_________________________________________________________________
_________________________________________________________________
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
MERIDIAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-12364 23-2237529
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Ident. No.)
35 North Sixth Street, Reading, Pennsylvania 19601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 655-2000
N/A
(Former name or former address, if changed since last report.)
_________________________________________________________________
_________________________________________________________________
<PAGE>
Item 5. Other Events.
Meridian Bancorp, Inc. ("Meridian") and United Counties
Bancorporation ("United Counties") entered into an Agreement and
Plan of Merger dated as of May 23, 1995 (the "Agreement"),
pursuant to which United Counties will be merged into Meridian
with Meridian as the surviving corporation. United Counties is a
bank holding company headquartered in Cranford, New Jersey, with
35 branches in Middlesex, Monmouth, Morris, Somerset, and Union
Counties. At March 31, 1995, United Counties had assets,
deposits, and stockholders' equity of approximately $1.6 billion,
$1.3 billion, and $188 million, respectively. In the merger,
each share of United Counties common stock will, subject to
certain adjustments, be exchanged for 5.0 shares of Meridian
common stock. The merger, expected to be completed during the
fourth quarter of 1995, is subject to the satisfaction of certain
conditions, including among others, approval of the merger by
United Counties' stockholders and Meridian's shareholders and
receipt of all required regulatory approvals. The transaction
will be accounted for as a pooling of interests.
The press release, dated May 24, 1995, of Meridian and
United Counties announcing the signing of the Agreement is
attached hereto as Exhibit 99.5 and is incorporated by reference
herein. The terms of the transaction described in the press
release are qualified in their entirety by reference to the
Agreement, a copy of which is attached hereto as Exhibit 2.1 and
incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The Consolidated Balance Sheets as of December 31, 1994
and 1993, and the Consolidated Statements of Income,
Consolidated Statements of Changes in Stockholders'
Equity and Consolidated Statements of Cash Flow for the
years ended December 31, 1994, 1993 and 1992, of United
Counties Bancorporation, and the related Notes to
Consolidated Financial Statements, are incorporated
herein be reference to Exhibit 99.1 hereof. The report
of KPMG Peat Marwick LLP on such financial statements
is incorporated herein by reference to Exhibit 99.3
hereof.
The Unaudited Consolidated Balance Sheets as of
March 31, 1995 and 1994, the Unaudited Consolidated
Income Statements, the Unaudited Consolidated
Statements of Changes in Stockholders' Equity and the
Unaudited Consolidated Statements of Cash Flow for the
three-month periods ended March 31, 1995 and 1994, of
United Counties Bancorporation, and the related Notes
to Unaudited Consolidated Financial Statements, are
incorporated herein by reference to Exhibit 99.2
hereof.
(b) Pro forma financial information.
The pro forma financial information giving effect to
the proposed merger with United Counties described
under Item 5 hereof is set forth on Exhibit 99.4
hereto, which is incorporated by reference herein.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of May 23,
1995, between Meridian Bancorp, Inc. and United
Counties Bancorporation.
23.1 Consent of KPMG Peat Marwick LLP.
99.1 The Consolidated Balance Sheets as of December 31,
1994 and 1993, and the Consolidated Statements of
Income, Consolidated Statements of Changes in
Stockholders' Equity and Consolidated Statements
of Cash Flow for the years ended December 31,
1994, 1993 and 1992, of United Counties
Bancorporation, and the related Notes to
Consolidated Financial Statements, are
incorporated herein by reference to pages 14
through 27 of Exhibit 13.1 (United Counties
Bancorporation 1994 Annual Report to Shareholders)
to the Annual Report on Form 10-K for the year
ended December 31, 1994 of United Counties
Bancorporation.
99.2 The Unaudited Consolidated Balance Sheets as of
March 31, 1995 and 1994, the Unaudited
Consolidated Income Statements, the Unaudited
Statements of Changes in Stockholders' Equity and
the Unaudited Consolidated Statements of Cash Flow
for the three-month periods ended March 31, 1995
and 1994, of United Counties Bancorporation, and
the related Notes to Unaudited Consolidated
Financial Statements, are incorporated herein by
reference to pages 1 through 11 of the Quarterly
Report on Form 10-Q for the quarter ended
March 31, 1995 of United Counties Bancorporation.
99.3 Report of KPMG Peat Marwick LLP.
99.4 Pro Forma Combined Condensed Financial Statements
(Unaudited) of Meridian Bancorp, Inc. and United
Counties Bancorporation.
99.5 Press Release, dated May 24, 1995, of Meridian
Bancorp, Inc. and United Counties Bancorporation.
<PAGE>
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.
MERIDIAN BANCORP, INC.
Dated: June 7, 1995
By /s/David E. Sparks
David E. Sparks
Vice Chairman and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated
as of May 23, 1995, between Meridian
Bancorp, Inc. and United Counties
Bancorporation.
23.1 Consent of KPMG Peat Marwick LLP.
99.1 The Consolidated Balance Sheets as of
December 31, 1994 and 1993, and the
Consolidated Statements of Income,
Consolidated Statements of Changes in
Stockholders' Equity and Consolidated
Statements of Cash Flow for the years
ended December 31, 1994, 1993 and 1992,
of United Counties Bancorporation, and
the related Notes to Consolidated
Financial Statements, are incorporated
herein by reference to pages 14 through
27 of Exhibit 13.1 (United Counties
Bancorporation 1994 Annual Report to
Shareholders) to the Annual Report
on Form 10-K for the year ended
December 31, 1994 of United Counties
Bancorporation.
99.2 The Unaudited Consolidated Balance
Sheets as of March 31, 1995 and 1994,
the Unaudited Consolidated Income
Statements, the Unaudited Statements
of Changes in Stockholders' Equity
and the Unaudited Consolidated
Statements of Cash Flow for the
three-month periods ended March 31,
1995 and 1994, of United Counties
Bancorporation, and the related Notes
to Unaudited Consolidated Financial
Statements, are incorporated herein
by reference to pages 1 through 11
of the Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995
of United Counties Bancorporation.
99.3 Report of KPMG Peat Marwick LLP.
99.4 Pro Forma Combined Condensed Financial
Statements (Unaudited) of Meridian Bancorp,
Inc. and United Counties Bancorporation.
99.5 Press Release, dated May 24, 1995, of
Meridian Bancorp, Inc. and United
Counties Bancorporation.
EXHIBIT 2.1
AGREEMENT AND PLAN
OF MERGER
between
MERIDIAN BANCORP, INC.
and
UNITED COUNTIES BANCORPORATION
May 23, 1995
<PAGE>
AGREEMENT
TABLE OF CONTENTS
Page
BACKGROUND.................................................... 1
AGREEMENT..................................................... 1
ARTICLE I
Section 1.01 Definitions..................................... 1
Section 1.02 The Merger...................................... 7
Section 1.03 The Bank Merger................................. 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF UCB
Section 2.01 Organization.................................... 12
Section 2.02 Capitalization.................................. 13
Section 2.03 Authority; No Violation......................... 14
Section 2.04 Consents; Dissenters' Rights.................... 15
Section 2.05 Financial Statements............................ 16
Section 2.06 Taxes........................................... 16
Section 2.07 No Material Adverse Change...................... 17
Section 2.08 Contracts....................................... 17
Section 2.09 Ownership of Property; Insurance Coverage....... 19
Section 2.10 Legal Proceedings............................... 20
Section 2.11 Compliance With Applicable Law.................. 20
Section 2.12 ERISA........................................... 21
Section 2.13 Brokers and Finders............................. 22
Section 2.14 Environmental Matters........................... 22
Section 2.15 Loan Portfolio.................................. 22
Section 2.16 Information to be Supplied...................... 22
Section 2.17 Securities Documents............................ 23
Section 2.18 Related Party Transactions...................... 23
Section 2.19 Investment Banking Opinion...................... 23
Section 2.20 Antitakeover Provisions Inapplicable............ 23
Section 2.21 Quality of Representations...................... 24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MERIDIAN
Section 3.01 Organization.................................... 24
Section 3.02 Capital Structure............................... 25
Section 3.03 Authority; No Violation......................... 26
Section 3.04 Consents........................................ 27
Section 3.05 Financial Statements............................ 27
Section 3.07 No Material Adverse Change...................... 29
Section 3.08 Contracts....................................... 29
Section 3.09 Ownership of Property; Insurance Coverage....... 30
Section 3.10 Legal Proceedings............................... 30
Section 3.11 Compliance With Applicable Law.................. 31
Section 3.12 ERISA........................................... 31
Section 3.13 Brokers and Finders............................. 32
Section 3.14 Environmental Matters........................... 32
Section 3.15 Loan Portfolio.................................. 32
Section 3.16 Information to be Supplied...................... 33
Section 3.17 Securities Documents............................ 33
Section 3.18 Related Party Transactions...................... 33
Section 3.19 Investment Banking Opinion...................... 34
Section 3.20 Quality of Representations...................... 34
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 Conduct of UCB's Business....................... 34
Section 4.02 Access; Confidentiality......................... 38
Section 4.03 Regulatory Matters and Consents................. 39
Section 4.04 Taking of Necessary Action...................... 39
Section 4.05 Certain Agreements.............................. 40
Section 4.06 No Other Bids and Related Matters............... 41
Section 4.07 Core Deposits................................... 42
Section 4.08 Duty to Advise; Duty to Update UCB's Disclosure
Schedule....................................... 42
Section 4.09 Conduct of Meridian's Business.................. 42
Section 4.10 Board and Committee Minutes and Meetings........ 42
Section 4.11 Undertakings by Meridian and UCB................ 42
Section 4.12 Employee Benefits............................... 44
Section 4.13 Employee Relations.............................. 46
Section 4.14 Relocation of Corporate Headquarters............ 46
Section 4.15 Post-Closing Board Membership................... 46
ARTICLE V
CONDITIONS
Section 5.01 Conditions to UCB's Obligations under this
Agreement...................................... 47
Section 5.02 Conditions to Meridian's Obligations under this
Agreement...................................... 49
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 Termination..................................... 51
Section 6.02 Effect of Termination........................... 52
ARTICLE VII
MISCELLANEOUS
Section 7.01 Expenses........................................ 52
Section 7.02 Survival of Representations, Warranties and
Covenants...................................... 52
Section 7.03 Amendment, Extension and Waiver................. 52
Section 7.04 Entire Agreement................................ 53
Section 7.05 No Assignment................................... 53
Section 7.06 Notices......................................... 53
Section 7.07 Captions........................................ 54
Section 7.08 Counterparts.................................... 54
Section 7.09 Severability.................................... 54
Section 7.10 Governing Law................................... 55
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>
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.
WJR 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.
:\D 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
66-2/3% 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 7.00 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: /s/ Samuel A. McCullough
Samuel A. McCullough,
Chairman and Chief
Executive Officer
Attest: /s/ William L. Gaunt
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
(CORPORATE SEAL) By: /s/ Eugene H. Bauer
Eugene H. Bauer
Chairman and Chief
Executive Officer
Attest: /s/ 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
<PAGE>
__________________________________
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 the 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, 383, and 384 and the
Treasury regulations thereunder.
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 hands of UCTC
immediately prior to 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.
21. 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.
EXHIBIT 23.1
Independent Auditors' Consent
The Board of Directors
United Counties Bancorporation
We consent to the incorporation by reference in registration
statements (No. 33-45562 and No. 33-58690) on Forms S-3 of
Meridian Bancorp, Inc. of our report dated January 13, 1995, with
respect to the consolidated balance sheets of United Counties
Bancorporation as of December 31, 1994 and 1993, and the related
consolidated statements of income, stockholders' equity, and cash
flow for each of the years in the three-year period ended
December 31, 1994, which report appears in the Form 8-K of
Meridian Bancorp, Inc. dated June 7, 1995.
Our report refers to a change in the method of accounting
for certain investments in debt and equity securities in 1994,
income taxes in 1993, and postretirement benefits other than
pensions in 1992.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 5, 1995
EXHIBIT 99.3
Independent Auditor's Report
The Board of Directors and Stockholders
United Counties Bancorporation:
We have audited the accompanying consolidated balance sheets
of United Counties Bancorporation and subsidiaries as of
December 31, 1994 and 1993, and the related consolidated
statements of income, changes in stockholders' equity, and cash
flow for each of the years in the three-year period ended
December 31, 1994. These consolidated financial statements are
the responsibility of the Bancorporation's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted audited standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of United Counties Bancorporation and
subsidiaries at December 31, 1994 and 1993, and the results of
their operations and their cash flow for each of the years in the
three-year period ended December 31, 1994 in conformity with
generally accepted accounting principles.
As discussed in notes 1, 3, and 15 to the consolidated
financial statements, the Bancorporation adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," in 1994, Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes," in 1993, and Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," in 1992.
KPMG Peat Marwick LLP
Short Hills, New Jersey
January 13, 1995
EXHIBIT 99.4
Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
The following unaudited pro forma condensed consolidated
balance sheet information combines the historical consolidated
balance sheets of Meridian and United Counties Bancorporation
("UCB") as of March 31, 1995. The following unaudited pro forma
condensed consolidated statements of income for the three-month
periods ended March 31, 1995 and 1994 are provided as if the
merger had occurred on January 1, 1995 and 1994, respectively.
The following unaudited pro forma condensed consolidated
statements of income for the years ended December 31, 1994, 1993
and 1992 are provided as if the merger had occurred on January 1,
1994, 1993 and 1992, respectively. The merger has been reflected
as a pooling of interests. This information is provided for
illustrative purposes only and is not necessarily indicative of
the results of operations or financial position that would have
resulted had the merger occurred on such dates or of future
results of operations or financial position.<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 1995
(Dollars in Thousands)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks....................................... $644,320 $71,971 $716,291
Short-Term Investments........................................ 176,611 50,321 226,932
Trading Account Assets........................................ 299,555 - 299,555
Investment Securities and Investment Securities
Available for Sale.......................................... 3,231,392 1,071,115 4,302,507
Loans and Other Assets Held for Sale.......................... 85,031 - 85,031
Total Loans................................................... 9,906,538 377,348 10,283,886
Allowance for Possible Loan Losses............................ (168,426) (11,274) (179,700)
Other Assets.................................................. 821,321 51,614 872,935
-------------- -------------- --------------
TOTAL ASSETS.................................................. $14,996,342 $1,611,095 $16,607,437
============== ============== ==============
LIABILITIES
Total Deposits................................................ $11,137,466 $1,319,847 $12,457,313
Short-Term Borrowings......................................... 1,988,319 70,841 2,059,160
Long-Term Debt and Other Borrowings........................... 361,200 5,764 366,964
Other Liabilities............................................. 286,522 26,659 313,181
-------------- -------------- --------------
TOTAL LIABILITIES............................................. 13,773,507 1,423,111 15,196,618
-------------- -------------- --------------
Common Stock.................................................. 291,585 2,524 345,192
Surplus....................................................... 210,900 23,947 161,749
Retained Earnings............................................. 792,497 181,583 974,080
Net Unrealized Gains (Losses) on Securities................... (689) 1,945 1,256
Treasury Stock................................................ (15,679) (22,015) (15,679)
Unallocated Shares Held by Employees Stock Ownership Plan
(ESOP) Trust................................................ (55,779) - (55,779)
-------------- -------------- --------------
TOTAL SHAREHOLDERS' EQUITY.................................... 1,222,835 187,984 1,410,819
-------------- -------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................... $14,996,342 $1,611,095 $16,607,437
============== ============== ==============
<FN>
Note: Reclassifications have been made between Common Stock,
Surplus and Treasury Stock to reflect the pooling-of-interest
financial accounting treatment for the transaction.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THREE MONTHS ENDED MARCH 31, 1995
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ -------------
<S> <C> <C> <C>
Interest Income............................................ $273,735 $26,040 $299,775
Interest Expense........................................... 123,258 10,055 133,313
------------ ------------ -------------
Net Interest Income........................................ 150,477 15,985 166,462
------------ ------------ -------------
Provision for Possible Loan Losses......................... 8,021 - 8,021
Non-Interest Income........................................ 57,757 13,364 71,121
Non-Interest Expenses...................................... 140,404 9,217 149,621
------------ ------------ -------------
Income Before Income Taxes................................. 59,809 20,132 79,941
Provision for Income Taxes................................. 18,574 6,799 25,373
------------ ------------ -------------
Net Income................................................. $41,235 $13,333 $54,568
============ ============ =============
PER COMMON SHARE
Net Income
Primary.............................................. $0.73 $6.21 $0.81
Fully Diluted........................................ $0.73 $6.21 $0.81
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THREE MONTHS ENDED MARCH 31, 1994
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $221,985 $24,518 $246,503
Interest Expense........................................... 75,057 7,893 82,950
------------ ------------ ---------------
Net Interest Income........................................ 146,928 16,625 163,553
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 8,825 (300) 8,525
Non-Interest Income........................................ 57,937 1,614 59,551
Non-Interest Expenses...................................... 136,868 9,882 146,750
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 59,172 8,657 67,829
Provision for Income Taxes................................. 18,633 2,919 21,552
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 40,539 5,738 46,277
Cumulative After-Tax Effect On Prior Years of Change
in Method of Accounting for Postemployment Benefits...... (2,730) - (2,730)
------------ ------------ ---------------
Net Income................................................. $37,809 $5,738 $43,547
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $0.70 $2.69 $0.67
Fully Diluted........................................ $0.70 $2.69 $0.67
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. ($0.05) - ($0.04)
Fully Diluted........................................ ($0.05) - ($0.04)
Net Income
Primary.............................................. $0.65 $2.69 $0.63
Fully Diluted........................................ $0.65 $2.69 $0.63
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $985,040 $100,810 $1,085,850
Interest Expense........................................... 372,624 34,580 407,204
------------ ------------ ---------------
Net Interest Income........................................ 612,416 66,230 678,646
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 28,086 (825) 27,261
Non-Interest Income........................................ 228,026 7,108 235,134
Non-Interest Expenses...................................... 579,668 39,333 619,001
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 232,688 34,830 267,518
Provision for Income Taxes................................. 70,600 11,038 81,638
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 162,088 23,792 185,880
Cumulative After-Tax Effect On Prior Years Of Change
in Method of Accounting for Postemployment Benefits ..... (2,730) - (2,730)
------------ ------------ ---------------
Net Income................................................. $159,358 $23,792 $183,150
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.80 $11.12 $2.70
Fully Diluted........................................ $2.80 $11.12 $2.70
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. ($0.05) - ($0.04)
Fully Diluted........................................ ($0.05) - ($0.04)
Net Income
Primary.............................................. $2.75 $11.12 $2.66
Fully Diluted........................................ $2.75 $11.12 $2.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $961,690 $101,972 $1,063,662
Interest Expense........................................... 344,398 33,399 377,797
------------ ------------ ---------------
Net Interest Income........................................ 617,292 68,573 685,865
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 58,781 175 58,956
Non-Interest Income........................................ 274,623 8,408 283,031
Non-Interest Expenses...................................... 623,526 40,946 664,472
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 209,608 35,860 245,468
Provision for Income Taxes................................. 59,068 11,667 70,735
------------ ------------ ---------------
Income Before Cumulative Effect in Change in Accounting
Principle................................................ 150,540 24,193 174,733
Cumulative After-Tax Effect on Prior Years of Change in
Method of Accounting for Income Taxes.................... 7,221 (579) 6,642
------------ ------------ ---------------
Net Income................................................. $157,761 $23,614 $181,375
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.61 $11.29 $2.55
Fully Diluted........................................ $2.61 $11.29 $2.55
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. $0.13 ($0.27) $0.10
Fully Diluted........................................ $0.13 ($0.27) $0.10
Net Income
Primary.............................................. $2.74 $11.02 $2.65
Fully Diluted........................................ $2.74 $11.02 $2.65
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $1,016,181 $108,053 $1,124,234
Interest Expense........................................... 442,998 45,498 488,496
------------ ------------ ---------------
Net Interest Income........................................ 573,183 62,555 635,738
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 81,096 1,527 82,623
Non-Interest Income........................................ 233,613 9,774 243,387
Non-Interest Expenses...................................... 540,316 38,953 579,269
------------ ------------ ---------------
Income Before Income Taxes and Cumulative Effect of
Change in Accounting Principle.......................... 185,384 31,849 217,233
Provision for Income Taxes................................. 48,679 10,256 58,935
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 136,705 21,593 158,298
Cumulative After-Tax Effect on Prior Years of Change in
Method of Accounting for Postretirement Benefits Other
Than Pensions............................................. - (4,031) (4,031)
------------ ------------ ---------------
Net Income................................................. $136,705 $17,562 $154,267
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.45 $9.96 $2.38
Fully Diluted........................................ $2.44 $9.96 $2.38
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. - ($1.86) ($0.06)
Fully Diluted........................................ - ($1.86) ($0.06)
Net Income
Primary.............................................. $2.45 $8.10 $2.32
Fully Diluted........................................ $2.44 $8.10 $2.32<PAGE>
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED CAPITAL RATIOS
AS OF MARCH 31, 1995
PRO FORMA
MERIDIAN AND
UNITED UNITED
Ratio MERIDIAN COUNTIES COUNTIES
-------------------------------------- ------------ ------------ ---------------
<S> <C> <C> <C>
Shareholders' Equity to Assets 8.15% 11.67% 8.50%
Tangible Shareholders' Equity to Assets 7.35% 11.66% 7.77%
Risk-Based Capital:
Tier 1 Ratio 9.32% 36.92% 10.43%
Tier 2 Ratio 3.48% 1.28% 3.39%
------------ ------------ ---------------
Total Risk-Based Capital 12.80% 38.20% 13.82%
Tier 1 Leverage Ratio 7.52% 11.60% 7.93%
</TABLE>
EXHIBIT 99.5
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, New Jersey, 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 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 four-
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.
