other than Meridian or an
affiliate of Meridian, enters into an agreement or letter of
intent with UCB pursuant to which such person or group or any
affiliate of such person or group would (i) merge or
consolidate, or enter into any similar transaction, with UCB
or United Counties Trust Company ("UCTC"), (ii) acquire all or
substantially all of the assets of UCB or all or substantially
all of the assets or liabilities of UCTC, or (iii) acquire
beneficial ownership of securities representing, or the right
to acquire beneficial ownership or to vote securities
representing, more than 9.9% of the then outstanding shares of
Common Stock or the then outstanding shares of common stock of
UCTC; or
(c) a person or group, other than Meridian or an
affiliate of Meridian, publicly announces a bona fide proposal
(including a written communication that is or becomes the
subject of public disclosure) for (i) any merger,
consolidation or acquisition of all or substantially all the
assets of UCB or all or substantially all of the assets or
liabilities of UCTC, or any other business combination
involving UCB or UCTC, 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, more than 9.9% of the then
outstanding shares of Common Stock, or any of the then
outstanding shares of common stock of UCTC (collectively, a
"Proposal"), and thereafter, if such Proposal has not been
Publicly Withdrawn (as such term is hereinafter defined) at
least 30 days prior to the meeting of shareholders of UCB
called to vote on the Merger, UCB's shareholders fail to
approve the Merger by the vote required by applicable law at
the meeting of shareholders called for such purpose or such
meeting has been postponed or cancelled; or
(d) a person or group, other than Meridian or an
affiliate of Meridian, makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly
Withdrawn, UCB willfully takes any action in a manner which
would materially interfere with UCB's ability to consummate
the Merger or materially reduce the value of the transaction
to Meridian;
(e) UCB breaches the covenant set forth at
Section 4.06 of the Agreement; or
(f) UCB breaches, in any material respect, any
binding terms of the Agreement or any provision of this Stock
Option Agreement or the Agreement after a Proposal is made and
before it is Publicly Withdrawn or publicly announces an
intention to authorize, recommend or accept any such Proposal;
or
(g) any affiliate of UCB breaches any material
provision of the UCB Affiliate Agreement attached as Exhibit 1
to the Merger Agreement or breaches in any material respect the
covenant set forth in Section 4.06 of the Agreement.
"Publicly Withdrawn" for purposes of this Section 2 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 UCB or in
soliciting or inducing any other person (other than Meridian or an
affiliate of Meridian) to do so.
Notwithstanding the foregoing, the obligation of UCB to
issue Option Shares upon exercise of the Option shall be deferred
(but shall not terminate) (i) until the receipt of all required
governmental or regulatory approvals or consents necessary for UCB
to issue the Option Shares, or Meridian to exercise the Option, or
until 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, and, in each case, notwithstanding any provision
to the contrary set forth herein, the Option shall not expire or
otherwise terminate.
UCB shall notify Meridian promptly in writing of the
occurrence of any Triggering Event known to it, it being understood
that the giving of such notice by UCB shall not be a condition to
the right of Meridian to exercise the Option. UCB will not take
any action which would have the effect of preventing or disabling
UCB from delivering the Option Shares to Meridian upon exercise of
the Option or otherwise performing its obligations under this Stock
Option Agreement. In the event Meridian wishes to exercise the
Option, Meridian shall send a written notice to UCB (the date of
which is hereinafter referred to as the "Notice Date") specifying
the total number of Option Shares it desires to purchase and a
place and date between two and ten business days inclusive from the
Notice Date for the closing of such a purchase (a "Closing");
provided, however, that a Closing shall not occur prior to two days
after the later of receipt of any necessary regulatory approvals or
the expiration of any legally required notice or waiting period, if
any.
3. PAYMENT AND DELIVERY OF CERTIFICATES. At any
Closing hereunder, (a) Meridian will make payment to UCB of the
aggregate price for the Option Shares so purchased by wire transfer
of immediately available funds to an account designated by UCB,
(b) UCB will deliver to Meridian a stock certificate or
certificates representing the number of Option Shares so purchased,
registered in the name of Meridian or its designee, in such
denominations as were specified by Meridian in its notice of
exercise and bearing a legend as set forth below, and (c) Meridian
will pay any transfer or other taxes required by reason of the
issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock represented by this
certificate have not been the subject of a registration
statement filed under the Securities Act of 1933, as
amended (the "Act"), and declared effective by the
Securities and Exchange Commission. These shares may not
be sold, transferred or otherwise disposed of prior to
such time unless United Counties Bancorporation receives
an opinion of counsel stating that an exemption from the
registration provisions of the Act is available for such
transfer."
4. REGISTRATION RIGHTS. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
Meridian, UCB shall promptly prepare and file a registration
statement under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission covering the Option and such
number of Option Shares as Meridian shall specify in its request,
and UCB 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 or the Option Shares, provided that
Meridian shall in no event have the right to have more than one
such registration statement become effective, and provided further
that UCB shall not be required to prepare and file any such
registration statement in connection with any proposed sale with
respect to which UCB's counsel delivers to UCB and to Meridian its
unqualified opinion to the effect that no such filing is required
under applicable laws and regulations with respect to such sale or
disposition. In connection with such filing, UCB shall use its
best efforts to cause to be delivered to Meridian such
certificates, opinions, accountant's letters and other documents as
Meridian shall reasonably request and as are customarily provided
in connection with registrations of securities under the Securities
Act of 1933, as amended. UCB shall provide to Meridian such number
of copies of the preliminary prospectus and final prospectus and
any amendments and supplements thereto as Meridian may reasonably
request. All reasonable expenses incurred by UCB in complying with
the provisions of this Section 4, including, without limitation,
all registration and filing fees, reasonable printing expenses,
reasonable fees and disbursements of counsel for UCB and blue sky
fees and expenses, shall be paid by UCB. Underwriting discounts
and commissions to brokers and dealers relating to the Option or
the Option Shares, fees and disbursements of counsel to Meridian
and any other expenses incurred by Meridian in connection with such
filing shall be borne by Meridian. In connection with such filing,
UCB shall indemnify and hold harmless Meridian against any losses,
claims, damages or liabilities, joint or several, to which Meridian
may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in any preliminary or final registration
statement or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading; and UCB will reimburse
Meridian for any legal or other expense reasonably incurred by
Meridian in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
UCB 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
Meridian specifically for use in the preparation thereof. Meridian
will indemnify and hold harmless UCB to the same extent as set
forth in the immediately preceding sentence but only with reference
to written information furnished by or on behalf of Meridian for
use in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and Meridian
will reimburse UCB for any legal or other expense reasonably
incurred by UCB in connection with investigating or defending any
such loss, claim, damage, liability or action.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
6. FILINGS AND CONSENTS. Each of Meridian and UCB 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 Stock Option Agreement.
7. REPRESENTATIONS AND WARRANTIES OF UCB. UCB hereby
represents and warrants to Meridian as follows:
(a) DUE AUTHORIZATION. UCB has full corporate
power and authority to execute, deliver and perform this Stock
Option Agreement and all corporate action necessary for
execution, delivery and performance of this Stock Option
Agreement has been duly taken by UCB. This Stock Option
Agreement constitutes a legal, valid and binding obligation of
UCB, enforceable against UCB in accordance with its terms.
(b) AUTHORIZED SHARES. UCB has taken all necessary
corporate action to authorize and reserve for issuance all
shares of Common Stock which may be issued pursuant to any
exercise of the Option.
8. SPECIFIC PERFORMANCE. The parties hereto
acknowledge that damages would be an inadequate remedy for a breach
of this Stock Option Agreement and that the obligations of the
parties hereto shall be specifically enforceable.
9. ENTIRE AGREEMENT. This Stock Option Agreement and
the Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede 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. Meridian represents that it
is acquiring the Option for Meridian's own account and not with a
view to, or for sale in connection with, any distribution of the
Option or the Option Shares. Meridian is aware that neither the
Option nor the Option Shares are the subject of a registration
statement filed with, and declared effective by, the Securities and
Exchange Commission pursuant to Section 5 of the Securities Act of
1933, as amended, but instead are being offered in reliance upon
the exemption from the registration requirement provided by Section
4(2)
thereof.
11. AMENDMENT OF STOCK OPTION AGREEMENT. By mutual
consent of the parties hereto, this Stock Option 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 Stock Option Agreement shall not affect the
validity or enforceability of any other provisions of this Stock
Option 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 telegram or telecopy, or by registered or certified
mail (postage prepaid, return receipt requested) to the respective
parties as follows:
(i) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief Financial
Officer
and
Michael J. Hughes
Senior Vice President, Corporate Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
Reading, Pennsylvania 19601
Attention: Joseph M. Harenza, Esquire, and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(ii) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Attention: Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
and
Alice Cadby,
Corporate Secretary
Telecopy No.: (908) 709-1583
(Marked "Confidential")
with copies to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-8950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
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 Stock Option Agreement shall be
governed by and construed in accordance with the domestic internal
law (but not the law of conflicts of law) of the Commonwealth of
Pennsylvania.
15. CAPTIONS. The captions in this Stock Option
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 Stock Option Agreement and/or (ii) the other
party's performance of any of its obligations set forth in this
Stock Option Agreement.
17. PARTIES IN INTEREST. This Stock Option Agreement
shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Stock Option 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 Stock
Option Agreement.
18. COUNTERPARTS. This Stock Option 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. EXPENSES. Except as otherwise provided herein, all
costs and expenses incurred by the parties hereto in connection
with the transactions contemplated by this Stock Option Agreement
or the Option shall be paid by the party incurring such cost or
expense.
20. REPRESENTATIONS RELATING TO AUTHORIZATIONS. UCB and
Meridian each represent and warrant that executions, delivery and
performance of this agreement have been authorized by their
respective boards of directors and constitutes a legal and valid
obligation enforceable in accordance with its terms.
21. TERMINATION. This Stock Option Agreement shall
terminate and be of no further force or effect upon termination of
the Agreement in accordance with the provisions thereof; provided,
however, that, if the termination of the Agreement occurs after a
Triggering Event, this Stock Option Agreement shall not terminate
until expiration of twelve (12) months following the later of the
termination of the Agreement or the completion or abandonment of
any Proposal or any acquisition transaction relating to the
Triggering Event.
22. SEVERABILITY. If any term, provision, covenant or
restriction contained in this Stock Option Agreement is held by a
court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained inn
this Option Agreement shall remain in full force and effect, and
shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option
will not permit the holder to acquire the full number of shares of
the Common Stock provided in Section 2 hereof (as adjusted pursuant
to Section 6 hereof), it is the express intention of UCB to allow
the holder to acquire such lesser number of shares as may be
permissible at such lesser price or on such other repurchase terms
as such court or regulatory agency may indicate to be reasonable,
without any amendment or modification hereof.
IN WITNESS WHEREOF, each of the parties hereto, pursuant
to resolutions adopted by its Board of Directors, has caused this
Stock Option Agreement to be executed by its duly authorized
officer and has caused its corporate seal to be affixed hereunto
and to be duly attested, all as of the day and year first above
written.
MERIDIAN BANCORP, INC.
By: SAMUEL A. MC CULLOUGH
---------------------------
Samuel A. McCulloch,
Chairman and
Chief Executive Officer
(CORPORATE SEAL)
Attest: WILLIAM L.GAUNT
---------------------------
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
By: DONALD S. NOWICKI, PRESIDENT
---------------------------
Donald S. Nowicki,
President
(CORPORATE SEAL)
Attest: ALICE R. CADBY
---------------------------
Alice Cadby,
Secretary
MERIDIAN TO ACQUIRE UNITED COUNTIES BANCORPORATION
Enhances New Jersey Banking Franchise
Reading, Pa., May 24, 1995 -- Meridian Bancorp, Inc.
(NASDAQ/NMS: MRDN) and United Counties Bancorporation (NASDAQ:
UCTC) jointly announced today the signing of a definitive agreement
to merge in a stock-for-stock exchange valued at $360 million.
United Counties is a $1.6 billion bank holding company based
in Cranford, N.J., with 35 branches in Middlesex, Monmouth, Morris,
Somerset and Union counties. Meridian Bancorp is a $15 billion
diversified financial services holding company headquartered in
Reading, Pa., with 319 branches throughout the eastern half of
Pennsylvania, southern New Jersey and the state of Delaware.
The agreement has been approved by both Boards of Directors.
Subject to regulatory and shareholder approvals, the transaction is
expected to close in late 1995 or first quarter 1996.
Upon completion of the transaction, United Counties will merge
into Meridian Bancorp's New Jersey banking subsidiary, Meridian
Bank, New Jersey. The resultant bank will be headquartered in
Cranford and, as of March 31, 1995, would have total assets of $2.2
billion, with 59 branches in 11 counties.
Under the terms of the definitive agreement, each share of
United Counties' common stock would be exchanged for 5.00 shares of
Meridian common stock. The acquisition will be accounted for as a
pooling of interests and will be a tax-free exchange for United
Counties shareholders.
"The United Counties acquisition will further enhance
Meridian's position in New Jersey by extending our presence into
the desirable central New Jersey banking market," said Samuel A.
McCullough, chairman, president and chief executive officer of
Meridian Bancorp. "The merger offers Meridian and United Counties
an outstanding opportunity to profitably expand United Counties'
array of financial products and services in the retail, middle-
market and business banking market segments.
"United Counties is an outstanding banking organization as
evidenced by its performance. In 1994, the company's return on
average assets was 1.46 percent and return on average equity was
13.88 percent," McCullough said.
McCullough emphasized that the acquisition is consistent with
Meridian's low-risk expansion strategy and will be accretive to
earnings per share within 18 months after closing. He also
stressed the benefits of affiliating with high-quality
institutions, noting that the United Counties acquisition would
enable Meridian to grow from a strong capital and highly liquid
financial position, along with providing the added capability of
better penetration in United Counties' marketplace.
"We are pleased to have reached a definitive agreement with
Meridian that will provide outstanding value to our shareholders,"
said Eugene H. Bauer, chairman and chief executive officer of
United Counties. "Our customers will reap the benefits of an
expanded branch system, a broader array of deposit and credit
products, and a technologically advanced bank that shares our
commitment to being the best in each of its communities.
"At the same time, this is a bittersweet moment for me
personally," said Bauer, who will become a consultant to Meridian
after the closing of the transaction. "This is clearly the right
time and the right partner for a merger. I've spent the last 23
years building upon the accomplishments of my father, Raymond, and
his father, George. I value deeply the relationships I've built in
our communities. Though I'm eager to get started on many new
activities, I will remain actively involved throughout the merger
to ensure a smooth transition."
Since Bauer's election as chief executive officer in 1980,
United Counties shareholders' equity has increased eight-fold,
almost exclusively through internal growth. The bank currently
holds a Sheshunoff rating of A+/96.
In connection with the execution of the merger agreement,
United Counties granted Meridian an option to acquire 375,000
shares of United Counties stock at $125 per share under certain
circumstances. Also, United Counties will receive two seats on
Meridian's Board of Directors.
Meridian and United Counties had entered into a letter of
intent in August 1994 but the parties were unable to reach a
definitive agreement due to prevailing equity market conditions and
an inability to agree on certain terms. Since that time, the
interest rate environment and equity market for banks have changed
favorably, enabling both companies to further study and perfect the
plan of merger.
